How financially secure are Saints?
For the 2nd year running, Saints announced an annual loss of around 250,000 pound… It makes great headlines for those convinced Armageddon is upon us. But what does this loss really mean, and where does it leave Saints?
Before we get started, I’ll warn you that Saints are very ‘brief’ in their financial reporting. While other clubs trading as PLC’s produce accounts detailing every aspect of their income and expenditure, Saints are only obliged to produce ‘Abbreviated accounts’ as per the Companies Act on the basis they are classed as a ‘small business’. This makes their accounts devoid from much information, other than the general well being of the club. For the purposes of this though we are going to examine the balance sheet, in addition to how that compares with other SPL clubs.
Above is shown the Saints balance sheet as of 31 May, 2012 (click for enlarged view). It is effectively broken into 3 sections:
1) Fixed Assets
- Stadium, vehicles and anything else with ‘value’
2) Current Assets
- Cash in bank, stocks and money owed from other companies
3) Liabilities
- money Saints owe to other companies
As can be seen, Saints have Fixed assets of around 650k, with 1.6million in the bank and another 400k owed by other companies. Against that they have payments due in the next year totaling 950k. Therefore, they have current (meaning liquid, or assets immediately available) assets of 1.1million and Net assets (including the fixed assets) of just short of 1.7million. There is NO long term debt (longer than 1 year).
All of this means Saints, as a business, are very healthy. Their assets are mainly liquid and can be called upon at anytime, while there is no need for overdraft facilities. It is also worth noting the value of the ‘fixed assets’ – this will include McDiarmid Park and the associated land holdings – as its something we will come back to later.
One last thing worth noting is the status of the first team playing squad, and the financial commitment.
Above is a chart showing the expiry dates of the Saints first team squad. In May 2013, all but 4 of the players will be out of contract. While not ideal from a footballing point of view, it means the financial commitment to the playing staff, and the potential liability of reduced income in the future is negated (that would be relegation or this mythical Armageddon we’re all awaiting).
So, with Saints in a seemingly healthy position, how does this compare to other Scottish Premier League clubs…
Firstly lets look at how we compare with current assets/liabilities. Remember, this is cash on hand, plus money owed, minus debt due within 1 year.
Please before flooding the comments with ‘this isn’t correct statements’ bear in mind that every set of accounts is slightly different in the way numbers are reported or recorded, so I have tried to simplify the data as much as I can for the layman. I have also excluded ‘stock holdings’ from almost all the accounts, and where season tickets have been booked as ‘debt’ I have excluded this as well (on the basis that the timing of the balance sheet each year will greatly affect this number). You will also note Inverness are missing – I couldn’t find their accounts anywhere!
As you can see, Saints are flying high in 1st place, on current available assets/liabilities. More worryingly for the SPL, the rest of the league, aside from Motherwell have net liabilities. Hearts and Aberdeen in particular are marooned at the bottom of this table.
But how about the long term health? Below is how the clubs show their Net Assets. This is all their assets, including their fixed assets (eg, stadium), minus what they owe.
Not surprisingly, Celtic top this chart, with Hearts, unsurprisingly, given their reliance on Eastern European money languishing at the bottom. But what does this really tell us? The net asset figure is largely dictated by the figure attached to the fixed assets, and especially the stadium.
As was shown from the Sevco/Rangers fiasco, the value that is placed on the balance sheet for a fixed asset, such as say, Ibrox can be just about meaningless. In their accounts, Ibrox along with the other land holdings was valued at around 120 million, but sold, a year later by Duff and Phelps for somewhere between 1.5m and 5.5m depending on what you think Green actually paid for the ‘history’. So what exactly are the clubs above recording the value of their fixed assets as?
Not surprisingly Celtic top the table here, with their fixed assets valued at 69m. Just about half of what Ibrox was valued at, but 65m more than was actually paid for it. It has to be noted that a lot of clubs will book ‘rebuild value’, or the value to replace the stadium as the actual value. In the real world however this doesn’t mean much. In the case of Celtic their fixed assets are broken down, with Celtic Park only accounting for 45m of the 69m.
Earlier on I told you to note how low Saints were valuing McDiarmid Park at. Infact, aside from Dundee, who own diddly squat, Saints have the lowest fixed assets in the league!
Now, just for fun, what would happen if ALL the other clubs booked their fixed values at the same value as Saints book McDiarmid?
Yep – that’s right… Saints are back on top of the league. Dundee in 2nd place is a little (correction, very!) unfair on the other sides as they own nothing to be valued at 600k in the first place. Motherwell and St.Mirren drop down, St.Mirren from 10m to just 200k… It is also unfair on Celtic, as obviously Parkhead is worth significantly more than 600k, even if you use a Duff and Phelps calculator…
While the last table is just a bit of fun, it does to illustrate just how financially well off Saints are right now. There has been many things said over the years about the clubs lack of ambition and their lack of openness with the fans, but when you look at these figures you gotta ask why Campbell “complicit in bankrupting Rangers’ Oglive is running Scottish football and not one Geoff Brown.
For anyone wondering – I used latest accounts published on the excellent duedil.com– for most clubs these were 2011 versions – Saints have just published their 2012 accounts and thus I used those.
Good article, Stephen.
Saints deserve great credit for running a sensible and sustainable operation while still managing to be reasonably competitive in the top flight.
I’m notice that Kilmarnock are less indebted than I’d previously believed them to be. I though that they were in the hole for about ten million pounds.
It’s a pity that there’s no data for ICT. I’d be very interested to see how they compare to the longer established senior clubs because I have enormous respect for the way that they, and Ross County, have risen all the way through the divisions on what appears to be a sustainable model.
Speaking of County, can we assume that their present financial position is a little bit worse than it would otherwise be simply because they’ve had to spend a lot of money to upgrade Victoria Park to comply with the SPL’s arbitrary stadium requirements? That’s a somewhat exceptional cost which they won’t have to repeat in the foreseeable future so they appear to be another well-run, sensible club.
I fear for Aberdeen though.
Whatever else Mad Vlad is accused of by his critics, it’s glaringly obvious that Hearts would have gone to the wall years ago without his support.
One thing that strikes me is that almost every club in the SPL would derive a considerable benefit from a couple of very good runs in the cups which could turn quite a few of those bottom lines from red to black. I imagine Kilmarnock’s League Cup success last season must have helped them to reduce their debt.
thanks for reading Henry,
re: Killie I’m not so sure they are in a great way, with short and long term debt at just over 10m. It is only their 15m of listed fixed assets keeping their balance sheet green, and, like Rangers, it is debatable as to whether their stadium is worth that, although I believe they do have a hotel attached which could well account for some of this. I imagine therefore they will depreciate the asset over a time period using profits from the hotel to pay this off… then again, they may not.
Ross County’s accounts came from 2010, so not sure the stadium improvements will be included, although, aside from a little long term debt they seem to be in a good way. Hearts would be bankrupt tomorrow without the Eastern Europe money and Aberdeen aren’t much better off.
Was surprised how healthy Celtic’s accounts seem to be – and with a ton of champions league money this year they’ll be in a very strong position by the time TRFC make it to the SPL.
Very interesting reading and well done indeed to Geoff Brown for the way he’s run Saints in recent years. Are you planning to update your tables as the 2012 figures are published ? Celtic & Dundee Utd figures out very recently. A quick way to ‘monitor’ the health of the SPL clubs financials.
that’s a great idea… i’ve subscribed to all the clubs on Duedil, so i’ll see how soon the accounts hit there. Saints released their accounts about 1 1/2 months ago, but it took that time to make it to companies house website, and Duedil is still showing the 2011 accounts.