The following email update was completed and sent to members on 12 May 2021.
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As mentioned in the last update, we had a meeting scheduled with the OUFC financial director Tim Davies and that has now taken place via Zoom. As usual Tim was open and honest and we had a constructive and informative chat. We firstly spoke about the accounts just published and how they reflected the club’s progress. Ben from our committee was on the meeting and has 30 years’ experience in accounting with his work with Oxford University and other major companies and now works on all financial issues we deal with.
He compiled this report on the filed accounts we have been through:
Oxford United Finance Review Financial Statements to 30 June 2020
|£000’s||OxVox Note||Year to 30 June 2020||Year to 30 June 2019||Variance|
|Less Cost of Sales||(6,879)||(6,721)||(158)|
|Other Operating Income||3||430||–||430|
|Profit on disposal of players||5||5,701||674||5,027|
|Amortisation of players contracts||(228)||(151)||(77)|
|Payment in respect of player contracts||(855)||(254)||(601)|
|Profit / (Loss) before Interest||1,687||(3.939)||5,626|
|Interest payable and similar expenses||(203)||(317)||114|
|Profit / (Loss) for the financial year||6||1,484||(4,257)||5,741|
- Turnover for 2020 was up 14.6% on prior year and includes gate receipts, sponsorship, advertising, and TV fees.
- There were 168 employees in year to 30 June 2020 on average. The 2019 costs would have included costs in relation to taking over and fitting out the training ground.
- Operating income includes government Covid 19 funding for employee salaries.
- Oxford United makes operating losses which needed to be funded by player sales.
- The profit on sale of players includes Baptiste, Fosu and Whyte. The Dickie sale will be in year to 30 June 2021.
- Overall Oxford United made a profit in the year but only due to the higher than normal profit on player sales.
Oxford United Summarised Balance Sheet
|£000’s||OxVox Note||As at 30 June 2020||As at 30 June 2019|
|Debtors & Stock||3,551||620|
|Amounts owed to group undertakings||1||(14,178)||(10,911)|
|Other Creditors under and over 1 year||2||(5,407)||(6,653)|
|Profit & Loss account||(17,206)||(18,690)|
- No split is provided of the Group undertakings but it will be entities controlled by the shareholders. This is common now in football clubs with funding being provided in terms of loans to the football club. Tim Davies confirmed that interest is not payable on these loans.
- Believe this has gone down due to settling of liabilities to the previous owner of the club and this partially explains why the amount due to group undertakings has gone up.
- The club is technically insolvent as it has negative reserves. The accounts have been prepared though on a going-concern basis as there is continued financial support from the ultimate controlling party.
Other points to note:
- The accounts are as at 30 June 2020 so will be substantially out of date and do not take in the impact of Covid 19 and the related reduction in revenue. Shareholding funding though has been provided by the owners of the club in 2020/21 to sustain the Club during this period and a £1m grant was received from the Premier League.
- Tim Davies mentioned that a funding envelope by shareholders is agreed for a year but then funding payments are made monthly.
Having discussed the accounts that have been filed, attention turned to this season and financial strain the club had been put under by the pandemic. Obviously all our major revenue streams have been affected, but it was reassuring to hear that the shareholders had budgeted for the losses and that they remained determined to fund the club through these difficult times. There has also been careful budgeting for next season that covers the possibility of a loss of stadium capacity and sales. We discussed the issue of where any extra debt was being allocated and while this is an area where Tim did ask for some confidentiality, it is our understanding that this debt remains off the club’s books as shareholder loans and would only be reclaimed under circumstances where the club had been very successful or had been sold. While this is positive, we remain determined to increase the transparency regarding the financial safety of the club and Tim has promised to work with us on that front.
As the discussion turned to next season and ongoing stability, the issues of club ownership and the stadium were raised. We have recently spoken to numerous people within and outside the club to keep on top of what is a very fluid situation. The single most important factor in improving our financial viability (setting aside promotion to the Championship or Premier league) remains the stadium. It is clear that discussions have taken place regarding some of the shareholders taking a larger/controlling stake in the club. It also seems clear that as our promotion campaign is decided we should get a better idea of what will happen.
The question of the stadium situation remains a difficult one where confidentiality is paramount, but it would seem reasonable to assume that the finalising of any takeover, one way or another, will allow the owners and shareholders to progress with more clarity. Do the potential new owners favour a new stadium? Again there is history of them having achieved this at another club, but developing on this scale in Oxford is a huge task. We continue to work closely with the club on this and all possible solutions until the problem is solved. Any of the potential solutions could benefit the club and put us in a much stronger, more sustainable position but all have inherent dangers and all require proper scrutiny from OxVox and from all supporters. While we understand the frustration among supporters and desire to know more details, we again ask for patience on this front. We have been working hard with the club and fully respect the need for discretion at this time.
Our conversation with Tim ended with him asking us where he thought the club could improve. We are constant in our position that better communication with the supporters is a must, and we mentioned that the vacuum created when the club does not comment, tends to be filled with speculation and guesswork. It should be possible for the club to communicate a clear and measured path to this problem without letting anything confidential out. On the communication front we have again been assured of greater access to the other shareholders should they increase their stake and become owners.
Thank you as always for taking the time to read this update and thank you for your support of OxVox. The value of supporters’ trusts was highlighted during the ESL attempt by the ‘big six’. The speed and unity their trusts showed in response was very powerful and shows the strength that supporters have. It goes without saying that we opposed the move in the strongest terms and while the work we put in to register that opposition has been made somewhat redundant, we are turning our efforts towards the ongoing conversation on reform within the game. We will keep you updated on our progress.
For now let’s enjoy having a chance of promotion via the playoffs. We have some nail biting final matches in store, but then it wouldn’t be Oxford if it were simple!