General Club Finances 2023

[captainox]

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[Berliner]

One option that no one has mentioned yet, and isn’t covered by the poll, is the prospect of going bust and starting again. Scary on one hand but I personally would see my enthusiasm and interest increase if we ‘did a Bury’ and had a small ground we owned and were playing in the lower echelons of non-league. The romance of football would see us work our way back like Bury, Wimbledon, Stockport or Dorking have done and it would be fun to do that. It would help us start again with an affordable clean slate, field a team of local players, and maybe even be a supporter-owned club.

Nothing whatsoever about going out of business is "romantic" or "fun".
Nothing.

 

[Scotchegg]

One option that no one has mentioned yet, and isn’t covered by the poll, is the prospect of going bust and starting again.

Your views are frequently ridiculed precisely because of comments like this.

This is absolutely the worst case solution and there are countless examples of clubs who have done this and never come back. People look to Wrexham like every lower league club can just pick up a bunch of Hollywood investors and a Netflix series and stroll through the leagues.

Of course, if the owners pulled out tomorrow we would have little alternative, but when we're on the brink of securing a state of the art stadium and could be promoted to the Championship in the next couple of months then the idea of throwing our hand in now is insane.

 

[holdsteady]

I think the rate of increase in deficit just makes the potential to find another investor (should the current owners decide they had had enough of their play thing and pull the plug) that much harder.

20 years ago the deficit was £2 mil, now it’s over £24 mil and accelerating, so the pool of potential investors for a club that fails to make it to the championship and build a new stadium is almost zero, I suspect.

This is knife edge now. Lose the stadium, lose the investors, lose the club.

The debt was still going up, would you not eventually run out of people willing to fund a lower league club with no ground etc? I do think this has bought us to that point a lot quicker though if it all goes tits up, can’t disagree with you about no one be willing to take us on now.

 

[QR]

This thread has really got thinking (no good thing I know). Maybe we are looking at this from the myopia viewpoint of Oxford United supporters and completely missing the obvious standing in plain sight.

The investors probably see the club as the golden key that allows them to build a stadium right next to a railway station that runs right into the heart of London. They'll probably do a Ryanair style rebrand and call the place Wembley North and then sweat the asset for all it's worth. With the club just be the Saturday and occasionally Tuesday evening gig.

 

[Ewes]

Your views are frequently ridiculed precisely because of comments like this.

This is absolutely the worst case solution and there are countless examples of clubs who have done this and never come back. People look to Wrexham like every lower league club can just pick up a bunch of Hollywood investors and a Netflix series and stroll through the leagues.

Of course, if the owners pulled out tomorrow we would have little alternative, but when we're on the brink of securing a state of the art stadium and could be promoted to the Championship in the next couple of months then the idea of throwing our hand in now is insane.

I’ve not suggested for one minute that we ‘throw our hand in now’.

I’ve said that I feel going bust is a very real scenario if we can’t secure the investment we need, can’t get the council to agree planning permission or the new football regulator has teeth to ensure clubs are run sustainably for its supporters.

If or when that happens, as I’ve said, it would be grounding and almost fun to watch our club go back up through the leagues.

 

[Scotchegg]

I’ve not suggested for one minute that we ‘throw our hand in now’.

I’ve said that I feel going bust is a very real scenario if we can’t secure the investment we need, can’t get the council to agree planning permission or the new football regulator has teeth to ensure clubs are run sustainably for its supporters.

If or when that happens, as I’ve said, it would be grounding and almost fun to watch our club go back up through the leagues.

In the same way it would be fun to lose my job, my house, my family and friends, but to get the experience of living on the streets?

As I said, it's a really bad thing to ever consider unless there are literally no other options for the survival of our club.

 

[Dillon]

In the same way it would be fun to lose my job, my house, my family and friends, but to get the experience of living on the streets?

As I said, it's a really bad thing to ever consider unless there are literally no other options for the survival of our club.

The loss of Oxford United would in no terms be an option for the club or its supporters. The future of our football league club is dependent on getting this planning approved.

Just imagine if we lost our club and became a phoenix club, not a future that I and many thousands of us would contemplate. Where would we play as a club rising from the ashes? Stratfield Brake

 

[Sarge]

I think the question(s) raised by @Colin B at the recent FF on finances, which had a couple on the top table squirming uncomfortably, was a lot more relevant than some perceived at the time. As this thread, kind of, confirms , there are questions regarding finances, debt ( to OUFC) etc that require honest answers , sooner rather than later too

 

[Osei Yaw]

I know there will be many that will find this hard to hear, but beyond a couple of million the level of debt becomes irrelevant as it could never be repaid. I hate to quote Essex, but this is just numbers of a spreadsheet.

So you're saying that £2m worth of debt is ok, but anything beyond that is irrelevant?

What's the level of debt where it becomes irrelevant?

 

[Scotchegg]

So you're saying that £2m worth of debt is ok, but anything beyond that is irrelevant?

What's the level of debt where it becomes irrelevant?

Badly worded, but there becomes a point where the debt could never be serviced and no new investor would ever take it on. So whilst the loss sits on the books of the club, the reality is that the owners would never see that money again. In that regard it is just numbers on a spreadsheet.

None of this takes away from how fragile the future of our club is or how important the stadium deal is for our future.

 

[Fred]

It's probably been mentioned on here but are our owners happy to let it seem the Club is at risk if the New Stadium is not passed? Then if it is passed fully explain how the future of the club looks.

 

[tonyw]

I'm sure you'll know Colin, is it the same at our level with infrastructure spending not counting to the spending rules? How much of the overspend falls into this category if that is the case?

Just to answer the question myself in Colin's absence - Leagues 1 & 2 operate very differently in terms of FFP than the Premier League and the Championship.

There, it is all about your overall finances, and total losses over a three year period.

In League One, the SCMP is solely about the playing budget, and tying that to the club's revenues. You can spend as much as you like on infrastructure (or transfer fees or loan fees etc. etc.) without risking sanction. But you can only pay players 60% of the money you bring in - and if the money is coming from the owners it is only classed as "Football Fortune" income (and therefore allows you to pay more than you should be able to afford) if it's a gift or equity injection, not a loan.

This is almost certainly why, of the £6m loss, it was split between £4m debt and £2m equity......because that's the only way the FL would allow us to run with the playing budget we did.

 

[tonyw]

Yep. That was the point I would make.

The callers into Rad Ox who ask for a change of manager every three weeks are the sort who are entirely results oriented. If we win, they don’t care how we got there. If we lose, it’s always the manager’s fault and we need to spend our way out of it.

There are a myriad of views between those people and the types who the have the know how to scrutinise a set of accounts. The fans’ forum illustrated that a lot of people know a fair amount about business and could take TW and co to task.

There’s certainly no naivety on here. I now understand how the stadium will be funded in more detail but still question how the return will occur. I’m not shocked we’ve recorded a loss but am aggrieved that we’ve binned the model that was preventing such big losses (the model was more or less switched off during the last days of KR and those that have come through won’t be sold for anywhere near the figures Atkinson, Dickie and McNally went for).

OxVox does bring all this up and puts pressure on. But if the top brass listen but chose to do something else, there’s not a lot we can do unless we want to protest. We’re not there yet.

Just out of curiosity - when do you think we would be there at the protest stage? Next year, when Ryan suggests (and I have no reason to doubt him) with all the stadium planning and consultancy costs, we're going to be looking at an eight figure loss and a debt of ~£35m? Or not even then, but later when things are getting really dire.

I hate that I keep bringing them up - but Reading fans didn't start protesting until they'd been relegated by the FL, the club weren't playing its taxes or staff and they were having a squad fire sale. And that's really too ****ing late, and we've been rightly castigating them for it this past twelve months.

I do understand the attitude that is exemplified by Scotchers - which is basically that it's too late now already......we're pot committed, so we may as well get all our chips into the middle and hope that the cards fall our way. And if that's the way we're going to collectively play it as a fanbase, so be it.

 

[JOHN BOY]

Excuse my ignorance but all this money we are in debt who do we owe it to?

 

[warksox]

Excuse my ignorance but all this money we are in debt who do we owe it to?

The vast majority is "Amounts owed to group undertakings". In other words, the club owners.

 

[JOHN BOY]

The vast majority is "Amounts owed to group undertakings". In other words, the club owners.

That's what I thought but they are the owners surely the debt should be there's. Maybe I'm being a bit naive.

 

[tonyw]

That's what I thought but they are the owners surely the debt should be there's. Maybe I'm being a bit naive.

I think you are being a bit naive!

It's a very rare football owner that gives their money away to the football club (or solely makes an equity purchase, which is practically the same thing). Almost all football owners loan their clubs money to pay the bills; most likely in the hope that if by some miracle they become profitable or valuable, they can get their money back.

It's not necessarily unfair or unreasonable when those bills concern paying the playing squad and/or on-pitch costs. Some of the current controversy, however, as Ryan Birdio describes succinctly earlier in this thread, is that costs related to the stadium are starting to be bourne by the club, when currently there seems no guarantee that the club will ultimately own the stadium. And that does seem unreasonable.

 

[OnlyOneUnited]

We had always been told that the club would own the stadium (or at least that a holding company would own it on behalf of the club and a peppercorn rent would be charged).

Seems like we've moved to the expectation being that the club will not own the stadium and will be charged rent by the owners? If so, this is no different to the situation we were in when Kassam owned the club. Or am I missing something?

 

[LeftSideLarry]

We had always been told that the club would own the stadium (or at least that a holding company would own it on behalf of the club and a peppercorn rent would be charged).

Seems like we've moved to the expectation being that the club will not own the stadium and will be charged rent by the owners? If so, this is no different to the situation we were in when Kassam owned the club. Or am I missing something?

None of us know yet.

Of course there is a big difference between a bare bones licence that we have at the Kassam and a lease that gives us control of the stadium and all revenue streams that it produces.

The underlying conditions of the lease of the Triangle from OCC will be very important in ensuring that OUFC is protected to the hilt. If those are done properly, then the stadium should become a far less attractive asset for an unscrupulous prospective owner.

All eyes on the information should it get that far.

 

[Scotchegg]

We had always been told that the club would own the stadium (or at least that a holding company would own it on behalf of the club and a peppercorn rent would be charged).

Seems like we've moved to the expectation being that the club will not own the stadium and will be charged rent by the owners? If so, this is no different to the situation we were in when Kassam owned the club. Or am I missing something?

We have not always been told that, but we have been told that the terms of the lease agreement on the land, and any future rental agreement, would protect the football club at every turn. This was again implied at the fans forum.

Talk is cheap, and any and every agreement must be legally binding, but I'm not sure that anything has yet changed on that front.