Edinburgh City

[Francesc Fabregas]

Thanks Ally, appreciate how difficult a time this must be for you and your fellow supporters - your posts on here, and your appearances on The Terrace Podcast, have been illuminating and much appreciated.

While tonight's statement describes how Edinburgh City are moving forward, it doesn't really tell us why they're in their current predicament, why the players are moving on and why the development and women's team are folding. It feels like some secret everyone knows about but isn't allowed to discuss openly. Following the Stirling Albion game, both the club's Twitter account and Michael McIndoe, speaking in his post-match interview, referenced the difficult, ongoing situation without directly addressing it. Why is this?

I think the club's communications over the past fortnight has been poor with newspaper articles, forum posts and rumours filling in the gaps where strong messaging should have been. I'm not sure if this has been deliberately but I don't think it's helped.

Good luck for the remainder of the season.

[Scorge]

7 minutes ago, Francesc Fabregas said:

While tonight's statement describes how Edinburgh City are moving forward, it doesn't really tell us why they're in their current predicament, why the players are moving on and why the development and women's team are folding.

Assuming the club don't own the ground, surely the basic accounting principle of having hardly any tangible assets (just SPFL membership/prize money, sponsorship, any external director/council/etc funding, gate money) against a stack of liabilities (player wages, running costs of development/womens squad, any rent if applicable) is just too lop sided with all the previous investment now being pulled.

There's guesswork involved for those not in the inner circle, but if EC went into administration IMO they'd struggle to get out. Hope the current measures work out, no matter how much any of us gripe about the ground.

[AllyMonc]

11 minutes ago, Francesc Fabregas said:

Thanks Ally, appreciate how difficult a time this must be for you and your fellow supporters - your posts on here, and your appearances on The Terrace Podcast, have been illuminating and much appreciated.

While tonight's statement describes how Edinburgh City are moving forward, it doesn't really tell us why they're in their current predicament, why the players are moving on and why the development and women's team are folding. It feels like some secret everyone knows about but isn't allowed to discuss openly. Following the Stirling Albion game, both the club's Twitter account and Michael McIndoe, speaking in his post-match interview, referenced the difficult, ongoing situation without directly addressing it. Why is this?

I think the club's communications over the past fortnight has been poor with newspaper articles, forum posts and rumours filling in the gaps where strong messaging should have been. I'm not sure if this has been deliberately but I don't think it's helped.

Good luck for the remainder of the season.

Thanks mate. I think the club's idea was to wait until they had something concrete to update on. I (and others) said interim statements to keep people at least broadly informed would be a better idea but it's up to the board I guess. I think a vacuum is a bad idea in instances like this as people will inevitably try to fill it.

 

In terms of the 'why', well I certainly think the club should be clearer about this and I don't really understand the reasons why things are hinted at rather than addressed. I've not seen the books so to speak but I think we can say with certainty that the financial position the club was handed over in is not what was advertised by the previous board (or understood by the current board?). There has also been issues with merchandise and sponsorship falling through but from what I can tell the big factor is a simple, outgoings well above incomings, and without a benefactor in place to plug the gap we've simply run out of money.

 

Best case scenario is this allows the club to reset and find its true sustainable level, wherever that may be.

 

I did promise yer man that I'd come back on the Terrace when things were a bit clearer so hopefully get that arranged soon.

[parsforlife]

That’s a very good statement IMO, if a bit late

[tamthebam]

Tom Tracey left in the summer reportedly leaving the club "debt free". Apart from all the debts he left us with... There are unsubstantiated rumours that he was preparing to pull out as early as halfway through last season so might have been less than willing to pay bills. But those are merely wholly and utterly unfounded rumours.

Spoiler

AFAIK the Women's team players were amateurs but there are other costs to consider I suppose: hire of pitches, buses, referees match fees, equipment etc. It's a shame to see them stop but it's not the first time this has happened. For example when Dundee were in administration their women's team was ditched and they became Newburgh Ladies for a while. I don't think Dundee FC currently have a women's team.

When every penny is a prisoner you have to find savings wherever you can I suppose. 

 

  

 

[EdinburghBlue]

2 hours ago, AllyMonc said:

Thanks mate. I think the club's idea was to wait until they had something concrete to update on. I (and others) said interim statements to keep people at least broadly informed would be a better idea but it's up to the board I guess. I think a vacuum is a bad idea in instances like this as people will inevitably try to fill it.

 

In terms of the 'why', well I certainly think the club should be clearer about this and I don't really understand the reasons why things are hinted at rather than addressed. I've not seen the books so to speak but I think we can say with certainty that the financial position the club was handed over in is not what was advertised by the previous board (or understood by the current board?). There has also been issues with merchandise and sponsorship falling through but from what I can tell the big factor is a simple, outgoings well above incomings, and without a benefactor in place to plug the gap we've simply run out of money.

 

Best case scenario is this allows the club to reset and find its true sustainable level, wherever that may be.

 

I did promise yer man that I'd come back on the Terrace when things were a bit clearer so hopefully get that arranged soon.

The last published accounts show a company that’s technically insolvent. 
 

[AllyMonc]

9 hours ago, EdinburghBlue said:

The last published accounts show a company that’s technically insolvent. 
 

Yes can't really spin those numbers any other way which totally contradicts the public (not private assurances, not subtle nods) statements from the previous owner stating that the club was being passed across debt free. 

 

Of course the owner could have settled those debts or converted any loans he had made to the club into equity but could is very different than did.

 

On the balance sheet you can see a significant deterioration in financial position across the reporting period:

 

Fixed assets is negligible across both periods.

Current assets drops by a lot and I assume that's the playing squad? Not always easy to tell in short form football club accounts.

Creditors due within 1 year (so debts the club needs to pay within 1 year) shoots up by about 90% which is loads and I can't really think what that would be, maybe short term bridging loans the owner has made into the club? Did we make loads of expensive loan deals during this time so would have loan fees to pay and I don't imagine you can include the loan players as current assets (as their not ours) so would partly explain the drop in the current assets figure.

Creditors due after 1 year (so longer term debts the company has to pay) goes from zero to circa 50k - this can only be a loan facility and based on the state of the club and the timings of the loan it will have been a Coronavirus Bounce Back Loan. They have incredibly generous repayment schedules/terms but they do need to be repaid and can't be wiped by going into administration.

 

A balance sheet is different than a profit and loss account so it's not like the club made 50k in 2021 and lost 100k in 2022 but if you can't service those debts then that's an insolvent entity.

 

Finally accounting is backward looking so we have no indication of what's happened (good or bad) between those accounts being filed.

 

Long way of saying I don't see how that reconciles with the debt free message given when the club was passed over.

[EdinburghBlue]

1 hour ago, AllyMonc said:

Yes can't really spin those numbers any other way which totally contradicts the public (not private assurances, not subtle nods) statements from the previous owner stating that the club was being passed across debt free. 

 

Of course the owner could have settled those debts or converted any loans he had made to the club into equity but could is very different than did.

 

On the balance sheet you can see a significant deterioration in financial position across the reporting period:

 

Fixed assets is negligible across both periods.

Current assets drops by a lot and I assume that's the playing squad? Not always easy to tell in short form football club accounts.

Creditors due within 1 year (so debts the club needs to pay within 1 year) shoots up by about 90% which is loads and I can't really think what that would be, maybe short term bridging loans the owner has made into the club? Did we make loads of expensive loan deals during this time so would have loan fees to pay and I don't imagine you can include the loan players as current assets (as their not ours) so would partly explain the drop in the current assets figure.

Creditors due after 1 year (so longer term debts the company has to pay) goes from zero to circa 50k - this can only be a loan facility and based on the state of the club and the timings of the loan it will have been a Coronavirus Bounce Back Loan. They have incredibly generous repayment schedules/terms but they do need to be repaid and can't be wiped by going into administration.

 

A balance sheet is different than a profit and loss account so it's not like the club made 50k in 2021 and lost 100k in 2022 but if you can't service those debts then that's an insolvent entity.

 

Finally accounting is backward looking so we have no indication of what's happened (good or bad) between those accounts being filed.

 

Long way of saying I don't see how that reconciles with the debt free message given when the club was passed over.

To a first approximation you can equate the change in the capital/reserves figures across the two years to profit or loss in that period, so a loss of around £150k for the year.

I think you would only show a player as an asset if you had paid a transfer fee for someone on a multi-year contract, and you woud then write the fee off over the length of the contract. A loan player would not be an asset, and I doubt any lending club would allow a fee to be postponed to a later year. So I expect current assets are mainly cash and any monies owed to the club.

It is possible that the new owners demanded that debt to existing shareholders be written off as a condition of the purchase.

There are three other clubs in this division that were also technically insolvent based on their latest published accounts.

Edited December 21, 2023 by EdinburghBlue

[Parttimesupporter]

I'm surprised to see that a brief unaudited balance sheet is enough for club licensing purposes.  What is there should surely be a red flag for the SFA?  Maybe the directors produced some kind of statement of comfort saying that a particular director or other supporter has guaranteed funding for the season to minimise the risk of the club going under.  

Perhaps if liabilities include loans from directors they provide assurances that they won't ask for repayment in a particular timescale.  However, not sure that is the case for City where amounts falling due after more than one year was zero in 2021.

 

[Rob1885]

Send Liam Fontaine our way.

[tamthebam]

3 hours ago, AllyMonc said:

Yes can't really spin those numbers any other way which totally contradicts the public (not private assurances, not subtle nods) statements from the previous owner stating that the club was being passed across debt free. 

 

Of course the owner could have settled those debts or converted any loans he had made to the club into equity but could is very different than did.

 

On the balance sheet you can see a significant deterioration in financial position across the reporting period:

 

Fixed assets is negligible across both periods.

Current assets drops by a lot and I assume that's the playing squad? Not always easy to tell in short form football club accounts.

Creditors due within 1 year (so debts the club needs to pay within 1 year) shoots up by about 90% which is loads and I can't really think what that would be, maybe short term bridging loans the owner has made into the club? Did we make loads of expensive loan deals during this time so would have loan fees to pay and I don't imagine you can include the loan players as current assets (as their not ours) so would partly explain the drop in the current assets figure.

Creditors due after 1 year (so longer term debts the company has to pay) goes from zero to circa 50k - this can only be a loan facility and based on the state of the club and the timings of the loan it will have been a Coronavirus Bounce Back Loan. They have incredibly generous repayment schedules/terms but they do need to be repaid and can't be wiped by going into administration.

 

A balance sheet is different than a profit and loss account so it's not like the club made 50k in 2021 and lost 100k in 2022 but if you can't service those debts then that's an insolvent entity.

 

Finally accounting is backward looking so we have no indication of what's happened (good or bad) between those accounts being filed.

 

Long way of saying I don't see how that reconciles with the debt free message given when the club was passed over.

what an absolute bunch of 

[BB_Bino]

19 hours ago, Jan Vojáček said:

Saw a few players from the ladies side leaving on Twitter the other night, and now I see that City have pulled out of the U20s league.

Would have thought your under 20's were like most of this level's, where it's made up of youngsters on amateur contracts and volunteer Coaches, so other than pitch hire and 'hand me down' kit, would be costing you nothing at all.

[AllyMonc]

A few people have mentioned (here and Twitter) about the savings from the Women's team and the U20's not being significant. I've been told that the savings are enough to make a material difference to our financial position.

 

By material difference, I mean might be enough to stop us going under. Which is quite material!

 

It is a good question though and one we posed to the board. 

[RubyTuesday]

8 minutes ago, AllyMonc said:

A few people have mentioned (here and Twitter) about the savings from the Women's team and the U20's not being significant. I've been told that the savings are enough to make a material difference to our financial position.

Such a shame for the Women's team in particular. 

The loss of the under 20's will presumably cut off any supply of potential first team players for next season? On the basis that most of the current under 20's are now the 23/24 first team squad. 

Glad to see that the ticket prices have increased to £15. That is very sensible. From memory last season was £18, but the cut to £11 was perhaps a little bit optimistic of the new board as the gates have not increased. 

Would love it if there was some merch to buy at the games to help the club out. Normal football fan stuff. A scarf? Bobble hat?

 

[oneteaminglasgow]

Don’t know if I’ve missed it, but has there been a list posted of which players have actually left - or the simple answer just “basically all of them”?

A shame about the youth team, and women’s team in particular. Even if the savings are only small, it sounds like any savings that can be made need to be made at the minute so fair enough.

[Binos]

Maybe if they changed the name to FC Edimburgo things would get better 

[Vegetableman]

26 minutes ago, RubyTuesday said:

Such a shame for the Women's team in particular. 

The loss of the under 20's will presumably cut off any supply of potential first team players for next season? On the basis that most of the current under 20's are now the 23/24 first team squad. 

Glad to see that the ticket prices have increased to £15. That is very sensible. From memory last season was £18, but the cut to £11 was perhaps a little bit optimistic of the new board as the gates have not increased. 

Would love it if there was some merch to buy at the games to help the club out. Normal football fan stuff. A scarf? Bobble hat?

 

Was more than surprised on the last visit to only pay the £11 ,  I immediately thought that was not a good idea bar the fact i could have had one more guinness up the road , makes sense to raise the price especially now , it seemed to me at the time to be a bad move .

[AllyMonc]

Well. Didn't see this coming. 

 

What on earth was he thinking. FC Edinburgh Spartans - is that the worst name of anything ever? Would crowds have got above double figures?

 

Challenge at the top of the Championship??

 

We knew a merger was proposed but thought it was the other way around!

 

"Wrote off my investment and walked away" probably tells you all you need to know about our finances just now.

 

Would rather be liquidated than this monstrosity.

 

Genuinely in shock

[ARF1928]

Just now, AllyMonc said:

Well. Didn't see this coming. 

 

What on earth was he thinking. FC Edinburgh Spartans - is that the worst name of anything ever? Would crowds have got above double figures?

 

Challenge at the top of the Championship??

 

We knew a merger was proposed but thought it was the other way around!

 

"Wrote off my investment and walked away" probably tells you all you need to know about our finances just now.

 

Would rather be liquidated than this monstrosity.

 

Genuinely in shock

Quite possibly one of the worst proposals in football history. It sounds so daft that it couldn’t be real, but it nearly was! 

 

Absolutely wild from that maniac. 

[HibeeJibee]

54 minutes ago, AllyMonc said:

A few people have mentioned (here and Twitter) about the savings from the Women's team and the U20's not being significant. I've been told that the savings are enough to make a material difference to our financial position.

By material difference, I mean might be enough to stop us going under. Which is quite material!

It is a good question though and one we posed to the board. 

Presumably pitch hire (training+matches)/referee fees/perhaps buses/etc.

 

4 minutes ago, AllyMonc said:

Genuinely in shock

WTAF ?

Edited December 21, 2023 by HibeeJibee