The loss is one thing, but i'm confused by the "related party transactions" on the last page.
NT Ventures debt seems to have disappeared. B-d-J would seem to have loaned another £2.8m to the Football Club. Sole Intention is NLQ's vehicle so the club owes him £2.5m despite the fact he bought 25% of Ventures.
Finally The Football Club "lent" its wholly owned subsidiary CDNL £1.65m
So now the club owes over £15m to its creditors whilst being owed £3m by its debtors. Net £12m in debt?
Some of the losses already mentioned relating to other clubs are quite frightening.....yet football carries on! Someone like Bournemouth, buying players but playing in front of 11000 gates, its easier to see why. Yeovil though.... how the hell can a bang average National League side lose that amount of money in one year?
My understanding of the total debt and related parties transactions is as follows:
Total debt owed to DB/KT as at 30th June 2023 was £7,346,025
Total debt owed to DB/KT/NLQ as at June 30th 2024 is £11,436,025.
In other words the total amount owed to the owners has increased by £4,090,000.
However, £1,653,000 was paid to the clubs subsidiary CDNL so it can be fairly argued that the net debt to the owners was £9,783,025 if you assume that CDNL are good for the money that they owe the club. [The increase in net debt broadly matches the annual losses].
It is also worth noting that the accounts say there is a capital commitment of £4.3m to the completion of the East Stand.
So the total debt owed to our owners is £15.7m gross, or £14m net as at 30th June 2024.
As we are now approaching the end of the financial year for 2025, it is probably reasonable to add another £1m - £2m to this debt to cover the trading losses for this year.
The general position of football clubs in the EFL and lower down is clearly un-sustainable in the short to medium term.
I don't think Sky TV, the football regulator etc will make any difference to the basic problem as historically all extra revenue finds its way to the players.
Clubs will feel that they have to compete with other teams in their division - so the only way to stop these losses is to design a set of rules that MAKE clubs break-even.
This could be done by a relatively simple set of rules but whether supporters would accept the implications for their own particular club I doubt.
But if the EFL and the new regulator don't get to grips with this problem URGENTLY, then what's happening at Reading will happen more widely very quickly.
Surely most football supporters must realise that there is a finite supply of very wealthy people who want or can afford to fund EFL clubs?
The Cobblers have not had to address this problem now, because of the owners anticipation of the revenue from the industrial land around Sixfields.
Exeter City FC, a supporter owned club, show that finances can be organised in a way to at least breakeven, but they still rely on the sale of players to do so. They say they have a 'base' budget that will allow them to break-even without the sale of players.
I hope they never have to demonstrate that this is the case as I fear greatly for their playing budget if they have to do so.
So, good news for the Cobblers is attendances are up, revenue is up and the East Stand completed.
Bad news is that we lost £2m and owe our owners a fortune.....football in general can't carry on like this for much longer..
NB: I've used the net debt figures in the analysis because they are most easily identifiable and relate directly to the money that the owners have put in.
It's reasonable to argue that my figures above over simplifies things because the investment in the East Stand (say £6m when completed) creates an asset class rather than say the rest of the money which has supported losses.
This is an entirely fair argument. On the other hand we will still owe the owners say c£14 - £16m by the completion of the stand and this year's losses.
[Something that I'm curious about, and I wonder if someone knows the answer, is why Sixfields Stadium is valued so low? Is it because of depreciation and/or the fact that it is leasehold?
I would think that there is an argument (all be it for another day) that Sixfields is worth considerably more than it is currently valued at? This does affect the view that you might take regarding the club's value to a new buyer?]
