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Thoughts on Yesterday’s HKSE announcements
Yesterday the news broke that Birmingham International Holdings were delaying releasing their end of year accounts until February 2012, and that they were also issuing a profit warning. I thought I’d put together my thoughts on this – I will stress that they are my opinions rather than facts, and they’re the opinions of myself only.
Let’s take it one thing at a time. Firstly, the news of a profits warning is hardly new news really, bearing in mind that Blues fans have been reminded in the press continually we’re in the financial toilet. Thus I think it’s pointless to lose our heads over it – after all, I think we knew it was coming. What I think is interesting is that the inference is that Blues lost money in the period July 2010-June 2011 – ie despite being in the Premier League that season, we lost money. You can almost hear the “where’s the money gone” shouts, can’t you?
Well, finishing 18th didn’t help us any. Using this guide here (pdf link) from the Premier League, you can see that finishing 18th earned us £7million less than finishing as we had in the previous season (9th). Combining that with us being on tv less (which I think is a product of us not being as good to watch) meant we earned a shade over £9million less from TV rights than our brethren across the expressway, who did finish 9th. With previous year’s turnover in the Premier League being around £56mil this is around a 16% drop in revenue from the previous season – a fairly hefty drop in itself.
On the flip side, wages were massively increased last season. Blues brought in players like Nikola Zigic, Ben Foster, Aliaksandr Hleb in the summer, and then added David Bentley and Obafemi Martins in the January window – all of whom are on wages likely to be in the 50k per week bracket. Spending an extra £10million on wages is going to put massive strains on the budget, and without money being pumped in from a mega-rich owner the worry is where that money is going to come from. Thus the news of a profit warning doesn’t surprise me in the slightest.
The more intriguing thing for me is the delay in approving the accounts. It seems a long time to delay it to me, and I can’t help but agree with people who have commented about the coincidence of the day of the meeting coinciding with the end of the January transfer window. Furthermore, I was under the impression that BIHL would be holding their AGM in December yet if the accounts aren’t ready to be approved, does this mean the AGM gets postponed also? I can’t help but get the feeling that the board are looking to sit on the accounts for some reason – but as they’ve announced a profit warning, what reason it could be I’m not sure.
One thing I’m absolutely unconvinced of is that Yang Yuezhou is going to turn up on a white charger to pump in a pile of money to BCFC. It’s been two months since Mr Yang took on the deputy chairmanship of the board, and as yet we’ve had no comment whatsoever from him about anything – let alone with relation to BCFC or BIH. I managed to obtain an address for Mr Yang and with the generous aid of a translator I wrote him a letter a few weeks back to ask him if he intends to make a statement. I’ve not received a reply – not that I thought I would get one.
All in all it adds up to a situation that isn’t great. I hope that Peter Pannu and the BCFC board, or Carson and the BIH board are able to do something to give us all belief, because without something positive happening soon I do fear the vultures will start to circle – and whilst I don’t think that Blues will be wiped out, I don’t think it would be pretty. Only time will tell.
Tags: BIHL, Carson Yeung
18 Responses to “Thoughts on Yesterday’s HKSE announcements”
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Peter Pannu states that the club should be self-sufficient. Stripping out the high earners (okay Ziggy might be on a packet), reducing the backroom staff and club staff has surely gone someway to doing this? No money is com ing into the club even though PP states that no money has left the club. I feel that we’re being used to help out BIHL and there problems. I still maintain that the best thing that could happen would be for CY to get a guilty verdict, they’ll be dancing in the streets in Brum if there is and the club can lurch towards some kind of end game.
It’s all guesswork. Only the Chinese know and they won’t even tell Peter Pannu. They have no clue how to run a football club let alone a business
I just have one question which you guys that write the blogs and are supposed to working in the best interests of the club etc have not done or asked?? what are the FA thoughts on this and why have they not got involved?? surely a campaign should be started to get them to look into what is clearly a cloudy area of one of THIER football clubs???
Not my cup of tea only football but a excellent article again mate. As far a i can see they appear to want to know where birmingham will be sitting in the next few months in the table. Whether blues can challenge for playoff’s or further. PP HAS already stated that play off’s now appears blues only option. We will need to wait until January window to see who else might leave so they can recoup more funds if need be!!!KRO my question to you has Mr Yang any interest in football or any knowledge regarding football!!!! Please could you return my question has your opinion is highly throught of. KRO……………
I have a bit of a feeling that yang coming on board has more to do with links through property then football. Previous to carsons arrest there was alot of talk about BIHL and property deals to build new provinces on disused land. It makes you wonder why he has put any money in really, its seems that at this moment in time neither the club or the holding company can really service any debt. They maybe an unfair comment to BCFC but not so with BIHL. So what sort of guaranteed return on his money is he expecting. Do we believe that yet again another lacklustre business decision has been made, surely yang carried out his ‘due dilidigence’ before he lent the money to BIHL. Maybe he has been sold on the fact that birmingham will definately get promoted this season and big money will come his way? It makes you wonder, it maybe an uninformed guess but it seems to be one gamble after another. KRO!
I imagine it may partly depend on how we are doing in January. If we are still performing well and are still in with a decent chance of promotion, people may want to get involved. Pumping money into a club that may be in the Premiership is worthwhile but doing so to keep a Championship club going isnt. Fingers crossed….
CY has apparently stated that with the current plight of BIH, then BCFC must stand on their own 2 feet. That’s fine because with all the costs that we have off loaded, with corporate and ticket sales and the Europa bonus plus TV payments and the parachute payments, we must be self sufficent, surely??? Problem is surpluses are NOT being returned to the club they are going offshore to fund the bail out!!!
No they are not. Not one penny has left the club for HK – that is a fact
Almajir, the last available report refers all of the Profit loss etc of BCFC (BCP) as group financial elements. Just because Pannu hasnt sent a wadge of bank notes to HK, doesnt mean that our finances are not embroiled. I did note a very worrying reference to financial commentary which suggests that BIH may well be no longer viable as a going concern and that was before latest developments!!
Pannu mentioned in his programme notes that he’ll be going to Hong Kong again soon to seek further investment. Question is what is he going to differnt this time compared to what he did last time when he came back with nothing? If he comes back with nothing again, then you have to question what is going on. Then again who in their right mind is going to invest in us at his moment in time. Also if Carson was suddenly found innocent of allegations then would investment suddenly come rolling in? I very much doubt it. The teams excellent performance is taking the attention away from the Yeung saga, if we were lower down the league you can imagine the scene with the board. Also Pannu should be nailing down Chris Hughton down to a longer contract, soon Wolves, Blackburn or Wigan could be looking for a new manager, and with a paltry 12 month rolling contact he could walk back to the Preniership and we will get no compensation.
Pannu’s most recent comments suggest that Yang Yuezho’s interest in BHIL does not extend to the football club. Either way, I believe that relegation has provided something of an excuse to the board. The dire financial situation at BIHL was well documented long before Blues went down.
Was there not an announcement late last year suggesting that the company could only continue to trade if new investment was forthcoming?
The most pressing task is to keep the mother company afloat. Blues seem to be slightly peripheral in all this.
In consideration of the relationship between BIHL and Blues the football club.
In 2009, Southampton were given a 10 point deduction because THEIR parent company went into adminstration. Not the football club but the company that owned it.
Legal battles were faught and lost to try and show that they were separate entities, but the FA stood it’s ground on the basis that the “parent” company and the football club were almost identical.
It is the position of BIHL itself that could drag down Blues, after all the hard work of Pannu-Hughton et al that I feel is the thing of greatest concern.
I do understand what people are thinking linking the new date for approving the accounts and the end of the transfer window but I do believe that this is a coincidence.
Any sale in the Jan Transfer window will not relate to the accounts being released for July 2010 to June 2011. I have heard numerous interpretations of why this delay has happened from pressure being put on CY to selling all our players in Jan. It is worrying times and I do fear what may happen but for the moment Im just going to put all my efforts into supporting the team.
In reference to YY though I have a sneaky feeling that he is playing the long game, I don’t believe he will let us go into administration after putting 12.5 million into the company. The fact he put this money in at such a time that investors are being warned not to signals a plan to me. If i was a betting man I would say YY will be our new owner within 6 months.
It seems that we are about to report “substantial losses”, well how so…? Players on high wages have all gone, others have been sold. Granted we’ve bought players but the balnce has to be in favour?? As predicted here a few months ago, we’ve been “rumped”. Pannu and Co are past masters at the fiddling / corruption game.
Unless something is done to attract attention to anomolies, we will just drift onto the rocks and fold as a going concern.
Zigic is still on an estimated 50k per week.. I bet beasejour and ridgewell are on 20k plus per week.. The high earners have not gone.. Yet they may well have done come the end of January!!!
delaying the accounts maybe a delaying tactic to avoid administration till later in the season when we will hopefully have enough points on the board to be able to weather a 10 point deduction and still stay in this league.
any of the points raised here may be true and our club is in their precarious hands, i just hope they know what they are doing as we can’t expect them to tell us too much as that could be to the detriment of the club i.e. to let the whole world know our dirty laundry (no pun intended).
we need the points in the league , but we need the europa money as well so another juggling act for Chris Hughton.
as the board, especially Yang Yuezho say nothing to the stock markets and give no positive news or communications and the shares are still suspended, who in their right mind would want to invest in BIH or BCFC.
If i had that sort of money i would be looking / waiting for a bargain and buying the whole club / company not investing and letting the current board mess it up again and waste more money down the pan (again no pun intended).
In Mr Yang’s case, one factor is, perhaps, that he’s getting a higher rate of interest on his investment than he would if he’d put all his HK$ in the bank?
I realise that still leaves a question of why he made it a condition he’s on the Board; I also realise that I don’t really know enough about these shenanigans to do much more that guess!
Does anyone know if the accounts in HK will be subject to independent audit, once issued?
They’ll have been audited independently prior to issue – it’s a legal thing.