Finances Announcement 13-14

Legally, can they just bury the operating cost figures? So if Mike/Lee took £15m each as salary, could we do anything? I guess not, given how that fecker at Blackpool operates.

 

Operating costs of a business encompass salaries, expenses, rent etc. So it's plausible that a salary can be lumped under the umbrella term operating costs. It would explain a lot. The wages of the playing staff have decreased significantly [I can't imagine us paying a lumper like Mike Williamson £50K per week], so unless there is something else that is increasing the Operating Costs, one plausible explanation is a massive salary paid out to one or more persons. I would have though those salaries would included on the Balance Sheet though? We will only know for sure when the accounts can be scrutinized. I could of course be talking utter bollocks, but that is my take.

 

You have to disclose related party transactions with anyone connected to the directors and or/major shareholder e.g. payments and deals etc.

 

When the formal numbers. One out it will be interesting.

 

No-one with an ounce of financial sense would pay themselves a salary of £28.5m considering it would be subject to NI and PAYE. Plus even in private limited companies there should be a wages note that will show comparisons of total wages bill for the current year vs the prior year (although I've never worked on a sports team's accounts so not sure if this would be different...). It would also disclose how much the highest paid director was paid (again, it did a few years ago unless the disclosure necessities have changed).

As soon as the accounts are widely available on Companies House there will be a lot of financial people poring over them so chances are nothing will be "hidden".

 

Hoping so mate.
It all boils down to trust and at the moment, on a personal level I don't trust the club one bit.
There are clever ways to move money around as we saw with Citeh and their stadium name.. I just hope that Mike has played fair.

 

Okay, maybe paying himself a massive salary like that was far fetched, but there are plenty of other ways to squeeze the orange. If Ashley has taken money out of the club then you can bet he will have the best legal/ financial advice that there is. He'll be exploiting every loophole available. Of course, once the accounts are available to scrutinize we shall see.

 

The annoyance is that there seems to be some black hole in our accounts placed there by Ashley to suck any possible funds out. We turn a healthy profit despite him getting free advertising around the stadium (worth millions), the syphoning of merchandising money through Sports Direct rather than ourselves (also worth a hefty wad) and there's still a fair chunk of money (£20-30m unaccounted for publically - apparently our 'operating costs' have shot up dramatically). The latter is why we were predicted to make £40m but only posted £19.8, I think we would be a pretty good financial prospect to many buyers as with the merchandising and advertising done differently you could add a fair few million to the profit figures with ease.

The reality is that Ashley wants to siphon the money off and declare as little profit as possible. The amount of debt is irrelevant now, if paying it off was a priority he could have reduced it significantly by now, it is left as that is his hold over the club. After the extra money from TV rights if our profits go up I still expect most of it to step sideways into operating costs and the debt to remain at a similar level. It is clearly "the plan".

 

These 'operating costs' need to be scrutinized. An increase of £28.5 million in one calendar year beggars belief to be honest.

 

Also, we've been turning a profit for a few years now. If this isn't being used to pay off debts what the hell is being done with it, it certainly isn't being used on playing staff?!?!?

Can everyone check your pockets please.

 

Ashley's loan has remained static with no repayment. Operating Costs have increased each year we have turned a profit. Those profits have not been re-invested in the playing staff. So where the **** is it?

 

Could he maybe have done something a bit cleverer by depreciating all the playing assets to zero. While the assets are on the balance sheet if you accelerate depreciation it affects the P/L - becomes an operating cost. Then when you sell them you can take all the profit being the difference between their value on the balance sheet and what you sold them for. I don't really see the point of doing this though -it would normally be done to avoid excessive tax during a bumper year but it doesn't matter how good 2013-2014 was as there is enough retained losses being brought forward that the tax bill will be zero anyway.

 

As it stands there is money unaccounted for

This had crossed my mind but I think amortisation is deducted after the operating profit/loss on the P&L statement. Someone can correct me if I'm wrong.

Since we hit our lofty 10th place target last year (and missed it the year before), there could be a significant rise in salaries due to the bonuses paid out which I image would not be insignificant. It's anyone's guess but possibly £10m?

 

I'll correct myself. Amortisation was deducted as a cost in last year's accounts to give the operating profit/loss. I'm not so sure they could just significantly raise the amount they deduct though as there are rules about how much of the NBV you can write off each year as I understand it.

 

Yes you could depreciate the value of your players 'all in one year ' if that is your company policy however for tax purposes depreciation is added back to profits and a % allowance (as per HMRC ie 20%) is allowed as a deduction for recalculate profits. Even with my basic knowledge it is easy to reduce the profits in a company though - Consultancy Fees paid to a third party (must be non family member or associated company) for 'Advice' - A loan not being interest free !! - Friends employed by a company not actually working for the company - Leases in the company name for land /premises / warehouses used for non company / alternate company purposes!! - The list is endless.

 

The role of Pardew suddenly becomes clearer.

 

Gold. Pure gold.

 

All I wanna see is Ashley put his hand in his pocket and pull out more that a pork pie.

 

I was watching the Daily Politics Show this lunchtime and there was a discussion as to why companies such as Sports Direct ( named in the debate ) use nearly 15,000 staff on Zero hour contracts. All agreed it was immoral and hopefully will be stopped whoever gets into power. Wonder what plan he next brings in?

 

Simple. If what's being proposed he will dismiss employees at 11 weeks and then "re-hire" after 1 or 2 week "break". The employee will then start again for 11 weeks.