Minority Report 2019-20 Annual Accounts

These notes should be read in conjunction with the accounts. To access the filing history of Barnsley Football Club Limited at Companies house, the web address is https://beta.companieshouse.gov.uk/company/04573250/filing-history . Select Full accounts made up to 31 May 2019, from the list.


The page numbers in the following report relate to the page numbers in the accounts.


The first thing to say is that Barnsley Football Club have given a lot more information in their accounts than they did the last time that they played in League 1 (under Patrick Cryne’s ownership).


Page 9 – Income Statement for the year ended 31 May 2019

Turnover reduced by £6,196,433. Note 3 analyses this reduction as follows

Football League distributions -£5,522,975

Match day revenue (lower revenue from ticket sales) -£514,097

TV and broadcast revenue -£61,923

Merchandise sales -£5,018

Sponsorship and advertising revenue +£46,866

Other Receipts -£139,295


Cost of sales are costs that are directly attributable to turnover, and which vary in a direct relationship with turnover. These reduced by £2,887,474. For a football club, this heading will include player pay. According to note 4, total pay of all employees and directors fell by £2,458,975 and a substantial part of that fall will be a fall in player pay. This is underlined by the increase in directors’ remuneration of £143,008.


Operating Loss is the loss that the club makes on normal trading, that is, trading before taking account of player sales and purchases. Football clubs in the lower leagues would expect to have to sell players on a regular basis to balance their books. Nevertheless, the losses before player trading increased by £3,389,952 in the year to a total of £4,793,108.


The profit from Player trading increased by £129,833 as compared to last year to a total of £1,356,812. Readers need to combine note 7 and note 11 to understand what is happening. First note 11. When the club buys a players, his transfer fee is capitalised to Intangible Fixed Assets. His fee is then written off against profit over the term of his contract. For example, if a player was signed for a transfer fee of £1 and a contract term of 4 years, the fee would be written off at a rate of £250,000 per year. If that player was sold after 2 years for £2m, then the profit on the sale of the player would be £1.5m (Selling price £2m less original fee not yet written off to profit £500,000). So note 11 shows the original cost of players sold in the year was £3,266,206 and the total amount of those fees written off to profit in previous years was £1,942,269 leaving a net current value of those players at the start of the season of £1,323,937. Note 7 shows the profit on player sales to be £3,801,551, so the total selling price of the players was £5,125,488. I will leave it to others to allocate names to this total fee, but I can only remember two players being sold in this period (Tom Bradshaw to Millwall and Brad Potts to Preston North End)

Note 11 lists additions in the year totalling £1,278,000 and the Review of Business (page 2) lists only 2 players purchased (Cauley Woodrow from Fulham and Mike Bahre from Hanover 96), but of course, these fees have been capitalised and are part of the player registrations amortisation of £2,379,326, which along with £65,413 for transfer levies etc has been offset against the profit on player sales calculated above, to arrive at the net figure of £1,356,812, also shown above.


After accounting for all of these above figures, the club Loss for the Financial Year was £3,436,296 as compared to £176,331 last year. There was no share dividend paid or declared.


Page 11 – Balance Sheet


I have already explained above Intangible assets (see above), so I will begin this section with Tangible assets (see note 12). Assets have a life exceeding 1 year, so they are written off against profits over their expected lifetime, or the term of the lease in respect of Freehold Property. Perhaps others will know what Freehold Property was acquired during the year for £78,730. Depreciation or all assets written off to profit in the year amounted to £119,845, against a total cost of additions of £273,709.

There was a large increase in Stock for resale of £132128.

Debtors increased by £1,752,203. Note 14 shows that by far the biggest reason for the increase was the increase in Transfer fee debtors (£2,504,418, which by coincidence, because the figures are unrelated, is almost 50% of the total selling price of players sold in the year as calculated above).

Although Cash at bank and in hand has fallen by £2,959,731 as a result mainly of having to fund losses (see Cash Flow Statement and note 1), the club still has adequate cash resources to fund day to day trading (£2,648,573).

Creditors increased by just £46,926. Note 15 shows that the increase in Transfer fee creditors was £128,985 to £1,426,485, and that considerably more was owed to BFC than was owed by BFC.

There was no increase in Share capital and Retained earnings now shows an accumulated loss since formation of the company in 2002 of £350,727.


Under the heading, other interesting bits and pieces, Note 4 lists Directors Emoluments and Note 25 lists Related Party Disclosures.

 

For info, there's some additional discussion in the other thread too, starting from this post:

http://barnsleyfc.org.uk/threads/bfc-accounts-up-to-31-may-2019-submitted-today.289256/#post-2436087

 

The balance sheet position being greater than £5.1m means that they can't file small company accounts. This was not the case during the years when the club were in league one when Patrick was the owner.

Our current owners are not choosing to be more revealing rather they are forced to. This may well change in future years if the asset figure falls below £5.1m.

 

Clearly my current knowledge is very much out of date. Thanks for the information.

 

By the way, there were a couple of things that I purposely left dangling in my original report, but no-one has so far picked up on them. What do you reckon to the investment in Freehold Property. It is only £79k so far, but it could be the planning for something bigger. The second thing is in note 25 Related Party Disclosures. It relates to purchases from entities with control, joint control or significant influence over the entity and is for £65k. I was wondering if these might be the fees payable in respect of James Cryne's software project. There is also another £20k payable to another related party.

 

I’m thinking this is BFC data services. By the way I know we discussed it last time but the debtors to Directors of Oakwell Holdings are exactly equal to the share premium account. These guys got the club cheap. If it doesn’t work out I do wonder what james will do.

 

It is true that based only upon the Balance Sheet at the time, the club was cheap, but the club is a money pit. Based upon its future prospects, the club was very expensive.

 

It’s only a money pit if you put your own money in. These guys can have a spin of the wheel and then leave James the keys if it doesn’t work out.

 

Doesn't James have the same option?

 

The club bought property in Gateway Plaza and a house near Oakwell.

 

But isn’t every football club a money pit? As said above, not for our owners as it’s not their money they’re gambling with now is it but the clubs from revenue gained from player sales.

These owners are next to pointless in my eyes as we will never progress farther than we are already in this guise. Waste of snap.

 

Can you explain what you mean by this mate, I think I understand your point but not 100%cheers

 

Thanks to Red Rain and Archerfield for this commentary. My knowledge of accounts is even more out of date, going back 35 years to the five years I spent in banking! However, it seems to me that these results offer no immediate cause for concern regarding the solvency of the club - even in a relegation situation - as things look pretty much under control, albeit to some extent depending on the continuing interest of the owners in the 'project'. However, neither do they offer any great hope of new funding streams or greater investment in the club in any attempt to move it forward. Dane Murphy's interview suggested that while the club would hope to hold on to the 'fab four' (my term) the directors, being businessmen, would naturally listen to any offers. When you consider that only three of Coventry/Rotherham/Portsmouth/Sunderland/Peterborough/Ipswich/Doncaster will escape League One this season, our chances of doing so without one or more of Woodrow, Mowatt, Brown or Chaplin would be far from certain.

 

Yeah cheers both

 

At the time of the purchase lots of figures were suggested at the price the consortium had paid for the club.

The accounts showed that the outstanding debt to Patrick was converted to the share premium account, effectively written off.

Looking at Oakwell holding accounts this suggests that the debt plus £1m pa for five years was the actual price paid for 80% of the club. So just over £11m.

Excluding any value ascribed to the playing staff the club had assets of £5m, mainly cash. So stripping that off purchase price the club (80%) was effectively bought for the repayment of Patrick’s debt, £6m.

That’s why I think they have a bit of a free hit.

 

Thanks mate

 

Did we fall within the restrictions set of SCMP?

 

To be honest, this constant argument about the owners and their fitness and suitability for ownership has all seemed a bit pointless recently. No-one ever changes their position and the whole thing spins round and round in the washing machine. I resolved some months back not to become involved again. However, for the very last and final time, this is my position.

The only money to be made in football is going to be made at the top of the Premier League. Every owner who wants to make money out of the sport realises that and is spending huge fortunes chasing that dream. The Championship is where the competition is fiercest, and where money is being thrown away by the richest in a pointless attempt to gain a seat at the top table, and become part of the club that allows owners to recoup some of their investment. Until that point, the only way that an owner can obtain a return on their investment is to sell to another fool who thinks he knows better than the rest. Someone else who thinks he has the magic formula for football success. That, or the vanity owner who simply wants ownership to prove to the community where he grew up that he has arrived. In short, the only people making money out of football are the players, and the more talented a player is, the more he is able to hold a gun to the head of an owner.

Would I want to be caught between a rock and a hard place? Would I want to be caught between greedy players, anxious to maximise their short career earnings whilst they can, and fans hungry for success and ambitious for their football fix, but unwilling to pay the price an owner must in order to try to guarantee it. I certainly would not, and that makes me sympathetic towards those caught like rats in that trap. A trap that was set by Mr Cryne who had learned the hard way that investing in football brings nothing but unhappiness and a dwindling fortune spent trying to please people who will never be satisfied.

I realise that this is not the answer that you expected or wanted, but the BBS is a home for fans who all have the same view. That view is summarised in the statement, I want success and I want it now. I have constantly asked others to show patience. I have constantly said that going down the same route as every other billionaire owner and throwing money at the problem is a ridiculous way to proceed given the evidence of the losses and debt in the Championship, but no-one wants to listen. When no-one wants to listen, the only sensible course of action is to stop talking. I am just glad that I am not caught in the trap.

 

Problem is that you can be financially self sufficient in the conference in a smaller stadium with only the die hard supporters turning up. I know it's great to rationalise things but it makes me question why bother?

 

Just read that last paragraph back to yourself Mr Rain.

Then remember the time you said you don't post in a condescending manner.

Then read the last paragraph again.

As for your general point? It is mostly valid - as stated on here countless times, nobody wants to see us go bust. The word 'Bury' has been mentioned on here until we're blue in the face.

But there is certainly a middle ground - going bust or not spending anything are not the only two options.

As stated before, I firmly believe that instead of signing 14 or 15 (mostly) unproven gambles, we should have signed 6 or 7 players of relative quality, supplemented by the youngsters we have. Our squad is massive. We have over 35 professionals. That's insane for a squad of our size. Don't freeze players out. Put Cavare/Pinillos/Thiam on the bench if needed. Don't buy two keepers of similar quality. Buy one and have Walton as back up. Don't buy Anderson/Sibbick/Diaby/Halme/Sollbauer. Buy two centre halves and a young back up. Don't buy Ritzmaier/Bahre/Thomas - buy one attacking midfielder to play with Mowatt and use Mcgeehan and Dougall as back up.

Our owners probably have spent a fair amount in replaceming what has left. But their idiocy in trying to spread that cost across many players in the hope that there'll be a gem in there has basically cost us relegation.