£17,000,000 losses & Al-Hasawi Owed £35m

So all in all, the £34m headline loss for us last year should be taken in context against the decisions taken this year to ensure we are as close to meeting FFP as poss

The worry for forest is that Fawaz has spent another £7m on transfers this season and has a bigger squad, on top of the £17m loss last year. The good thing is that he isn't demanding his £35m loan back anytime soon and it has no interest, but the losses will have increased this season so he will need to raise significant funds to meet FFP.

Have derbys accounts been released? Presumably they are on course for ffp

Thanks Milf, that will take a couple of days to sink in, but appreciate the learning....of course I knew it all really and was just staging this conversation so the thicko's on these forum's could learn something .... honest ........ .....

comment by BlackStarr (U12353)
posted 59 minutes ago
So all in all, the £34m headline loss for us last year should be taken in context against the decisions taken this year to ensure we are as close to meeting FFP as poss

The worry for forest is that Fawaz has spent another £7m on transfers this season and has a bigger squad, on top of the £17m loss last year. The good thing is that he isn't demanding his £35m loan back anytime soon and it has no interest, but the losses will have increased this season so he will need to raise significant funds to meet FFP.

Have derbys accounts been released? Presumably they are on course for ffp
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Don't think our accounts to June 2013 have been filed yet, they have till the end of this month. Let's just say we'll likely be less 'off course' for ffp at June 2013 than Leicester & Forest were

As you say, Leicester's owners have sorted their position now (my you dropped lucky with them!) but it still doesn't explain such a large loss in 2012/13 - a combination of interest, rent and overspending on players I guess - 2 of which are resolved for 2013/14.

I guess if Fawaz was going to go down a similar road to the Leicester owners he would've done it by now? It is all smoke and mirrors ultimately. We all know that if owners get bored and want out, they will get their pound of flesh. I don't think anyone is sitting pretty to be honest, like someone said, GSE are only Paying the interest off on PP.

Regarding Leicester, this is the situation and history as we understand it from our Thai owners:

When Top (our Vice-Chairman, the owner's son, real name Aiyawatt) was young, he and his friends all associated with a Premier League team each. His was Leicester under Martin O'Neill.

The first English football match he was taken to by his father was one of our League Cup finals, which we won.

Many years later, the opportunity came up to buy an English football club. Milan Mandaric was looking for a buyer, and they met. Everything fell into place and the Thais bought the club. That it was us that Top had a particular association with was essentially pure luck.

At first they spent a lot, trying to buy their way to the Premier League. They brought in Sven and gave out massive-wage contracts to the players they brought in. Unfortunately, Sven couldn't achieve promotion (some argue he didn't have enough time but that's a nother story) and so they sacked him and brought in Nigel Pearson.

Most of the players turned out not to be good enough. However, they were still on whacking great contracts (some earning up to £40k/week). Whether this was a reason to bring in Pearson or whether it's simply his policy to buy cheaper, we don't fully know. But Pearson started to bring in younger, better players on lower wages.

FFP started to loom, but we were still losing a lot of money each season, so the owners decided to do a lot of things last year. They specifically looked to get rid of the high earners who weren't playing (Bolton bought most of them for some reason, but thanks anyway) and also did a few (perfectly legal) accounting tricks, such as revaluing the squad as assets. Essentially, they tried to fit in as much spending as early as they could so that we could at least try to comply with FFP.

The crowning jewel in this, of course, is what has already been mentioned above: They converted all of the debt owed to them to shares in the club. Those shares will undoubtedly have plummeted in value as soon as they took them, and so in the process they took a massive hit but finished with a healthier business with no interest on any debt.

We were all pretty stunned when this was announced. Yes, they accrued a significant portion of that debt themselves, but this was enormous to us: It means that even if they walk away, they leave a healthy - or at least healthyish - business behind them. We have of course discussed this between ourselves, trying to work out whether there's something we're missing (who gets anything for free after all) but we can't find anything. All we can see is that this a great gesture and a signal that the owners are prepared to just say: We've lost some money on this, so be it.

It is a fantastic commitment to the club, and the owners signalled at the start of the season that they were in it for the long haul even if we didn't achieve promotion. Basically, it's kind of a very expensive toy, although still one that they can afford as their other businesses have been doing well elsewhere. All the evidence of their time here is that they are superfans who just want to have a football club, and this one will do nicely. Added to this, they haven't even tried anything crazy like the Cardiff or Hull owners have. And they've always come across as nice, polite and respectful. And yes, this is no more than luck on our part that they turned up on our doorstep. Any Leicester fan who doesn't appreciate what they've done and continue to do is an idiot.


All in all, we just hope that they continue as they have done ever since they put Pearson back in charge.

You've certainly dropped lucky with them

I think that we will see a lot of debt being attributed to clubs in this set of financial results as it is the last year of allowed overspend without FFP penalties.
Next year accountants will really be earning their money as ownership sponsorship deals etc will become under greater scrutiny. Fawez has already announced that further sponsorship deals are in the pipeline.
Finally I have no problem with the £35 million debt as long as it remains an interest free loan as apposed to the leveraged debt (to third parties) that the Glaziers used to siphon money from Man Utd.

The difficulty fot Fawaz will be the staff costs. Even in the last financial year Leicester trimmed theirs by nearly £2m and the main staff cuts happened this season. Leicesters squad is fairly small and th high earners have gone.

Fawaz on the other hand has spent more money and accumulated one of the biggest squads in the championship. He will need to bring increased revenue from sponsorship, however UEFA have announced that they are reviewing all sponsorship related revenue to ensure this is not being used to bypass FFP or to continue operating under unsustainable models.

Fawaz must have some kind of plan up his sleeve but uefa are reviewing all such sources of increased revenue.

The authorities are always several steps behind though. Why can't they make decisions in real time? It's not like they can't afford to get the best advice. I want a level playing field like we used to have pre Sky where lots of teams could challenge for honours rather than a self interested few.

Looks like you've bottlejobbed promotion yet again - tick tock