Salford financial issues(again…)

[Worzel]

2 hours ago, LeeF said:

Salford would have been ranked 4th not 12th under the previous model. Which is the most accurate?

^^ 100% this

4 minutes ago, LeytherRob said:

The financial year ends in April, so clubs submit the financial aspects of grading is submitted in May/June time to give time to audit the data. There just isn't an accurate way to have live financial data informing the grades come October time unfortunately - there are quite severe punishments including a reduction of a full grade (A to B, B to C) for any insolvency events so if it did come to that Salford would be guaranteed relegation at the end of the year since they would be a C.

Well said. The current model has a clear mechanism to deliver consequences to clubs in this sort of scenario, in a way that was never as clear before.

Edited January 13 by Worzel
Typo

[Wakey Til I Die]

2 hours ago, Tommygilf said:

Yeah I can't say I agree with any of that opinion piece I'm afraid.

As ever, the Bradford example is a fair one to bring up. I don't think the sport has ever come up with a clear response to situations like these - if Salford are too big to fail then surely Bradford were too, likewise if Bradford could have finances cut and the rest, then Salford shouldn't be preferred to any greater extent. Or do we say we have learned from Bradford, admit it was dealt with in the wrong way then and have a better strategy going forwards?

Wherever there is money being invested from outside, indeed from competitors in this example, those people have a right to know where this money is going. Martyn's idea seems to be for the club owners to gift Salford 6 figure sums each and let them carry on. That can't be right.

Agreed. The idea of other clubs owners chipping in to allow Salford to carry on as they are regardless is as laughable as it is inherently wrong. The premise of his piece seems to be that Sky will enforce reductions if Salford drop out of Super League. Well possibly so but only if that happened now or just after the start of the season and we were left with 11 clubs thus meaning we can't supply them with the requited content levels. But that is the whole point of the player sales, to raise quick funds through the sale of their better and most expensive players and to enable them to operate moving forward at cost most akin to their income, i.e. to stop them going bust and to carry on as a going concern. They could probably achieve this by selling 6 or 7 players. They can be replaced by much cheaper free agent agents (for eg. Walker & Hampshire would likely be cheaper than Brierley & Sneyd) and young lads wanting a chance, like Cas did last year. Even at that point they would likely have a better team on paper than London did last year so there can be no moaning about the league not being competitive enough if they shed players. And if they are replaced next year by Bradford then so be it, the upshot for Sky would likely be more eyeballs watching anyway. Salford have got themselves into this mess, they alone have to take their medicine.

[Tommygilf]

2 minutes ago, Wakey Til I Die said:

Agreed. The idea of other clubs owners chipping in to allow Salford to carry on as they are regardless is as laughable as it is inherently wrong. The premise of his piece seems to be that Sky will enforce reductions if Salford drop out of Super League. Well possibly so but only if that happened now or just after the start of the season and we were left with 11 clubs thus meaning we can't supply them with the requited content levels. But that is the whole point of the player sales, to raise quick funds through the sale of their better and most expensive players and to enable them to operate moving forward at cost most akin to their income, i.e. to stop them going bust and to carry on as a going concern. They could probably achieve this by selling 6 or 7 players. They can be replaced by much cheaper free agent agents (for eg. Walker & Hampshire would likely be cheaper than Brierley & Sneyd) and young lads wanting a chance, like Cas did last year. Even at that point they would likely have a better team on paper than London did last year so there can be no moaning about the league not being competitive enough if they shed players. And if they are replaced next year by Bradford then so be it, the upshot for Sky would likely be more eyeballs watching anyway. Salford have got themselves into this mess, they alone have to take their medicine.

I tend to agree with that, even more so precisely because this isn't a one off

[M j M]

54 minutes ago, Bull Mania said:

Just my opinion but I fail to see how a club who was/is weeks away from going bankrupt, can be deemed the 12th strongest club. Doesn't matter how many tiktok followers you have if you can't pay players wages. 

Finances account for 4.5. points out of 20 in the IMG rankings. Some of the reasons Salford are weak financially will spill over into other areas, especially fandom, but the assessment wasn't ever set up to be solely a measure of financial stability. Or, going back to previous arguments, about quality of stadium.

Like it or not it was a blended average of a range of metrics and Salford are obviously better off than Championship clubs in lots of the other ones.

[Jill Halfpenny fan]

Does anyone have a breakdown of Salford's IMG score?

[Worzel]

2 minutes ago, Jill Halfpenny fan said:

Does anyone have a breakdown of Salford's IMG score?

Yes, Salford published it when they got it

https://salfordreddevils.com/salford-red-devils-publish-img-grading-breakdown/

[binosh]

2 hours ago, Martyn Sadler said:

The difference being that we can't always rely on wealthy new owners stepping forward, as the Salford example shows.

I just don’t buy this rhetoric that you can’t just rely on wealthy owners, plenty of clubs exist and perform without, they just cut their cloth accordingly and play within their means in the relevant division (which is what most people are suggesting Salford do) Batley are a good example of that, Widnes for a few years, Bradford for a few years, Swinton, Rochdale, Barrow, Keighley to name a few, all of which have had to cut their cloth accordingly aswell. But Salford stubbornly won’t do that with the arrogant notion it’s SL or nothing for them.

If Danson, Moran, Beaumont, Gaush, Hudgell, Davy or whoever walked away from their clubs and they couldn’t find a buyer to cover it I’d expect all of them to cut costs and play within their means no matter the division so that the club remains for fans.

Who knows, maybe Ford et all would have bought Salford instead of Oldham and reinvigorated the club if they weren’t currently in SL overspending and were in the lower divisions. Problem is now they have racked up loads of debt that new owners would be expected to clear.

I bet 90% of all sports clubs worldwide have a benefactor.

[LeeF]

2 hours ago, Bull Mania said:

Just my opinion but I fail to see how a club who was/is weeks away from going bankrupt, can be deemed the 12th strongest club. Doesn't matter how many tiktok followers you have if you can't pay players wages. 

We're talking weeks after the gradings were handed out, not half way through the following year. Even if you're pro  IMG, I think it's fair to ask that there should be better scrutiny on the financial elements of the grading. Otherwise it won't succeed IMO and it will just be licensing all over again. "nice idea but wasn't implemented/governed correctly" Then we'll have yet another restructure.

The scoring is based on the latest year end accounts which will have been months before October 

You could use more upto date financial info but that would be club produced which potentially brings its own issues 

The Salford financial score was poor as I posted above. The 12th position is a much better indicator than the 4th based on the old system 

[LeeF]

1 hour ago, LeytherRob said:

The financial year ends in April, so clubs submit the financial aspects of grading is submitted in May/June time to give time to audit the data. There just isn't an accurate way to have live financial data informing the grades come October time unfortunately - there are quite severe punishments including a reduction of a full grade (A to B, B to C) for any insolvency events so if it did come to that Salford would be guaranteed relegation at the end of the year since they would be a C.

Also if their financial year end is April they don’t have to produce the 24 accounts until 9 months after so the scoring could be on the 23 financials. 
 

The comments about the live data and severe punishments are spot on. 
 

Actual year end for the club seems to November so a lot of water has passed since November 23

https://find-and-update.company-information.service.gov.uk/company/08371113/filing-history

BTW there was an average of 64 employees

 

Edited January 13 by LeeF

[DEANO]

8 hours ago, Martyn Sadler said:

If you take away directors' contributions, Salford made the lowest losses in Super League in 2023.

Is that cos they don’t pay their bills

[M j M]

4 minutes ago, DEANO said:

Is that cos they don’t pay their bills

That doesn't make any sense.

[DEANO]

1 minute ago, M j M said:

That doesn't make any sense.

How much would their losses be if they paid everyone they owe plus the advance they’ve brought forward 

[Worzel]

22 minutes ago, DEANO said:

How much would their losses be if they paid everyone they owe plus the advance they’ve brought forward 

The entirety of their losses will be in the P&L described, so you can take those numbers as the actual ones. 

Their payments due to suppliers, whether on time or not at all, will be reflected in the Balance Sheet in the creditors section. 

[dboy]

34 minutes ago, M j M said:

That doesn't make any sense.

Yes it does.

They default on a huge proportion of their rent every year. Instead, Salford Council pay it, as guarantors.

If SRD actually paid that money themselves, they would record an even bigger loss.

[M j M]

43 minutes ago, DEANO said:

How much would their losses be if they paid everyone they owe plus the advance they’ve brought forward 

That's not how profit and loss works.

[DEANO]

34 minutes ago, M j M said:

That's not how profit and loss works.

Forgive my naivety and keep on spending what you haven’t got

[M j M]

21 minutes ago, DEANO said:

Forgive my naivety and keep on spending what you haven’t got

Sorry for pointing out that you made a nonsense point, but you feel free to abruptly change the subject.

[Dullish Mood]

2 hours ago, dboy said:

Yes it does.

They default on a huge proportion of their rent every year. Instead, Salford Council pay it, as guarantors.

If SRD actually paid that money themselves, they would record an even bigger loss.

I’m definitely paying for a blood pressure monitor for you for when Salford beat Wakey in a game this coming season.  Off the charts!!!!!

[JonM]

8 hours ago, dboy said:

Yes it does.

They default on a huge proportion of their rent every year. Instead, Salford Council pay it, as guarantors.

So, in effect, they do have a wealthy benefactor - the council have been effectively providing some variable amount of funding to them for some years. The problem is that this benefactor can't really afford it and has to justify it to the public.

[The Blues Ox]

16 hours ago, Worzel said:

Yes, Salford published it when they got it

https://salfordreddevils.com/salford-red-devils-publish-img-grading-breakdown/

I like this part of their statement:-

"However, we believe that additional due diligence within the reporting system may be necessary to maintain a level playing field."

[Worzel]

1 hour ago, The Blues Ox said:

I like this part of their statement:-

"However, we believe that additional due diligence within the reporting system may be necessary to maintain a level playing field."

Self-awareness is always welcome

[Chronicler of Chiswick]

13 hours ago, DEANO said:

Is that cos they don’t pay their bills

Doesn't work like that, unpaid bills have to appear as a liability in the accounts. If Salford aren't doing that then their accounts can't be certified.

[LeeF]

No P&L in the 23 accounts registered at Companies House but that’s not unusual. 
 

Shareholders Funds reduced by c£400k which gives an indication of their losses

Short term creditors increased by c£50k. Long term ones by over £500k

Charged were registered in July & August 24 by Wedo Finance Ltd which indicates they may have borrowed some funds although this may be a refinance. 

[M j M]

1 hour ago, The Blues Ox said:

I like this part of their statement:-

"However, we believe that additional due diligence within the reporting system may be necessary to maintain a level playing field."

The thing is I don't think anyone is questioning Salford's IMG score as not being accurate.

[LeytherRob]

45 minutes ago, LeeF said:

No P&L in the 23 accounts registered at Companies House but that’s not unusual. 
 

Shareholders Funds reduced by c£400k which gives an indication of their losses

Short term creditors increased by c£50k. Long term ones by over £500k

Charged were registered in July & August 24 by Wedo Finance Ltd which indicates they may have borrowed some funds although this may be a refinance. 

Weren't these relating to the M60 digital billboard? I'm sure someone posted the docs on here earlier in the thread