August 15 2002

Selhurst Park

We've managed to hold of a copy of the latest Palace accounts to see how financially secure the club was before the ITV Digital crash. Resident accountant Saxon Eagle tells us what all the numbers mean...

Crystal Palace accounts to 30 June 2001

With the financial difficulties widely publicised affecting many clubs, it is in every supporters mind that this club and many others, could again find itself under administration or even worse, liquidation.

The takeover of CPFC (1986) was completed on 8th May 2000, when the new company Crystal Palace FC (2000) Limited was formed.

The following figures are from the date when the company commenced to trade, 6th July 2000. For all intense and purposes, these are figures for almost a full year.

Turnover £12,205k

Operating expenses £13,153k

Loss before player registrations £948k

Loss on player contracts (the fact that a player’s contract is shorter means his market value is potentially less) £1,729k

Exceptional costs (costs incurred by the company to restructure the club after administration) £1,178k

PROFIT on disposal of players £194k

TOTAL LOSS FOR THE YEAR £3,666k

Operating expenses include:

Lease on land & buildings (ie shops and stadium) £294k

Staff Salaries (including NI & Pension) £8,135k

The staff split is as follows:

Players, managers & coaches 63

Commercial & merchandising 60

Office management 25

Ground/maintenance staff 10

Part-time match day staff 842

Directors’ salaries are £312k (3 directors).

Recent reports have also suggested clubs wage bills account for over 75-80% of turnover whereas at CPFC, the amount is 66%, which is one of the lowest in the league, but still above the recommendations set out by the Football League accountants.

Also included in the accounts is a directors view of the business and future developments. This extract is the directors' view:

"REVIEW OF THE BUSINESS

Whilst making losses is always disappointing, the loss incurred by a football club in the current climate, particularly a club purchased from administration, with the depletion of resources that such a situation inevitably involves, a trading loss of £948k – with a further £1.7m on player amortisation and £1.1m spent on restructuring costs – does not give undue cause for concern.

The club has achieved a dramatic increase in its commercial performance with advertising, hospitality and sponsorship sales all reaching record levels.

In addition to this, the launch of an expanded retail network for club merchandise, introduction of a catering operation and the birth of affinity schemes will have both short and long term financial benefits to the club.

On the playing side, there has been a significant investment in the clubs playing staff with the market value of the current playing squad approximately £30m.

The club has also acquired its own training facilities and has revitalised its youth academy as a means of developing promising young players and reducing the investment required in purchasing players from other clubs.

It is believed that in the course of this financial period, the club has laid down a very solid platform for future success via investment, restructuring and development in order to make the business independently financially viable and move the club towards its ultimate aim of a return to the Premier League."

So, the club has made a loss, but as the above paragraph explains the reward of the Premier League needs to be bought but the directors are going about it sensibly.

We are all worried and we have some cause to be, especially as these accounts do NOT take into account the revenue the club will lose from April/May 2002 with the demise of ITV (wank, wank, wank) Digital.

Perhaps the best answer to all our queries will arrive in the next set of accounts, which must be filed by April. Who knows what might have happened by April...

Your resident accountant,

Saxoneagle J