Turning A Profit

[Gemmel]

Guess it shows what can be done

 

 

 

http://www.guardian.co.uk/football/2008/nov/27/leeds-united-profit-football-league-one

 

'The past is now the past' say Leeds as club announces £4.5m profit

 

• 'We are operating without being saddled with existing debt'

• Repurchase of Elland Road and training ground a priority

 

Leeds United have announced profits of more than £4m for the 14-month period ending on June 30 this year, a period that included relegation, a spell in administration and the deduction of 25 points.

The League One club have released figures that show a turnover for the period of over £23m.

The club said in a statement: "The directors of Leeds United Football Club Limited are pleased to be able to confirm that the audited accounts for the 14-month period to June 30 2008 show a profit of £4,553,000. During the period the club made an operating profit before player trading of £902,000 from a turnover of £23,249,000.

"On the field the club are seeking to gain promotion to the Championship at the earliest possible opportunity and to continue strengthening the club's academy. Off the field, the directors have identified that the re-purchase of both the Thorp Arch training facility and Elland Road as a priority within the next 12 months."

Leeds' descent into administration after relegation to League One in 2007 was mired in controversy, with Her Majesty's Revenue and Customs initially challenging the club's company voluntary arrangement, Ken Bates gaining full control of the club and the Football League allowing them to start the 2007-08 season only if they were deducted 15 points. Leeds' challenge to the points deduction was rejected the following May.

The Leeds chief executive, Shaun Murray, said today that a line should be drawn under the past. "I think the results will come as a shock to the football world at a time when many clubs are announcing record losses," he said. "The fact is that we are operating without being saddled with existing debt from the past and it shows that the club can be run effectively and profitably.

"The past is now the past. It can't be pointed at for problems in the future."

[ozzmeister]

Shows it can be done. Presumably by going into Administration there past debt was wiped away?

Therefore the burden of debt replayment (albeit you have point deduction) is gone?

[s0108787]

They have a turnover af £23m we have £13-14m.

 

That's what a difference a large fanbase makes.

[Colinjb]

They have a turnover af £23m we have £13-14m.

 

That's what a difference a united fanbase makes.

 

Corrected for you.

[VectisSaint]

They have a turnover af £23m we have £13-14m.

 

That's what a difference a large fanbase makes.

Not sure that accounts for £10m. Their average last season was over 26k, compared to our 21k, so thats approx £3.5m more over the season, even if their ticket prices were the same (I suspect theirs were lower as they were in League 1). TV revenue lower as well. So how do you expalin the other £7-7.5m? (I know the figures were for 14 months, compared to our 12 months, but this still does not explain such a substantially higher turnover). If our turonover had been £23m we would also have turned a profit I believe. Are there any other lessons that Saints could learn here about increased turnover?

[TheSaint75]

How much will it cost to buy back the stadium and training ground, which I assume they lost when going into admin? I don't expect £4.5m to cover it!

[Window Cleaner]

Not sure that accounts for £10m. Their average last season was over 26k, compared to our 21k, so thats approx £3.5m more over the season, even if their ticket prices were the same (I suspect theirs were lower as they were in League 1). TV revenue lower as well. So how do you expalin the other £7-7.5m? (I know the figures were for 14 months, compared to our 12 months, but this still does not explain such a substantially higher turnover). If our turonover had been £23m we would also have turned a profit I believe. Are there any other lessons that Saints could learn here about increased turnover?

 

Perhaps they have substantial commercial revenues.

Perhaps they do better concerts, better catering.

In today's world football revenues are not everything.

We only had 4 million or so commercial revenues, not profits revenues.

I have no doubt that the "megastores" don't make much money.

that's the problem when the board concentrate too much on football, we can't pay our way.

The matchday and broadcasting revenues fall 2 million short of out player and coach wage bill.

Edited 28 November, 2008 by Window Cleaner

[solentstars]

so it means they do not own their own ground and no training ground , a very bad position to be in i would think.

[TheSaint75]

so it means they do not own their own ground and no training ground , a very bad position to be in i would think.

 

Precisely, they may have struck a deal with the council for example to lease Elland Rd and the training ground at a reduced rate until the are financially sound, buying them back could put them back into a lot of debt.

 

Best compare apples with apples!

[Big Bad Bob]

Not sure that accounts for £10m. Their average last season was over 26k, compared to our 21k, so thats approx £3.5m more over the season, even if their ticket prices were the same (I suspect theirs were lower as they were in League 1). TV revenue lower as well. So how do you expalin the other £7-7.5m? (I know the figures were for 14 months, compared to our 12 months, but this still does not explain such a substantially higher turnover). If our turonover had been £23m we would also have turned a profit I believe. Are there any other lessons that Saints could learn here about increased turnover?

 

I expect that Player's wages will account for a fair proportion of that. I doubt if they had players on £15K+ per week, more likely their highest earner is prob on £2-3k....

[Mole]

Leeds United must be viewed as a beacon for Saints.

 

We desperately need to go into administration so that we can rise like a phoenix from the flames.

 

If ever justification was needed for the Lowe boycott then this is it. Those boycotting should feel proud for pushing the PLC to the brink.

[Big Bad Bob]

Leeds United must be viewed as a beacon for Saints.

 

We desperately need to go into administration so that we can rise like a phoenix from the flames.

 

If ever justification was needed for the Lowe boycott then this is it. Those boycotting should feel proud for pushing the PLC to the brink.

 

And of course Leeds are rising majestically from the flames aren't they??

 

And how would you feel if RL bought SLH/SFC back from the Administrators a la Ken Bates??

[Gemmel]

Leeds United must be viewed as a beacon for Saints.

 

We desperately need to go into administration so that we can rise like a phoenix from the flames.

 

If ever justification was needed for the Lowe boycott then this is it. Those boycotting should feel proud for pushing the PLC to the brink.

 

Stanley, i certainly wasn't advocating that we should go into administration and on the basis that the council dont have the money to buy our stadium and lease it back to us (They are super skint) then administration would not wipe out our debts. Additionally who was the chairman when they went into administration and who is their chairman now?.................be careful what you wish for.

[Mole]

And how would you feel if RL bought SLH/SFC back from the Administrators a la Ken Bates??

 

Lowe can't afford it and even post admin we'd be a punt so can't see his cronies wanting in .

[s0108787]

Corrected for you.

 

Good shout!

[s0108787]

Not sure that accounts for £10m. Their average last season was over 26k, compared to our 21k, so thats approx £3.5m more over the season, even if their ticket prices were the same (I suspect theirs were lower as they were in League 1). TV revenue lower as well. So how do you expalin the other £7-7.5m? (I know the figures were for 14 months, compared to our 12 months, but this still does not explain such a substantially higher turnover). If our turonover had been £23m we would also have turned a profit I believe. Are there any other lessons that Saints could learn here about increased turnover?

 

Merchandise must figure an awful lot. lets not forget that Leeds have the largest fanbase in the country based on the poulation of the city of leeds.

[Mole]

Stanley, i certainly wasn't advocating that we should go into administration and on the basis that the council dont have the money to buy our stadium and lease it back to us (They are super skint) then administration would not wipe out our debts. Additionally who was the chairman when they went into administration and who is their chairman now?.................be careful what you wish for.

 

LUFC under Bates and SFC under Lowe are completely different kettle of fish. Bates made sure he was the largest creditor so could therefore buy the club back for £1. Lowe is not in this position of power. NU and Barclays will call the shots through the administrators. Because of this the club will be sold to the highest bidder.

[s0108787]

I expect that Player's wages will account for a fair proportion of that. I doubt if they had players on £15K+ per week, more likely their highest earner is prob on £2-3k....

 

Player wages will not influence turnover though. Just cost of revenue and profit.

[Big Bad Bob]

Lowe can't afford it and even post admin we'd be a punt so can't see his cronies wanting in .

 

LUFC under Bates and SFC under Lowe are completely different kettle of fish. Bates made sure he was the largest creditor so could therefore buy the club back for £1. Lowe is not in this position of power. NU and Barclays will call the shots through the administrators. Because of this the club will be sold to the highest bidder.

 

So what has Lowe been doing with the 'millions' that he's 'milked' out of SLH over the last 14 years??

Edited 28 November, 2008 by Big Bad Bob

[Big Bad Bob]

Player wages will not influence turnover though. Just cost of revenue and profit.

 

Yes, you're right of course, sorry misunderstood the question...

[eelpie]

They have a turnover af £23m we have £13-14m.

 

That's what a difference a large fanbase makes.

 

That's what a difference a large and united fanbase makes.

 

(correcting Colinjb)

[s0108787]

So what has Lowe been doing with the millions that he's 'milked' out of SLH over the last 14 years??

 

i don't think he's milked millions out of us down the years. Just his salary - whcih 99% of chairmen would take.

 

Dividends have been virtually non existent and the club has not turned a porper profit for years.

 

There has been NO milking.

[s0108787]

That's what a difference a large and united fanbase makes.

 

(correcting Colinjb)

 

Another good one

[Big Bad Bob]

i don't think he's milked millions out of us down the years. Just his salary - whcih 99% of chairmen would take.

 

Dividends have been virtually non existent and the club has not turned a porper profit for years.

 

There has been NO milking.

 

I've amended my original post!!

[s0108787]

I've amended my original post!!

 

Now i see!

[RinNY]

LUFC under Bates and SFC under Lowe are completely different kettle of fish. Bates made sure he was the largest creditor so could therefore buy the club back for £1. Lowe is not in this position of power. NU and Barclays will call the shots through the administrators. Because of this the club will be sold to the highest bidder.

 

And just whom do you see bidding? All those people who have been lining up to bid for the club the past 4 or 5 years I assume: who was that again? Let's see ... hmmm ... ummm ...

 

Oh yeah: no-one! Well, that dodgy hedge fund SISU, but they own Coventry so we can't expect them to bid again. Who does that leave who has shown a willingness to put down some money and take control of this club? Eh?

 

You know the answer: Wilde, Crouch, Lowe & co. ... the very people who have been in charge, turn & turn about, the past few years, the ones you can't stand. You're living in fantasy land. There is no white knight out there for Saints: how many years can you keep clinging to that belief?

 

What would administration accomplish? Easy: SMS and the training facilities out at Staplewood would be sold off, and if the club are lucky it might be possible to arrange to lease them back. Any player who would fetch a transfer fee would be sold, and the money would go to the creditors. We'd be deducted 15 points, end up in League 1 with no ground or training facilities of our own, fewer and worse players than we now have, and one or more of the same old triumvirate in charge, because they're the only ones willing to do the job. And with the crap boards around the country get from the "fans" these days, I'm not surprised! I'm just amazed anyone at all is willing toi even think of running a football club outside the tope4 or 5. Talk about a thankless position ...

 

Btw, it seems not many people around here have any real memory of what happened at Leeds, the sale of the club ground, the training ground, the fire-sale of their players, most of them going for absolute peanuts, the club forced to give them away effectively because they couldn't pay them & no-one was willing to offer real fees to a club that had no choice but to let the players go. It was not pretty, not at all. If you wish all that for Saints, well, it shows what you truly are and are not: are, a hater; not, a Saints fan.

[Saint_Jonny]

Leeds United must be viewed as a beacon for Saints.

 

We desperately need to go into administration so that we can rise like a phoenix from the flames.

 

If ever justification was needed for the Lowe boycott then this is it. Those boycotting should feel proud for pushing the PLC to the brink.

 

your almost as bad as scooby! Argh... I could go on for ages about how WRONG you are, but I just cant be arsed.

[Window Cleaner]

And just whom do you see bidding? All those people who have been lining up to bid for the club the past 4 or 5 years I assume: who was that again? Let's see ... hmmm ... ummm ...

 

Oh yeah: no-one! Well, that dodgy hedge fund SISU, but they own Coventry so we can't expect them to bid again. Who does that leave who has shown a willingness to put down some money and take control of this club? Eh?

 

You know the answer: Wilde, Crouch, Lowe & co. ... the very people who have been in charge, turn & turn about, the past few years, the ones you can't stand. You're living in fantasy land. There is no white knight out there for Saints: how many years can you keep clinging to that belief?

 

What would administration accomplish? Easy: SMS and the training facilities out at Staplewood would be sold off, and if the club are lucky it might be possible to arrange to lease them back. Any player who would fetch a transfer fee would be sold, and the money would go to the creditors. We'd be deducted 15 points, end up in League 1 with no ground or training facilities of our own, fewer and worse players than we now have, and one or more of the same old triumvirate in charge, because they're the only ones willing to do the job. And with the crap boards around the country get from the "fans" these days, I'm not surprised! I'm just amazed anyone at all is willing toi even think of running a football club outside the tope4 or 5. Talk about a thankless position ...

 

Btw, it seems not many people around here have any real memory of what happened at Leeds, the sale of the club ground, the training ground, the fire-sale of their players, most of them going for absolute peanuts, the club forced to give them away effectively because they couldn't pay them & no-one was willing to offer real fees to a club that had no choice but to let the players go. It was not pretty, not at all. If you wish all that for Saints, well, it shows what you truly are and are not: are, a hater; not, a Saints fan.

 

And after all that they're still in League 1.

 

Phoenix rising from the ashes be phoeked .

[VectisSaint]

Perhaps they have substantial commercial revenues.

Perhaps they do better concerts, better catering.

In today's world football revenues are not everything.

We only had 4 million or so commercial revenues, not profits revenues.

I have no doubt that the "megastores" don't make much money.

that's the problem when the board concentrate too much on football, we can't pay our way.

The matchday and broadcasting revenues fall 2 million short of out player and coach wage bill.

Precisely my point. It would appear that Leeds are able to have a substatially larger turnover than us, and it is not accounted for by the extra attendances. Sure, merchandise could be a bigger earner than for us. Maybe they earn more from better concerts, better catering. We maybe can learn from Leeds what else can be done to increase our income and turn that into a profit (by the way I don't actually believe they have extra revenue from concerts or catering because Leeds do not actually own their ground and so would not be the beneficiaries of such events). It would appear though that somehow Ken Bates, who most people detest, has found a way of having a substantially higher turnover than either our previous Board or for that matter the current board. We supposedly now have the most astute financial man in the game, yet it ic clear once again that in fact he is not financially astute, but is only able to see ways of cutting costs, rather than maximising revenue. We have several ways of earning revenue that are not open to Leeds (because we have rights to our stadium and they do not).

 

Lessons could and should be learned. It does not need to be all doom and gloom like Lowe and Wilde would have us believe.

[Thedelldays]

im sure leeds had or still have high ticket prices for the league they are in (which is still league 1 by the way) and the fans still turned out in fair good numbers...

 

that has to be a factor

[um pahars]

Not sure that accounts for £10m. Their average last season was over 26k, compared to our 21k, so thats approx £3.5m more over the season, even if their ticket prices were the same (I suspect theirs were lower as they were in League 1). TV revenue lower as well. So how do you expalin the other £7-7.5m? (I know the figures were for 14 months, compared to our 12 months, but this still does not explain such a substantially higher turnover). If our turonover had been £23m we would also have turned a profit I believe. Are there any other lessons that Saints could learn here about increased turnover?

 

The 14 month period certainly muddies th picture somewhat, but if you straight line it down to 12 months, then you get just under 20 million.

 

We by contrast pulled in just under 15million.

 

So we're looking at a difference of 5million.

 

I think the single largest difference is their larger attendances and I'm also sure that they had some pretty expensive season ticket prices as well (can remember the furore when Bates upped them a while back).

 

After that, I'm sure accompanying commercial revenue from that larger fanbase probably fills in the gap.

 

They have one of the most ardent fanbases with regards spending money on their club.

 

When there was much research into football Clubs having their own football channels (and local cable being one of the main carriers) then after Man Yoo, Leeds were second when it came to potential punters willing to fork out XX pounds per month.

[Window Cleaner]

I wish I could convince myself that our "commercial activities" don't actually cost us money.

 

The loss is too abyssal for it to be wholly football related.

[AndyNorthernSaints]

As much as i hate Dirty Leeds, they are a much bigger club than Saints. I don't think Saints would get 30000 fans in League 1.

[Saint In Exile]

"The fact is that we are operating without being saddled with existing debt from the past and it shows that the club can be run effectively and profitably.

"The past is now the past. It can't be pointed at for problems in the future."

 

Says it all really.... I suspect any company with a loyal and committed custmer base could manage to make a profilt if it has all of it's debts wiped out without having to pay them.... Even Lowe and Saints would manage to turn a profit if the debt was taken away at no cost other than the points deduction!!

[Mole]

your almost as bad as scooby! Argh... I could go on for ages about how WRONG you are, but I just cant be arsed.

 

I don't believe you.

Edited 29 November, 2008 by Mole

[Saint_clark]

Lowe can't afford it and even post admin we'd be a punt so can't see his cronies wanting in .

 

So going into administration IS a big risk then.

Make your mind up.

[Saint in Paradise]

OK all you "Admin" fans, what happens if after going into admin no-one buys Saints ?

Saints as we know them will cease to exist so what are your suggestions for what SMS could be used

for or would it be better to knock it down and build flats,shops perhaps a swimming pool ???

[OLYMPIC]

Good to see them turning it around but when they say it shows what can be done because they are no longer saddled with massive debt,it makes me wonder how many small companies suffered because of money owed to them.

Also there massive debt was based on gambling with doing well in the premiership and champions league,must be nice to wipe that out when you run the business badly and screw everyone you owed money to.

[solentstars]

OK all you "Admin" fans, what happens if after going into admin no-one buys Saints ?

Saints as we know them will cease to exist so what are your suggestions for what SMS could be used

for or would it be better to knock it down and build flats,shops perhaps a swimming pool ???

igot to agree with you .if admin was so easy,don,t you think lowe would have done that by now.

so if we lost our ground,,academy,training ground and all the bits of the club,we would be stronger club

,anyone who thinks that is living with his head up his own arse.

[Minsk]

Eeeerrrmmmm, who was it who said way back when that 'we don't want to do a Leeds'?

[Wade Garrett]

Good to see them turning it around but when they say it shows what can be done because they are no longer saddled with massive debt,it makes me wonder how many small companies suffered because of money owed to them.

Also there massive debt was based on gambling with doing well in the premiership and champions league,must be nice to wipe that out when you run the business badly and screw everyone you owed money to.

 

I agree. The only person who didn't lose out was Ken Bates - and the underhand way he did his business with the ground was out of order. They fully deserved their points reduction.

 

Morally their profit should go back to their original creditors.

 

Dirty Leeds.

[VectisSaint]

The 14 month period certainly muddies th picture somewhat, but if you straight line it down to 12 months, then you get just under 20 million.

I agree with your figure (£19.9m on a like for like basis) but the fact is that the 14 month period included 2 "close seasons" (May/June 2007 and May/June 2008) when there would have been very little income. So I think the gap between our turnover and theirs is substantially more on a year on year basis that 5m. Still no-one can adequaltely explain how Leeds can generate approx 50% greater turnover in League 1 than Saints in the CCC when the revenue streams they have access to are more limited than our own (lower TV, no income from the stadium). It would be really interesting to understand exactly what they are doing that we are not, once the additional support based is factored out of the equation. Then perhaps Saints board could learn some lessons and perhaps find ways of substantially increasing our own income, instead of going the negative way that Lowe prefers of simply cutting costs.

[Gemmel]

I agree with your figure (£19.9m on a like for like basis) but the fact is that the 14 month period included 2 "close seasons" (May/June 2007 and May/June 2008) when there would have been very little income. .

 

Actually wouldn't it be the exact opposite and maybe the reason why their is such a delta between ours and Leeds turnover.

The two close seasons would include two lots of season ticket money. im not sure how many season tickets they have, but i'm sure it would be two big chunks of cash

[um pahars]

Actually wouldn't it be the exact opposite and maybe the reason why their is such a delta between ours and Leeds turnover.

The two close seasons would include two lots of season ticket money. im not sure how many season tickets they have, but i'm sure it would be two big chunks of cash

 

Season ticket cash would be banked, but it wouldn't flow straight in the P&L figures that were releases, instead it is released as the games are played.

 

Going back to Vectis' point, although normal Mays are quite blank, you have to remember that this May, Leeds played all the way through (with big attendances) as they got to the play offs.

 

So they then pulled in an extra 5,000 punters for every league game, had a play off semi (36,000) and a trip to the Play off final (share of 75,000 punters). That's something like 200,000 extra punters through that season, which could easily be 4million.

 

On top of that pure ticket money, with 25% more fans than us, then I think it wouldn't be too hard to imagine commercial revenues would also be higher.

 

I've just had a look at their season ticket prices and they are actually comparable to what we pay (and I think more in the main stands).

 

I think the main part fo the difference is punters through the door (and associated income they bring with them).

[Mole]

So going into administration IS a big risk then.

Make your mind up.

 

Any business is a risk for an investor. Post admin we'd be a risk for an investor, but as far as the club is concerned it's a process that is innevitable and necessary.

[Gemmel]

Any business is a risk for an investor. Post admin we'd be a risk for an investor, but as far as the club is concerned it's a process that is innevitable and necessary.

 

Stanley, i am not an expert on these things and i can't be arsed to type it all out again, but from my understanding the structure of our debts i.e the stadium means administration wouldnt provide the benefits that it can for some others.

The idea it will wipe off all our debts is completely wrong. Admin will hurt us enormously, if not kill us

[docker-p]

Turning a profit is all Lowe wants, not footballing success. If RL can get a successful academy producing a Theo, Bale etc every season and sold on to the Premiership for a profit he'll be more than happy for us to dwindle into league 1 or 2

[Arizona]

Call me a retarded optimist, but is it not possible we could ourselves turn a profit this season?

 

A loss of £4.9m last season, but I reckon we've cut our outgoings by a good £6m this year. I know we are down on gates, but I still think it's possible.

[Andy Durman]

Without debt, they do not have to paid interest. If the council owned our stadium we would make a profit

[Gemmel]

Without debt, they do not have to paid interest. If the council owned our stadium we would make a profit

 

I think our repayments our around 1.5 to 2 mill a year. Our losses are much more than that. So no we wouldnt