Coventry City - £3.3m loss

Coventry City filed their accounts last week showing a loss of £3.3m for the year to May 2020. It’s worth noting that these figures are for their promotion season from League one and really highlight the gulf in revenue between that and the championship driven by the central distribution.

A few numbers from their accounts;

1 Overall turnover £5.1m (BFC over £14m)
2 Wages and salaries £6.5m (BFC over £11m)
3 Operating loss £5m
4 Interest costs £2.3m
5 Profit on player sales £3.8m

So in a year when the club makes close on £4m on player sales they still lose £3.3m and in that have to pay £2.3m in interest on debt of £20m.

Post year end and in May 2021 they took out an interest free loan of £3.2m to help pay ongoing running costs. A further £700k of player bonuses payable on promotion are excluded from these numbers as promotion was confirmed post year end.

 

relatively similar to the loss we made in our promotion year I think, though they do have significant interest costs which we don’t have.... yet.

 

It is the interest on the loan which basically brings about the deficit ,thus highlighting the plus side to the business model our new owners have adopted, I know some of our fans crave for big investment in players but to do that we would incur a large debt which is shown in the Coventry balance sheet to be a headache , obviously the return on the investment ultimately has to be promotion but it is a huge gamble & in my eyes I think the more prudent safe approach is the best way for the Reds , others may disagree .

 

i think you should watch our balance sheet, how fast it’s draining should be a concern to all.

 

It goes to show how important it is to be in the top two leagues. Not enough Premier League cash trickles down to League 1 and League 2 teams. Teams in those leagues should get more TV cash/coverage so they don't struggle so much.

 

Its great to see how a well run club like ours can achieve top six status without cheating the system whilst employing a fantastic head coach and a squad full of talented young players some of who I'm sure will play at Premiership level one day.

 

if all the clubs are run like ours though we'd no longer have the edge.

 

Would you care to expand. Genuine question.

I expect a deficit on next years announced accounts. Largely due to the knock on effect of a full seasons lockdown. Which given last seasons ST sales.( In comparison to this coming seasons sales and the hope of casual income ) will I believe. show a substantial loss. (Peanuts, in comparison to other clubs, who have probably taken bigger slices of the loan, from the Premier league)
2023's announcement on this coming season. will be a more accurate reflection of how the club are performing. Financially.

 

Where does one get an interest free loan? I wouldn't mind one of those myself. Invest it in dividend shares. The reason I bring this up is it's almost like it is a gift to the club, which would surely have FFP loophole issues.

 

Not this coming season though I actually want to see him and Mads play at Oakwell in person!

 

@Archerfield when are the accounts of Derby County and Sheffield Wednesday due?

 

The latest accounts weren't for this last season, they won't be released until next year, they were from the season before. We lost millions from the balance in the previous two seasons.

 

The year 2024, but don't hold your breath

 

Wednesday’s next accounts are for the period to 31st July 2020, the filing deadline, allowing for the three month extension, is 31 July 2021

Derby haven’t filed June 2019 accounts so they are almost a year late in filing.

 

That is from the EFL and available to all clubs.

 

Sheffield Wednesday moved their year end to 31 July when they were trying to fiddle their way around FFP, so they are now out of step with everyone else. During COVID conditions, Companies House extended filing to 12 months after your year-end (from 9 months), so in theory, they are due by 31 July, however, the last thing that a company wants to do, if it is in as much trouble as we think Sheffield Wednesday is, is file its accounts.

 

I touched on this when archerfield did his commentary. We’ve burned through the buffer we had when Patrick sold the club and we now have negative retained earnings. It’s largely gone under the radar, but covid, the wilks costs, and likely write offs of expensive signings that haven’t worked out will increase losses and eat up cash.

We don’t know what these owners will do when we run out of cash. At Nice they took out a very strange loan at exorbitant rates and that precipitated the protests.

look at the balance sheet that Patrick left after he capitalised some of his losses and look at it now in the accounts which are already 12 months out of date.

 

There should be numerous concerns. Using BFC to settle debt as part of the takeover ‘bonus’ drained more cash last year than covid losses. The year before we lost over £3m.

our retained earnings are negative.

these should all be huge concerns and shouldn’t blindly follow the pretence ‘we’re a well run club’

 

What we haven't done as yet, and you haven't eluded to, is take advantage of what are now very saleable assets. I don't pretend to have the business acumen that you appear to have. But I don't see the picture as black as you seem to think it is.
Also other financial experts appear to show us as a/the leading light on how to run a football club. I don't know of any other club that recieved better reviews.