It's that time of year again!

[rob_bridge]

But it is not just about MON it is how the club has been run virtually from day 1 of the RL era. There has been no long term (or even medium term) plans put in place as to how the teams will play, what style of manager etc. Just look at Swansea and see how they have formulated a plan and worked it through even to the extent that the chairman has said if Laudrup is tempted to move on they have plans laid down in relation to his successor. (and there is another club not a million miles away who also appear to be run very efficiently!)
Do you think that they even considered MON would leave at some point? And did they consider that Houlliers health might mean he would not be staying? It just beggars belief, IMO.

Ahh - succession planning. Doug always had a plan in that respect which he executed every 3 years or so.

MON - Houllier - TSM - Lambert.

Motivator and Organiser followed by a Coaching Director followed by Turgid Robot followed by an (albeit briefly) Bright Young Thing.

Where is the fucking logic?

And why on earth is Faulkwit still in a job?

[Ads]

I would imagine the likes of Collins and Heskey going has been off set by the new signings, so we wont see too much movement there next year.

I expect Ireland, Bent, Dunne and Given to go, which at a rough guess you’re probably talking in excess of £240k per week. If we bring in 6 or 7 players again, then the wages may not decrease a great deal, but if they’re of sufficient quality then you would hope that the league placings would improve and the extra TV money would make a healthy addition to the balance sheet.

I find that operating cost staggering though and would love to know how it compares with other clubs and exactly where the money is going. I wouldn’t have thought there were too many left on big wages.

[Risso]

We now owe about £260m in share capital, loan notes and other loans.  Still, at least we're not Leed.....well actually, we're not far off.

[Rip Van We Go Again]

You lot make me sick, putting an overly negative slant on these figures.
There are about 60 League clubs who would love to be in our position.

Hang your heads in shame, so called 'Villa supporters'

[Clampy]

Leeds went the way they did because they paid the likes of Seth Johnson stupid amounts of money. We've stopped doing that now.

[Chico Hamilton III]

So when will we actually see some dissenting, anti-Lerner shouts at Villa Park?

We seem to be resigned to our fate, like a....like a.... like a frog in a pan of boiling water.

[Risso]

Leeds went the way they did because they paid the likes of Seth Johnson stupid amounts of money. We've stopped doing that now.

We'll still be paying Shay Given lots of money for a few years yet.  Even Stephen Ireland has another year to go on his contract, and I can't see there being a queue of buyers for him in the summer.

[Ad@m]

Thought I'd add to the analysis...

Firstly, the operating loss - yes, on the face of it £58m looks horrific but there are 'paper' losses in there (amortisation and depreciation) which have absolutely no bearing on the club's ability to finance itself.  When these are stripped out the loss is £33m vs £34m last year.  This was caused by the £12m drop in revenue (discussed already) and the £13m drop in costs (all related to staff costs).  Like others have said, this would appear to be a case of ever decreasing circles but because of the nature of football clubs (ie a core set of fans will turn up whatever) the costs will have further to fall than the revenue.

As for the costs, before amortisation the club's operating costs were £113m of which £70m was staff costs.  Firstly, those staff costs still include the wages of a number of players bought present during the MON or GH era (ie before we think the wage cap came in) such as Cuellar, Collins, Heskey, Warnock, Given, Dunne, Ireland, Makoun, Petrov, Bent & Gabby).  I wouldn't be surprised if that lot were on an average of £40k a week which equates to £23m a year.  Cuellar, Collins and Heskey disappeared just after the year end presented here and Warnock disappeared six months later.  Even with all the new signings (players from lower leagues or the Dutch league so likely to be on considerably less) that will represent a further saving next year.

The slight confusion I have is the other costs.  Excluding wages we spend £43m a year.  £6m of that is depreciation and £6m is pay-offs for sacking managers (McLeish) or stealing managers (Lambert).  But what is the other £31m?  This seems high.  That said, if we assume the revenue doesn't drop much lower than £80m and assume the £31m of other costs remains, we should still have more than enough to build a competitive squad.  But the short-term target should certainly be to try to get the wage bill below £50m - a reduction of £20m on where we were in 2011/12.  I reckon getting rid of Heskey, Cuellar, Collins and Warncok will cover almost half of that.  Getting rid of the others who aren't contributing (Bent, Makoun, Ireland, Given & Dunne) might well cover the rest.

The trouble with the wages is that they'd got so out of hand that a complete clearout became necessary.  Having high earners on the books forces up the other players' salaries as they all compare themselves with one another - anyone remember NRC complaining that he wanted pay-parity with Young?  By getting rid of all the high earners you shift the base down and negotiations become more sensible with new contracts.

Other thoughts

Randy put another £10m in during 2011/12 so he's now put £133m in as equity and £107m as loans which aren't repayable until at least the end of 2021.

Summer 2012 transfers cost £22m for signings and generated £2.5m for sales.

The club employs 544 full time staff (what do they do?!) and a further 1,196 part-time staff.

So, as I said at the start of this thread, these results were never going to be showing a profit but at least they show we're going in the right direction.  Even the 2012/13 accounts won't show a profit.  If we manage to stay up this year and move on more of the high earners in the summer then the 2013/14 accounts might be close to break even.

[Villadroid]

Looking at the latest numbers and attempting to predict a positive or negative future for the club is futile because ultimately everything depends on the whim of the owner.

Even if the club was now breaking even at this point in time it does not mean that the club is going to spend the maximum it can within the FFP regulations.

We may know the numbers almost a year after they had any relevance and we might identify a trend, one way or the other, but the great unknown still remains unknown.

Without knowing what Lerner's vision for the club is, knowing if the club is profitable or not does not help.

Other clubs make big profits but they do not spend them on players, so why would we assume Lerner would either?

Until he converts the debts into equity we cannot be sure that he won't continue to take millions a year out of the club in interest.





 

[Ad@m]

Until he converts the debts into equity we cannot be sure that he won't continue to take millions a year out of the club in interest.

How can he continue to do something he hasn't done in the past?!  I've lost count of the number of times it's been mentioned in this thread that Randy, as of 31 May 2011, has charged the club exactly zero in interest on the £240m of cash he's put in to the club.  Is that really something you can criticise?

As for the rest of your post, to dismiss the accounts as meaningless because we can't read Randy's mind seems to miss the point somewhat.  If that were the case why are so many people paid to analyse financial statements and provide advice on the future off the back of that?

I think Randy's motivations are fairly clear in that he wants the club to be successful, both on and off the pitch, whilst not wanting to bank roll that success with a bottom pit of cash.  He's put a hell of a lot in so far on a gamble of Champions League qualification and it's not unreasonable for him to want to break the cycle of cost-increases now Champions League qualification seems very unlikely in the short-term.

With that in mind, I think an analysis of the current and likely future performance and position of the club is entirely valid.

[PaulWinch again]

I'll leave the analysis of the figures to people better qualified than me, but it doesn't look good. We appear to be as bad on the business side of things as the football side of things. We really really need to stay up.

[Villadroid]

Until he converts the debts into equity we cannot be sure that he won't continue to take millions a year out of the club in interest.

How can he continue to do something he hasn't done in the past?!  I've lost count of the number of times it's been mentioned in this thread that Randy, as of 31 May 2011, has charged the club exactly zero in interest on the £240m of cash he's put in to the club.  Is that really something you can criticise?

As for the rest of your post, to dismiss the accounts as meaningless because we can't read Randy's mind seems to miss the point somewhat.  If that were the case why are so many people paid to analyse financial statements and provide advice on the future off the back of that?

I think Randy's motivations are fairly clear in that he wants the club to be successful, both on and off the pitch, whilst not wanting to bank roll that success with a bottom pit of cash.  He's put a hell of a lot in so far on a gamble of Champions League qualification and it's not unreasonable for him to want to break the cycle of cost-increases now Champions League qualification seems very unlikely in the short-term.

With that in mind, I think an analysis of the current and likely future performance and position of the club is entirely valid.

But surely if we are going to assess the financial performance of the club we can't consider our personal estimation of the owner's future behaviour as due diligence?

The fact that the debt appears in the accounts and that the owner decided to waive his interest payments does not mean that that debt is not a threat to the business's future, especially if its income falls and the interest swallows up an ever-increasing proportion of the club's income.

I don't think Lerner's motives are clear at all.

He has put the club's status and future prospects in peril by pushing through his cuts over an unrealistic timetable.

He has stuck to that plan through endless failure and gives the impression that his priorities are overwhelmingly financial.

Any other interpretation is just denial and wishful-thinking.

We do not know what he thinks because he has never taken the trouble to actually tell us.

The only thing we know is that he radically changed his mind and there is nothing to say he won't do the same in the future.

 

[Hoppo]

I dont get it. No one asked Lerner to buy us. With buying a Premier Club you have to invest so why do we have to pay anything back?

[Risso]

Looking back at the old accounts, the first lot of loan notes issued are due for repayment in 2016.  I wonder what will happen then.

[supertom]

Anyone like to hazard a guess at how many years we could afford to be outside the Premiership before financial problems become potentially club threatening?
I'm not sure we could do what Ashley did at Newcastle and keep on a lot of their higher earners, as well as make significant signings like Nolan (albeit before knowing if they'd be down).
We'd likely have to just strip the club bare as quick as possible of our "name" players. Easier said than done of course, as finding takers for the likes of Dunne and Ireland will be hard. A lot will depend on how much we can get from Benteke's fee. It's be good to get absolute top dollar.