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Hello, I have just signed up to post because several of you have been asking for an expert to make sense of these figures. While I am no expert as such, I have just completed a degree in Sports finance and can hopefully clear some things up.
First, here are the key figures from today's results. It's important to remember that these are figures for the 12/13 season, in other words our most recent season in the Premiership.
- Confirmed losses of £65.4 million
- Net debt has virtually doubled from £91.4m to £177.1m
- Turnover dropped from £64m to £60.6m
- Ticketing revenue was down from £8.4m to £8.3m
- Wages and social security costs soared from £58.5m to £78m
Anyone can see how these figures are unsustainable. A decrease in revenue coupled with an increase in costs will only ever lead to a loss. More worryingly, this season in the Championship, ticketing revenue and TV money, as well as sponsorship and corporate income, will all have decreased further from those figures mentioned above. Last season, QPR earned £40 million through Premiership TV rights. This season in the championship that figure will have dropped by £38million to just over £2million. In terms of parachute payments, QPR received £23m in the first year (this year) and will receive £18m in the second and £9m in years three and four. You can see how this year, the parachute payment (£23m) does not make up for the loss of TV revenue (£-38m) alone.
Many of you here are posting that the debt does not matter or is insignificant. As you say, the majority of the debt is interest free and is owed to the owner. There would be a huge problem (worse than with Portsmouth) if TF decided to leave, but that is extremely unlikely - it would be an extremely unwise financial move by the owner and there are no realistic motives for him wanting to do so. If the owner does leave, however, the chances of finding a buyer are, without wanting to sound pessimistic, pretty much nil.
The League has got tougher on finance and with the introduction of FFP, QPR's prospects (pending possible legal action) do not look good. While 2012/13 seasons finance's do not count towards it, this seasons does. Many of you are suggesting that TF could simply right off the debt - I'm afraid it does not work like this. There is now no legal way for an owner to write off a loss in terms of FFP - the league will simply look at the balance sheet itself. He can make a contribution to try and limit the losses, but this itself is capped at around £2million.
In terms of punishment, if promotion is achieved, QPR can expect a heavy fine. Klonk is right - losses up to £18m are a max of £6.7m and then it's £ for £. If this years losses were to be repeated, QPR should expect a fine of around £54million. Many predict the 2013/14 losses will actually be nearer the £30million mark. If this happens, expect a fine of around £19million. Obviously, a loss of £30m plus a fine of around £20m will still lead to a net loss of around £50 million for the season, causing net debt to further increase.
If promotion is not achieved, and a similar level of losses to this year are announced, QPR can realistically expect a transfer embargo lasting more than one whole season, and more likely for 4 windows, depending on how long losses are sustained
Hope this helps!
First, here are the key figures from today's results. It's important to remember that these are figures for the 12/13 season, in other words our most recent season in the Premiership.
- Confirmed losses of £65.4 million
- Net debt has virtually doubled from £91.4m to £177.1m
- Turnover dropped from £64m to £60.6m
- Ticketing revenue was down from £8.4m to £8.3m
- Wages and social security costs soared from £58.5m to £78m
Anyone can see how these figures are unsustainable. A decrease in revenue coupled with an increase in costs will only ever lead to a loss. More worryingly, this season in the Championship, ticketing revenue and TV money, as well as sponsorship and corporate income, will all have decreased further from those figures mentioned above. Last season, QPR earned £40 million through Premiership TV rights. This season in the championship that figure will have dropped by £38million to just over £2million. In terms of parachute payments, QPR received £23m in the first year (this year) and will receive £18m in the second and £9m in years three and four. You can see how this year, the parachute payment (£23m) does not make up for the loss of TV revenue (£-38m) alone.
Many of you here are posting that the debt does not matter or is insignificant. As you say, the majority of the debt is interest free and is owed to the owner. There would be a huge problem (worse than with Portsmouth) if TF decided to leave, but that is extremely unlikely - it would be an extremely unwise financial move by the owner and there are no realistic motives for him wanting to do so. If the owner does leave, however, the chances of finding a buyer are, without wanting to sound pessimistic, pretty much nil.
The League has got tougher on finance and with the introduction of FFP, QPR's prospects (pending possible legal action) do not look good. While 2012/13 seasons finance's do not count towards it, this seasons does. Many of you are suggesting that TF could simply right off the debt - I'm afraid it does not work like this. There is now no legal way for an owner to write off a loss in terms of FFP - the league will simply look at the balance sheet itself. He can make a contribution to try and limit the losses, but this itself is capped at around £2million.
In terms of punishment, if promotion is achieved, QPR can expect a heavy fine. Klonk is right - losses up to £18m are a max of £6.7m and then it's £ for £. If this years losses were to be repeated, QPR should expect a fine of around £54million. Many predict the 2013/14 losses will actually be nearer the £30million mark. If this happens, expect a fine of around £19million. Obviously, a loss of £30m plus a fine of around £20m will still lead to a net loss of around £50 million for the season, causing net debt to further increase.
If promotion is not achieved, and a similar level of losses to this year are announced, QPR can realistically expect a transfer embargo lasting more than one whole season, and more likely for 4 windows, depending on how long losses are sustained
Hope this helps!
SIR LESLIE FERDINAND!!
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