Quote: The Ghost of '99 "Not really.
1. The asset is generating income for St Helens and is fundamental in them moving away from losing money at EBITDA level and starting to break even from a cash point of view. The asset at Wigan is generating income for Wigan football club and the operating losses being made by the Rugby League club are pretty much all cash losses.
2. Depreciation on a stadium is vastly different to maintenance costs. And regular maintenance is being expensed by clubs like St Helens anyway.
A look at their Balance Sheet shows Saints aren't exactly in a healthy financial position but (pre Covid) they no longer needed directors to stick money in year after year, which McManus thinks is a decent position to be in (I'd like to see them actually making money but they seem happy enough with their position).'"
I appreciate there are no absolutes and different assets are accounted for in different ways. However I was oversimplifying in order to make a point. Maintenance is different from the depreciation as the asset is still becoming less valuable over time (assuming it has a finite lifespan) and no amount of running cost maintenance negates this.
In simple terms; if the club has an asset (let's say a laptop for ease of understanding) and it spends maintenance money on a new screen and a stick of ram and perhaps a new hard drive during it's serviceable lifetime, that merely delays its obsolescence. It doesn't prevent it. Ultimately the asset will still become worthless. Again, I am aware that a stadium and a laptop are not identically comparable but it illustrates the point.
In a nutshell, If depreciation losses weren't real losses as is being put forward here then
HMRC wouldn't allow them.
Addendum: You mention the directors don't need to put money in year on year. I would add the caveat of "for now". As the stadium deteriorates and operating revenues continue to not cover any future significant infrastructure replacement or upgrade, then this is unlikely to remain the case.