This all started 6 months agoin 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 !