With the Bradford debacle going on at the moment and Wasps now begging for donations of £2m, I listened to a phone in show on one of the regional BBC radio channels. They had some sports finance expert on who said both codes have very troubled futures and that potentially half the professional sides now will not exist in 10 years. The main reason for success or failure was ground ownership. He was saying the Union Premiership can basically be divided into two, the haves who own their stadium and who are crying out for an increased cap to £6m per season (!) and the have nots who are on the verge of bankruptcy who do not own their ground. The suggestion was that at least 4 of the 12 Union clubs are likely to disappear or cost a benefactor a truly ridiculous amount of money. It was suggested that as many as 6 Union sides and 10 Super League sides are currently sat on unsustainable balance sheets which will likely see the club struggle to find new owners when the current benefactors lose interest.

Which got me thinking. What is our balance sheet like? After the rumours of big losses at the club, are we in this position? Are we totally dependant on Eamon McManus and the other directors for hand out? Or are we going to be significantly profitable in the new ground? With the cap at £1.8m and crowds averaging 15,000 it would be hard to see how we'd lose money. It's staggering to think some Union sides want an increase to £6m to compete with French Union, when presumably only Leicester average more than we do? (Excluding any attempts to add the Wembley gates to average crowds).

If you believe the press releases, shareholder loans but no bank debt.



For the immediate term, I would say yes. It will probably take 2 or 3 full seasons before we start turning a profit. No basis for that, just a hunch on how long it will take to get the off the field business really humming.

People will talk about our increased debt to build the stadium, but from a balance sheet perspective, those long term liabilities will be cancelled out by the increase asset value oif the new stadium over the old, and that's before you consider the jiggery pokery that will go on in order to convert the personal loans into shares, instead of paying them back.

We've only been in the new stadium for a few months, you need a full financial year to make a judgement. I'm not sure whether saints run their year jan-dec or april-march, but until they've had a full year trading from the new facility, you'll be hard pressed to tell how we're doing at a glance.

Yup, I appreciate that, but what is the starting point? How bad had it got before the move?

A quick check shows we lost £1.3 million pounds in the finacial year that ended 31st October 2010.
That's the last figure I can see available. I wouldn't be suprised to see a similar (or worse) figure when the numbers for the year ending Oct 2011 come out, given us playing at Widnes infront of reduced crowds, as well as some set up fees for the new regeime.

The figures for year ending October 2012 is what you need to see, but you'll not be able to get hold of them until about 2013.

Leeds definately seem to be the money bags, although its difficult to be completely sure as they have a few companies, Leeds Rhinos RUgby League, Leeds Cricket, Footbal and Athletic company, etc.

If its any comfort to you, McManus has just gone through an awful lot in order to build a new stadium. He's not going to walk away now he's done all the hard work.

I could have sworn someone mentioned that when Big Mc announced the refinancing for the debts with regard to the stadium, that all debts were effectively 'wiped out', with the moneymen on the board taking the hit in terms of the shares etc?

Yes there was a long thread about this on 18th Oct last year. Fear The Vee has also posted extensively about this.

Yep, I think the debt from the personal loans were to be gradually converted into shares, essentially wiping them out. This will reduce the long term liabilities on the balance sheet and therefore increase the value of the club and therefor its security against debt being called in.

It won't, however, affect the general operating profit of the club in its new stadium. You could still make a profit, even if you're a million pounds in debt. It would just mean that by the end of the year you'll owe less than you did.

Whilst wiping the debt will give us security, the operating profit is one we need to get right in order that we are no longer a drain on our directors finances and therefor not at the mercy of board members losing interest and withdrawing the support.

As I say,we'll not know anything for sure until we can see the october 2012 figures, which won't be available until about August 2013.

I don't think the bit you quoted was written by me, but is an interesting refresher nonetheless!

In an attempt to cheer me up, one of my accountant friends from back home did some research (in his own time of course) and emailed me that of the 30 professional rugby (both codes) clubs in England only 2 have made any sort of profit (in admittedly terrible economic conditions) in the last few (available) years.

These being Leicester Tigers and the Leeds holding company. The other 28 have all posted losses.

Obviously you guys should be well placed now and moving forward with someone who has taken the long view and absorbed some short -term debt.

What we really need to do is abolish the salary cap.

(Right, that's my work done here. I am off...)

I have heard that we lost an enormous amount of money whilst at Widnes for that year. Obviously no figures yet (and might never will be) but I was told it was significantly more than was lost the year before (2010) which was published.

The break-even for the club presently is 10k season tickets, average gate 14k+, and hospitality at an average of 78% capacity for the year. So far we are hitting this target so maybe the owners could even hope for a small profit for this year?