From our last accounts our Cost of Sales (the costs of running the business we presume) is over £4.5m, which was up 16% on the previous year.
The admin fees (less the figure for the JV) was £2.5m (more than 50% of the cost of running the business) and up 8% on the previous year.
Now I think most would expect some form of admin expenses, but that does seem excessive and with no idea what they are it's difficult to make a confident statement.
The fact that we know our ownership team are somewhat relaxed with being truthful, it does make you immediately err on the side of something being not good.
It is actually tough to compare with other clubs because some include the salary costs of the football side of the business in their Admin expenses, however, given we include them under CoS, our Admin expenses are somewhat out of whack with those who do similar and are of a similar size/scale that do publish.
It's not that relevant to Manc's original question though, which was more centred on the debt vs equity question. He asked whether that really mattered, and I'd say yes, very much so. Not only is debt much more "real" than equity during a sale of this business, but the type of debt has changed.
In any sale, it seems clear that value is being attributed to the club even when the balance sheet is that of a business that is worthless. It also comes with a pile of debt that the club has a commitment to pay. If the money had been added as equity, it would be in the balance sheet as such and it would be harder to increase the value of the business. This way Clem gets his cake, someone elses cake and still gets to eat both.
The type of debt is also changing - it was originally listed as Director loans, which are at least pretty soft in the case of Administration. In the last set of accounts, a significant chunk was transferred to Axis - so is now owed to a separate business entity. For now, as Clem is the sole shareholder in that business it is not worrisome, but on buying the business or during an Administration, that's a harder debt than a directors loan.
To go back to losses - losing 1m a year is not unique. A club getting our attendances and spending what we do on CoS, recording it the way we do, is at best shitty on the performance scale though. We make considerably less per supporter than some others that produce sufficient details to compare. That speaks to the state of the club people refer to. So - we make less money than we should, we likely spend a bit more outside the FC operations than comparable clubs seem to and therefore we still lose as much as some clubs running beyond their means because their owners are footing the bill annually.
Investment is possible - for the right deal, we are not well known within the football business world as a well run club (from several sources).
