Master of Puppets

"Master of puppets I'm pulling your strings,

Twisting your mind and smashing your dreams,

Blinded by me you can't see a thing,

Just call my name 'cos I'll hear you scream....

...Master! Master!"  (Metallica)

Charlton's audited accounts for the year to 30 Jun 2016 have finally been filed at Companies House (four months after being signed off).

Given the smoke and mirrors which characterise the club's current owners, this is a precious document which presents some real unarguable facts.

As in previous years, I start each point with an observation from the accounts followed in brackets by my own interpretation (which may or may not be accurate).

- The 'strategic report' begins with a review of the Academy before discussing the poor onfield performances of the first team (this is decidedly odd and would be akin to say Tesco beginning their annual report by trumpeting say 'sustainability' or 'inclusivity' goals they have met before talking about their challenges in the aisles);

- Total turnover was relatively stable at £12.1m vs £11.8m in 2014/15 (this is not surprising given both seasons were spent in the Championship - higher TV/broadcast revenue from a new deal and more live home games more than offset lower revenue through the turnstiles);

- Total administrative expenses rose significantly to £24.1m from £19.4m (this was a pretty shocking observation which is largely explained by wages/staff costs rising by £2.6m - we all know that the season on the pitch represented abject failure in absolute terms, but it was also abject failure relative to the additional resources which were made available to the three 'managers' we used);

- There was a de minimis profit on disposal of players of £39k (this makes sense as the only players sold during the period for an undisclosed fee would either have been virtually given away eg. Parzyszek, Nego, Daniel or sold for fees which were not in excess of their carrying value on the balance sheet [having been signed for a fee in the first place] eg. Wiggins, Wilson - it is worth recalling that there was a profit on disposal in the prior year of £4m [mainly from Gomez] which explains why the total loss for the year below is higher than implied by the rise in administrative expenses alone);

- The total loss for the year increased by 234% to £13.5m (largely self-evident given the above);

- Some of the club's leasehold property (comprising The Valley and the training ground) was revalued by £9.2m during the year resulting in the 'comprehensive loss for the year' falling from the above £13.5m to £4.3m (this struck me as somewhat unusual and can be interpreted in several possible ways - cynics might suggest some underhand property development deal is in the works, although a more positive interpretation might be that the owners are preparing the club for sale by presenting its assets in the best possible light [or they may simply be planning to borrow against it] - alternatively the £9.2m neatly bridges the increase in administrative expenses and the decrease in profit on disposal of players resulting in the 'comprehensive loss for the year' being virtually unchanged from 2014/15! [even though the cashflow position is materially worse as this is clearly a non-cash effect]);

- Moving on to the balance sheet, cash at bank is a measly £628k (like any current asset or liability, this is a dynamic item for which a one-look snapshot at year-end might not be very meaningful but with administrative expenses above of £24.1m pa, this cash balance is enough to pay just ten days' of expenses emphasising the frequency with which Staprix must be injecting cash and the psychological toll this might finally be having?);

- The profit and loss account has exceeded the negative £50m mark as a result of the above £13.5m loss (since this represents the cumulative losses of the football club [including all those go-go years in the Premier League], it's a reminder of just how awful a business proposition midsized clubs like Charlton are - a quick look at the accounts to 30 Jun 2007 [our last season in the Premier League] shows the cumulative losses at that point were £27.3m suggesting that we have generated approx £25m of losses during the decade or so since [even after the constant selling of players like Shelvey, Jenkinson, Gomez, Poyet etc.] - indeed whilst the current owners have made matters materially worse with their reckless decisions, when fans sing "Just sell the club", I can't help asking myself "To whom?" - note 2.2 to the accounts rightly confirms that it is only the stated ongoing support of the owners which enables the accounts to be prepared on a 'going concern' basis);

- Once again directors were not paid any emoluments directly by the club (given it's reasonable to assume Katrien Meire is not working on a pro bono basis, she is presumably being paid via some external arrangement);

- There were exceptional staff restructuring costs of £623k (it is easy and probably right to assume this relates to the dismissals of Luzon and/or Fraeye although the figures seem high if so alone);

- The club spent £4.1m on new players during the year (this would have related to Messrs. Kashi, Bergdich, Teixeira, Sarr, Ajose and Holmes - Sarr, Bergdich and Ajose were clearly failures but Kashi looked a decent signing until his injury, whilst the contribution of Holmes and Teixeria has generally been positive - either way again one can't reasonably accuse the owners of not spending but as the old adage goes, "price is what you pay, value is what you get");

- The players sold/released during the year orignally cost the club a total of £3.1m (this can be deduced from the note 10 regarding intangible assets - given that the list of players sold/released during the period was [Etheridge, Munns, Osborne, Ben-Haim, Wilson, Daniel, Wiggins, Thomas, Nego, Eagles, Vaz Te, Parzyszek, Moussa] and we know that many of these were not even signed for a fee, it suggests quite extraordinarily that we likely paid £1m+ type fees for Nego and/or Parzyszek [it is reasonable to assume that Wiggins might have cost say £500k from Bournemouth - unless I have completely misinterpreted the accounts, this is perhaps the single most damning indictment of the mismanagement of the club in this document);

- £2.1m was spent on leasehold property (this is separate and unrelated to the above uplift in the valuation of leasehold property - this must relate to various stadium/training ground improvements);

- Bank loans outstanding were fully paid off during the year (it is hard to put a negative spin on this and it is another supporting factor to back up my view that the owners are benevolent albeit incompetent, rather than anything worse);

- The amounts owned to the parent (Staprix) increased to £55.6m from £40.1m (this type of increase is self-evident given the losses sustained during the year - the accounts additionally confirm that this debt is accuring interest at 3% pa - there are some fans that become agitated by this fact but in my view it is akin to your 'current account' borrowing from your 'savings account' for some short-term needs but charging it some interest for the priviledge - your 'current account' [the club in this case] might be aggrieved but from your consolidated point of view, your financial position is unchanged);

- Interestingly the accounts confirm for the first time that Staprix took on £21.6m of debt upon acquisition of the club in Jan 2014 (again it is not clear why the accounts would suddenly mention this very relevant fact - however if one extrapolates from the accounts to 30 Jun 2013, then it is reasonable to assume that the debts at that time due to the previous owners were in the region of £22-23m, suggesting they didn't after all take a meaningful 'haircut' upon sale as I had always assumed - also it proves quite neatly that Staprix have injected £34m since they purchased a Championship club which is now fighting a League One relegation battle - what did they used to say about fools and their money?);

- The £7m of loans to current/former directors (including Richard Murray) remain in place (these are repayable upon promotion to the Premier League - it would be an interesting financial exercise to estimate the fair value of these loans given their contingent but perpetual characteristics - how much would you pay today to have the chance to earn £7m if Charlton win promotion to the Premier League at any point in the future [administration/liquidation etc notwithstanding]?);

- An additional £2m might be payable if certain players reach milestones, whilst a further £4.6m might be receivable for the same reasons (the £2m payable figures seems high and is most likely very unlikely to occur [may well have related to Premiership promotion clauses etc for the likes of Vetokele or Watt], whilst the £4.6m receivable must relate to various long gone players such as Gomez, Poyet etc as well as more recent departures, and are likely on average relatively worthless);

- Between 30 Jun 2016 and 28 Nov 2016 (the date of accounts signing), £6.1m was received in transfer fees (this must have related to the sale of Gudmunsson, Pope, Holmes-Dennis, Cousins and Harriott - from a purely financial point of view this seems a decent return [given there are probably additional contingency payments as suggested above], but as we know the real problem has been how we subsequently spent any proceeds);

- Between 30 Jun 2016 and 28 Nov 2016, £359k was spent on transfer fees, agents and termination payments (the only player acquired for a fee during this period was Magennis).

- The sale of Lookman is not relevant for these accounts as they were signed before he was sold (it is not clear how much of the reported fee was paid upfront and how much will be contingent, but in addition to the other post-30 Jun sales it is likely that losses in the current season will be relatively limited).

- The accounts of the parent company (Baton 2010 Ltd) are not available yet (but I'm prepared to assume that they won't reveal much more than is included above).

SkyBet Chumpionship

With relegation for Charlton virtually assured and bad feeling towards the owner highly elevated, I thought it was about the right time to stand back and provide some high level context to what it means to own a club in the Championship. 

Specifically for Charlton I also wanted to understand better to what extent we had underachieved versus reasonable finance-based expectations.

An analysis of the accounts of all 24 clubs currently in the Championship follows below. The accounts were all for the year-ended 31 May 2015 or 30 Jun 2015, with the exception of Bolton whose accounts remain outstanding and are thus analysed to 30 Jun 2014 only.

Some minor assumptions or estimates may have been required due to certain complexities, and these have been noted below where material.

It is important to bear in mind that direct comparisons between clubs is challenging given the impact of recent spells in the Premiership (and thus parachute payments), but there are ways to deal with this as noted below.

TURNOVER (£m)

A league table of turnover follows - in order to equalise for Premiership-related turnover (recipient clubs marked **), matchday turnover only is shown in brackets too:

QPR** 85.9 (8.1)
Hull** 84.1 (9.0) - matchday income estimated due to insufficient disclosure
Burnley**  78.8 (6.0)
Fulham** 43.3 (7.0)
Cardiff** 37.6 (5.7)
Reading** 35.0 (5.7)
Bolton** 30.6 (3.4)
Wolves** 26.4 (5.6)
Leeds 24.4 (8.7)
Brighton 23.7 (9.8)
Blackburn** 22.4 (4.1)
Derby 21.5 (7.9)
Birmingham** 21.0 (4.0)
Middlesbrough 20.5 (9.8)
Forest 17.4 (8.2)
Ipswich 16.4 (6.5)
Sheff Weds 14.9 (6.0)
Charlton 11.8 (5.1)
Huddersfield 10.4 (3.1)
Brentford 10.0 (3.1)
Preston 7.3 (3.5)
Bristol City 7.1 (3.7)
Rotherham 5.2 (1.2)
MK Dons 5.2 (2.6)

Unsurprisingly the clubs with the highest turnover are those that spent last year in the Premiership (QPR/Hull/Fulham) or are in receipt of Premiership parachute payments. 

The disproportionate impact of TV money on turnover meanwhile is emphasised by the fact that for example Burnley generated less matchday income than say Ipswich which had similar attendances in a division below.

The dire position of Bolton is emphasised meanwhile by the fact that with parachute payments ending at the completion of this (relegation) season, they will operate with just £2-3m of matchday income (and modest income from elsewhere) in League One.

Amongst the clubs with the highest 'normalised' turnover (excluding Premiership-related), it should be no surprise that Brighton, Middlesbrough and Derby are performing well whilst conversely Leeds and Forest are notable underachievers.

With regard to those clubs fortunate enough to be in receipt of Premiership-related revenues, it is clear that (so far) they range from the seemingly 'well managed' (eg. Burnley, Hull) to the veritable 'basket cases' (eg. Bolton, QPR, Birmingham). 

From Charlton's perspective as the 18th and 15th ranked club respectively for overall turnover and matchday turnover, our base expectations at the start of the season ought to have been modest but clearly relegation would not have been predicted in this simple model.

Although not likely to be significant either way (and not outlined here in detail), somewhat oddly despite our attractive London location we are ranked 21st for 'commercial' income, ahead of only Brentford, Bolton and Preston. 

WAGES (£m)

The analysis below shows total wages and salaries (for all club employees) but obviously playing staff receive the significant majority. 

Several studies have shown the clear correlation between payroll and success so notwithstanding the need to take into account the impact of recent spells in the Premiership, this ought to have served as a better 'predictor'.

In order to better assess 'sustainability' and to thus understand which clubs are taking a short-term gamble on success, the figures in brackets show wages and salaries as a percentage of overall turnover.

QPR** 60.8 (70.8%)
Hull** 50.1 (59.6%)
Cardiff** 36.9 (98.1%)
Reading** 33.3 (95.1%)
Fulham** 32.1 (74.1%)
Blackburn** 26.4 (117.9%)
Forest 26.0 (149.4%)
Burnley** 25.3 (32.1%)
Bolton** 23.6 (77.1%)
Derby 19.3 (89.8%)
Brighton 18.3 (77.2%)
Middlesbrough 18.1 (88.3%)
Leeds 17.8 (73.0%)
Brentford 15.8 (158.0%)
Wolves** 15.7 (59.5%)
Ipswich 14.3 (87.2%)
Birmingham** 12.8 (61.0%)
Sheff Weds 11.9 (79.9%)
Huddersfield 11.7 (112.5%)
Charlton 10.2 (86.4%)
Bristol City 8.7 (122.5%)
Preston 7.8 (106.8%)
MK Dons 4.4 (84.6%)
Rotherham 3.0 (57.7%)

Again the analysis is skewed by those clubs which have recently been in the Premiership.  As expected however the speed with which they have ratcheted down their wage bill is generally a function of how long ago they were relegated (ie. Birmingham 2010/11, Wolves/Blackburn/Bolton 2011/12, Reading 2012/13, Fulham/Cardiff 2013/14, Hull/Burnley/QPR 2014/15 etc.).

However it is notable that Burnley had a lower wage bill in 2014/15 than their arch rivals Blackburn despite playing one division higher - unsurprisingly perhaps this self-control (just 32.1% of turnover) left them in a strong position to mount a successful campaign this season. 

Meanwhile with Blackburn's parachute payments ending at the end of this season, their financial position becomes extremely perilous.

The problems of QPR are well understood, but the failure notably so far of Cardiff, Reading or Fulham to bounce back to the Premiership puts considerable pressure on them to put their houses in order next season.

With wages at around 150% of turnover, both Nottingham Forest and Brentford are the standout teams in terms of 'having a gamble' despite no Premiership-related revenues.  The latter may be adopting a 'Moneyball' approach to scouting but it is ironically backed by real money too.

As noted in the turnover analysis, the relatively successful campaigns of Brighton, Middlesbrough and Derby this season should be little surprise given they each spend 75-90% of their high turnover on wages.

At the other end of the scale, Rotherham seem to be extremely efficiently run with a wage bill of just £3m on turnover of £5.2m, yet it would appear to be enough for a second consecutive season of survival in the Championship. 

Similarly Sheff Weds have likely outperformed wage-based expectations, although their payroll in 2015/16 is likely higher than the accounts from last season imply.

Charlton are 20th in the payroll league which perhaps should have served as the single most realistic predictor of where we ought to have finished this season (in other words we failed to meet expectations which however should not have been very high to begin with). 

Indeed with payroll as a percentage of turnover right around the 88% average for all 24 clubs, we are neither taking any reckless Forest or Brentford-esque gambles nor putting much aside for the proverbial 'rainy day' (which unfortunately is firmly around the corner).  More about that at the end.

DEBT  (£m)

The majority of football club debt is owed to controlling shareholders (as opposed to banks etc.) and has thus been termed 'friendly debt' since they have virtually nothing to gain from pushing the club into bankruptcy.

However it does require the ability to continue funding ongoing deficits and/or the ability to find another 'greater fool' to step in and do so going forward.

To analyse debt levels, I show below the total of all creditors (which also includes some other minor non-debt items like deferred season ticket income). 

The total is an extraordinary £1.75billion:

Rotherham 3.1
MK Dons 14.3
Sheff Weds 15.6
Burnley 16.4
Birmingham 18.7
Bristol City 22.3
Preston 32.4
Fulham 33.8
Derby 34.2
Wolves 39.2
Leeds 43.8
Huddersfield 47.4
Brentford 55.9
Charlton 58.8
Reading 68.0
Brighton 85.1
Forest 91.9
Middlesbrough 105.2
Ipswich 106.3
Hull 111.2
Blackburn 120.3
Cardiff 165.0
Bolton 226.8
QPR 236.7

The predictable 'basket cases' are at the bottom of this particular table with some eye-watering amounts of debt, most of it accumulated in recent seasons. 

Again the likes of Rotherham and Burnley are highlighted as amongst those which are run on more sensible lines, whilst Sheff Weds again screens well. 

Conversely the viability of the likes of Forest, Ipswich, Middlesbrough and Brentford will surely be called into question unless promotion to the Premiership is achieved in the next couple of seasons. 

Charlton are in the middle of the pack but debt levels have accelerated meaningfully since relegation in 2007 and will continue to do so in League One - Duchatelet is firmly at a crossroads regardless of his stated commitment to ownership of the club.

PROFITS/LOSSES (£m)

Below I have put the most recent year's net profit/loss which is somewhat insightful as a single year's snapshot, but is nonetheless potentially impacted by significant one-off transactions like transfers (eg. MK Dons and Dele Alli). 

Again I have marked the clubs in receipt of Premiership-related payments as **:

Burnley** 29.9
Hull** 11.5
Ipswich 5.5
Cardiff** 3.8
Reading** 2.6
Wolves** 2.4
MK Dons 1.6
Birmingham** 1.3
Rotherham (0.6)
Leeds (2.0)
Preston (3.3)
Charlton (3.9)
Sheff Weds (4.4)
Huddersfield (7.1)
Middlesbrough (7.1)
Brighton (7.4)
Bristol City (8.2)
Bolton** (9.1)
Derby (10.1)
Brentford (14.7)
Blackburn** (19.8)
Forest (21.5)
Fulham**(27.0)
QPR** (45.7)

Again a familiar picture emerges with Burnley's sensible Premiership season earning them rich reward financially.

For those clubs in receipt of Premiership-related payments and still generating substantial losses (ie. Blackburn, Fulham, QPR, Bolton), the medium-term outlook is likely to be dire and it is no surprise that they have each struggled on the pitch this season.

Again the extent to which Forest and Brentford have gambled is apparent (the losses are obviously related to earlier analysis of wages), whilst Rotherham's sensible approach is again evidenced here with limited losses of £600k.

Charlton are in the middle of the pack with losses somewhat reduced from the prior season, but turnover in League One is likely to fall by 50% or so.  Keeping the losses at similar levels will require a hatchet job on the squad however.

SUMMARY

To bring it all together, I have put together a proprietary ranking index to list the 24 clubs in order of relative financial stability (the key word being 'relative' since in absolute terms none could be so described). 

In an ideal world the table below would reflect the actual one but in reality clubs must continually weigh up the potential upside of a short-term gamble versus the long-term security of the club. 

Moreover the ability of owners to make good rational decisions is highly questionable in many cases, as some towards the bottom of the table below have found out (or will likely soon do so).

Somewhat reassuringly Charlton are positioned firmly in the top half, although the downside of greater long-term sustainability is unfortunately the enhanced risk of near-term disappointment:

Rotherham
Burnley
-------------
Wolves
MK Dons
Birmingham
Leeds
------------
Sheff Weds
Hull
Ipswich
Charlton
Brighton
Bristol City
Preston
Middlesbrough
Cardiff
Reading
Derby
Forest
Fulham
QPR
Huddersfield
-----------
Bolton
Brentford
Blackburn

Flawed Execution

,The club's accounts to 30 June 2015 have recently been filed at Companies House (despite being signed in late-November).  

Given the understandably toxic relationship between supporters and the Board, these accounts arguably represent one of the very few sources of real 'truth''.  

My analysis follows below and it relates interchangeably to both Charlton Athletic Football Club Ltd (the 100%-owned subsidiary) and Baton 2010 Ltd (the parent).  My personal interpretation and opinions are given in brackets: 

The 'Group Strategic Report' contains a notable gem, "It remains a target of the Board to grow the current attendance levels to a target of 20,000 in the Championship." (If this report had been written in March 2016 rather than November 2015 [or earlier], I suspect this item would have been omitted for obvious reasons).

Turnover was slightly down from the prior year (£11.8m vs £12.7m), explained by the run to the FA Cup quarter-finals in 2013/14.

£9.5m of financing was injected into the club by way of additional loans from Staprix (this represented continued funding of operational deficits, plus other outgoings such as capital expenditure and bank debt repayment [more on this later]).

Wages and salaries were unchanged at £11.5m though this still represents nearly 100% of turnover (a simple statistic which encapsulates the madness of the football finance model).

The operating loss was down from £5.9m to £4.4m thanks to the sale predominantly of the homegrown pair, Gomez and Poyet (if my interpretation of the accounting treatment is correct, the total transfer fees received [including from others eg. Lepoint, Morrison...] was a total of £4.47m, of which some remains payable [see below]).

Perhaps a more telling statistic is that the club now has £73m of cumulative tax losses (a more telling data point about the flawed football business model it would be hard to find.  Indeed even since Baton 2010 Ltd was created just prior to the Slater/Jimenez purchase, cumulative losses have been nearly £27m.).

Total full-time club employees fell from 161 to 144, almost entirely explained by the non-football side (perhaps supports the commonly held view [evidenced by various well-publicised cock-ups] that the club is insufficiently resourced).

Exceptional items included £162k relating to 'staff restructuring' (it seems reasonable to assume this relates to the sacking of Bob Peeters mid-season.  Curiously the amount paid in 2014/15 is exactly 50% of the amount paid in 2013/14 [ie. £324k] - one might conclude that if one briefly tenured ex-manager was paid six months' salary in severance, and another longer tenured ex-manager [Powell?] was paid twelve months' salary, then the going rate for a Charlton first team coach might be around £324k pa.  Then again it may just indeed be a coincidence!).

Just under £1m was paid to Staprix in the form of interest payable on its loans to the club (at 3% pa) - debt outstanding to Staprix was approx £40m at 30 Jun 2015 (it is not entirely clear why Duchatelet would not provide these loans interest-free, except perhaps to inject a sense of commercial reality into an inherently uncommercial investment.  Some fans are deeply concerned about this aspect of the club's financing, but injecting debt into a perennially loss-making business is arguably akin to equity. Moreover an interest rate of 3% hardly reflects the true risk of lending to the club - in short I view this aspect as virtually irrelevant).

Former directors continue to be owed £7m, contingent upon promotion back to the Premiership (now if anyone deserved even a meagre 3% return....).

Approx 2/3rds of the outstanding bank loans were repaid during the year (total £1.8m) and are now <£1m and due within one year (reassuringly or worryingly [depending on your point of view], the club will shortly be in a position where the only stakeholder with a enforceable claim on the club will be the owner himself).

No directors fees were paid during the year (so either Katrien Meire is working on a pro bono basis or more likely she is being compensated through some other entity, possibly directly by Staprix).

Transfer fees of £1.7m were paid during the year and these predominantly related to Bauer and Ba who were signed before fiscal year-end (although Bauer had been moderately impactful before he got injured, these signings hardly scream 'value for money' compared to what else might have been available).

£1.2m was spent in the form of fixed asset capital expenditure (presumably representing improvements to the stadium, pitch and training ground).

'Accruals and deferred income' of £3.2m must mainly relate to season ticket revenue earned prior to 30 Jun 2015 but relating to the 2015/16 season (since this represents >25% of total turnover and >60% of ticket/matchday turnover [and is received upfront], it emphasises how powerful a season ticket boycott could be).

Up to £6.2m of additional receipts may be due if former players sold achieve certain targets (this is £2m higher than the previous year suggesting that Poyet and Gomez were sold with contingent payments included in the agreement).

On a similar note the amount for 'trade debtors due after more than one year' is a nice round £1.500m (reading between the lines, it is quite possible that rumours of a £3m initial fee for Gomez were true with the amounts payable in two £1.5m instalments).

Rather more curiously the amounts that Charlton may have to pay to other clubs contingent on its own signings achieving certain targets, increased by £1.3m to £1.7m (if Bauer and Ba represented the only significant transfer fees paid during the year, did they really also need to include £1m+ contingencies? For the club's sake let's hope this is only payable upon promotion to the Premier League and not mere appearances etc.).

Between 30 Jun 2015 and the signing of the accounts in late-Nov, £300k was received in the form of transfer/loan fees (there is no additional transparency given, but this is likely to have included Rhoys Wiggins [who is now back in the Premier League!]).

Similarly between 30 Jun 2015 and late-Nov, a further £2.6m was paid out in transfer fees (this would include Sarr, Kashi and Bergdich, as well as a possible loan fee for Makienok).

In truth, there were not many huge surprises in the accounts although the biggest frustration is that unlike fans of say Blackpool, we cannot seriously accuse Duchatelet of fleecing the club.  

Staprix has now injected £40m in total (in the form of the initial deal with the former owners and the funding of ongoing deficits since) and his 'return' is a measly 3% pa, equivalent to the sort of return he could generate in blue-chip 'investment grade' bonds with virtually no risk.  He doesn't even get to enjoy watching the matches.

The club continues to pay transfer fees including £4.3m for the players signed last summer, only two of which (Bauer and Kashi) could be described as good additions.  

Indeed the transfer fees paid almost exactly mirror those received during the full period examined, so even the argument that Duchatelet wants the club to become self-financing through player sales seems very flawed.

Meanwhile the accounts prove that solid Championship players like Wiggins and Morrison are being offloaded for peanuts, yet in both cases the greater value to their new clubs is obvious as subsequent developments show.

So in short one must conclude that (for reasons unclear) he is either acting in a wholly irrational and non-commercial manner with regard to this investment, or more likely he has perfectly good intentions but has executed in a remarkably bad way whether due to naivety or gross incompetence.

With League One football looking increasingly inevitable, the 2016/17 accounts could be a veritable horror show.

Emails Update

(This post is a parody - any similarity to actual events is purely coincidental.)

As regular readers of this blog will know, when the club is in crisis I like to use my stealth IT skills to hack into the club's emails to get a sense as to what is going on behind the scenes.

Unsurprisingly a picture of a dysfunctional club emerged - the story begins towards the end of last season:

---

From: katrien@cafc.co.uk
To: marketing@cafc.co.uk
Subject: WTF!

I KNOW I SPEAK ENGLISH WITH AN ACCENT, BUT I SAID "SAX ON THE PITCH" YOU UTTER MORONS......

'SAX' AS IN LIVE JAZZ BEFORE THE BOURNEMOUTH GAME!

---

From: roland@staprix.be
To: katrien@cafc.co.uk
Subject: Re: 2015/16 Budget

My dear Katrien

The budget generally looks fine - however I was shocked to see that the expenditure for names on first team  shirts has increased by 20%.

I presume this is mainly due to the imminent emergence of future Premiership starlets Ahearne-Grant, Charles-Cook and Holmes-Dennis.

Can we work within the agreed budget please?

Best

Roly

---

From: katrien@cafc.co.uk
To: guy.luzon@cafc.co.uk
Subject: Re: Summer transfer targets

Shalom Guy!

Excuse my ignorance but what is a 'big lump up front'?

I thought that was the statue of Sam Bertrand outside the West Stand.

K

---

From: katrien@cafc.co.uk
To: joe.gomez@cafc.co.uk
Subject: Re: Re: Re: Liverpool offer

Hey Joe!

We all accept your decision and wish you well.  The chance to spend several seasons working under Brendan Rodgers must be hard to resist.

Moreover although we believe our £15,000 per week offer was competitive, we understand your desire to move to Liverpool and get on the housing ladder.

You will always be welcome back at any time.

Regards

K

---


From: phil.chapple@cafc.co.uk
To: katrien@cafc.co.uk
Subject: Re: FW: 2015/16 Budget

There's a lad at Sunderland called Ba.

Enthusiastic but not exactly the quickest.

Sorry it's the best I can do....

---

From: roland@staprix.be
To: katrien@cafc.co.uk
Re: FW: DFS Summer Sale - up to 75% off!

My dear Katrien

You are hereby authorised to purchase the cream Italian leather sofa from the Azzurri range.

I agree the reception area needs freshening up and I do love a European bargain!

Best

Roly

---

From: bexleyheath@marriott.co.uk
To: katrien@cafc.co.uk
Subject: Re: Re: Re: Re: Booking

Dear Ms Meire

That will be absolutely fine - we look forward to welcoming Mr. Bauer to the hotel.

We are pleased once again to offer a 30% discount for stays of over 16 weeks - however I'm sorry to confirm that Mr Lepoint's stay did not qualify.

Kind regards

Katarina Kasak
Reservations

Ps - with regard to your catering question, we regret to inform Mr Bauer that the breakfast sausages are actually from Lincolnshire.

---

From: karel-mourinho@hotmail.be
To: phil.chapple@cafc.co.uk
Subject: Re: Re: Naby Sarr

Tall, commanding, cultured, confident....

From what I hear, he's everything you were as a centre half.  LOL!

Karel

Ps - any thoughts on those Bergdich videos?  He's 'top drawer' as Henry Redknapp would say (one of my all-time managerial heroes).

---

From: katrien@cafc.co.uk
To: guy.luzon@cafc.co.uk
Subject: Re: Re: Re: Summer transfer targets

Ah I see!  Wires crossed again...

We entered your parameters into our proprietary network transfer database (BRAVO) and it has highlighted Mr Simon Makienok who is currently playing at Palermo.

Consider him signed....

K

---

From: katrien@cafc.co.uk
To: johann.bg@cafc.co.uk
Subject: Re: Re: Contract offer

Such wonderful news JBG! We are pleased that you see Charlton as the springboard to meet your ambitious career goals.

Ps - no I'm sorry I don't know - what did Iceland used to be called?

---

From: marketing@cafc.co.uk
To: katrien@cafc.co.uk
Subject: Re: Kids for a Quid spin off customer promotions?

OAPs for 1p?
People Called Rob for Only Ten Bob?

We're struggling to be honest - can we move away from gimmicks and build a coordinated ticketing strategy?

---

From: katrien@cafc.co.uk
To: daniel.levy@spurs.co.uk
Subject: Re: Re: Christian Ceballos

Hi Daniel

Totally free? You mean you don't want to negotiate at all?!

Regards

K

---

From: johann.bg@cafc.co.uk
To: katrien@cafc.co.uk
Subject: Re: Re: Re: Re: Contract offer

Bejam

---

From: julian@sidcup-counselling.co.uk
To: nick.pope@cafc.co.uk
Subject: Low shots

Nick

Just a quick note to see if you are feeling ok after yesterday's session?

There was no need to feel embarrassed about the emotional outpouring - I've been doing this job for thirty years and there's no patient situation I'm not prepared for.

Keep working on those mental imagery exercises - really try to feel the ball sticking in your hands.

Kind regards

Julian

---

From: katrien@cafc.co.uk
To: steve@greenwich-disco.com
Subject: Re: Re: Pre-game lounge music

Smooth soul and R&B is a bit too clichéd.

Do you perhaps have any hard heavy underground Belgian speed techno?

K

---

From: katrien@cafc.co.uk
To: tony.watt@cafc.co.uk
Subject: Official warning

Tony

The club embraces and values your eccentric behaviour up to a point.

However we have had several complaints from parents that you advised some of the Academy U9 boys that Tennent's Super was a rehydrating energy drink.

As a result we must issue you with an official warning.

Regards

K

---

From: julian@sidcup-counselling.co.uk
To: nick.pope@cafc.co.uk
Subject: Re: Hull setback

Nick

So sorry to hear what happened - I was watching Goals Express on Sky Sports News and really felt your pain, but at least the team got the late winner.

Please trust me that together we'll get through this - for example feel free to speak to Chris Solly whom I guided through an imaginary knee injury.

Kind regards

Julian

---

From: dr.ashwin.patel@bupa.co.uk
To: katrien@cafc.co.uk
Subject: Re: Johnnie Jackson

Dear Katrien

Thank you for your enquiry.

I'm afraid there is no such medical condition known as 'legs are gone'.  Over time muscle fibres and joint mobility will begin to exhibit gradual signs of degradation, especially in elite athletes.

In short, there is no operation which will treat this naturally occurring condition.

Kind regards

Dr Ashwin Patel
Consultant

Ps - the nurses here have become rather fond of Mr Vetokele!

---

From: katrien@cafc.co.uk
To: guy.luzon@cafc.co.uk
Subject: Re: We need more players!

Shalom Guy!

Before breaking the budget Roland agreed to, are you sure we've tried out everyone?

For example there's a work experience kid called Ademola who can volley an empty Coke can into a bin from 25 yards.

K

---

From: rabbi.cohen@catford-synagogue.co.uk
To: guy.luzon@cafc.co.uk
Subject: Re: Can you help?

Dear Guy

I hope you and your family are well and let me wish you a hearty Mazel Tov on the occasion of the battling home draw versus Fulham.

With regard to your request for spiritual assistance, I will indeed ask members of the community to spare some prayers for the Addicks at this difficult time,

Best.

Rabbi Cohen

Ps - just a personal view (not from the Almighty), but have you tried going 4-5-1 with Gudmonsson in the hole?

---

From: madame.diarra@yahoo.fr
To: alou.diarra@cafc.co.uk
Subject: Je veux rentrer a France

L'equipe Charlton est merde.

Il pleut toujours ici.

Nous avons beaucoup d'argent - on pourrait etre en St Tropez mais nous sommes en Orpington.

Ps - Je ne comprends pas le football mais comment est-ce que Morgan Fox est footballeur professionnel?
---

From: karel-mourinho@hotmail.bl
To: katrien@cafc.co.uk
Subject: Re: Confidential approach

Katrien

I'm honoured that you would 'tap me up' with regard to the potential managerial vacancy at the club - of course I would consider moving up from my current role as Senior Vice President of the Continental Network of Unified Transfer Strategists (CNUTS).

With regard to your question on realistic goals, I think automatic promotion is a long shot at this point but play-offs are well within reach - suffice to say I would be honoured to lead this team out at Wembley.

Kind regards

Karel

Ps - not sure what you meant by providing contact details for some referees?  I once shook hands with Howard Webb but I can't claim to have his phone number.

---

From: mikhail.kennedy@cafc.co.uk
To: guy.luzon@cafc.co.uk
Subject: Re: Re: Playing time

Obviously I'm not looking for cast iron guarantees but I just want to know if I can tell my mates and girlfriend whether I'm a professional footballer or not.

---

From: katrien@cafc.co.uk
To: guy.luzon@cafc.co.uk
Subject: YOU'RE FIRED!

Sorry it didn't work out - your P45 is at reception.

Sweet dreams.

K.

---

From: katrien@cafc.co.uk
To: roberto.martinez@evertonfc.co.uk
Subject: Conor McAleny

Hola Roberto!

When you said "on the cusp of the first team", can you confirm exactly what you meant by cusp?

Kind regards

K

---

From: katrien@cafc.co.uk
To: roland@staprix.be
Subject: Birmingham - yet another great win!

Hi Roly

As we had both hoped and expected, Karel is proving to be a veritable managerial phenomenon - two wins on the spin including back-to-back goals for JJ (his legs may have gone but at least his head hasn't!).

Let's just wait for one more triumph before blitzing the media with news of his permanent appointment.

K

---

From: katrien@cafc.co.uk
To: tony.watt@cafc.co.uk
Subject: Cardiff loan

Q: How do you get two whales in a Mini?
A: Straight down the M4.

(JJ's joke not mine...)

---

From: katrien@cafc.co.uk
To: roland@staprix.be
Subject: Re: Brighton away

"Shut up shop?". It's simply not in his DNA.....

I've read many books about enigmatic geniuses and it rarely pays to tame their wild spirit.

K.

---

From: dr.ashwin.patel@bupa.co.uk
To: katrien@cafc.co.uk
Subject: Re: Rhys Williams

Dear Katrien

Good to hear from you again - so pleased to hear the new NHS call centre is operating well.

Yes of course I know Rhys Williams; indeed he has a wing of the hospital named after him.

Sadly he'll never play professional football again but I believe he has the charisma and intelligence to carve out a bright career in coaching or management.

Dr. Ashwin Patel
Consultant

---

From: katrien@cafc.co.uk
To: nigel.pearson7@btinternet.com; malkay.mckay@hotmail.com; garrymonk10@gmail.com
Subject: Applications

Thank you for your job applications.

Unfortunately we regret to inform you that we will not be pursuing them further as the position has already been filled after a lengthy search process.

We wish you the very best of luck in your future careers in top level football management.

Katrien Meire
CEO

---

From: nurse.mary.oreilly@lewishamandgreenwich.nhs.uk
To: katrien@cafc.co.uk
Subject: Re: Xmas hospital visit

Hi Katrien

I'm aware the players hospital visit is an annual tradition, but given recent form on the pitch it may not have the desired impact - some of the patients are really very poorly.

Perhaps they could drop in to a local old folks home?

Kind regards

Nurse O'Reilly
Intensive Care Unit

---
From: karel@cafc.co.uk
To: IT.help@cafc.co.uk
Subject: Email lists

Hi

Can you please merge the 'MIDFIELDERS@cafc.co.uk' mailing list into the existing list called 'FORWARDS@cafc.co.uk'?

Thanks

Karel

---

From: scouting@cafc.co.uk
To: karel@cafc.co.uk
Subject: Colchester United - Scouting report

Hi Karel

Given limited departmental resources, a short form scouting report follows:

They're in League One.
They play in blue and white stripes, especially at home.
Their ground is on the outskirts of the town.
They're quite physical.
They'll pass it on the ground briefly and then hit it long.
They've a tricky black winger who creates and scores goals (but we understand he may not be available).
Their manager is keen.
Erm...
That's it.

--

From: katrien@cafc.co.uk
To: johnnie.jackson@cafc.co.uk
Subject: Re: Huddersfield refunds

JJ

Lovely gesture but have you thought this through?  There were 2,000 at Watford last season and our lawyers believe they may be entitled to a retroactive claim.

Regards

K

Ps - LOL re: refunds for Hull away but I'm sure it won't come to that ;-)

---

From: karel@cafc.co.uk
To: katrien@cafc.co.uk
Subject: Out of Office Reply - Re: Ground Control to Major Karel

I'm currently out of the office and not responding to media enquiries until further notice.

---

From: chris.parkes@cafc.co.uk
To: reza@cafc.co,uk
Subject: Re: Sanctions

Unfortunately the imminent lifting of Iranian sanctions does not apply to your one game suspension.

---

From: johnnie.jackson@cafc.co.uk
To: stephen.henderson@cafc.co.uk
Subject: Huddersfield whip round

Everyone is in for £200 except Kashi and Diarra who claim no responsibility.

Meanwhile I can't get hold of Ahearne-Grant at all - according to Katrien he's just gone on loan to Cambridge University.

---

From: roland@staprix.be
To: jose.riga@gmail.com
Subject: Coffee?

This message has no content.

---

From: jose.riga@cafc.co.uk
To: FIRST-TEAM@cafc.co.uk
Subject: Hello again!

With only 24 hours before the Hull game, I thought I'd just send a quick note saying how much I believe in you all.

However for now I've selected an eleven just to keep things nice and tight - we'll take a 0-0 and start properly versus Blackburn.

Jose

---

From: julian@sidcup-counselling.co.uk
To: stephen.henderson@cafc.co.uk
Subject: Reaching out

Hi Stephen

Nick Pope gave me your details.

Please give me a call at your earliest convenience.

Kind regards

Julian Edwards
Counsellor

---

THE END

Accountability

The audited accounts of the club (and its owner Baton 2010 Ltd) were published on the Companies House website earlier today.

The accounts to 30 Jun 2014 reflect the final six months of the Jimenez/Slater regime and the opening six months of the Duchatelet regime (or more specifically Staprix NV, a company owned 95% by Roland Duchatelet). 

This division makes it difficult to draw very strong conclusions about what has changed financially but nonetheless some interesting observations are outlined below , with some additional interpretations of my own.

As has been the case for several years, a review of the accounts is complicated by the addition of the Baton 2010 Ltd entity which is owned by Staprix and in turn owns the club.  My comments below relate to the club’s accounts unless stated otherwise:

-          The ‘strategic report’ at the front of the accounts make reference to the lack of investment in the squad during summer 2013 and the problems with the pitch (caused by collapsed drainage) ;

-          Average attendances fell from 18,480 to 16,130 but this still placed us in the top half of the Championship attendance table – the report additionally notes it is the ‘priority of the Board’ to grow attendances to 20,000 in the Championship ;

-          The club aspires to achieve ‘Category 1’ status for its Academy ‘as soon as possible’, but this will require significant development of the training facilities etc. ;

-          Turnover increased from £11.9m to £12.7m – this was explained by an increase in Premier League ‘solidarity’ payments and matchday revenue £0.7m higher than the previous season, explained entirely by the FA Cup run to the Sixth Round  - indeed without the additional Cup revenues, matchday revenue would understandably have been down (given lower average attendances) ;

-          Commercial income was moderately higher at £1.5m as the result of ‘new sponsorship and preferred supplier contracts’ ;

-          The club made an operating loss (before transfers) of £7.2m (2013 : £7.4m) – profit from the disposal of players (which is not the same as ‘transfer fees received’) was again £1.7m, the same as the prior year ;

-          Staff costs were down slightly at £11.5m (2013 : £12.0m), of which £10.4m was wages/salaries - moreover this includes £0.3m of ‘severance costs’ relating to former employees  - once severance costs are added back, this implies staff costs equal to 88% of turnover ;

-          The above staff costs were spread across 161 employees (2013 : 146), of which 101 are on the football side – a quick ‘back of the envelope’ calculation would suggest that 75% of staff costs are accounted for by the first-team squad (say 25 players) and a further say five key coaching staff – on this basis it implies these 30 key playing staff earn approx £5k per week, which seems about right for a Championship club with no legacy Premier League ‘overhang’ ;

-          Non-staff costs (which must be approx £7m) are not broken down in enormous detail, but £2.8m relates to ‘matchday costs’ (presumably policing, stewarding, and maybe costs of goods sold), £2.2m to ‘site costs’ (presumably rates, power, security etc.) and £1.4m to ‘administrative costs’ ;

-          Intangible assets on the balance sheet (ie. The non-amortised portion of the cost of player registrations) increased by £3.3m, reflecting particularly the acquisition of Igor Vetokele just before financial year-end ;

-          Directors fees of £112.5k were paid (2013 : £150k), all of which was paid to a single director – since £150k is equivalent to £12.5k per month and 9 x £12.5k is £112.5k, then I’d be inclined to assume that this was paid to Martin Prothero for his six months work (with a further three months notice ?) – however this begs the question how Katrien Meire is being paid  since no other directors’ remuneration is disclosed ;

-          There is a new item in the accounts called ‘Interest payable on loans from ultimate parent company’ (ie. Staprix NV) – in other words the ongoing operating losses are being funded (as they must somehow) by the owner(s), but not on an interest-free basis  but at 3% ;

-          Although it does not seem very ‘exceptional’, the £89k for ‘pitch cover costs’ are included in ‘exceptional items ‘ ;

-          One of the most interesting issues concerns player transfers, or as they’re known in accounting circles ‘intangible fixed assets’ – the amount spent in fees during the year is very clear (£4.4m), and this relates mainly to the purchases of Messrs. Vetokele, Parzyszek, Nego and Ghoochannejhad.  As has been well-documented, the latter two were ‘in network’ signings and thus any fee (which may of course have been nominal) is effectively an intercompany transfer, however the rumoured fee paid for Vetokele (and to a lesser extent Parzyszek) really do appear accurate.  Whilst fans may question the long-term plan for these players within the network, £4m+ is a meaningful outlay by a Championship club without a Premier League parachute ;

-          The club only received £194k in transfer fees during the year which seems exceptionally low given it includes Stephens, Kermorgant, Button and Smith – admittedly as noted below there may be contingent payments to follow, but the sale (particularly of Stephens/Kermorgant) really does seem to have been driven by wages and a desire to earn at least some fee, rather than just let their contracts expire in the summer ;

UPDATE #2: The above instinctively felt wrong as much as it was clear from the accounts that £194k was the sum received on the sale of intangible assets.  Moreover I couldn't reconcile this amount with the 'profit on disposal of players' of £1,718k.

A review of the 2013 accounts shows a consistency of accounting treatment whereby the amount of the fees which offset any unamortised carrying value of the players sold (£194k for the year to 30 Jun 2014) is shown as cash received on the 'sale of intangible fixed assets' (because it is effectively only a balance sheet transaction), but any excess is accounted for as 'profit on disposal of players' (£1,718k) within 'cash from operating activities'.

I would thus (now) state with some confidence that instead transfer fees received (including an add-on relating to Jonjo Shelvey) were £1,718k + £194k = £1,912k.   Moreover it is likely some of this remained outstanding at year-end given the relatively large 'trade debtors' balance of £906k.  

Apologies for any earlier confusion! (the treatment really is not especially clear).

-          Contingent assets on players sold (if certain hurdles are surpassed eg. appearances) increased significantly from £3.0m to £4.2m – it is easy to assume this relates to part of Diego Poyet’s move to West Ham, but this may have been infeasible (he was out of contract after all) and anyhow belong in the following year’s accounts – instead the difference as suggested above may simply relate to the aforementioned four in-contract players who were sold for a fee ;

-          Contingent liabilities on players purchased are however only £0.4m ;

-          Between 30 Jun 2014 and the date of the accounts, player sales generated a further £891k – this in my view is more likely to relate to Poyet and Michael Morrison ;

-          £755k was added to the value of tangible fixed assets (stadium, offices etc.) which presumably includes some combination of new seats, undersoil heating, training ground improvements etc. (dependent upon the date of the works) ;

-          Amounts owed in bank loans/overdraft fell from £4.8m to £2.7m which must be seen as a positive development  - Richard Murray continues to personally guarantee an overdraft up to £650k (it’s not clear why he is still obliged to do so) ;

-          However as expected this was more than offset by an increase in ‘amounts owed to parent company’ which increased by £12.9m during the year – if my maths is correct, this can be explained in terms of : Cash outflow from operations £4.8m, Net transfer fee outlay £4.2m, Purchase of tangible fixed assets £0.8m, Bank loan repayment £2.1m, Interest £0.6m, Other/Rounding £0.4m – who’d be a football club owner ?;

-          The legacy loans owed to former directors remain at £7m as per the previous year ;

-          Finally between 30 Jun 2013 and the date of the accounts, agents fees of £327k were paid on new signings (this would include the likes of Bikey, Gudmonsson, Henderson etc.).

 A very brief summary for the less financially literate would thus be as follows :

-          The club continues to generate substantial losses ;

-          These losses are being financed by low-interest parent company loans (with no fixed repayment schedule) ;

-          The amounts owed to the bank have been cut substantially;

-          The average first-team player earns approx £5k per week;

-          Substantial transfer fees have been paid out for new players (£4m+ in the last fiscal year, which does not include Gudmonsson and others) ;

-          Transfer fees received for Stephens, Kermorgant, Button and Smith (plus an add-on for Shelvey) amounted to just under £2m.

Red Army

“How did you go bankrupt?"
Two ways. Gradually, then suddenly.”

(Ernest Hemingway)

The audited financial statements of the club were finally posted to the Companies House website this week.

My summary follows with personal thoughts and interpretations in italics. 

All references are actually to the financial statements of Baton 2010 Ltd, the 100% owner of both Charlton Athletic Football Company Ltd ("the club") and Charlton Athletic Holdings Ltd ("the property investment subsidiary").

As a reminder the accounts are for the year ended 30 Jun 2013 and thus effectively comprise a summary of the first season back in the Championship.

• The accounts were signed off by the auditors on 17 Jan 2014 - thus it seems the club waited until the last possible moment to file them  (31 Mar deadline) for reasons unclear.

• The accounts confirm that Staprix NV acquired Baton 2010 Ltd (from CAFC Holdings Ltd) on 3 Jan 2014 - interestingly they note that Staprix NV is owned only 95% by Roland Duchatelet suggesting a 5% minority owner may exist (although it may well be a related party such as a family member or trust).  Nonetheless this is potentially a curious observation.

• Turnover was 39.3% higher at £11.9m - this was explained as expected by a substantial 257% increase in 'central income' (ie. TV), even though the accounts additionally note that this was the first year of a new three year Sky deal which was valued 26% lower than the previous one.  Clearly the dwindling TV revenues in the Championship (as Premiership TV revenues skyrocket) provides a further challenge to any second-tier club seeking to break even.

• Within turnover, matchday income was only 10% higher than the prior League One season - the average attendance was only 6% higher at 18,481 which must be a disappointment given the 9th place finish.  Indeed there seems a reasonable likelihood that matchday income in 2013/14 may be lower than the League One 2011/12 title season given current (lower) average attendances of only 16,248.

• Within turnover, commercial income was 23% lower at £1.4m but this is explained by a change in the way the retail operation is managed (now outsourced to Just Sport), and is thus not meaningful.

• The loss on ordinary activities was £6m, down slightly from £6.8m in 2011/12 - the failure to reduce the loss significantly in the Championship is simply explained by an increase in adminstrative expenses almost identical to the increase in turnover (both £3.3m).  The largest component of administrative expenses is of course staff costs which rose by £3.1m to £12.0m (including national insurance of £1.3m).  As a result, staff costs remain higher than turnover in 2012/13 just as they were in 2011/12 although the ratio has fallen slightly to 100.5% of turnover from 103.7%.  Either way this is a wholly unsustainable situation and perhaps pours some water on the idea that we were being run on a shoestring last season.  Moreover whilst promotion took us one step closer to the promised land of the Premiership, from a purely financial point of view promotion did not really improve the club's situation at all.

• The average total number of employees (excluding temporary matchday staff) rose by 18 to 146 during the year, almost entirely on the playing, training and football management side (rising from 73 to 90) - the wage bill is not categorised separately between those on the playing side and those on the operational side, but if one assumes that those 90 playing staff (representing 62% of total staff) take a 80% share of total staff costs, then it implies average wages per individual of £95k although of course there will be considerable divergence between say the top ten or so best players/management and the rest.  A better interpretation may thus be as follows - to use some round numbers, if one assumes that there is a first-team squad of 15 'senior pros', 10 'junior pros' plus 5 key management personnel (Powell, Dyer, Hart etc.) and if one assumed that the 15 senior pros earn say £300k, the 10 junior pros earn say £100k and the 5 key management personnel earn an average of say £150k then these 30 earn a total of £6.25m.  If so this would leave £4.4m to be spread amongst the remaining 116 total staff (146 - 30) implying an average wage of £38k for the remainder.  Given this includes some well-paid operational staff like Martin Prothero, as well as a myriad of coaches, Academy pros, medical staff, commercial staff etc. (In addition to less well-paid admin staff) this doesn't appear an unreasonable set of 'guesstimates' to me.

• The highest paid director was paid £150k - others have suggested this was Martin Prothero and I've no reason to disagree.

• The interest burden on the club's debt was £360k, down slightly from £384k - the interest burden is not especially significant at just 3% of turnover but this is a little misleading given the vast majority of the debt is not interest-bearing (so-called 'friendly debt' owed to the holding company and former directors).

• During the year £813k was paid to acquire player registrations - these would appear to largely relate to Lawrie Wilson and David Button, and almost certainly also promotion-related add-ons relating to transfers from the summer of 2011.

• There was profit on players sold of £1.7m arising predominantly from contingent fees relating to Shelvey/Elliott/Jenkinson/Richardson/Hudson/McCarthy and Academy players, Palmer and Huddart (to Chelsea and Arsenal respectively) - it is frustrating to learn that Academy players that most fans wouldn't have heard of are being poached by the big clubs though with the likes of Poyet and Cousins making such a big and public impact at first-team level, hopefully this trend will slow.

• Subsequent to year-end, the disposal of player registrations has generated income of £570k -  given the date the accounts were signed, this can't relate to Kermorgant, Stephens and Smith.  However it may include the likes of Button and some contingency payments on prior sales.

• The carrying value of the club's tangible fixed assets (freehold and leasehold property) was revalued upwards following an independent review by £9.6m - this is probably an irrelevant fact (certainly not offering any cashflow benefit) reflecting rising property valuations across the region, although cynics will no doubt point out that this may be interesting news should the club be considering a move someday from The Valley.  The flipside of course is that the value of the land we might have to purchase or lease to build a new stadium will have increased too!

• Short-term debts (due in less than 1 year) fell slightly as a result of the repayment of £250k due to Richard Murray (as noted in the previous year's accounts).  Bank loans and overdrafts remain at £2.2m of which Murray has guaranteed up to £800k.

• Longer-term debts (due in more than 1 year) rose as expected by nearly £6m simply reflecting the need to finance the ongoing operational deficit above of exactly £6m.  Total debts due in >1 year now total a somewhat shocking £29.7m of which £2.5m are bank loans, £7.7m are former director loans, £15.4m are loans to the parent company ('owner loans') and £3.8m are grants received - the majority of long-term debt remains 'friendly' in nature but the figure will simply keep going up unless either the club breaks even or the new owners perhaps choose to inject equity rather than more debt (or convert one to the other).  I continue to remind fans however that the specific nature of the club's debts both now and in the recent past renders administration a highly unlikely possibility (why would owners and/or former directors push the club into administration thus almost guaranteeing a near worthless return?) - this fact is very clearly misunderstood by many fans.  On a different note it was good to see that £1.6m of the longer-term (and 'less friendly') bank loans were repaid during the year, reducing the total outstanding to £4.2m (paying a floating rate of LIBOR + 2.5 to 3%). 

• In addition to the repayment of Murray's £250k short-term loan above, a further £880k of longer-term loans to Murray were also repaid - per the previous year's accounts, £1.55m of Murray's loans became repayable upon promotion to the Championship and it appears that over half of this amount due was indeed repaid.  If my calculations are correct therefore, Murray was repaid a total of £1.1m during the year and moreover in Jan 2014 was of course relieved of his 10% stake in CAFC Holdings Ltd, the previous ultimate parent company of the club.  In short the club's financial obligations to Murray remain significant but reduced, whilst Murray's quasi 'obligation to the club' (via his equity stake) has been removed as of January.

So in short despite promotion to the Championship, limited investment in new players and a respectable 9th place finish, the club's finances remain perilous with a £6m running annual loss and long-term debt of £30m. 

It is not surprising therefore that Duchatelet might wish to adopt an alternative approach, and it is one which we ought to cautiously welcome if only because the approaches that came before have patently failed to deliver stability. 

Clubs like ours can deliver footballing success with a degree of financial stability (think Brighton, Burnley, Swansea) or without it (think Portsmouth, Leeds, QPR). 

As a fan with hopefully many more decades of support in front of me, I'd personally rather wait longer for a shot at the former than recklessly target the latter. 

Early signs suggest Duchatelet feels the same way.