BFC Accounts 2021

A few completely uneducated thoughts on this

• It's disappointing to see the losses exceed the drop in matchday income by so much. Particularly given the increase in TV revenue, which I assume is deferred payment from the restart of the 19/20 season
• I wouldn't be concerned about being in debt, if there is a plan to service that debt. But we've been told that our wage bill has gone up, and we've not really sold anybody for a significant fee. Add the cost of our probable relegation to that, and we're screwed. Maybe the plan is a Nice style loan from the owners.
• Conway was insistant that there wasn't value in lower league signings. But I'd like to see where the value is in Prem / top end of championship academy players. Kane was displaced by Palmer. Benson displaced by Wolfe. Palmer and Wolfe will be earning significantly less than Kane and Benson, yet are more likely to play and we may lose both for nothing in the summer. Christie-Davies never played a game. Luke Thomas is also probably on a salary that should reflect a first team regular. The likes of Kitching and Brittain have probably cost less, and Brittain in particular has offered way more value.
• 14m+ should be a wage bill that allows for the signing of an experienced spine. Maybe even keep hold of Mowatt. But we seem to spread it pretty thin, and this season spent it dreadfully. Two of the players mentioned above out on loan. Another still not playing. Then add the Oulare debacle on top of that.

 

Actually, the increase in current liabilities is primarily an increase in accruals and deferred income, so is essentially the increased season ticket monies received not being recognised as income until the following set of accounts (i.e. payments received in April/May relating to this season's season ticket income).

In essence, this liability is recognising that BFC have received cash in advance for services that they are yet to provide (being the joy of watching/boycotting this shitshow of a season).

 

Excuse my ignorance. But does that make things better or worse?

 

THE £8.33MILLION LOANS OFFERED TO ALL CHAMPIONSHIP CLUBS BY THE EFL

We have partaken in it, in the lower range.

I can’t give an exact number but it is far below the £8.33million figure. We felt as a board and a club that it was necessary to get us through the next period before fans are back and before we know what division we’re in and what our financial windfall will be from that.


It is a short-term loan that has to be paid back pretty quickly but it gives us more breathing room and a little bit more easy access to things we need to do to close out this successful season and make sure we’re not looking over our shoulder. It is about bridging gaps and making sure our bills are paid on time and also to help with taxes. We’re just making sure the club is running smoothly.

We are on decent financial footing compared to some of our competitors but we thought it was the right decision to take that loan.

https://www.barnsleychronicle.com/a...IcW9r8y8ZvMNMCswyXSuZNTpp1eesYp3m1bdMZ5f3k08c

 

I think you'd struggle to name 50 clubs from the top 4 divisions if you tried to create a list of those more likely than BFC.

 

Really? That's shocking if true, considering the level of debt within those 4 divisions.

 

Every club pretty much will post a loss after the past few years. Our board have pumped an extra three million pounds in to wages and made a profit on transfers, all well not stressing about the debt by selling key assets on the cheap like we've done many times in the past.

 

Wow, what an absolute disaster! That's way beyond what I expected for this set of accounts.

I've just had a skim, but the three significant points that stand out (other than the catastrophic loss).

1. Directors remuneration. James Cryne said he was foregoing his salary (in the August 2020 statement) to assist the club financially. Despite this, directors remuneration has jumped significantly to £409,180 from £314,500. I find it highly unlikely that the rise is anything but an increase in amounts to the owners. It could be some performance bonus to Murphy, but given he walked, I'm not sure that would be likely to be paid out.

2. EFL loan and HMRC job retention scheme. Essentially, our cash flow has had a temporary reprieve courtesy of the EFL. This has to be paid back. The CJRS we've claimed £2.8m allegedly for non playing staff. I'd be very interested to see this breakdown up to 31st May given that we only had a short period where relatively normal operations were suspended.

3. And perhaps the most worrying to me. Debtors v creditors. Short term debtors (1 year) stand at £4.2m, and noticeably a huge fall in player transfer fees incoming (down to just £1.5m from £5.3m in 2020). This is compared with short term creditors (within 1 year) of £9.545m. With long term creditors adding another £1.896m.

The 2021/22 seasons accounts will be damaging as well looking at that wage bill. As I thought in the January window, we needed to generate significant cash and reduce wages. We didn't.

These accounts debunk any myth that our owners are prudent, put the club first or know what they are doing.

An absolute disaster and although covid has had an impact, its only a nominal one considering we received £2.8m from the govt.... which exceeds our reduction in turnover!

 

Don't forget Schmidt, another expensive flop, who was never going to suit the high press but ironically might have suited Conway / Schlopps so called passing game but wasn't given the chance, instead we sign 3 more strikers that don't start 20 games between them but add considerably to the wage bill.
We need to run a smaller squad supplemented with quality loans and give more opportunities to our best accademy players.

 

I'll have to concede to the accountants on here that this set of accounts is horrific.

But I'm not going to lose any sleep over it, club will be here tomorrow and for years going forward. We could be in a much, much worse position, imo.

 

Many other clubs will have an owner who will, sometimes readily or in some cases only if necessary, personally fund shortfalls in the form of loans - sometimes these ‘loans’ are never paid and written off, sometimes structured and repaid.

Our owners have been clear that they won’t do this. The fact they are so, ahem, popular, wont compel them any more to do so.

If they used relatively little of what was their own capital when purchasing the club, they also wouldn’t be too tempted to keep the club afloat in order to return on their investment further down the line.

The finances are not going to look any more healthy this time next year - we got £2mil in for Val but little else; have had to pay off a head coach we sacked, and have likely, if anything, increased the wage bill quite a bit. And then there is the real possibility of a further massive drop in income with relegation which would effect the accounts the year following.

I am quite concerned. Plenty of other clubs have books which look much worse debt and liability wise - but we have little to no prop to lean on.

Call me pessimistic but I can see this going south very quickly.

 

Better in terms of the snapshot at 31st May 2021 but likely with adverse implications for where we stand today.

Assuming that all the accruals and deferred income amounts were related to season ticket income (which is a simplification to illustrate the point), then its saying that £5.3m of the £9.5m of current liabilities aren't debts where we need to stump up the cash to pay an external creditor, but are amounts that get gradually reversed over the course of this season as the company matches the cash it has already received against the 'service' to which it relates. The equivalent figure in the previous year was £1.9m, which would be consistent with our expectations of a big increase in season ticket revenues for this season.

However, assuming that the £5.3m all relates to season ticket monies, then the fact that we 'only' have £3.5m in cash at 31st May 2021 suggests we've already burned a chunk of that money paying costs relating to last season. The increase in cash that we see on the balance sheet is effectively the season ticket monies for this season having just been received, and it is essentially one of the main income streams that will be recognised in the next set of accounts. If we've started to eat into that money already (as the headline figures would suggest) then we've used a proportion of this season's income to pay liabilities relating to last season (e.g. the increased level of performance related bonuses referred to in the accounts).

Overall, I'd say it paints a picture consistent with us having run short of funds this season to the extent where we could only afford to make loan signings in the January transfer window. On immediate viewing the increased cash looks like a good thing, but it's essentially just money held relating to the next period of annual accounts.

 

The finances would look better if we'd sold Mowatt instead of letting his contract run down so the club deserve credit for that one.

 

Just to cover off the obvious questions of the £750k that most people might be interested in.

- There is no further related party payment recorded in the accounts similar to the £750k from the previous accounts. This is as would be expected given that the £2.75m outstanding to the Cryne family is the subject of a legal dispute.
- However, there is also still no sign of any contingent liability being recognised relating to the £2.75m, so BFC is essentially saying there is no prospect of it ever being required to pay that money. The most recent information on the £750k implies that any further monies owing to the Crynes will ultimately be paid via the club so I would have expected to see this being reflected as a feasible event via recognition of it as a contingent liability. The absence of this continues to raise questions, in my opinion, as to the true nature of this debt.

 

There is no breakdown between the two but I'd hazard a guess that a fair-sized chunk of the £2.8m 'other income' is from the business interruption insurance that is also mentioned in the same note.

 

It's why I'd like to see a breakdown!

 

I expect that the increase will relate primarily to Dane Murphy, but most likely his regular pay. In the listing of directors his departure is stated to have been a post-balance sheet event, so he was still employed by BFC at the date of these accounts.

Payments to the highest paid director went up from circa £150k to just under £200k, so there's a £50k increase related to one person within the figures, and Dane is the most likely candidate (and that is probably still a very low overall figure for a Championship CEO's salary).

 

Got to be mainly Struber (although not techically 'player sales') which was reported at 2m euros at the time. McGeehan maybe £0.3-0.4m and Ritzmare loan fee about the same based on his reported wage. Add some low value loan fees Aitchison, ICD, Brammall etc and I think you're nearly there.

 

Indeed. I do find this set of accounts 'minimalistic' to say the least in terms of info in the notes to inform the user!

 

In some ways you are right, we could be in a much worse position. There are certainly plenty of clubs who are massively in debt. In many of those instances its been a conscious choice for an owner to subsidise those losses and take the debt upon themselves. The point where that individual runs out of money, or patience, or breath, and that club has a massive problem. As we're seeing at Derby, as we saw at Bolton, and to a lesser extent, Wigan.

But those clubs that are reliant on an owner, do have a safety net of alternative funding. We don't have a safety net from our owners. They have publicly stated they won't put money in. And as we've seen, quite the opposite. Through the £750k and what I now suspect all the more, the regular taking of directors income.

The biggest concern I have are the next 2 financial periods. As has been touched upon, we have significant cash showing in these accounts that is actually for this current season. In 2021/22 we have a significant shortfall between short term debtors and creditors of £5.3m. We have a further £2m due over 12 months.

Somehow we have to fund that. We either generate significant profit on player sales, cut costs so swingeingly (sic) that we create huge profit (not possible in my view) or we have to look to external funding, which would have additional impact on profit due to interest.

We have cash of £3.4m which is much less than the £5.3m shortfall.

We could readily find a credit crunch next season even before considering a potential £7-8m fall of income due to reduced TV deal and considerable drop in ST holders following possible relegation.

I'm very very worried.