Regarding consortium

[Jonny]

Jonny, I am afraid you get his wrong.

1. Losses are shooting up, not the other way around.
2. The FFP did not finish by the end of the 2017/18 season – it is a three years rolling thing.

I believe we just about passed the FFP calculation this time.
However, the big trouble of FFP is ahead of us.
We had a £13m loss in 2016/17, prior to player transfer surplus, and ca £6m net loss after netting £7m profit on transfers. Ca £2m of the costs are exempts from FFP calculations.
The last season (2017/18) we had £15m less than the previous year in parachute payments and no profit on sale of players. This means £22m less than last year. Admittedly, we had lower salary costs last 12 months than the previous 12 months and a modest reduction in player amortization, but this does not prevent us from posting a loss north of £20m for 2017/18. So contrary to what you state, our loss has sky rocketed, rather than going down.

In order to stay inside the £39m FFP limit we need to do drastic cost cutting in 2018/19. However, whatever we do won’t be enough, as revenues are dropping faster than costs. We will have to sell players for minimum £10m to comply.

The big trouble hits us in 2019/2020 though, as the parachute payment disappears altogether, and we lose another €15m (a reduction of £30m from 2016/2017). The only way we can deal with this, is to continue to sell players while we work hard to get other costs down.
Normally it won’t help to get in new investors. Ruben (our 70% owner) has enough cash and this isn’t the bottleneck. The problem is the FFP rules. However, there is one exception: The club will save interest on Rubens loan if a new investor will provide cash on softer terms. Even though we don’t pay any interest to Ruben (the interest is converted to new shares), the interest hits our P&L and thereby make it even harder to comply with FFP.

Run your math again Jonny: It looks pretty grim and the this is why we will have to sell a shitload of players to stay on the right side of the FFP limits.

Oslo, I’ll make you eat your words as you are somewhat off the mark and an unnecessary harbinger of doom! No need to run any math again sir, I’ll post it up for all to see tomorrow. In the same context I will also outline why we are now an attractive investment proposition, which is why I contributed to this thread in the first place.

[hal9thou]

Admin. Can we put the Davman / Jommy / Oslo exchanges in the financial sticky?

Beginning to think FFP almost warrants a sticky of its own, but since this topic is already being discussed over in financial I reckon thats the best place for the discsussion context wise.

[QPROslo]

Jonny, I am afraid you get his wrong.

1. Losses are shooting up, not the other way around.
2. The FFP did not finish by the end of the 2017/18 season – it is a three years rolling thing.

I believe we just about passed the FFP calculation this time.
However, the big trouble of FFP is ahead of us.
We had a £13m loss in 2016/17, prior to player transfer surplus, and ca £6m net loss after netting £7m profit on transfers. Ca £2m of the costs are exempts from FFP calculations.
The last season (2017/18) we had £15m less than the previous year in parachute payments and no profit on sale of players. This means £22m less than last year. Admittedly, we had lower salary costs last 12 months than the previous 12 months and a modest reduction in player amortization, but this does not prevent us from posting a loss north of £20m for 2017/18. So contrary to what you state, our loss has sky rocketed, rather than going down.

In order to stay inside the £39m FFP limit we need to do drastic cost cutting in 2018/19. However, whatever we do won’t be enough, as revenues are dropping faster than costs. We will have to sell players for minimum £10m to comply.

The big trouble hits us in 2019/2020 though, as the parachute payment disappears altogether, and we lose another €15m (a reduction of £30m from 2016/2017). The only way we can deal with this, is to continue to sell players while we work hard to get other costs down.
Normally it won’t help to get in new investors. Ruben (our 70% owner) has enough cash and this isn’t the bottleneck. The problem is the FFP rules. However, there is one exception: The club will save interest on Rubens loan if a new investor will provide cash on softer terms. Even though we don’t pay any interest to Ruben (the interest is converted to new shares), the interest hits our P&L and thereby make it even harder to comply with FFP.

Run your math again Jonny: It looks pretty grim and the this is why we will have to sell a shitload of players to stay on the right side of the FFP limits.

[davman]

Not sure what your point is here?

You originally said we can’t spend because of FFP, but the owners would if they could. The reality is that we now can, but won’t. That is my point if it wasn’t clear before.

Granted I know this is not common knowledge amongst our fan base, but we will not breach the new regulations (3 years rolling loss total of 39m), and have passed.

This is not based on opinion, with some finger in the air assumptions on transfer fees, wages etc, but on in depth financial analysis, financial modeling, and an appreciation of FFP rules.

From memory, we have still managed to record losses of around £25m over the last two seasons despite £10m for Raheem Stirling and £4m for Charlie. We now have significantly less income and are trying desperately to appease the league so that they do not pursue us for the £50m fine hanging over our heads.

We are not out of the woods yet and have to limit losses, so no, we can't spend significant amounts.

Hopefully, that is clear enough for you...

[Jonny]

Nah.
You may think we are on target and I hope that you are right. However, we have made money in the transfer market over the last two seasons that you mention are included in the 3 years and have had around £25m in parachute payments.

Next season we will be another £10m worse off as those parachute payments disappear. So, if money comes in, we cannot afford to spend it!

...and THAT is the reason we can only hope for the two centre backs and one striker for less than £1.5m...

Not sure what your point is here?

You originally said we can’t spend because of FFP, but the owners would if they could. The reality is that we now can, but won’t. That is my point if it wasn’t clear before.

Granted I know this is not common knowledge amongst our fan base, but we will not breach the new regulations (3 years rolling loss total of 39m), and have passed.

This is not based on opinion, with some finger in the air assumptions on transfer fees, wages etc, but on in depth financial analysis, financial modeling, and an appreciation of FFP rules.

[davman]

That’s not true though. The three year rolling FFP rules conclude this season (17/18). We have to be inside 39m of total losses otherwise have breached rules. We will be and are on schedule.

And since losses are coming down year on year, even allowing for end of parachute payments start of 19/20, we are bringing both our annual loss down, and therefore, our 3 year rolling loss down in tandem.

The net result, beginning 18/19, i.e. this coming season, is that the total 3 year rolling loss is reducing. What does that mean? It means that IF the club wanted to spend on transfers, it could. But won’t, save for maybe a £2m young striker gamble from lower league, for all the reasons they have learnt before.

In order to calculate just how much we could theoretically spend, you have to understand the P&L statements, make some projections, and do the maths.

Nah.
You may think we are on target and I hope that you are right. However, we have made money in the transfer market over the last two seasons that you mention are included in the 3 years and have had around £25m in parachute payments.

Next season we will be another £10m worse off as those parachute payments disappear. So, if money comes in, we cannot afford to spend it!

...and THAT is the reason we can only hope for the two centre backs and one striker for less than £1.5m...

[QPRDave]

Lee Carsley wont be assisting Steve McLaren...i believe it will be John Eustace...

Right deals off!

[QPRDave]

any news on signings birchy? find out before you're sacked

Naughty...

[Banbury]

Lee Carsley wont be assisting Steve McLaren...i believe it will be John Eustace...

[Jonny]

If there is a consortium associated with McLaren, it can only to buy out a current member of the board or to provide funds for the Training Ground, or a new stadium with a part ownership going forward to take a share of non-football revenue earned by the stadium.

As others have said, we simply cannot spend abusing FFP. Funds from the current lot aren't short; they would spend more if they could, but they aren’t allowed to.

We'll just have to wait and see...

That’s not true though. The three year rolling FFP rules conclude this season (17/18). We have to be inside 39m of total losses otherwise have breached rules. We will be and are on schedule.

And since losses are coming down year on year, even allowing for end of parachute payments start of 19/20, we are bringing both our annual loss down, and therefore, our 3 year rolling loss down in tandem.

The net result, beginning 18/19, i.e. this coming season, is that the total 3 year rolling loss is reducing. What does that mean? It means that IF the club wanted to spend on transfers, it could. But won’t, save for maybe a £2m young striker gamble from lower league, for all the reasons they have learnt before.

In order to calculate just how much we could theoretically spend, you have to understand the P&L statements, make some projections, and do the maths.

[Undecided]

Of course, if there is a consortium waiting in the background possibly the EFL might want to do their own due diligence, to make sure the new ownership are good for the fifty odd mil fine they're hoping will fall in there lap?

[Hitman34]

Why not build the stadium at Warren Farm and continue to use Harlington as training ground

[davman]

If there is a consortium associated with McLaren, it can only to buy out a current member of the board or to provide funds for the Training Ground, or a new stadium with a part ownership going forward to take a share of non-football revenue earned by the stadium.

As others have said, we simply cannot spend abusing FFP. Funds from the current lot aren't short; they would spend more if they could, but they aren’t allowed to.

We'll just have to wait and see...

[MYU]

I don't get the consortium wanting to invest thing

Given our existing owners aren't short of a bob or two, and with a proven willingness to spend, it is only the dire ongoing FFP consequences that are stopping them

Surely it is the club that is unable to exceed the spending limits imposed by it's limited income - regardless of how much it has in the kitty and who from ?

Does investment in Warren Farm or the LC stadium fall outside FFP limitations ?

Absolutely spot on, our owners have the money and want to spend but are restricted.

This is why a new bigger ground is needed, the club have known this for years and years. Every new owner has tried to find a new home for us, it's not that easy.

[Rebel R's]

I don't want to upset young mark here,but he reminds me a bit of "dazzler" while trying hard to be a "walkonby",which he isn't. Please don't shoot me Mark for saying this,just noticing the trend of your recent threads.