Bristol City chairman delivers verdict on £11.8million loss
BRISTOL City were today counting the cost of Championship football after announcing club record losses of £11.8million for the last financial year.
Chairman Steve Lansdown insisted the latest loss is sustainable, but admitted the club's current balance sheet is "a mess."
-
Bristol City FC chairman Steve Lansdown
City lost £11,808,085 during the year ended 31 May, 2010, almost double the then record shortfall of £6,565,072 announced 12 months earlier.
While the losses can be explained in part by the cost of developing City's training headquarters at Failand and funding the new stadium project at Ashton Vale, players' wages again proved the biggest contributory factor in the club's spiralling debt.
Increased investment in staff failed to deliver the Premier League status Lansdown craves and the millionaire businessman conceded the club was now picking up the tab for the final year of former manager Gary Johnson's reign.
● Turnover for the year ended May 31, 2010 was 11,149,882 compared with 11,673,051 in the previous year.
● Staff costs rose from £10,227,578 in 2009 to £13,823,516.
New stadium project costs amounted to £1,969,718.
● City lost £2,162,357 on player trading during the same 12 months.
The independent auditors' report, commissioned on behalf of accountants Deloitte LLP, will make uncomfortable reading for all City supporters. It confirmed: "The group made a net loss of £11,808,085 during the year ended May 31, 2010 and, as of that date, the group had net current liabilities of £3,571,652 and net liabilities of £10,076,723. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the group's ability to continue as a going concern."
A majority of the club's debt is owed to Lansdown and while he remains at the helm, losses on such a scale will no doubt be sustainable. But the chairman today warned that costs must be cut if City are to return to profitability in the future.
In a frank interview, he admitted: "Most of the losses have been incurred in football."
And in a direct reference to Johnson's record in the transfer market, he added: "We brought a lot of players in on loan last season, players like Alvaro Saborio, Andrei Velicka, Evander Sno, Chris Iwelumo, Patrick Agyemang and Stefan Maierhofer and they were expensive commodities.
"We also had to reach a settlement with the manager (Johnson resigned in March), so it was an expensive year in terms of salaries from which we didn't derive much benefit.
"As is normally the case in football, if you chop and change too much, it causes you aggravation and it costs you money. It certainly cost us money last year. We tried to make that push to get us into the play-offs and up to the Premier League and it didn't come off."
At the same time as staff costs were rising, revenue from gate receipts was falling.
"It's disappointing, but not surprising," said Lansdown. "We didn't get very far in the League Cup, we didn't get very far in the FA Cup and we had a bit of an up and down season in the Championship. We finished well but had a very poor middle and revenue through the gate was down because of that and season ticket sales were down on the previous year.
"Our income from football was not as good as it could have been and neither was our income from Ashton Gate, because we didn't have a major event there last year.
"On top of that, we have had the stadium expenditure and the training ground expenditure and these have seen the losses creep up. We have been building up a lot of expenditure over that period which has been funded by debt."
He added: "The majority of the net debt is to myself, so the club owes me money. The reason the debt has built up is that I thought we would have had things in place by now with regard to the stadium and we would have had the funding in place and been drawing on the facilities we had for the stadium financing.
"We're probably a year behind in our original timetable and that catches up with you. I've been content to put that money in to push the football club and stadium forward until the stadium issue is resolved.
"I don't want to give the impression that the club is in trouble. I think people realise that most of the funding comes from myself, but the balance sheet looks a bit of a mess at the moment because of the push we have made to make the football club more successful."
110 Comments
View all
by Mike, Avonmouth
Sunday, November 07 2010, 10:27AM
“At the end of the day, Lansdown has tried to buy his way out of the division and it hasn't worked, and now he is being churlish, making threats that if he doesn't get his way, ie promotion/ new ground, then he will walk away!.
Well good for him!!.
Because if he does go, there will still be Bristol City Football Club, and there will still be 14,000 odd people turning up at Ashton Gate to watch football.
Looking back to when Gary Johnson was appointed manager, (something i didn't agree on), Johnson NEVER promised promotion from Division 1. All he promised was "Bums on seats", and "Attractive football". And under Johnson we did do well, we got a promotion, and we nicked a few edge of seat 1-0 wins, and the fans believed in the club, and gates slightly increased. But towards the end of Johnson's tenure, the club lost it's way on the pitch, and the Board took it's eye off of the ball, and that's why we are in the current mess. Would a new ground guarantee increased revenue through gate receipts? Would increased ticket prices actually deter fans from going week in, week out?. I know of a few fans who only go to the odd game now, as they have been forced to make savings in their home lives. And the club must of been narrow minded, thinking that planning for a new stadium would of sailed through unopposed, and apart from the redevelopment of Ashton Gate, (can't even see that happening now) where was plan "B".? The alternative site?. And with the rumors of why Coppell walked, the players on more than the clubs wage cap, increased cost with loanees, no wonder the club is in debt, and how much have the Board themselves put into the club over the past 12/24 months to stem the losses?. As they say, it isn't easy being a City fan!!”
by Still Waters, South Bristol
Saturday, November 06 2010, 6:32PM
“@ Mark,
"
I dont understand why you think there is anything wrong with the commercial relationship between Mr Lansdown and the club?
Is he doing something illegal by presenting the club with the financial opportunity it needs to succeed?"
Nothing illegal at all - but I contest the idea that he's offering them any 'financial opportunities'.
To put it simply: SL owns stadium, SL charges higher rent to BCFC, BCFC *must* either get more bodies through the door, or charge higher ticket prices to pay higher rent.
Non-match day revenue - straight into SL's pocket, unless he allows BCFC to retain a profit slice, which will probably be needed to cover the gap in ticket sales > rent.
Arena - nothing to do with BCFC, private company/private profits.”
by Mark, Bristol
Saturday, November 06 2010, 9:41AM
“Mr Stillwaters.
I dont understand why you think there is anything wrong with the commercial relationship between Mr Lansdown and the club?
Is he doing something illegal by presenting the club with the financial opportunity it needs to succeed?
There is nobody else queuing up to offer the club this kind of support; you can take it that being experts in the activity of running a football club those on the inside will have considered there options and reached the decision tha this is the right thing for the club.
The alternative is as Mr Lansdown says to give up any aspirations and downsize at Ashton Gate.
I would submit to you that as a professional and competitive football club that prospect is counter intuitive to everbody involved in any kind of sport.
The only way is up and belief in success through endeavour is for the majority a valuable work ethic.
it does not extend to robbing communities of their land, their dreams, livelihoods and aspirations with selfish lies.”
by Ms. Mart, Ukraine, Dnipropetrovsk
Saturday, November 06 2010, 12:09AM
“@rob, Ashton Vale 04-Nov 14:53
"I suggest like me you just ignore them,jealous loosers" >
- I don't agree. I know 'special one' Gas and he is the positive, wise, kind person - James McNamara.
He is one - as atonement (ransom) for all their sins!
:-p”
by Ms. Mart, Ukraine, Dnipropetrovsk
Friday, November 05 2010, 11:45PM
“@ Sharon, 17:08 <
Sharon, are you crafty or cunning girl?
You still haven't answered the question - what are your personal all-consuming passion? Adrenaline and goose skin in you do occur?
Besides linguistic eloquence and caustic sarcasm, what else? "what turns you on?" /© rob, ashton vale/
You are intolerant to simple human happiness, because you don't have its authentic simple joys?
Or you are in a closed cycle of his own "small-minded" head?
@Redferryman, 13:35 <
Yea, Gillett and Hicks did not build a stadium/hotel/fast-food etc. They plucked to the feathers unhappy Liverbird: stripped to the skin, almost..”
by bob, outer Bristol
Friday, November 05 2010, 9:21PM
“If this goes to Court. Who will pay the Councils Costs?
I am sure all the desenters in Bristol and Noth Somerset will be only too pleased to cough up.
They seem very good at telling us what SL, BCFC and Sainsburys should do with their money. "Build all these wonderful hospitals, hospices etc in Bristolso we can use them, but dont ask us to pay for them or build them on green belt".”
by Swiss, Frome
Friday, November 05 2010, 11:44AM
“Teacher, Bristol
I hope you never end up teaching any of my children, your clearly a little bit strange.”
by Swiss, Frome
Friday, November 05 2010, 11:42AM
“Pythagoras, Greece
Gratz you have discovered how to work out an average :)”
by Lawrence, Nanaimo B/C Canada,
Friday, November 05 2010, 2:06AM
“Evening, lets make over the 100 comments,
After GJ & brother was [let go] near the end of last season K/M did turn things around a little ,
Then the new guy came is signed a few more players like GJ did lots of , then up & quit ,
Then ball then lands in KMs lap, , after a few hickup games he`s got the lads rolling again , l say good on SL with staying with KM,
Lets hope a few more wins & slowly climb away from the basement,
UP deh CITY,,,,”
by Rind, Cheddar
Friday, November 05 2010, 1:57AM
“Losses £6m two years ago, losses then doubled.
Radical idea, let's get relegated, get rid of all the expense, clear the debt, build a quality team and gain promotion eventually back to the Championship making a profit.
Can we afford to rack up a loss of £24m this season with SL's double or quits tactics?”