Following the release of the Loftus Road plc accounts recently, I sat down and spent a couple of hours reading through them. They meant nothing to me! So I sought the help of a financial expert and asked him the following questions. Here are his answers.

So what exactly what information has been released?
The plc has completed two years worth of accounts covering up to May 2002, the end of last season.

Why’s it taken so long?
The first set of accounts were delayed due to administration, the second set aren’t as late as you might think. Companies have up to seven months after their year end to release their accounts, we should expect to see the 2003 accounts around December time.

Do the accounts tell us exactly who £10 million loan is from?
Nothing that you don’t know, only that is from a company called ABC Corporation.

So what has happened to the £10 million?
Most of it has gone on settling old debts. £3.5m was given to Chris Wright to write off his outstanding loans. Nearly half a million was paid to the administrators for their services and nearly £300,000 to the solicitors for the same reason. They spent £660,000 cancelling existing player’s contracts and the rest went to the bank and clearing other loans.

So Wright walked away with a tidy sum then?
Well yes and no. His loans to QPR totalled over £8 million; he lost over half of that. He also handed over 26.8% of the plc’s shares back to QPR. These have been ring fenced into a new company called QPR nominees, the idea being the board can look to sell these to future investors.

Then Wright doesn’t own any of the club anymore?
Yes he does. He retained a 16.4% personal shareholding, plus a company called Aspen (of which he is a trustee) owns 6.2% and the trustee’s of Wasps (of which you’d imagine he had some involvement) own a further 4.6%

Did we lose money?
Yes. Although the losses have been substantially reduced. To the end of 2000 and 2001 the plc lost over £5 million each year. The latest set of accounts show a loss of “only” £323,000 to May 2002.

Where have these reductions come from?
Obviously there has been a massive reduction in player costs. To year end May 2001 the player and management salaries totalled over £9 million. The latest set of accounts show a wage bill of just over £3.5 million.

Does it tell you who earns what?
No, but you can work out that the average salary between players and management is just over £57,000 a year. Compare that to the 2001 accounts which show an average salary of £75,000 a year and you can see the drop.

What about the directors, are they earning a fortune?
David Davies is the only director on the board paid a salary. He gets a total package worth £158,000 a year. This includes £20,000 of performance related bonuses.

How much do the fans contribute towards the club?
The total revenue earned from season tickets, match day tickets, programmes etc totals over £2.6 million. There is also a figure of £1.3 million for combined income from sponsorship, merchandising and commercial income. Manchester United claim that they could play every week in an empty stadium and still make money, with an annual turnover of £5.6 million it is clear Loftus Road plc can make no such claim.

How do our early cup exits affect us?
In season 2000-2001 QPR reached the 4th round of the FA cup and the 1st of the League Cup, in season 2001-2002 they were knocked out of the first round in both. The accounts ending 2001 show a figure of £358,000 from cup match tickets, whereas the latest account show a figure of £23,000. This gives you an idea how devastating early cup exits are.

So if our turnover is £5.6 million, and our loan has cleared all our debts what do we spend it all on?
In a nutshell wages. The total wage bill for the club was £5.175 million. This includes £3.5m on player and management wages and the rest goes on the regular staff.

How has the £10 million pound loan made a difference?
It has cleared all existing debts and loans and Loftus Road plc owe nothing substantial aside from this loan. There are outstanding invoices that remain unpaid, however these are included in the balance sheet and therefore accounted for. The clubs saving grace is Loftus Road itself; valued at over £14 million it keeps the plc as a viable company. If they hadn’t taken the loan the debts and interest on them from the 2001 accounts would have outstripped the value of the ground and there would have been no plc and therefore no football club.

ron@qprnet.com