From Milk Cup To Potless (The 2007 Accounts)

Posted on by Site Admin

This all started 6 months ago…in a pub where most of these things tend to start. There I was minding my own business, when one of the owners of this Site blindsided me. I know two or three of them but this one pretends to be my friend but I know that he really hates me. How do I know this ? Well, the conversation went something like this:

Him: “How’s life Frog ?”

Me: “Rubbish, what could be worse, I’m suicidal !”

Him: “What’s the problem, football, work, women or money ?”

Me: “All of the above !”

Him: “Oh ! Sorry to hear that ! Can you write me something for the Site then ?”

(I was weak, I’m sure I owed him for something, but I can’t remember what ?)

Me: “Oh, I suppose so” (notice the enthusiasm there)

Me: “About what ?”

Him: “The Milk Cup Final”

Me: “Arrrrgghh, I’m going to jump !”

I then managed to avoid him for months. That is until recently. He has many elephant like tendencies and ‘memory’ is one of them. 

Him: “When you going to write something for the Site ?”

Me: “Errm, soon, on what ?” (hoping that his elephant like memory had been addled by alcohol)

Him: “How about the 2006-07 Accounts ?”

Me: “Arrrgghh, I’m going to jump !”

He then went off discussing at length the merits of Steve Morrow, Tony Scully and Wayne Fereday, true legends of QPR’s past. So now you see why I think he hates me ? I have a choice of a nightmare 90 minutes that’s still painful 20 odd years later, or writing for 90 minutes about a nightmare year in our nightmare of 20 years. Great ! I can’t possibly win here ! So I’m going to be brave and do both. It can’t be worse than being shot at ! But, I’m not so sure ! Before I start, I’d like to make a few things clear. I’m not an Accountant. I’ve not discussed or read anything written elsewhere about the Accounts this year. I’ve never spoken to Mark Devlin, Bill Power, Chris Wright or Nick Blackburn. I’ve had ‘chats’ with two Italians that are/were connected to the running of the Club. I’m not a member of any QPR related organisation anymore. I’m just a stakeholder (I hate that word) in QPR. These are my opinions and mine alone. You may agree with me, or you may not. So now that I’ve made that clear, first the Milk Cup Final in 1986.

Jim Smith successfully managed the underdogs Oxford United to a 3-0 victory over Queen’s Park Rangers in front of 44,000 QPR fans (a Wembley record for ticket sales for one team) It was a masterful display of tactics by Smith as his Oxford United side dominated QPR from the start and they never had a chance. Unfortunately for us, Smith had stopped managing Oxford United the year before and was supposed to be managing QPR. But, hey, we all emphasise the positives on our CV’s ! I don’t actually remember anything much about the game. I’m sure under deep hypnosis I’d remember something. I remember the journey there. I remember getting drunk on ‘Merrydown’ cider on the way home. I remember going to school on Monday. I remember the deep humiliation. I remember not being able to ever look at the video of the game. But fortunately, I don’t remember the game at all. But I’m sure I was never the same person again. 

I know this to be true because the next season I went to all the games, home and away, trying to recover and I did that for another 19 odd seasons and 1000 games. I’m lucky I’ve seen some of the memorable games of our recent history. ManU away 4-1, Liverpool away 3-1, Leeds away (and that Wegerle goal), a win at Highbury, hat tricks for Allen and Ferdinand at Goodison Park. In fact I saw every game Ferdinand played for QPR and every game played so far in the Premier League. But I honestly don’t think I could have appreciated any of that without experiencing the trauma of the Milk Cup Final. But I haven’t forgotten it either. Yes, I’ve forgotten the game (unless hypnotised) but I haven’t forgotten how bad I felt that day. I just don’t have the words to describe the feeling; ‘bad’ just doesn’t do it !

Right, now the Accounts…….

The period the Accounts covered is June 2006 to May 2007. Gary Waddock was Manager and had been given a new contract despite the poor end to the previous season and Gianni Paladini was Chairman. This was the ‘sailing in safe waters’ period of Rangers history. A time when we were led to believe that every sponsorship deal would be doubled or trebled in value, when costs would be tightly controlled and we were heading for break even if there was a good Cup run. It was the time when many new players were brought in and the time when other more established players were frozen out e.g. Bircham, Bignott and Gallen to a certain extent. It was the time when we were led to believe that we would have a smaller squad of around 23 players.

The first point of interest in the Accounts is the Chairman’s statement. Interesting for two reasons, it was unsigned and basically a cut and paste from last years Accounts including the same excuses. It didn’t really make much sense to me when I first read it, but once I read the previous year’s and realised it was almost an exact copy with the figures changed, it then made more sense. The Chairman states that losses were £4.7m and due partly in an increase in players’ wages and the team’s disappointing end to the season. This apparently had an impact on commercial activities and season ticket sales. Now in my mind, the bulk of commercial activity and season ticket sales normally occur at the beginning of the season and not the end of it. But this is probably an issue with cutting and pasting the same excuses from the previous year. It clearly shows that although the Board were being openly optimistic at the start of the season, more people in the public domain decided to keep their hands in their pockets. 

The same with the outlook, the Board were looking to bring in tight financial controls just as they were looking to do so the year before. So, it was another ‘Groundhog’ year of promising much and delivering little. Future prospects should be different because of the takeover. So we’ll have a new Chairman and a new report next year. Next up is the Directors report. Now this is different. Finally after 10 years we have the openness in the Accounts that we’ve always been promised. Thanks, Gavin Taylor. He gives an indication of the Key Performance indicators (turnover, attendance per match, gross margin, average salary per player and shareholders funds) He then goes on to say that the turnover was down by 12% to £8.2m, mainly due to the lack of sponsorship interest. Gross loss was up to £1.3m and the operating loss up to £4.8m from £2.35m last year (the loss the year before was £1.8m)

Mr Taylor also indicated that risks are closely monitored by the Directors who have recently taken steps to strengthen both playing and non-playing staff. This is good to read as it’s something many of us have been asking for ever since the departure of the last CEO. It was also noted that Caliendo and Dunga resigned as Directors leaving Gianni Paladini as the only Director remaining at the end of the year. The main Accounts show turnover down, playing and match day costs up to £8.3m, stadium and other direct operating costs down to £928k from £1.2m, although stadium and match day costs rose during the same period. Administrative costs were also up slightly to £3.51m. This all gives an operating loss of £4.874m, up from £2.358m. These losses were offset slightly by player sales of £1.612m.

The retained loss for the year was up to £4.729m from £3.344m, a rise of around £1.4m. So without the player sales the loss would have risen by a staggering £3m. The balance sheet also shows that for the first time, the Group was technically insolvent during the period with net assets of £-3.832m instead of the previous year’s total of £897k. The profit and loss account was showing a total loss of £22.5m, up from £17.8m ! The notes to the Accounts also show that the Directors were paying themselves £214,000 during this period, up from £105,000 the previous year which was also up from £76,000 the year before that. 

I’m assuming that the Director was Gianni Paladini as he was the only one left at the end of the year, but he’s welcome to tell me who it was if it wasn’t him. So, I’m astonished that during this period, most if not all the Key Performances indicators are worse than the year before and that the Directors felt that they should be paid more than double what they earned the previous year. Especially as we were told that we couldn’t afford £90,000 for a CEO. Mr Paladini also had use of a car (Mercedes ?), leased through a relative for a benefit of £8,920. This takes Directors ‘earnings’ past the £220,000 mark.

The notes also show that playing and support staff numbers rose from 42 to 54 which isn’t surprising due to the number of players brought into the club when Gary Waddock was Manager and the inability to get rid of the unwanted players. As for the loans (apart from ABC), they totalled £6.974m which were mainly payable to Antonio Caliendo. I also find it amazing that there were £1,948,000 in loans not held under any formal agreement ! My opinion is that this shows that the club was not being managed correctly, but I’m delighted that it’s been made clear in the Accounts by Mr Taylor. Subsequent to the year end, the loans have been changed to interest free, non-convertible into Shares and £4,581,328 waived by (presumably) Mr Caliendo. It’s a nice gesture by him but I don’t think he had much of a choice considering the way the club was losing money.

Also subsequent to the year end (post takeover), certain footballers registrations were disposed of for £2.5m and certain footballers registrations acguired for £6.25m. This shows how much it has cost us to move from the bottom of the table to mid-table and also the amount of money the new owners are prepared to ‘spend’. Next year’s Accounts will be interesting for differing reasons, but they will be checked just as carefully, but hopefully they will be as open as this year’s. Share capital was also increased by 500 million to 600 million for the takeover.

Now that was pretty depressing for me to write and I keep thinking about the bright side which is that the new owners have installed their own financial team and there is no one left managing the money that was involved during the accounting year. I’m sure many will tell me to forget the past, but I believe it’s important to remember this part of our history so that we can truly appreciate the good times when they come. It also allows the old timers to remember the legends like Steve Morrow and Tony Scully so that the new generation don’t have to watch players like that. For me, it’s the same as having to endure the humiliation of the Milk Cup that allows us to remember the truly great achievements like humiliating ManU on their own patch. 

I’m glad this ‘sailing in safe waters’ period is over, but I don’t feel that any of the people involved that were sailing this ship during this period are responsible for saving us. Maybe Caliendo kept the ship from sinking so fast, but two years ago I felt that we were sailing the ship slowly away from the iceberg after our previous near miss. That Captain was overthrown and in my opinion the new Captain seemed to put the engines into reverse and it seemed to have us heading back towards the iceberg despite the shouts of ‘iceberg’ from many of his passengers. Sure there were other ships around the iceberg too, but there were plenty of ships not sailing so close to them either. From where I sit, I can only see that the new Captain is being thanked because he managed to shout ‘mayday’ loud enough for one of the rescue boats that were already circling the ship to hear !

Frog



14 Responses to From Milk Cup To Potless (The 2007 Accounts)

  1. ChrisPTenner says:

    You must be a glory hunter like most of us on here.
    The AGM will be interesting to say the least.Thankfully the club is now being run by competent,skilled people.

    “Those who do not remember the past are condemned to repeat it”

  2. Kerrins says:

    …and on top of defeat in 86 we had to witness TV pictures of that Charlatan Financier Robert Maxwell later cavorting around the Manor Ground with the trophy in his hands.

    Speaking of Charlatan Financiers on the Boards of Football Clubs…no on second thoughts I wont go there! lol

  3. Steve Zico says:

    Nice article Frog.

    Totally agree about Smith.
    He was the happiest man in Wembley that day.

    As for the Accounts…..
    I’ve always been bemused when people try and spin, or dare I say lie about the financial state of our club.
    The truth is the truth, and the facts are the facts.
    Nothing that anyone will ever say or do will change that.

    It’s all about QPR, (or should be) not about who is or isn’t the ‘Top Man’
    Yet some still defend the indefensible.
    Why?

    I read an article that the Steel fella wrote the other day.
    He said something along the lines of……
    ‘We’re not going to let some rich idiot run the club.’
    That filled my heart with joy, because if that is the case, they are certainly not going to let some poor idiot run it either.

    The lot that are recent (or will be) history, told me that we are in safe waters.
    Am I, or thousands like me the enemy within because I questioned?
    Am I, or thousands like me disloyal because I questioned?
    Am I, or thousands like me a glory hunter?
    Am I, or thousands like me not a real fan?

    The sooner the broom that has begun it’s work, finally sweeps away the recent history of our club…..the better.
    It’s been said that some QPR fans have an Agenda?
    Yes, I confess, some of us have had an Agenda.
    The Agenda was/is the best, the very best for Queen’s Park Rangers.
    For those that suggested such a thing……
    Piss on you….because you are beneath contempt.

    Am I worried about Bernie, Flav and the other fella mugging us? No.
    We are pocket money to them, nothing more.
    They have much more to lose……Their reputations as successful businessmen.
    Hopefully they are here for the long haul and the ride and who knows, maybe they will enjoy it as much as the fans.

    But if I am wrong…..if they are here to mug us…..
    Well……..
    It will make a change….from the Two Bob Piss Ants who have done so in the past.

    P.S.
    Great read Frog.
    But then, the truth always is.

  4. pete-ranger says:

    Nice Steve.

    I wish I’d wrote that.

    And cheers Frog.

  5. QPR Report says:

    Interesting!

    This I don’t understand: “The notes to the Accounts also show that the Directors were paying themselves £214,000 during this period, up from £105,000 the previous year which was also up from £76,000 the year before that”.
    Are you sure all going to one individual? That would certainly be “interesting” (to avoid being accused of anything)

    I wish the accounts were online, so I could just do a link to them. I’d link to this one, if you didn’t mind, although the first is a little too humorous.

  6. DelroyQPR says:

    I enjoyed reading this, great write up Frog.

    The club was dying financially with bad business practice.

    Its almost uncanny that the clubs loss amounted to the waivered loans by Caliendo + Paladini’s increased wage ?

    Great post Steve, they do look stupid trying to defend something that really stands out in the accounts.
    It just so happens 1 of them gets a little sneak preview to try & dampen the impact. Same crap different time.
    Do you remember the quotes about the Oldham chairman & ABC ? ;-)

    Its time now to put that awful phase out of our minds & just enjoy the ride with our new found wealthy hosts.

    Onwards & Upwards URrrrrrrrrrssss

  7. Kim says:

    A very good read Frog and some very interesting comments to follow. I wish I could be as articulate as some in their wording.
    The broom, what a nice thought that is, but what I find confusing is going from a statue, a stand, a new ground to a broom and being swept away. How the mighty have fallen!
    A new era and a great time for (genuine) Queens Park Rangers supporters, young and OLD!

  8. finney says:

    Thnak you Frog for the time you put into doing this for the site.
    Also about asking for a bit about the Milk Cup…..sorry.

    On a serious note what Zico wrote is bang on and i wish i had wrote that.

  9. Benv says:

    Excellent read, Cheers Frog. Probably the worst time in QPR history since the war. Its great to have some rich, successful, business men on board but isnt it a shame that the only way forward for most clubs is having to have a VERY rich benefactor? Admitedly after reading this it is obvious that the club finances were spiralling out of control and we needed serious cash to save the club but how things have changed in what 10, 15 years?

  10. Frog says:

    In answer to QPRREPORT, no i’m not sure £214,000 went to one director, but as I said it’s a lot of money and they can tell me where the money went if I got it wrong.

    And I thought i’d made it clear that I don’t know Bill Power or Mark Devlin and anyone that says i’ve called for their return is just spinning IMHO because i’ve never suggested that. But, it’s a matter of fact that costs where being reduced during their time running the club.

  11. Tom - QPR fan says:

    why is everyone so suspicious of Paladini? Being an accountant and a rangers fan who is fed up of the negative comments directed at Paladini consider the following:

    Monies paid to directors during the year can include costs relating to termination of contracts, of which I’m sure a few were, especially during the period of caliendo and other financiers coming in.

    Further costs may have been incurred in appointing new directors such as Alexander Agag (check spelling) who I believe was a de fact director during the period of Caliendo’s involvement.

    Paladini has secured the immediate future of Qpr by working tirelessly to attract the investment of Bernie and Flav. For this we should be eternally grateful especially reading the status of those accounts. So whatever salary he was actaully paid (the note to the accounts will probably not disclose this) we should see it as remuneration for a job well done.

    Talking of Bernie and Flav. I think we have a unique set of new owners and should be further thank-ful to Paladini. I think Gigi was good appointment – we play some great football and score goals from all over cite Wolves away and Stoke at home. They have attracted good investments so far – Lotto. And as far as possible are growing a hungry team without any premiership has beens that brought shame to the hallowed turf the last time we had money (C Wright).

  12. DelroyQPR says:

    Tom
    I am sure you can make more sense of the accounts than me as I am not an accountant, I suppose I should reajust my way of thinking & see that whatever Paladini earnt was justified due to his hard work & his real strength at the club is being a professional introducer rather than a chairman, managing a successful club, handling accounts, hiring staff etc, going by past years !

  13. chriscarrsrightfoot says:

    Good read , atleast we haven’t ended up in Oxford’s position !

  14. julia says:

    “Paladini has secured the immediate future of Qpr by working tirelessly to attract the investment of Bernie and Flav. For this we should be eternally grateful especially reading the status of those accounts. So whatever salary he was actaully paid (the note to the accounts will probably not disclose this) we should see it as remuneration for a job well done.

    Talking of Bernie and Flav. I think we have a unique set of new owners and should be further thank-ful to Paladini.”

    Thanks Tom, very kind of you to tell us how we should be thinking and feeling.


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