Absolutely, which is why its always better to owe money to your directors/shareholders than to a bank.

I see.....But in the long term and with the debt getting bigger how do the directors get their money back and still keep the club afloat?.I can't see that they will ever get 10,000 plus crowds,which they have never had in their history,plus big sponsorship to turn the debt around?.

It is a '[iqualified opinion arising from disagreement over accounting treatment[/i'.

It also overstates Fixed Assets by something to the order of around 75%.

What does it state these fixed assets at? What are the fixed assets? How do you know it overstates them? I'm interested to know?

To be honest, I think the chances of the 'investment' ever being recouped in full are slim to vanishing. I know it is on a different scale, but do you think Abramovich expects to ever get a financial return on Chelsea?

Keeping the club afloat and maybe turning a modest profit have to be the realistic ambitions. Hudgell has said the board are committed to financially supporting the club through 2010 at least, beyond that a different model might have to be adopted. An upturn in the economy and the potential for improvement on the retail side of things could help, as would any largesse from local stakeholders. Bringing through a few young, local and cheaper players to gradually replace some of the big earners brought in to make us competitive quickly would help cut costs. It won't be easy - as evidenced by the 10 other SL clubs running sizeable deficits. Of the other 3, Bradford's transition hasn't been altogether painless and you have to wonder how much Hull's financial success is down to business acumen (I'd be the first to admit some of it is, btw) and how much due to the KC falling in their lap. Leeds, being bigger than most of their rivals have an inbuilt advantage - just the way it is. So, in theory, should Wigan though.

There are two ways to get their money back:

1. Increase revenue/reduce expenditure leading to increased profitability over a period of time gradually reducing the debt, as is happening at Hull FC.

2. Sell out to someone else who will invest the money to repay their loans as part of the deal.

The third option is to accept that they are doing it for their love of the club and are unlikely to get their money back. In this day and age you have to admire anyone who takes that view.

It overstates Fixed Assets simply because it is against standard accounting practice. I don't know of many companies that include their employees as fixed assets in their y/e accounts.

It doesnt. It adds players on their for information. They do not officially count against fixed assets. They do not feed into the financials that make up the P&L. Anyone reading the accounts that knows what theyre reading will know that the players are not fixed assets. Its not against any practice that i know of, its just not standard, doesnt mean its wrong.

Is that from our accounts ? How do we know its the accountants disagreeing with the club, it could be the other way around ?

Again, its of no consequence to the P&L though.

The disagreement must go in both directions, by definition. Or are you suggesting the accountants insisted on including the valuations, despite dissent from the club, then included a note implying it was an unusual thing to do? Strikes me as unlikely.



Indeed. Biggest red herring since Sherlock Holmes' 'Case of the Giant Crimson Kipper'.

As i understand it its nothing to do with accountants, the simple case here as youve hinted at with the red herring comment is that the auditors have said they wouldnt have shown it on accounts like we have.