BFC Accounts 2021

This is what I think as well. Surely there would be some sort of disclosure required by the auditors if there was the potential of a contingent liability occurring?

 

I did see the note and the assumption is that Murphy is being paid the £190k (and absolutely crazy amount for someone with zero experience, but thats another discussion).

So we have to account for a further £210k or so. Conway stated he's never taken a penny (that is obviously something many/some of us now believe to be untrue). James Cryne has stated he wouldn't take a salary and had not asked for rental payments (both of which may or may not be for the whole period). So that leaves Robert Zuk.

The other directors are owners.

If Conway ever appears to be interviewed, I very much want to ask how those executive fees are split and directly ask if he and his fellow owners take any form of salary and or expenses from the club.

 

True. Though I suspect his wage demands would've been less than those we sign from clubs who pay their u23s multiple thousands a week, I'd be surprised if the transfer fee is as high as reported, and not based on any performance add ons, which may or may not be met.

Not sure if the potential add ons owed is included in the overall figure for money owed, or is separated out.

 

Keep calm and carry on.

New owners imminent remember!! I heard so on Facebook, and they are going to be announced at the Garrison (at some point).

 

Unless the 80%ers are now accepting that the £2.75m is a charge (if valid) against the Hong Kong company (and their defence is that isn't a valid charge at all for some reason)? Although that would be at odds with KEA saying that the club was paying the legal costs for defence, so, if anything these accounts at best give us nothing and imho muddy the waters further!

I'm forming a conclusion that unless we stay up (or someone gives us a ludicrous fee/s for a player/s), this time next year we will either be in administration or heading there, saddled with an owner loan akin to Nice's on crippling terms.

£218k left to account for and as you say that could only be to Conway, Cryne and Zuk. If we take Conway at his word (dangerous I know) and assume Cryne took his c. £30-40k that he took before Covid that leaves around £170-180k to Zuk. That is absolutely obscene and unnecessary for a company with only a £14m turnover. I'd do it (better ) for half that!

 

Thanks. I guess if we'd followed up last season with any sort of consolidation this year, it might not look so bad. So it was the worst summer possible to lose the CEO, club secretary, sports scientist, physio etc.. And the worst possible summer to have Conway in charge.

We had a summer of fans itching to get back into Oakwell, after the success of last season. Could barely find a ticket in the Ponty end or East stand for the Coventry game, but then the disastrous running of the club in the summer caught up with us and the gates went down. These accounts make the theory that the West Stand was shut to divert stewards to the away end even more feasible.

A mid table finish this season would've also meant the prospect of bringing in decent fees for the likes of Helik and Styles.

Though these accounts may add a bit of context the next time we do sell a regular first teamer. You hear figures mentioned that we should hold out for, which are way above what anybody would pay, particularly given all other clubs know we're skint.

 

Pretty sure KEA's exact quote was that the club would be paying for any legal defence for any cases against the club specifically.

 

Indeed. We are either massively paying over the odds for executive salaries, we are paying nominal amounts to all or some of the directors who are also owners, or a bit of both.

It's perhaps a sign of the way these owners operate and communicate that I'm not naturally assuming that the highest paid director in 2020/21 was Dane Murphy.

 

That we're skint will only be a nominal factor... given there are plenty of other cubs who are skint too. The level of losses that have been subsidised by other owners should only suppress the transfer market more unless you develop a player capable of playing at Premier league level. I don't think we have.

So we have the double whammy of being desperate for cash while others at Championship level are likely desperate too, or at best, not able to commit to significant transfer fees. Thats also compounded by having a sizeable amount of deadwood that we can't sell, so have taken the route of trying to at least generate some form of contribution to their salaries.

 

Would there have been a loan fee for Matty James? Or just his wage contribution?

 

Looking at the player trading activity:

We've reported a profit of £3.4m on player sales, having sold players with an original cost of £4.3m but with a value of £1.4m (after amortisation) at the time of sale. This implies a total outgoing transfer valuation of £4.8m (which will likely be payable in instalments, so some of this will sit within debtors).

The cashflow statement shows £7.9m of cash receipts relating to player sales, so the difference will relate to instalment payments received in respect of earlier transfers. Transfer fee debtors show a reduction in monies due from £5.3m to £1.6m which is consistent with the much higher figure cash receipt compared to purchase cost in the year.

Based on permanent players sold for a fee, the £4.8m total income relates to the following players:
Cameron McGeehan
Jacob Brown

Looking at the incoming transfer activity we've added intangible assets of £4.3m in the year, which are related to the valuations of the following incoming players (assuming that we don't recognised any value for incoming free transfers, of which there are several further names):
Dominik Frieser
Michal Helik
Callum Brittain
Herbie Kane
Cameron Thompson
Liam Kitching
Carlton Morris

The cashflow shows that we spent £3.5m on the purchase of intangible assets, including any instalments payable on earlier transfers. Amounts owing on incoming transfer were £1.5m compared to £1.7m the previous year, so were relatively stable.

The 'elephant in the room' is what treatment was adopted with regard to coaching contracts? Everything within the accounts refers to players, so the natural assumption is that coaches are excluded from this. However, we know that during this particular season, we effectively 'sold' Gerhard Struber to New York Red Bulls. I'm struggling to see anywhere else within the breakdown of turnover where the buy-out clause would be recognised so can only assume that the coaching contracts are included within intangible assets totals. Assuming so then we need to add Struber to the the list for the £4.8m of player transfer income. I'm not aware that we paid any compensation to bring in Ismael, so he presumably would be treated as a free transfer recruit in terms of the cost of player purchases.

In all likelihood, we made £3.4m profit on McGeehan, Brown and Struber. McGeehan was an inter-group sale to Oostende, so I doubt he commanded much of a fee. If Struber's fee was anything close to 6-figures then the profit we achieved on Jacob Brown looks to have been less than I'd have expected, at a likely maximum of £2.5m. The profit will equate to the fee received for him, as he didn't cost us anything as an academy developed player. Assuming £2.5m on Brown and nothing on McGeehan would leave a gap of £0.9m relating to compensation for Struber, so perhaps US$1m was the fee. Anything more on Struber reduces the Jacob Brown fee by an equivalent amount.

 

The original £750k was shown as a liability of the investment company, paid by BFC and then subsequently written off. This makes sense contractually, on the basis of the investment company being the purchasing entity.

However, it creates a potential loophole in that the contingent liability disclosure can be avoided on the basis that it's a contractual debt of the investment company. However, the owners have been arguing consistently that it's a liability of BFC since the issue came to light, which is exactly the point I'm referring to in terms of having questions as to the true nature of the debt. The accounts suggest to me that the contingent liability is being treated as one of the investment company until such time as any payment is made when it ends up as a cost to the football club. If so, this is extremely misleading as to the true financial state of the football club.

 

Just to follow up on Loko's point regarding loan fees, these would presumably be part of the costs paid out, but the assets are never ours to own, so including them as intangible assets feels wrong to me from an accounting perspective. Their loans are more closely related to being an operating lease, where the cost is simply written off across the period of the loan.

However, it's logical to assume that the £4.3m might also include loan fees paid for Daryl Dike and Matty James.

 

Assuming he actually wanted to move before his contract expired that is. He presumably made a killing out of WBA not having to pay a transfer fee.

 

Loan costs can’t be recorded as an intangible purchase as it is not a purchase of an asset. It should be recorded under salary costs or in some cases a lease cost.

 

For anyone that really doesn't understand accounts.