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– for most clubs these were 2011 versions – Saints have just published their 2012 accounts and thus I used those.