QPR accounts for 2012/13 season

[West London is Rss]

Hello, I have just signed up to post because several of you have been asking for an expert to make sense of these figures. While I am no expert as such, I have just completed a degree in Sports finance and can hopefully clear some things up.

First, here are the key figures from today's results. It's important to remember that these are figures for the 12/13 season, in other words our most recent season in the Premiership.

- Confirmed losses of £65.4 million
- Net debt has virtually doubled from £91.4m to £177.1m
- Turnover dropped from £64m to £60.6m
- Ticketing revenue was down from £8.4m to £8.3m
- Wages and social security costs soared from £58.5m to £78m

Anyone can see how these figures are unsustainable. A decrease in revenue coupled with an increase in costs will only ever lead to a loss. More worryingly, this season in the Championship, ticketing revenue and TV money, as well as sponsorship and corporate income, will all have decreased further from those figures mentioned above. Last season, QPR earned £40 million through Premiership TV rights. This season in the championship that figure will have dropped by £38million to just over £2million. In terms of parachute payments, QPR received £23m in the first year (this year) and will receive £18m in the second and £9m in years three and four. You can see how this year, the parachute payment (£23m) does not make up for the loss of TV revenue (£-38m) alone.

Many of you here are posting that the debt does not matter or is insignificant. As you say, the majority of the debt is interest free and is owed to the owner. There would be a huge problem (worse than with Portsmouth) if TF decided to leave, but that is extremely unlikely - it would be an extremely unwise financial move by the owner and there are no realistic motives for him wanting to do so. If the owner does leave, however, the chances of finding a buyer are, without wanting to sound pessimistic, pretty much nil.

The League has got tougher on finance and with the introduction of FFP, QPR's prospects (pending possible legal action) do not look good. While 2012/13 seasons finance's do not count towards it, this seasons does. Many of you are suggesting that TF could simply right off the debt - I'm afraid it does not work like this. There is now no legal way for an owner to write off a loss in terms of FFP - the league will simply look at the balance sheet itself. He can make a contribution to try and limit the losses, but this itself is capped at around £2million.

In terms of punishment, if promotion is achieved, QPR can expect a heavy fine. Klonk is right - losses up to £18m are a max of £6.7m and then it's £ for £. If this years losses were to be repeated, QPR should expect a fine of around £54million. Many predict the 2013/14 losses will actually be nearer the £30million mark. If this happens, expect a fine of around £19million. Obviously, a loss of £30m plus a fine of around £20m will still lead to a net loss of around £50 million for the season, causing net debt to further increase.

If promotion is not achieved, and a similar level of losses to this year are announced, QPR can realistically expect a transfer embargo lasting more than one whole season, and more likely for 4 windows, depending on how long losses are sustained

Hope this helps!

Great post laaaaadddd!!

[klonk]

So a sponsor can give money to a club and that can balance the books, but an owner can't balance the books with a donation? Is that what you're saying?

yes... essentially the sponsor is buying a service (advertising, association with a brand etc), so this is operating income associated with day-to-day club activities, so it can be offset against the costs of operating to show profit and loss. profit/loss on the operating statement shows how well income and costs compare - not how much money a company has.

just donating cash (or injecting stakeholder capital) is nothing to do with how well the club is run (although it tends to indicate that a company is spending more money than it can raise via banks etc).

it is possible to dress up some stakeholder capital injections as 'sponsorship'... but the accounts need to be signed off by an independent auditor as giving a 'true and fair view' of what is going on. if sponsorship income from a company owned by a board member suddenly soared from £5m to, say, £55m, no auditor would sign that off because the amount involved could not reasonably be argued to be a credible figure for sponsoring an english championship club (unlike us, man city can argue that this level of income would be appropriate given the global branding and visibility of premier league and champions league).

[Nick]

Don't worry guys, Harry is in charge.

Give it a focking rest will ya.

[QprSinceBirth]

I wonder if money laundering is involved somewhere?

why would it?

[ollyhoops]

I wonder if money laundering is involved somewhere?

[herman bloom]

I'd be rather worried about FFP myself. They might tweak them, but the majority of clubs have been cutting their cloth in preparation for this. One way or another, stricter financial rules will come into force.

[Marshy]

Don't worry guys, Harry is in charge.

[West Acton]

Cheers 93

Im not worried by FFP as it won t happen there is already suggestions us and other championship clubs are ready to group together and challenge as are the 76 major clubs in European football who UEFA recently announced.

What I cannot get my head around is how Ticket revenue and Turnover dropped from being in the prem surely it should go up with bigger crowds etc

[qprboy93]

Hello, I have just signed up to post because several of you have been asking for an expert to make sense of these figures. While I am no expert as such, I have just completed a degree in Sports finance and can hopefully clear some things up.

First, here are the key figures from today's results. It's important to remember that these are figures for the 12/13 season, in other words our most recent season in the Premiership.

- Confirmed losses of £65.4 million
- Net debt has virtually doubled from £91.4m to £177.1m
- Turnover dropped from £64m to £60.6m
- Ticketing revenue was down from £8.4m to £8.3m
- Wages and social security costs soared from £58.5m to £78m

Anyone can see how these figures are unsustainable. A decrease in revenue coupled with an increase in costs will only ever lead to a loss. More worryingly, this season in the Championship, ticketing revenue and TV money, as well as sponsorship and corporate income, will all have decreased further from those figures mentioned above. Last season, QPR earned £40 million through Premiership TV rights. This season in the championship that figure will have dropped by £38million to just over £2million. In terms of parachute payments, QPR received £23m in the first year (this year) and will receive £18m in the second and £9m in years three and four. You can see how this year, the parachute payment (£23m) does not make up for the loss of TV revenue (£-38m) alone.

Many of you here are posting that the debt does not matter or is insignificant. As you say, the majority of the debt is interest free and is owed to the owner. There would be a huge problem (worse than with Portsmouth) if TF decided to leave, but that is extremely unlikely - it would be an extremely unwise financial move by the owner and there are no realistic motives for him wanting to do so. If the owner does leave, however, the chances of finding a buyer are, without wanting to sound pessimistic, pretty much nil.

The League has got tougher on finance and with the introduction of FFP, QPR's prospects (pending possible legal action) do not look good. While 2012/13 seasons finance's do not count towards it, this seasons does. Many of you are suggesting that TF could simply right off the debt - I'm afraid it does not work like this. There is now no legal way for an owner to write off a loss in terms of FFP - the league will simply look at the balance sheet itself. He can make a contribution to try and limit the losses, but this itself is capped at around £2million.

In terms of punishment, if promotion is achieved, QPR can expect a heavy fine. Klonk is right - losses up to £18m are a max of £6.7m and then it's £ for £. If this years losses were to be repeated, QPR should expect a fine of around £54million. Many predict the 2013/14 losses will actually be nearer the £30million mark. If this happens, expect a fine of around £19million. Obviously, a loss of £30m plus a fine of around £20m will still lead to a net loss of around £50 million for the season, causing net debt to further increase.

If promotion is not achieved, and a similar level of losses to this year are announced, QPR can realistically expect a transfer embargo lasting more than one whole season, and more likely for 4 windows, depending on how long losses are sustained

Hope this helps!

[West Acton]

Play off winners get £90m..maybe that's why we've been awful of late! Lol

For clarification that £90mil is the premier league money so makes no difference if you go up automatically or via play offs

[SuperHoopNik]

Play off winners get £90m..maybe that's why we've been awful of late! Lol

[West London is Rss]

Thank god our manager doesn't have a history of spunking away a load of money and leaving clubs bankrupt

.. beyond worrying really isn't it

[Pie & mash]

So a sponsor can give money to a club and that can balance the books, but an owner can't balance the books with a donation? Is that what you're saying?

See man city who used their sponsor (owned by the owners) to balance the books

[DeepcutHoop]

Unsurprising & depressing.

[Olly]

So a sponsor can give money to a club and that can balance the books, but an owner can't balance the books with a donation? Is that what you're saying?