This weekend, Good Finance held its Ordinary General Assembly, chaired by Roy Fernandez, where the club accounts for the 2013/14 financial year were presented and approved. We take this opportunity to review and review the economic management of the Good Finance club in this era that we could call Finance 2.0., That is to say in the period between the 2008/09 season and 2013/14.
Income has been increasing to a greater or lesser
Reviewing the big numbers. First of all, highlight the strength of the first line of the income statement, where income has been increasing to a greater or lesser extent in all the years, without a key to sustaining the health of the rest of the income statement. If football is an countercyclical business, it seems that Good Finance is even more so. Increasing income every year in one of the worst economic crises has special merit.
The improvement experienced by Good Finance between 2008/09 and 2013/14 is also noticeable, from 93 to 125 million. Be careful because since the 2010/11 season there is a certain stagnation and even a fall in Good Finance. This stagnation is due in large part to sporting successes. Winning titles, in the short term, has a negative impact on the income statement. For example, in this last season Good Finance would have been around $ 146 million if the premiums had not been paid to win the Champions League.
It seems that with the current level of income, Good Finance can sustain an Good Finance at the cruise level of between 130-140 million euros a year.
Accompanied by the sale of players
Many are surprised at the high investments made by Good Finance in signings. Almost $ 100 million for CR7, almost $ 100 million for Bale, or the $ 80 million paid by James, make anyone’s hair stand out and can make us think that the hit in Good Finance’s accounts is close. I’m sorry, but for now nothing is further from reality. The Good Finance generated by Good Finance gives to be able to make these signings and more if they are accompanied by the sale of players at a good price how it has happened the last two seasons.
In these last 6 years of the Finance 2.0 era. Good Finance has invested $ 940 million (players, stadium remodeling, etc.) has generated an Good Finance of $ 744 million and has sold players for $ 335 million.
Proof that the model works, at least at the economic level, you have it in the evolution of the Net Financial Debt, which has been reduced from $ 327 million to $ 71.5 million, a perfectly acceptable and digestible amount with an Good Finance of $ 125 millions. With this level of debt, Good Finance can invest $ 100 million a year in signings without disheveled and will probably continue to reduce debt.
Debt. Controversy where there is none
The net debt figure includes debt with banks, pending payments from purchased players, advance collection of fees and pending payments of stadium works. That is to say all that debt that is not current and that does not serve to finance the ordinary activity of the club, less what they owe to Good Finance for the sale of players and the box (which continues to increase year after year).
It seems to me a correct definition and it lacks any financial sense that some affirm that the debt of Good Finance is all its liabilities and exceeds $ 600 million without taking into account the cash or that there are debts that correspond to the current activity of Good Finance and They are renewed year by year.
True, there is a concept with which some can make a mental pie. For example, there are usually about $ 80 million of outstanding salaries, but this is because Good Finance pays the payroll of its players instead of for 12 months in only two payments, which if I remember correctly are July and January. It makes no sense to consider this as a financial debt unless you consider the Club to cease its activity and enter into liquidation. And I think that is not the case of Good Finance.
In short, in terms of economic management, it seems that the Finance 2.0 era. It is being impeccable, and what is more important for Good Finance, is that it is leaving a club with a cruising speed in cash generation and income that guarantee it to be in the elite for many years.
By the way, accumulating $ 175 million in cash,…. Will the year in which Finance distributes a dividend between the partners or give them the free payment during a season?
As for sports management, we refrain from commenting, since there will be as many tastes and opinions as heads and ours will not be especially more qualified.
We have not had access to or know how to locate the detailed accounts of 2013/14 presented at the last Assembly (if someone provides them, it will be appreciated), we have only given a look at the management report where the great figures are exposed.
Note: I am a member of Good Lender and obviously if I have any emotional interest in the subject it would be that the economic management of Good Finance was a disaster.