Barnsley FC Account to 31 May 2016

Actually it was Peter Doyle who split the football club from the land and ground , but Patrick obviously thought it was a good idea so kept it like that

 

Of course it doesn't explain all but would have had a bit of an impact. But regardless burton are clearly a very-well run club. How many other Championship clubs are losing less money than us though? I bet none are other than them. Our loss is nothing for some clubs; not saying it's good, but when the account is released next year it's very likely we'll be running at a profit

 

The loss posted is for a L1 club not a Championship one

 

Granted. But clearly it is much harder for a club like ours to make a profit in League One. And I'm still trying to make a comparison to the clubs we're up against in this league. If anything our figure reflects better on us as I see it due to less income, TV Money etc. Of course more outlay at Championship but our income will be significantly higher even before player sales

 

If Burton are very well run, then we can't be or we would have also made a profit.

 

I assumed that the reclassified amount had been put down as a loss because you described the £9.5M figure as "accumulated losses". Section 45 allows trading losses to be carried forward against subsequent profits. So it might be a wise move with the inflows in the next accounting period?

 

No the accumulated losses refer to losses since the formation of the company.

 

Every empty seat in Oakwell is counted as a loss....

 

Gu on Keef

 

Or bring in more advertising revenue, have a better club shop, have the ground used more often etc. We shouldn't have to sell playing assets thus weakening the team and making it harder for Hecky to achieve our ultimate goal just to break even. It's poor to lose nearly a million quid despite the success we had. Something is badly wrong somewhere and it's extremely worrying.

 

I agree about the other revenue streams - I don't think we've been good at that for as long as I can remember.
The losses are not so worrying I think. Orsen Kaht's thinking is probably correct in that the losses will offset profits to follow in subsequent years, allowing a much reduced tax bill, so it's sort of to our benefit to post big losses at this point.
It sounds as if we're investing in the Academy every year to the tune of £750k. You can call it a loss, it might be recognised in the accounts that way, or worse, see it as a drain on resources, as some on here clearly do, but I prefer to see it as an investment.
Year-after-year it looks like a cost, but every so often it pays a lump back to cover the previous few years. It also feels like the right thing to do for the community.
With rules increasing the proportion of home-grown players for each team, it looks like a pretty good investment strategy at the same time as benefitting the community.

 

But the - £9,008,785 retained earnings, which you described as accumulated losses:

Note 13 (Reserves) shows the deficit on Retained Earnings has increased by £577,669 to £9,586,454. What this means is that Barnsley FC lost £577,669 last year, and its accumulated losses now stand at £9,586,454 in total. Remember that last season, the club visited Wembley twice, and yet it still lost money.

previously included the notional 3,900,000 share capital. Now the -£9,586,454 retained earnings doesn't include that figure, and is all presumably now "accumulated losses"? Hope I'm not being thick here?

It looks to me as though the notional 3.9M share capital which, if assigned would have offset the accumulated losses has been reclassified so that the figure remains simply a part of the overall accumulated losses - which it always was in reality?

 

I'm not saying it's reight but back in the day John Dennis told me pretty much the same and I trust him.

 

Wouldn't the money recouped from Stones, Holgate and Bree rather end the argument over its value?

 

I don't usually buy a matchday programe but Saturday I did just to read patricks page in it. Don't know who else read the piece but to me it sounded like even if patrick gets his health back we won't see him hands on at the helm again. I don't know who will run the club after patrick but I think if patrick goes the academy will fold as it seems this is where alot of the overspend goes.

 

Red Rain takes an extremely deep breath and tries to think of a way of explaining this without causing further confusion. Unfortunately, I am probably doomed to failure, but I will give it a go anyway.

The Financial Accounts of a company are split into two basic parts. The first used to be called the Profit and Loss Account and the second is the Balance Sheet. To further complicate matters, double entry bookkeeping requires that there are two entries in two different accounts for every transaction. The Accounts that are deemed to be Profit and Loss accounts (e.g for your local shop Sales, Purchases of the stuff that is sold, wages, overheads etc ) appear in the annual statement of Profits and Losses. These figures are then consolidated and carried forward in the Balance Sheet as one figure representing the accumulated profits less any tax paid (Retained Earnings). In the case of Barnsley Football Club, it is carrying forward a figure that represents the accumulated losses since its formation. Even though there is just one figure, the double entry rules are still obeyed because the other side of double entry of the transactions making up Retained Earnings is contained in summary elsewhere in the Balance Sheet.

Your difficulty seems to be that there are many transactions that do not pass through the profit and loss account. They are sums that are not the result of trading in the business you are in. For example, every company begins when a group of individuals decide to set up a company. The company will issue shares to the individual shareholders. These shares can usually be traded in the market and they have a price that is not linked to the price that they were originally issued at. The prices are different because the share price represents the current accumulated worth of the company, which will not be the same as it was when the shares were issued. To further complicate matters, it is not even the Balance Sheet worth of the company, but let us just park that one. Let us say that the Company issues £1m shares at £1 each. Even though the company has not yet begun trading, it is possible to construct a Balance Sheet. It looks like this

Current Assets
Balance in Bank £1m

Current Liabilities £0

Net Assets £1m

Represented By

Issued Share Capital £1m


What Mr Cryne has done is move £3.9m, which was notionally Share Capital on the Balance Sheet as at 31 May 2015 (a credit item in terms of double entry bookkeeping) to his Loan Account as at 31 May 2016 (another credit item ). Technically, he has debited Share Capital and credited his loan account. Neither transaction is a trading cost, so neither transaction affects profitability. According to accounting rules and regulations, you are not allowed to do this, but in this case it is allowed because the shares were never issued.

There I told you that you would be even more confused. What you need to remember is that the Profit and Loss Account (Retained Earnings) covers only trading income and expenses, and that transaction is not a trading transaction.

 

It depend when you have the argument.

If you have the argument on 1 June 2016, when we have lost £1m and have not recouped any transfer fee in that year, the argument looks won.
If you have the argument at the end of the summer transfer window after the sale of John Stones, the argument is lost.
If you have the argument having just sold your best player, thereby weakening the team, the argument is lost again.
If you use the money from that sale to recruit an even better player from another team, the argument is won again.

The problem is that these things are always a matter of judgement. Conan Troutman has been arguing all day that the club must be badly run because Burton has not lost money this year. The fact is that the two clubs are run on entirely different principles. Burton makes money because it is run as a lower division team that controls every cost. Barnsley hopes to compete at a higher level and in order to do that, it maintains a higher cost base. The academy represents a large proportion of that higher cost base. Comparing Burton to Barnsley is akin to comparing apples with pears or Barnsley with Manchester United. You would expect their cost bases to be entirely different.

As for the academy, Mr Cryne wants it and is prepared to fund the losses that it generates when we do not sell a player during the season. That will do for me.

 

Some good posts on here Red Rain. Not much to debate though when there's only half of the figures available for viewing, next year will be a lot more interesting.