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BCFC Accounts Analysis
Birmingham City’s newly published accounts show that the club requires £4.4million in working capital in the short term to continue to operate. With the club posting another loss and wages being dangerously close to 100% of turnover last season it could be said that the accounts paint a bleak picture for the club.
Before I say anything I’m going to add in my usual caveats – I’m not an accountant nor do I claim to be one; I am working as a layman off the accounts – which are available for a pound from Companies House – interpreting it as best as I can. I’ll cite whatever facts I can but where I do speculate I will clearly say so and I invite you to treat that speculation with the scepticism it deserves.
What do the accounts say in simple terms?
The headline figures are thus:
- Turnover of £20.086M, down from £24.198M the season before
- Operating loss (after transfers) of £4.622M, up from £2.751M the season before
- Staff costs (player related and other) at £20.058M – 99.86% of turnover
- Auditors sign off the club as a going concern – on the proviso that £4.4M is provided by BIH
Obviously the big sticking point is the £4.4M that BIH need to provide BCFC. This was due to come from the conversion bond that was to be sold to Deluxe Crystal Ltd, a company owned on a 50/50 basis by BIH Chairman Cheung Shing and BIH Vice-Chairman Victor Ma Shui Cheong. That deal lapsed on November 3 due to the low BIH share price and no revised Bond has been offered, meaning that the hole would appear to remain there.
That’s bad isn’t it? How can we afford to sign Michael Morrison or offer a deal to Demarai Gray?
The key thing to remember that accounts are only a snapshot in time; these accounts are for the period up to June 30 2014 and were signed off in late September by Panos Pavlakis. Since the end of June we have received (as per the accounts) £1.25M for Tom Adeyemi and then there is the money that is to come from Jordon Mutch’s transfer from Cardiff to QPR. That will have made up some of the shortfall.
Although logic would dictate that BIH will struggle to raise any money I personally have come to the conclusion logic doesn’t apply in BIH’s case – they seem to have a knack of pulling rabbits out of hats where money is concerned. A club insider I spoke to today repeatedly said that although the accounts might seem bad they aren’t – and that due to the diligent and hard work of the staff behind the scenes at the club plus the money that has come in the need for money isn’t great and we can afford to do the deals outlined above.
What about wages? Is the £20mil on wages including a vast amount to directors?
Only one director – Peter Pannu – was paid by Birmingham City last year, and his wages were down to £220k for the period. I’m led to believe that Pannu was not actually paid for the final few months of the year by BCFC – with his salary and expenses being transferred to BIH. Neither Panos Pavlakis, Victor Ma Shui-Cheong nor Ryan Yeung were paid a penny by BCFC – Pavlakis and Ma are both paid by BIH.
The sad fact is that as always player wages are what cripple us. With turnover likely to drop massively again this year this is why the £5k per week wage cap was introduced to ensure that BCFC no longer spent over its means in this way.
How much did BIH take out of BCFC?
The actual question should be how much did they put in. If you disregard the £15.4M loan that was novated to BIH, the holding company put £6.2M into the club as of the balance sheet as working capital. That figure dwarfs the £3.6M that came across the counter as gate receipts last season – once again showing that it’s the commercial and above all TV income that keeps the club afloat, not the money from fans.
So what now?
While I’m still a bit nervy about Blues needing the money in the short term, I’m a believer that actions speak louder than words. By signing Morrison to a three and a half year deal, and going public with details to offer Dimmi Gray a new deal the club have shown intent to hold onto talent and improve the footballing side. I don’t doubt we will sell players in the window – but I suspect that will be what Rowett considers the dead wood and I hope that the club emerges in February a leaner outfit but with more quality than before.
Tags: Accounts, BCFC, BIH, Demarai Gray, Michael Morrison, Panos Pavlakis, Peter Pannu
34 Responses to “BCFC Accounts Analysis”
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Looking at the transfer fees received since that accounting period we look about £1,800,000 short. Was Mr P on the ball after all?
Surely the brightside next accounts will fair much better? With no pannu flashing the bcfc credit card around hotels,airports,greggs & various hong kong ladyboy bars? And king ziggy playing on a reported 57,000 pay cut..also attendances are actually up from when the new gaffa took over and if we continue to play well i cant see why we wont start getting the 20,000 plus again.that will accumulate to about 7 million in savings. Or correct me if im wrong dan!! Top job by the way for your efforts in 2014. Kro sotv!,,
I trust you don’t mind me pointing out that wages as a % of turnover last season included Mr zigic’s alleged £3m a year. Take this out and we are down to 85% now at a stroke.
Although I don’t get it. We have 30 players on 5k a week. That comes to £7.8M. Am i being thick here? Even with Mr zigic playing for his beer money only these days, that leaves c. £10m i can’t work out……
Those figure would include Burke, Elliot, Mullins and a few other who were on around £15k a week up til around June of this year so i would expect those add a considerable amount on to the figures. I would ask if there was a bonus to players/staff for staying up though x
:-)
The accounts being discussed are upto June 2014.
The estimated need for £4m plus is based on foreseeable expenditure.
The high earners, from Chris and Lovenkrands etc and Niki’s wages have all gone gone.
The accounts DO NOT SAY that they anticpated that huge reduction in the wage bill.
How could they anticipate player releases and sales…all they say was that BCFC NEED £4m+ on the basis of the situation at June 2014.
AUDITS are the historical record, with riders about the future-sure -but they are written and finished about the period UPTO…. June 2014.
Pavlos took over then, and he is keeping the ship afloat. If a snapshot audit was done today…I seriously doubt that we see a suggestion of £4m……in June, okay…but NOW ?
The ship has veered away from the icebergs since June… I think.
PS
I had a very bad thought about the guy I’ve supported so much.
The “up-front” money we received for Jack, Nathan etc, whether it was reasonable or desperate..iI don’t know…but it did mean that there was ‘dosh in the trough at Blues’…..and that meant that Blues would have the dosh to pay my ex-love, when his various income streams had to be met.
Hindsight is brilliant. Unfortunately.
You’re right.
Simple maths suggests the £20m wage bill is historic, not actual. If the club has, say, 20 players on £5k a week, plus say a further 20 on £2k a week, that comes to £140k. If you guess that staff might add another £100k, you get to £240k. That’s about £12.5m annually.
The club must be (at least) close to self-sustainability at present.
The fact the accounts are up to June 2014 (ie last season) should indicate that wage bill is historic ;)
From your analysis, Dan, would you say that the club is probably breaking even right now?
Probably
Just pay the revenue on time please chaps. I fear every championship club will be in the same boat, even more so the ones splashing the cash.
Anybody with bit of nous should realize that is it was the players wages that had a stranglehold around our necks…Glad to see GR got Z in on peanuts because GR possible told him that all his worth peanuts…….now come on he get to stay in our wonderful country, he loves Brum…. For me I want to see sweat, tears and 100% commitment, and desire for peanuts…lol
Suffice to say, no other clubs wanted him. He must be over the moon that Blues offered him a chance !
We will just have to wait and see as usual
And there are still those who believe boycotting the club and depriving it of much needed income is a good thing…
Auld Bertie , I’ve said all along that those people who don’t go think there starving the owners out of money and “helping” to get rid of them are deluded and kidding themselves with pathetic excuses…if they don’t go it’s because they don’t want to and are making finance and owners as an excuse yet still call themselves supporters.. Don’t wash with me and NEVER will unless you live in another part of the country or abroad your excused but no one else is from my criticism . Kro .
I went last Saturday as I keep telling you , AND I brought two others with me, one a Villa Fan from Australia , so I have done my bit , now stop moaning.
same swan song Dave they keep using its to close to Christmas, then it be the January sales lol….kro
no excuses in Bluenoses not breaking the 20.000 crowd at home…..
oh dear they got no-one to moan at………;)
Great to see bcfc offering Demmi 2 year extension in contract will this be a enough to entice him to stay???? or will he feel its time for a bigger paid day, an bigger challenge to play with the greats in the premier league where untold glory and frame………will be at his feet….
If he joins a premier club, the only thing that will be at his feet is concrete… as he shuffles his feet on the bench. Still, if young players see that as a career, fair enough.. as long as we get a good deal out of it.
This is the first comment I have ever left on here so please excuse the rambling…..
iv just started reading you book dan and in doing so realised just how much time/work/effort you have put into providing the rest of us bluenoses with extremely hard to come by information. iv been a constant reader of your site since before the CY trial and have always enjoyed reading both the fact and opinion you provide.
I am a diehard bluenose like thousands of others, a season ticket holder living in north wales(been a long journey home some Saturday evenings in the last couple of years!) and id just like to say thank you. your effort and determination to help our club and provide information to the rest of us when others have provided only silence(or BS) has been priceless. The rest of us bluenoses love our club but none of us have got up and done what you have and i think many others will agree when i say we will remember that long after the current regime are long gone.
. Thank you for the work you have done, hopefully soon we will turn a corner and you will have happier stories to give on a regular basis. either way i wish you all the luck in the world and once again mate, thank you! KRO
Thanks for your kind words
Sorry chas I did not realise I was picking on you personally and I also did not realise that you’ve told me many times before that you went Saturday , bully for you and your party for turning up.. Lets hope others follow suit and support the great staff we have if not the owners.kro
:-) I was pulling your leg, Dave. It might have ben the other Dave who I told I would go if they re-signed Ziggy. Glad I did go tho, it was light years ahead of the tripe we watched under the previous manager. Really enjoyed it.
That’s ok chas I do tend do go off on one now and again but your bang on with the difference Gary rowett as brought to the team particuly at home where were looking a force again…0-8 to Bournemouth and 6-1 against reading is unparallel in performance and team work and its hard to believe that it’s the same squad (except Morrison) that put in those two diverse performances ..glad you enjoyed the game and lets hope it tempts a few more out of there arm chairs and down to the ground and maybe there’s more to come in games like that. Lol&kro.
just another indication of the poor job Pannu did over the first three years of Championship football in reducing the wage bill, proving he and Asia Rays were imo paid too much.
he was allowing the club to spend far too much on wages and only this season do we seem to have finally got things under control.
i just worry that next year with no parachute payment after January 2015 the income will be slashed even further, meaning mi would presume more cuts in wages as i doubt we will be sold.
However, the Birmingham Mail revealed in November that BIHL will still end up paying the club’s former acting chairman £230,000 during the tax year up to June 2015…………..
They should check the accounts properly, they have the figure slightly wrong – I have it right.
is the 3.6 mill gate receipts excluding season tickets because over 23 games that equates to £156500 per game and at say £18 average ticket price equates to 8700 fans which is about 7000 short on the 15400 average last season
if you add 7000 season tickets that takes the figure to around £6 million which next season will be around 50% of the clubs income.
I’m sure a lot of loyal Blues fans still attend from outside the cityj ust like our friend from Wals.As an ex Great Barr lad I now come from Ashby de la Zouch which is about 30 miles from Stans but I’m still glad to do so at the age of 72. The rest of our fan base that doesn’t attend may have many reasons, like work commitments, or no job to pay for it,with family expenses being the main one. After all if you’ve a couple of lads or girls to pay for it’s an expensive day out.
Where can these accounts be viewed?
As I said in the article, Companies House – it will cost you a quid.