BFC Accounts 2021

No, in so many ways:-

1) On a similar income to ours Luton reduced their annual costs by around £1m to £19.5m, whilst we increased ours by £2.6m to £21m.
2) Luton were coming off a prior year surplus of £3.4m whereas our prior year was a loss, inclusive of a highly dubious (morally at least) £750k charge.
3) Luton run a demonstrably 'steady ship' - over the last five years taken together they have a small cumulative profit.
4) Crucially, Luton's Balance Sheet shows that their net current assets are £1.6m (ie they have more assets than liabilities due in the next year by £1.6m) whilst we have net current liabilities of £1.7m (ie we have £1.7m more due in the next year than we have realisable current assets in that period).
5) There is zero chance of them being relegated this season and having to adjust to a life with c. £7m less income next. They may even challenge the play-offs.
6) With an income virtually the same as ours they seem to be able to attract some of those top end UK lower division players/talent some commenters in this thread have said clubs of our resources aren't able to! Kai Naismith, Elijah Adebayo, Jordan Clark, James Bree, Tom Lockyer, Joe Morrell, Gabriel Osho, Fred Onyedinma, Alan Campbell and Carlos Mendes Gomes have all been brought in the last couple of seasons. Luton have also kept hold of their own talents, principally the excellent Mpanzu and Cornick in a way we don't.
7) Luton will in the next 2-3 years bring to completion substantial retail, business and housing developments alongside a brand new 23,000 capacity stadium which, as a result, they will fully own without any debt. We don't even own our decaying ground, with debt.
8) Lastly, there is no cloak of uncertainty at Luton for £2.75m of unaccounted for payments that may or may not fall to Barnsley Football Club to pay, dependent upon a legal case between different elements of the ownership.

So in terms of structural finances, playing strength and league position, commercially, assets and ground, ownership and unity of purpose, I'd say Luton are in a massively better context right now. In that context having an extra £3m loan which is interest free btw and repayable over 3 years pales into relative insignificance imho.

 

Not getting involved in your other opinions, @Exile, but have to disagree with your summary of Mpanzu and Cornick at Luton.

Pelly left them last summer for a while, a free agent, there were rumoured talks with Boro but he ended up back at Luton a couple of weeks later and re-signing. He's a solid enough player at the level. I'd say mid-table Championship is about right. At 28. But he's never courted any interest from other clubs in terms of them buying him. So it makes your point redundant, where you earlier suggested them keeping him (and Cornick) was some kind of great show, and opposed our own strategy.

Cornick has never had a sniff of interest elsewhere. The lad is a forward player and last season scored once in 43 league fixtures. One assist. We moved Chaplin on (who scored four goals with three assists) for the same fee we paid for him. Of course Cornick was still at Luton this season. They'd have had to give him away. He's improved his output this season admittedly and like Mpanzu, I actually think he's a useful enough player, for someone of his age.

 

I don't believe there's a never ending supply of the quality of player you've highlighted in the lower leagues.

Also, although we weren't the first to identify players based on statistics, there were fewer doing it then than there are now. It's basically everyone now. The algorithm used for analysis may vary a bit, but everyone gets the same stats. Our advantage of being early adopters was only ever going to last a couple of seasons. Our back up plan of looking to Europe was scuppered by Brexit.

No blame attached to anyone here but we can no longer identify players that others miss, everyone spots them, and then we're likely to lose out because some teams offer silly wages that we can't afford. Looking at some of the losses other clubs have filed, I wouldn't want us to.

 

So after all the debate, the conclusion I would draw is that player trading is not really working.

A combination of Covid, other clubs adopting the same analysis, the state of lower league finances and Brexit have all conspired to remove what was perceived a comparative advantage.

Then again the position of the club, since 2005 hasn’t really changed. Without the £13m from the totality of John Stones transfers the club would have been in a very tricky situation much earlier. For all the talk of other transfers the only one that made a significant impact on the finances was Stonesio.

If it hadn’t been for his transfer, at the time of the acquisition the club would have had debt of £12m and nothing on the balance sheet.

Unlikely that anybody would have fancied taking the club on in those circumstances. Unless there is a big readjustment in player wages, or we can drop on another home grown talent, the club are going to struggle financially.

 

I do not see Luton Town as the shining light that others do, I'm afraid, and do not forget that we are looking at the accounts of the club, and not its Holding Company (2020 Holdings Ltd). Barnsley has made a bigger loss in the year, but the overall accumulated losses are just £4,891532 as compared to £17,470,959 at Luton. They made lower losses than we did this year, but our record from the past is better. They also borrowed more than we did from the EFL, and that money has to be repaid under strict and onerous terms. The two clubs' figures are very similar, and that reflects in their respective standings. The big difference comes in the way that they are funded. Luton has £18,145,003 in share capital, whereas Barnsley has just £6,288,073. Of course, the PMG Group paid the Cryne family slightly more than that and the Cryne Family retained 20%, so the club was valued at about £10m at takeover, but the club did not get any of that, and because Patrick Cryne wrote off his loan funding, the funding by the new owners was as seen in the Balance Sheet. Frankly, the new owners need to increase their funding of the club , they need to repay the £750k and they need to forget about the £2.75m. They need to forget about doing it through interest bearing loans, and they need to do it through Share Capital as is described by the Luton model. The club is underfunded and will struggle in the short term if they do not.

It is much easier to write off a current business model than it is to create a new one. I believe that the analysis of the problems with the business model used by Barnsley by @Archerfield above is correct. However, it is one thing to rubbish one model, but quite another to come up with a better alternative, and that is where we are at. Every club has scrambled aboard our statistics based system because we were seen to be successful with it, but we need to balance our books and we must have a way of doing that. In the long term, markets will stabilise and the model will work better than it has over the last 2 years of COVID, but in the short term, we need something else. I believe that something else is a recapitalisation of the company, and the owners are the only ones for whom that could make sense.

 

It’s not just league clubs….