I take it you are referring to Saints.

Saints had to take out a bridging loan to cover the season away from KR, and construction of the new stadium.

By generating a few million quid up front via 5 year Season tickets, Saints are assisted in paying for the stadium and covering this bridging loan.

Nothing suspicious about it.

From Saints point of view i think the club will take any tax hit that may occur on the chin, because they possess not only rich backers, but valuable real estate in the form of a new stadium, which will be owned by the Saints.

Some other clubs without that level of backing, and who do not own their own ground, might however find the going very tough in the short term.

Its noticeable that a number of clubs have been taking "hair cuts" of late, with little in the way of recruitment. Players going out seem to be greater than those coming in, with the emphasis being purely on bringing low cost juniors through the system. It does make me think this is a case of clubs cutting their cloth accordingly, in anticipation of a financial apocalypse.

I assume Mat was referring to the Bulls 5/10 year deals.

He was referring to our own long-term deals offered this year (and yes, I DO know cos we discussed it in PM). Nothing to do with Saints whatsoever.

Anyone know when this court case will be resolved?

Is that right about Wire? I haven't looked at any accounts in detail, but the headlines have been about the club being sustainable and making small profits. I would expect if our backer withdrew we would have no major transfer fees for a while, but 'seiously badly insolvent'???

The RL club company is - last time I looked. The stadium owning company has megabucks in fixed assets and shareholders' funds, thanks to coming heir to a stadium for next to nothing. Therefore the pro-forma consolidated group is fine. But the RL club, operated by the subsidiary, has a massive deficit of shareholders' funds. I remember a couple of years ago a big debate about club losses, and especially the figure reported for Wire. IIRC the RL club made a biggish loss but the parent - operating the stadium - made a profit, so the net result was a smaler loss. The best way is to get hold of the accounts - and ALL the accounts, not just the parent or the subsidiary. This is especially important where the combined entities are not large enough to have to prepare group consolidated accounts, so you have to do a pro-forma consolidation yourself to see something like the overall position.

I doubt anyone but those close to the arrangements knows how much Moran pays out on behalf of the club (or has done so over recent years) which has been by way of gift and therefore does not need to be reflected in the club accounts. Vraious accounts from informed Wire fans over the years suggest the amounts have been substantial - and it is very much Wire's good fortune that they have a genuine fan (as Moran quite clearly is) who is also very wealthy and prepared to put his hand in his pocket. Would that we had one such! As well as a council that was able to facilitate a Tesco-funded stadium development like Wire, Saints and Wigan rather than our load of muppets who alow Tesco to build big stores anywhere but Odsal!

Incidentally, for the avoidance of doubt: add the Wire RL club company and the stadium-owning company together, and you have (or had, last time I checked) the strongest balance sheet of any RL club - even more so than Leeds. This arose pretty well entirely through the stadium, which is in the books at a substantial value but where the original cost was small because of the deal with Tesco.

One club which has not been listed on the forum as having issues is Hull FC. In the recent takeover Pearson was quoted in the YEP, which has subsequently been edited, that the club's finances were not as strong as they could be due to the potential of ongoing court case being found against them.
This was obviously referring to the image rights issue. Pearson does not strike me as being niaive and has no doubt asked about the likelyhood of the judge ruling in their favour prior to his purchase and is preparing the FC fans for a shock.
Given that Kathy Hethrington was in the chair you can assume that their exposure is potentially similar to that of Leeds.

Very useful info there, mate. Albeit reinforces the worry. Thanks.

Again, from memory (so probably incorrect!) I thought the stadium company actually made a small loss last set of accounts.

It may have - I was drawing from memory too, and I can't remember whether I am thinking of the 2008 or 2009 accounts. When I get a minute (won't be today) I'll go check. I seem to recall that Wire fans were quoting one headline loss figure based on one of the companies, when the real number was somewhat higher - so you might well be right. Indeed, it being your club the probability is that you are.

It was 2008 I was thinking of,. and yes the parent made a modest loss too that year. The RL club company had net liabilities of around £2 3/4m. The parent had net assets of over £12m. Not sure if I ever pulled off the 2009 accounts for the club and the parent. About the only ones I can't find on my PC. Bet I trash-canned them somewhere. Anyone who has a pdf copy fancy saving me a couple of quid and mailing me a copy of either or both at adeybull@hotmail.com? Happy to reciprocate.

It was 2008 I was thinking of,. and yes the parent made a modest loss too that year. The RL club company had net liabilities of around £2 3/4m. The parent had net assets of over £12m. Not sure if I ever pulled off the 2009 accounts for the club and the parent. About the only ones I can't find on my PC. Bet I trash-canned them somewhere. Anyone who has a pdf copy fancy saving me a couple of quid and mailing me a copy of either or both at adeybull@hotmail.com? Happy to reciprocate.

An interesting thread, thanks to those in the know for posting the detail. The implications are rather worrying though.

I wonder if this is why Leeds haven't made any new signings for next season yet?

Quote ="Adeybull"It was 2008 I was thinking of,. and yes the parent made a modest loss too that year. The RL club company had net liabilities of around £2 3/4m. The parent had net assets of over £12m. Not sure if I ever pulled off the 2009 accounts for the club and the parent. About the only ones I can't find on my PC. Bet I trash-canned them somewhere. Anyone who has a pdf copy fancy saving me a couple of quid and mailing me a copy of either or both at adeybull@hotmail.com? Happy to reciprocate.'" Thanks. Apologies if this is a stupid question, but when the clubs announces their results, and i'm referring to the headlines and the press release rather than the detailed report, when they quote a £340k loss for 2008 and a £40k (IIRC) profit for 2009, are they referring to the overall group, including RL club and stadium, or do they basically pick and choose what they want to quote anyway? Cheers in advance!

Quote ="Adeybull"It was 2008 I was thinking of,. and yes the parent made a modest loss too that year. The RL club company had net liabilities of around £2 3/4m. The parent had net assets of over £12m. Not sure if I ever pulled off the 2009 accounts for the club and the parent. About the only ones I can't find on my PC. Bet I trash-canned them somewhere. Anyone who has a pdf copy fancy saving me a couple of quid and mailing me a copy of either or both at adeybull@hotmail.com? Happy to reciprocate.'" Thanks. Apologies if this is a stupid question, but when the clubs announces their results, and i'm referring to the headlines and the press release rather than the detailed report, when they quote a £340k loss for 2008 and a £40k (IIRC) profit for 2009, are they referring to the overall group, including RL club and stadium, or do they basically pick and choose what they want to quote anyway? Cheers in advance!

They can quote either I guess. Most businesses would pick the figures that looked best! Logically, you would expect either the RL club company or the consolidated results.

One day, but not for now, I wil tell a story about the Bulls' reported results of one year a few years ago, and how to spin. And no-one that I saw, not in the media, not even Chair Maker at Stains (who was watching these things like a hawk ready to pounce, and was actually more on the right lines generally than I ever admitted to him or acknowledged!) spotted it! It was naughty, but it worked.

That 2008 figure is either the RL club only or the pro-forma consolidated. I suspect the former, but accounts are on PC at home and I can't remember the exact numbers. If that is a published 2009 figure, then it suggests the RL club is now indeed covering its costs. There is still the big historic deficit to make up, mind!

IIRC, there was a big debate on these forums and in another place when the 2008 results for all the RL clubs came out. The gist was, IIRC:

- Hull was the only SL club made a profit (albeit IIRC they capitalise player values in their accounts, which as an accountant I would find very iffy)

- Bulls broke even

- Quins and Hudds lost over £1million each - IIRC somethintg like £1.8m and £1.3m respectively. See what I mean about sugar daddies?

- Saints lost a shedload too, and I think this was one factor that led to McManus capitalising about £1.4m of his loans.

- The debate re Wire was over which entity you looked at. Some were quoting the small loss for the holding company, and I upset a few by reporting the RL company's larger loss.

- All the other clubs lost money, in the hundreds of thousands IIRC. Even Leeds IIRC, albeit for one-off reasons.

- Hull KR were late filing their accounts as usual. The Black & Whites were of course having a field day.

I stress, all from memory, so E&OE

Not sure if a similar debate took place for 2009. I recall some limited debates took place, cos the Hull forum's resident financial commentator saved me some money when she emailed me pdfs of the accounts of some clubs I had not yet called off.

All clubs should have filed their 2010 accounts by the end of September, or August if they have a November year end as I recall Wire do. Except Hull KR of course...

cheers again.

On your point above, I believe the profit announced was attributed to our first visit to Wembley in 20 years. I suspect the results may be good for 2010 too on the back of the return trip, but will be interesting to see.

You may be thinking of something different but 2006 springs to mind. I actually pondered what the mechanics were for filing a query at Companies House where the directors' report didn't on the face of it entirely tally with the bits stated in the notes but decided it wasn't worth the hassle

Warrington Sports Holdings in their accounts report the figures as "consolidated" and refer to this as including the "financial statements of the company and its subsidiary undertakings" with "The Warrington Football Club" being identified as the sole subsidiary.

Would this mean that the reported figure reflects the "combined" perfromance of the two companies?

They do give seperate sets of figures for the balance sheet for the company (Warrington Sports Holdings) and the Group as a whole (including Warrington Football Club). It would appear that the club is reducing its debt however it still remains substantial.

There is no mention of any on-going investigations by the HMRC that I have seen specific mention made to in other club's accounts.

The last consolidated accounts (2009) showed a small profit of 21k. The previous accounts (200icon_cool.gif showed a loss of 339k - this was the year that transfer fees for Myler and Atkins were incurred. I think Warrington took the full hit of the fees that year whereas the like of Wigan spread the cost across the full duration of the player's contract - which of course is fine as long as you don't sack them (yes I'm looking at you Mr Gleeson).

The 2009 accounts must have been group accounts then (the 2008 ones were not), so yes it would seem so.

As for provsion for the HMRC settlement...and given that it is a truth universally acknowledged that Wire are more exposed than everyone else and the suim involved must be about the same size as the GDP of Belgium, then maybe Mr Moran has agreed to underwrite any settlement amount?

Nah. I'll send you a PM when I have a minute. On the list with a few others I owe a PM reply to on various subjects

Apologies if you have already covered this, and I think you have, but can we take it as read that if HMRC win the day, and the payments made to players under image rights are deemed to have been net, then pretty much every club will posthumously (not entirely a Freudian slip) fall substantially foul of the salary cap?

I don't suppose it will make much odds if every club starts the season on minus 6, but it would be a nice head start for Widnes who presumably wouldn't have the problem?

Would clubs falling foul of this be deducted league points?
Also would they have their future SC amounts reduced due to having taken more "salary cap value" than declared in past seasons?
The general gist seems to be that it will affect all clubs to a lesser or greater degree except those who have recently gone into administration.
The one thing we all fear is losing this case v HMRC.
The other which will be very interesting will be the attitude of the RFL when it has to be publicly admitted that almost all clubs were, via these tax dodges, breaking the SC on an Industrial scale.
Interesting time ahead!

I don't see the benefit to the RFL to punish all its clubs for a technical tax issue. All clubs will have had player contracts up to the max value of £1.65m, if they were using tax loopholes, fair enough if it was common practice, which it appeared to be in sports, this does not appear to be a way of trying to cheat the salary cap.

If clubs receive large tax bills for this, the major issue is making sure that the sport and the clubs can afford this rather than looking to punish them IMHO.

The RFL will no doubt be aware of the fact that lower tax rates will have been paid to certain players on portions of their wages, and if they didn't agree with this, they could at this stage pro rata them up to the full tax rate and punish these clubs for a technical breach of the salary cap. The fact that this hasn't happened, and the fact that it appears to have been a widespread method, suggests that they are not looking to dish out punishments.

I have indeed covered this on numerous occasions in recent months, all over the place, making exactly that point! And usually had my head chewed off, generally by the fans of the clubs thought by common consent to be the ones most likely to have used excessive image rights to get more bang for their salatry cap bucks. The reception on the Wire forum, in particular, a year or so ago when I raised this issue was frenzied, to say the least.

Yes, as far as I am concerned (and the current salary cap rules state) if it transpires that a club ends up paying tax and/or NIC on behalf of a player (as would be the case) then that amount is part of that player's salary cap value. And so yes, you would have retrospective breaches of the cap IMO.

I very much doubt the RFL would take any action, though. They were aware of the club-paid image rights deals (and similar) and did NOT make any adjustmenst at the time. Therefore, they can hardly go back now and say that the clubs cheated the cap when everything was in plain sight?

Which is likely to pìss off those clubs that did not employ expensive antipodeans or were not spending the cap, and so may not have needed to resort to these devices to the same extent. Or those clubs who were nervous about using these devices, and considered it prudent not to resort to them. they are the ones who could fairly feel cheated.

Although I made a lot of mischief at the time on various forums about this issue, I never once expected any retrospective penalties to kick in. So those clubs who paid what may subsequently be ruled to be "excessive" image rights, pensions (I violently disagree with HMRC over that one - bunch of wakners), employee benefit trusts and heaven knows what else, may well have been as guilty of "cheating", if not more so, as those who have actually been penalised in the past; but will have got away with it.

And anyway, since it is the SL clubs effectively decide the RFL's policy, turkeys ain't gonna vote for Christmas?

And then, of course, we get onto the whole separate issue of third party-paid image rights...





Lest anyone forget - what we are talking about primarily here is antipodeans receiving a big chunk of their packages in the form of image rights paid to their personal service company in a tax haven - free of tax and NIC. No UK tax liability provided the money remains offshore because they are non-domiciled. Then, when they leave the UK to return to their country of domicile, they cease to be resident in the UK so can collect the money with impunity on the way back. And escape tax back home in Oz or NZ or whatever because they received the money before they bacame resident again in their country of domicile. The "Singapore Sling", "Singapore Parachute" or "Flying over Singapore Payments" as they were variously called, since the money had to be transferred while the player was physically in transit on the way back and therefore, for a short period, not resident in ANY country. Singapore is of course a bit over half way. So these guys paid far less tax than you or I could every get away with.

Not sure that Warrington will be the most exposed. No doubt they may have recently been utilising this route however going back a few seasons they were not even operating at the salary cap (hence being able to bring Johns in on a short term deal - and he did and still does earn his image right payments for the club).

I would image a fair few other clubs have a bigger exposure due to it going back 6 years.