City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

[dasblues]

What about Chelski then, they're in debt to the tune of over £1billion and they aren't exactly worth much.

Chelsea aren't very open and transparent so they dont publish their financial statements online ie we cant see their balance sheet to establish weather the £1bn you quote is a liabilty or equity

Unless you know different?

If I understand it correctly the debt was moved to the holding company and is interest free but would have to be repaid if notice given.

I would imagine that this would be still part of the consolidated group statements though. I can be arsed paying the £1 to companies house to find out ...!

 

[dasblues]

What about Chelski then, they're in debt to the tune of over £1billion and they aren't exactly worth much.

Chelsea aren't very open and transparent so they dont publish their financial statements online ie we cant see their balance sheet to establish weather the £1bn you quote is a liabilty or equity

Unless you know different?

It's a liability, owed to Roman Abramovich by their holding company, whose financial statements are available from Companys House.

Thanks , I'm guessing you have paid the fee to get access to the accounts then?

Or is this information online?

 

[aguero93:20]

Chelsea aren't very open and transparent so they dont publish their financial statements online ie we cant see their balance sheet to establish weather the £1bn you quote is a liabilty or equity

Unless you know different?

It's a liability, owed to Roman Abramovich by their holding company, whose financial statements are available from Companys House.

Thanks , I'm guessing you have paid the fee to get access to the accounts then?

Actually no, I'm taking somebody else's word for it who has but I've seen a printout, it's £958m to be exact to Abramovich as well as some smaller liabilities.

 

[dasblues]

It's a liability, owed to Roman Abramovich by their holding company, whose financial statements are available from Companys House.

Thanks , I'm guessing you have paid the fee to get access to the accounts then?

Actually no, I'm taking somebody else's word for it who has but I've seen a printout, it's £958m to be exact to Abramovich as well as some smaller liabilities.

So its a liabilty which carries no finance costs and had no settlement date......sounds a bit like equity to me.

Its probably some kind of insurance policy for him in case he needs to get out at some point...

 

[aguero93:20]

Thanks , I'm guessing you have paid the fee to get access to the accounts then?

Actually no, I'm taking somebody else's word for it who has but I've seen a printout, it's £958m to be exact to Abramovich as well as some smaller liabilities.

So its a liabilty which carries no finance costs and had no settlement date......sounds a bit like equity to me.

Its probably some kind of insurance policy for him in case he needs to get out at some point...

It sounds like equity but it's not equity, precisely because he can get his money back. So it's debt and it leaves Chelsea in an unhealthy position financially. If he didn't want an opportunity to get it back, he'd just turn it into equity as Mansour has done with City.

 

[dasblues]

Actually no, I'm taking somebody else's word for it who has but I've seen a printout, it's £958m to be exact to Abramovich as well as some smaller liabilities.

So its a liabilty which carries no finance costs and had no settlement date......sounds a bit like equity to me.

Its probably some kind of insurance policy for him in case he needs to get out at some point...

It sounds like equity but it's not equity, precisely because he can get his money back. So it's debt and it leaves Chelsea in an unhealthy position financially. If he didn't want an opportunity to get it back, he'd just turn it into equity as Mansour has done with City.

Yes, I agree..although he would get his money back anyway if he sold the company on to someone else, or did an IPO

I would be worried about this if I was a Chelsea supporter....

 

[blueparrot]

<a class="postlink" href="http://www.independent.co.uk/sport/football/premier-league/more-than-1billion-in-12-years--roman-abramovichs-backing-for-chelsea-10248343.html" onclick="window.open(this.href);return false;">http://www.independent.co.uk/sport/foot ... 48343.html</a>

"Roman Abramovich’s interest free-loan to Chelsea has exceeded £1billion for the first time, according to the latest accounts for Fordstam, the company through which the Russian billionaire owns the club.

The loan from Abramovich now totals £1,041,243,000 which is, according to Fordstam’s accounts up to June last year, repayable at 18 months’ notice. That amount was up from £984m from the accounts of the previous year.

There is no suggestion that Abramovich, who has owned the club for almost 12 years, is seeking repayment of his loan within the near future. In the accounts’ strategic report, the company secretary Paul Heagren notes that “the company has received confirmation from the ultimate controlling party that sufficient funds will be provided to finance the business for the foreseeable future”.
Chelsea announced in November a profit of £18.4m in the club’s financial results up to the end of June last year. The accounts for Fordstam encompass the group’s additional assets including a hotel management company, the health club behind the stadium and the club’s digital media company as well as the football club itself. Fordstam reported profits of £14.2m.

There was a profit on player trading of £65.1m which included the deals to sell Juan Mata, Kevin De Bruyne and David Luiz, all of which went through before the end of June.
Since these accounts were compiled, Chelsea have sold Andre Schurrle and Ryan Bertrand in January for around £34m, and acquired Juan Cuadrado from Fiorentina for £27m.

In the Fordstam accounts, the club values its total playing staff at £353m, a dramatic increase from the £272.2m the previous year. The accounts also include £13.7m of investment on facilities at Stamford Bridge and Cobham. The Cobham training ground that Abramovich acquired soon after taking over the club in 2003 and turned into one of the leading facilities in the game has already been extended and improved. The group made £2.9m in charitable donations.

The Fordstam accounts also show that Abramovich spent £1m last season on his executive box, one of the premium Millennium Suites in the West Stand from which he watches games at Stamford Bridge.

“These sales were made at current market rates in line with other corporate hospitality box sales,” the accounts say.

 

[mrtwiceaseason]

http://www.independent.co.uk/sport/football/premier-league/more-than-1billion-in-12-years--roman-abramovichs-backing-for-chelsea-10248343.html

"Roman Abramovich’s interest free-loan to Chelsea has exceeded £1billion for the first time, according to the latest accounts for Fordstam, the company through which the Russian billionaire owns the club.

The loan from Abramovich now totals £1,041,243,000 which is, according to Fordstam’s accounts up to June last year, repayable at 18 months’ notice. That amount was up from £984m from the accounts of the previous year.

There is no suggestion that Abramovich, who has owned the club for almost 12 years, is seeking repayment of his loan within the near future. In the accounts’ strategic report, the company secretary Paul Heagren notes that “the company has received confirmation from the ultimate controlling party that sufficient funds will be provided to finance the business for the foreseeable future”.
Chelsea announced in November a profit of £18.4m in the club’s financial results up to the end of June last year. The accounts for Fordstam encompass the group’s additional assets including a hotel management company, the health club behind the stadium and the club’s digital media company as well as the football club itself. Fordstam reported profits of £14.2m.

There was a profit on player trading of £65.1m which included the deals to sell Juan Mata, Kevin De Bruyne and David Luiz, all of which went through before the end of June.
Since these accounts were compiled, Chelsea have sold Andre Schurrle and Ryan Bertrand in January for around £34m, and acquired Juan Cuadrado from Fiorentina for £27m.

In the Fordstam accounts, the club values its total playing staff at £353m, a dramatic increase from the £272.2m the previous year. The accounts also include £13.7m of investment on facilities at Stamford Bridge and Cobham. The Cobham training ground that Abramovich acquired soon after taking over the club in 2003 and turned into one of the leading facilities in the game has already been extended and improved. The group made £2.9m in charitable donations.

The Fordstam accounts also show that Abramovich spent £1m last season on his executive box, one of the premium Millennium Suites in the West Stand from which he watches games at Stamford Bridge.

“These sales were made at current market rates in line with other corporate hospitality box sales,” the accounts say.

Is it me but how come Chelsea can loan another £57m and have no ffp sanctions ?
Why carnt the sheikh loan the money to city then. ?
Or is that to simplistic ?
How can the post £18.4 million profit if they are just basically putting the debt onto their overdraft ?

 

[Prestwich_Blue]

Re: City & FFP (continued)

It's amazing isn't it.

Gross debt is £400mill and rising, and UEFA aren't interested.

Their gearing ratio (debt / debt + equity) is still within an acceptable tolerance level of 50% though, so shouldn't be a concern.

The debt situation is a complete red herring that people use to try and beat them with. It means fuck all.

In business it is widely accepted that debt is the cheapest form of finance (beween debt & equity) as you get tax savings on the debt interest.

Businesses that operate with no debt are not pursuing the best strategy to maximise shareholder wealth.

You're right that their gearing as it stands probably isn't a problem but you've made an assumption about their debt which is completely wrong.

Most businesses use debt to invest in something that creates a positive cash flow on which the return on investment exceeds the cost of the debt. So if you can borrow at 5% and get a return of 7% then it's worth doing.

Arsenal have taken on debt to build their stadium and have paid for it via higher match day revenues and naming rights. That's a classic and acceptable use of debt, as you described.

United's debt is not there to produce a return for the club but for the owners. They borrowed money to finance the purchase of the club then had to increase revenues to support that debt. That's a typical private equity model where individuals borrow money but secure it on the assets they've purchased using that debt. They didn't need that debt to increase revenue; they could just as easily done that without being a penny in debt. It was non-productive debt and the problem was that it could have crushed them, particularly when the credit crunch hit in 2008.

So if UEFA was really interested in ensuring the financial sustainability of football clubs, it would have introduced a process where clubs had to justify their level of debt and its use in their business model. Because unsustainable debt is what has sunk most clubs and what nearly finished us off in 2008.

 

[Combat Carl]

http://www.independent.co.uk/sport/football/premier-league/more-than-1billion-in-12-years--roman-abramovichs-backing-for-chelsea-10248343.html

"Roman Abramovich’s interest free-loan to Chelsea has exceeded £1billion for the first time, according to the latest accounts for Fordstam, the company through which the Russian billionaire owns the club.

The loan from Abramovich now totals £1,041,243,000 which is, according to Fordstam’s accounts up to June last year, repayable at 18 months’ notice. That amount was up from £984m from the accounts of the previous year.

There is no suggestion that Abramovich, who has owned the club for almost 12 years, is seeking repayment of his loan within the near future. In the accounts’ strategic report, the company secretary Paul Heagren notes that “the company has received confirmation from the ultimate controlling party that sufficient funds will be provided to finance the business for the foreseeable future”.
Chelsea announced in November a profit of £18.4m in the club’s financial results up to the end of June last year. The accounts for Fordstam encompass the group’s additional assets including a hotel management company, the health club behind the stadium and the club’s digital media company as well as the football club itself. Fordstam reported profits of £14.2m.

There was a profit on player trading of £65.1m which included the deals to sell Juan Mata, Kevin De Bruyne and David Luiz, all of which went through before the end of June.
Since these accounts were compiled, Chelsea have sold Andre Schurrle and Ryan Bertrand in January for around £34m, and acquired Juan Cuadrado from Fiorentina for £27m.

In the Fordstam accounts, the club values its total playing staff at £353m, a dramatic increase from the £272.2m the previous year. The accounts also include £13.7m of investment on facilities at Stamford Bridge and Cobham. The Cobham training ground that Abramovich acquired soon after taking over the club in 2003 and turned into one of the leading facilities in the game has already been extended and improved. The group made £2.9m in charitable donations.

The Fordstam accounts also show that Abramovich spent £1m last season on his executive box, one of the premium Millennium Suites in the West Stand from which he watches games at Stamford Bridge.

“These sales were made at current market rates in line with other corporate hospitality box sales,” the accounts say.

Is it me but how come Chelsea can loan another £57m and have no ffp sanctions ?
Why carnt the sheikh loan the money to city then. ?
Or is that to simplistic ?
How can the post £18.4 million profit if they are just basically putting the debt onto their overdraft ?

Because Roman isn't an Arab. Get with the program.