In normal circumstances, the club will lose around 500k pa if it budgets to be trying to get promoted from this division or have a reasonable chance of staying up in the 3rd tier. Obviously that will be lower if we cash in on a player, have a decent cup run etc.
I guess around half of the 'debt' was accrued because the budget was increased massively around the time of the Chinese involvement. Of course, that money didn't materialise so the owners we have had to step back in and fund the losses. Then the covid season would have added more pressures...
The 'issue' with the debt is that it is so high because of the Chinese saga. Assuming money was made from the sale of the club, and I have no reason to not believe that was the case, then I guess it comes down to whether or not you believe that ethically is it right or wrong. To be honest, I don't know enough 'detail' to make that judgement (I don't think anybody really does) but even if I did I would probably be fairly blaze about it simply because its a business deal and its got little to do with me. Would I have rather the (6million plus) have been pumped back into the clubs coffers and spent on a new stand/players etc? Yeah, of course! Im sure we all would. Would I rather the owners write off the losses each year instead of lumping more debt via loans? Yeah, again of course I would. Would I like us to have owners who are here for the fun, passion and motivation to get us up the leagues whilst losing millions of their own cash? Yep, too bloody right I would!!
However, and being totally honest. If I ever make enough cash to buy the Cobblers (highly unlikely!!
) , knowing the little bit about tax etc that I do (I run my own business), my 'investment' would be in the form of loans. Simply because its considerably more tax efficient.
That's why most clubs are in massive debt. I think we as fans, are most often a bit to idealistic. We could propel up the leagues if we had a rich owner, but I will never be convinced that we could do it 'organically'. I reckon it would cost someone a minimum of 30million quid to take us to the next level (top end league1/bottom end championship) and be there competing financially with those types of clubs. The likes of Hull, Barnsley. I wouldn't say Sunderland or Ipswich because clearly they are boxing below their weight. On the flip side, Luton are boxing way above their weight (but I think are losing millions p.a doing so).
Bottom end championship club = circa 15million minimum wage bill. 8 times roughly ours. And about 9million more than our turnover. Think about how much it would cost to put in infrastructure and a team on the field that could generate that type of wedge. And that would only move us up around 24 places in the football league. Unless we had a one off season, like Wycombe did or Barnsley did last season (when they nearly made it to the prem).
We could go round and round in circles here and I think we will!
That doesn’t appear to be the case though. Whilst it is more tax efficient to do things that way it appears there is a significant gap between turnover and spending and most owners don’t have a realistic plan for the club to pay that money back. There are a couple of clubs that seem to be bucking the trend and they are continually held up as examples to demonstrate that we will be fine. What needs to be accepted is that the overwhelming majority don’t get close to breaking even. There has to be more in the pipeline than this otherwise we will continue to limp along under the spectre of insolvency at best, that is a statistical fact. Once the land deal is done and the owners leave we currently have no method of financing the gap between our operating costs and our turnover. Hoping there is some overspend or discrepancy in the accounts to address this issue or expecting that the dormant masses will finally pour through the turnstiles to save us are unlikely solutions. As is clinging onto the one club that breaks even as a comfort blanket, none of these can realistically mitigate the very real risk we face. There is nothing wrong with demanding a stadium to be proud of, or a minimum of league one football. However, there are leagues going the other way on the football ladder and it is currently equally possible that we are heading there, arguably more so.