Col Ewe post huge losses !!!

[weststander]

Thought this would fit into this forum due to its financial nature.

Anyway I have been perusing the Inbreds website and its seems that its a good job theyve got a very rich owner as their accounts for the year to September 2009 show a huge operating loss of £4.7 million !!! Lets hope that Robbie has some very deep pockets as they're thinking that they will lose the same amount in the next set of accounts as well.

http://forum.cu-fcchat.com/viewtopic.php?f=5&t=11442&sid=a67a56db4a2662df1b26a8bcb3981bda

 

[Onion_Bag_Dave]

Not surprised at all. They need to sort it out, get rid of some of the over paid knob heads off the books. Or their sugar daddy is going to soon get sick of it.

 

[Jam_Man]

Theres the thing, we have to now prove to the taxman we are a sustainable business, but many clubs arent and are kept afloat by owners.

The big factor being our owners cant afford to run us at the moment...

 

[Beefy]

Ridiculous. Absolutely ridiculous.

 

[Medway Blue]

Had a pretty good idea that this has been the case for some time now with Colchester. With their awful attendances and the fact that they're paying some big wages and transfer fees now due to Cowling's financial backing, they are in reality posting big losses in their accounts. A lot bigger than our year-by-year losses.

Proves that the difference is some random millionaire deciding to take a punt on owning a football club. It could just have easily been us. Thing is, with Col U, it's all false. Cowling has no emotional attachment to Col U. He's a lifelong West Ham fan. Col U are just a toy to keep him from being bored, but what happens when he gets bored with them and decides to stop covering their huge operating losses? They'll be stuck without their sugar daddy and with massive expenditure. They would be ****ed.

Colchester United, and several other football clubs, are even more 'plainly insolvent' as businesses than Southend United are.

 

[Interpol Shrimper]

Proves that the difference is some random millionaire deciding to take a punt on owning a football club. It could just have easily been us. Thing is, with Col U, it's all false. Cowling has no emotional attachment to Col U. He's a lifelong West Ham fan. Col U are just a toy to keep him from being bored, but what happens when he gets bored with them and decides to stop covering their huge operating losses? They'll be stuck without their sugar daddy and with massive expenditure. They would be ****ed.

Colchester United, and several other football clubs, are even more 'plainly insolvent' as businesses than Southend United are.

Quick somebody show this post to Ronald.
James, you might find yourself as our last line of defence at the hearing next week with an argument as solid as that one!!!
Expect a call from Nigel Brunning by the end of the week ;)

 

[Medway Blue]

Quick somebody show this post to Ronald.
James, you might find yourself as our last line of defence at the hearing next week with an argument as solid as that one!!!
Expect a call from Nigel Brunning by the end of the week ;)

Whoops!

That wasn't meant to be a defence of Ron Martin.....more a snide dig at Colchester :)

 

[Jam_Man]

Had a pretty good idea that this has been the case for some time now with Colchester. With their awful attendances and the fact that they're paying some big wages and transfer fees now due to Cowling's financial backing, they are in reality posting big losses in their accounts. A lot bigger than our year-by-year losses.

Proves that the difference is some random millionaire deciding to take a punt on owning a football club. It could just have easily been us. Thing is, with Col U, it's all false. Cowling has no emotional attachment to Col U. He's a lifelong West Ham fan. Col U are just a toy to keep him from being bored, but what happens when he gets bored with them and decides to stop covering their huge operating losses? They'll be stuck without their sugar daddy and with massive expenditure. They would be ****ed.

Colchester United, and several other football clubs, are even more 'plainly insolvent' as businesses than Southend United are.

They would be screwed without Cowling, but they have him so they arent.

It always gets raised that he is a West Ham fan, but he still puts the money into Col U because he wants to. Its like saying Tilson wasnt a true Southend through and through type guy because he supported Leeds....

Your last point is key though, they are just as insolvent as us, yet as they are being kept afloat (and paying bills on time) they arent required to prove it like we need to.

So how will we?

 

[Firestorm]

I haven't seen the accounts (but i can feel a lunchtime anorak moment coming on) but If the accounts are showing a 4M + loss on the bottom line (ie shareholders funds) then Cowling would appear not to be putting the money in or is doing so in the forms of loans.

if However, the Loss is an operating loss but the Balance sheet is showing break even for example, the Cowling may well be actually giving the money.

The difference for Col U is with the first scenario, if he walks or has personal financial issues he may want the money back and Col U will have to find the funds.
With the second if he goes they will just have to tighten their belts (rather a lot it would seem)

 

[Beefy]

I haven't seen the accounts (but i can feel a lunchtime anorak moment coming on) but If the accounts are showing a 4M + loss on the bottom line (ie shareholders funds) then Cowling would appear not to be putting the money in or is doing so in the forms of loans.

if However, the Loss is an operating loss but the Balance sheet is showing break even for example, the Cowling may well be actually giving the money.

The difference for Col U is with the first scenario, if he walks or has personal financial issues he may want the money back and Col U will have to find the funds.
With the second if he goes they will just have to tighten their belts (rather a lot it would seem)

But with either situation the thing that could kill them, like it's killed us, is too many players on too much money with too many years left on their contract. It's difficult to tighten your belt with so many long-term financial commitments.

People talk about running football clubs like other businesses but player contracts make that very difficult. In other businesses if you get a significant drop in income you can lay off some of your high wage earners. In football though you don't have that option unless you can find someone to take over the contract.

 

[nevereatwhitesnow]

Hi Chaps,

A couple of points to note - Firstly the accounts are from the first year after relegation from Championship and at new stadium - After a poor season Williams was allowed to spend a small fortune on players in an attempt to avoid relelgation all of which on big money. Subsequently Williams was sacked, Lambert came in and again spent to big money hoping for the bounce back (it didn't come). - The net result of which is we had (still have but reducing) a massive squad of over 30 "first team" pro's on our books with quite a few on their final years of Championship Money.

In terms of the accounts themselves it's worth noting that the corporate side is not included as this is trading seperately and made a healthy profit.

As for Robbie, he's cutting the cloth now, Ward is being given less money to spend - we've just received the best part of £1 million in compensation for Boothy and Lambert and we are cutting the size of the squad - all very sensible.

At the same time he got one of his companies to sponsor one of the stands, and negotiated our biggest ever shirt sponsorship deal so things are certainly becoming more stable financially.

In terms of his "loyalty" he's decided rather than replacing our Cheif Executive (resigned months ago due to drink-drive conviction) he's given the General Manager more responsibility but, more tellingly has taken on additional responsibilities himself and bases himself at the stadium more frequently.

We are still in the process of building the training ground too which is another financial committment Cowling has taken on for the club.

In summary most Col U fans accept and agree we had been living way beyond our means and are grateful for Cowling. Robbie has now decided to stop the wholesale spening on new players but is still supporting the manager in getting in new players (2 signed so far, 3 trialists)

Yes, financially things weren't sustainable based on the accounts for 2008-2009 but thankfully Cowling is a mulitmillionaire who's companies are still making a profit year on year and he is happy to keep putting his own money into our club.

I'm certainly thankful we've got him rather than Martin!

 

[Beefy]

I'm certainly thankful we've got him rather than Martin!

No one is disputing that. The point is that had Cowling been impacted by the recession the same way that Ron Martin was (as a property developer who relied on bank lending) then Colchester could be in a similar situation to the one that Southend find themselves in.

Clubs at this level just aren't viable businesses - particularly ones who want to compete at the top of League One/Championship. They invariably have horrendous operating performances and the money to cover those losses has to come from somewhere.

If Cowling gets hit by a runaway tractor tomorrow, Colchester are ****ed.

 

[nevereatwhitesnow]

No one is disputing that. The point is that had Cowling been impacted by the recession the same way that Ron Martin was (as a property developer who relied on bank lending) then Colchester could be in a similar situation to the one that Southend find themselves in.

Clubs at this level just aren't viable businesses - particularly ones who want to compete at the top of League One/Championship. They invariably have horrendous operating performances and the money to cover those losses has to come from somewhere.

If Cowling gets hit by a runaway tractor tomorrow, Colchester are ****ed.

Thankfully Robbie has set everything up via additional share issue's (to himself) so we don't actually have ANY debt. If he walked away (or got hit by the tractor you mentioned - Ipswich scummers!) then the club would be sold at an agreed price and any new owner would get a debt-free club in a new stadium with a large squad - of course they'd need to either cut costs or invest their own money but hardly a doomsday scenraio for us.

I can understand why you lot would prefer to look and laugh at our situation and if it gives you some comfort fair enough. Find it strange with you in particular Beefy as you are so forgiving and understanding of your own Chairman yet seem to thrive on looking for the problems with ours?!

 

[Matt the Shrimp]

I can understand why you lot would prefer to look and laugh at our situation and if it gives you some comfort fair enough.

Because it is easier to laugh and point at the mote in your eye, than to deal with the beam in our own...

:'(

 

[Beefy]

I can understand why you lot would prefer to look and laugh at our situation and if it gives you some comfort fair enough. Find it strange with you in particular Beefy as you are so forgiving and understanding of your own Chairman yet seem to thrive on looking for the problems with ours?!

I'm not entirely sure where you get the idea that that is what I am doing.

Colchester United are a house of cards waiting to fall down. Your income doesn't come anywhere near your expenditure and regardless of whether or not you'd have any debt if anything were to happen to your Chairman you'd be wholely relient on a huge amount of money being continually invested into the business in order to meet the sort of cash obligations that Southend United have been struggling with. Football as a whole in the lower leagues is in a mess. It's not a 'Southend vs Colchester' affair (as you seem to be trying make my opinion look like). I'd apply the same analysis to both Clubs. What has happened here could happen to you (and I sincerely hope that it does not) and it wouldn't be because your Chairman had screwed you over or was bleeding the Club dry. It would simply be because your business model is fundamentally flawed, just as ours is.

 

[nevereatwhitesnow]

I'm not entirely sure where you get the idea that that is what I am doing.

Colchester United are a house of cards waiting to fall down. Your income doesn't come anywhere near your expenditure and regardless of whether or not you'd have any debt if anything were to happen to your Chairman you'd be wholely relient on a huge amount of money being continually invested into the business in order to meet the sort of cash obligations that Southend United have been struggling with. Football as a whole in the lower leagues is in a mess. It's not a 'Southend vs Colchester' affair (as you seem to be trying make my opinion look like). I'd apply the same analysis to both Clubs. What has happened here could happen to you (and I sincerely hope that it does not) and it wouldn't be because your Chairman had screwed you over or was bleeding the Club dry. It would simply be because your business model is fundamentally flawed, just as ours is.

I've been reading the posts on ShrimperZone for months and months and your posts seems to be universally supportive of Ron Martin and you don't seem to give much credibility to contrary views - apologies if that's not the case but it's my honest assessment thus far.

In terms of us - firstly bear in mind that they accounts are historical (as they always are) - since then a few of our highest wage earners have left (Sheringham, Hammond, Gerkin, Yeates, Jackson etc etc) - and our income has increased vastly from commercial activitiy (although this income isn't shown in the above accounts as is trading as a seperate company).

Whilst we have invested heavily in the squad in the last two years most players are on more reasonable League 1 salaries and we have generated good income through sales of some players (Hammond, Fox, Yeates, Gerkin et al), however the turnover of managers, Williams - Lambert - Boothroyd and now Ward has resulted in us having too large a squad. This is being worked on now and the budget cut for new signings until we've off-loaded some of the squad.

Our business model wasn't sustainable without Robbie's continued additional financial backing - however we are rapidly moving a position where it is much closer to being so.

I remember many posters slating the U's for being unambitous in getting 10k capacity stadium that was council owned, however that is part of a sustainable business plan - I can't see how a 22k capacity stadium that is owned by the companies of an unpopular debt-ridden chairman is going to assist with improving your business plan though? And make no mistake - the income from that new stadium when fully operating WON'T be going into SUFC coffers as Ron Martin's exit strategy will be far far more painful to you than what is currently happening

 

[Jam_Man]

Hi Chaps,

A couple of points to note - Firstly the accounts are from the first year after relegation from Championship and at new stadium - After a poor season Williams was allowed to spend a small fortune on players in an attempt to avoid relelgation all of which on big money. Subsequently Williams was sacked, Lambert came in and again spent to big money hoping for the bounce back (it didn't come). - The net result of which is we had (still have but reducing) a massive squad of over 30 "first team" pro's on our books with quite a few on their final years of Championship Money.

In terms of the accounts themselves it's worth noting that the corporate side is not included as this is trading seperately and made a healthy profit.

As for Robbie, he's cutting the cloth now, Ward is being given less money to spend - we've just received the best part of £1 million in compensation for Boothy and Lambert and we are cutting the size of the squad - all very sensible.

At the same time he got one of his companies to sponsor one of the stands, and negotiated our biggest ever shirt sponsorship deal so things are certainly becoming more stable financially.

In terms of his "loyalty" he's decided rather than replacing our Cheif Executive (resigned months ago due to drink-drive conviction) he's given the General Manager more responsibility but, more tellingly has taken on additional responsibilities himself and bases himself at the stadium more frequently.

We are still in the process of building the training ground too which is another financial committment Cowling has taken on for the club.

In summary most Col U fans accept and agree we had been living way beyond our means and are grateful for Cowling. Robbie has now decided to stop the wholesale spening on new players but is still supporting the manager in getting in new players (2 signed so far, 3 trialists)

Yes, financially things weren't sustainable based on the accounts for 2008-2009 but thankfully Cowling is a mulitmillionaire who's companies are still making a profit year on year and he is happy to keep putting his own money into our club.

I'm certainly thankful we've got him rather than Martin!

Thats the key point, if he walks, you are screwed as whilst you may not have any debts I doubt your income is enough to sustain your wage bill. Forgive me if thats incorrect, Im not one for looking at accounts :)

Dont take this as us laughing at Col U, its just highlighting that the problems we have are problems every club has and shows the importance of having additional financing, which begs the question how we are meant to demonstrate to the courts we are a sustainable business, when most clubs arent....

 

[Jam_Man]

I've been reading the posts on ShrimperZone for months and months and your posts seems to be universally supportive of Ron Martin and you don't seem to give much credibility to contrary views - apologies if that's not the case but it's my honest assessment thus far.

In terms of us - firstly bear in mind that they accounts are historical (as they always are) - since then a few of our highest wage earners have left (Sheringham, Hammond, Gerkin, Yeates, Jackson etc etc) - and our income has increased vastly from commercial activitiy (although this income isn't shown in the above accounts as is trading as a seperate company).

Whilst we have invested heavily in the squad in the last two years most players are on more reasonable League 1 salaries and we have generated good income through sales of some players (Hammond, Fox, Yeates, Gerkin et al), however the turnover of managers, Williams - Lambert - Boothroyd and now Ward has resulted in us having too large a squad. This is being worked on now and the budget cut for new signings until we've off-loaded some of the squad.

Our business model wasn't sustainable without Robbie's continued additional financial backing - however we are rapidly moving a position where it is much closer to being so.

I remember many posters slating the U's for being unambitous in getting 10k capacity stadium that was council owned, however that is part of a sustainable business plan - I can't see how a 22k capacity stadium that is owned by the companies of an unpopular debt-ridden chairman is going to assist with improving your business plan though? And make no mistake - the income from that new stadium when fully operating WON'T be going into SUFC coffers as Ron Martin's exit strategy will be far far more painful to you than what is currently happening

10,000 is unambitious and instantly restricts how many tickets you sell which does benefit the club.

22,000 is well above what we need obviously now, but anything under 18,000 would have been a disappointment for me.

As for how the stadium revenue will benefit us who knows, we haave been told it will be but weve been told lots of stuff before and we want clarification on that ourselves. However surely theres more chance of it benefiting us than one owned by the council?

 

[Beefy]

I've been reading the posts on ShrimperZone for months and months and your posts seems to be universally supportive of Ron Martin and you don't seem to give much credibility to contrary views - apologies if that's not the case but it's my honest assessment thus far.

In terms of us - firstly bear in mind that they accounts are historical (as they always are) - since then a few of our highest wage earners have left (Sheringham, Hammond, Gerkin, Yeates, Jackson etc etc) - and our income has increased vastly from commercial activitiy (although this income isn't shown in the above accounts as is trading as a seperate company).

Whilst we have invested heavily in the squad in the last two years most players are on more reasonable League 1 salaries and we have generated good income through sales of some players (Hammond, Fox, Yeates, Gerkin et al), however the turnover of managers, Williams - Lambert - Boothroyd and now Ward has resulted in us having too large a squad. This is being worked on now and the budget cut for new signings until we've off-loaded some of the squad.

Our business model wasn't sustainable without Robbie's continued additional financial backing - however we are rapidly moving a position where it is much closer to being so.

I remember many posters slating the U's for being unambitous in getting 10k capacity stadium that was council owned, however that is part of a sustainable business plan - I can't see how a 22k capacity stadium that is owned by the companies of an unpopular debt-ridden chairman is going to assist with improving your business plan though? And make no mistake - the income from that new stadium when fully operating WON'T be going into SUFC coffers as Ron Martin's exit strategy will be far far more painful to you than what is currently happening

I'm not pro-Ron Martin and I'm not anti-anyone else. I just acknowledge that there's a bigger issue at work here than us being asset-stripped by a Satanic Property Developer. We have a business model which is entirely dependent on outside support in order to meet our obligations, because we haemorrage cash. You have the same business mode as us. You haemorrage cash too and you are even more dependent on outside support. The accounts may be historic but I'd wager a lot of money that the next set of published figures show another huge loss as well. You aren't "rapidly moving" towards a position where you're sustainable without the help of your Chairman because the sort of level of expenditure which would have you breaking even on your income would have you competing with a much lower wage budget than that which you obviously operate.

Your last paragraph is nothing more than speculation. And even if it is right (which it could well be and I've never argued anything else) I don't see what relevence it has to a discussion regarding your accounts.

 

[Medway Blue]

10,000 is unambitious and instantly restricts how many tickets you sell which does benefit the club.

22,000 is well above what we need obviously now, but anything under 18,000 would have been a disappointment for me.

As for how the stadium revenue will benefit us who knows, we haave been told it will be but weve been told lots of stuff before and we want clarification on that ourselves. However surely theres more chance of it benefiting us than one owned by the council?

The more involved Sainsbury's get in this project, the less money this club will see from the stadium revenue. Sainsbury's are now down as 'co-developers' of the Fossett's project. Their involvement is starting to go beyond just buying RH from Martin. As co-developers, surely they're going to want to see a return? Maybe that return will be a proportion of revenue from the new stadium, so reducing SUFC's benefit.