CAFC Club Finance: Autumn 2013 – Part 1 (includes 2013-14 losses forecast)

CAS Trust’s Role

In order to assist in preserving the long term future of the club, CAS Trust aim to develop and maintain as full an understanding and knowledge of the financial state of the Football Club as possible. We therefore welcome any access to financial information that we can analyse and publish to assist in that aim.


In the programme for the recent local derby with neighbours Millwall, Charlton released an overview of the club’s Finances for  2012-13 and offered some insight on 2013-14, via an article by its Chief Financial Officer David Joyes.

The piece is one of several recent articles by the senior management team - which also includes Chief Operating Officer Steve Bradshaw, and Chief Commercial Officer Ben Kensell – to have featured recently in Valley Review, as well as one from Board Member and Executive Vice Chairman Martin Prothero.

With Messrs Bradshaw and Kensell also due to speak at two forthcoming fan events in October (Bromley) and November (East Kent), there seems to have been a change in approach to fan communication after the quiet of the last year or so.  We welcome this – we have been asking for improvements in this area for some time and this is definitely something to be encouraged. We very much hope Mr Prothero can also be tempted out on to the supporters’ branches Q&A circuit to further strengthen efforts in this area.

Overview of 2012-2013 Accounts

Since we are now in possession via David’s article of some figures for CAFC accounts we thought we'd take a look at how they compare to our own projections and the effect that the Financial Fair Play rules will have. This is something that we have attempted to research and understand  in our magazine ‘TNT’ and on our website area “Footy Biz”

The information published in the article is early relative to previous years. The accounts do not have to be filed until early 2014 – and this is a welcome development. It helps us understand where things are going and makes it easier to forecast this season and next season which is where FFP really kicks in.

The Trust was fairly accurate in its predictions last March –

  • The club made an operating loss of some £5.5M – we predicted £5M
  • Turnover and loss were largely as predicted except for the added windfall of £1.7M on player sales due to bonuses relating to Jenkinson, Shelvey and Elliott.  This helped reduce the total loss to £6m (we predicted £7m)
  • Also, two clubs were promoted with ex Charlton players in their squads –  a double edged sword if ever there were one.
  • It is uncertain whether this will this be repeated -perhaps Shelvey and Jenkinson will earn for CAFC this time around ?

Turnover rose sharply by £3.4m in 2012-13 to £11.9m due to the increased TV deal in the Championship.

Costs also increased markedly to £17.4m from £14.3M in League 1 due to loan signings, the signing of Ricardo Fuller (since departed) and also we understand due to many player contracts in the League1 title squad having pay increase clauses if Championship football was achieved



**£2M reduction guestimate based on squad changes – Costs may rise if additional players are signed

Financial Fair Play (FFP)

As those who have been following developments will already know, FFP restricts what clubs can spend by placing limits on losses based on the bottom line – this is calculated after taking out non squad costs, such as

  • Depreciation on the Valley (£1M)
  • Academy costs (£1.2M).

CAS Trust predicted that these would total £2M  and the club have confirmed them to be £2.2M as above. So the final FFP result is £1.2M different to our forecast, mainly as a result of the player sales windfall. This forecast was produced after the audited accounts were filed last February. So we are comfortable that the forecast for this season will have the same accuracy, albeit costs may change on the playing side.

Remember, as discussed,  FFP rules are designed to prevent the ‘arms race’ which has led to an explosion of debt - £1 billion on the 2012 published accounts of Championship clubs (of which CAFC, with £40m, are about average)

  • The Football League's “Acceptable loss deviation” refers to the amount of debt a club is allowed to acquire when seeking to invest in its squad (£4m last season, £3m this season)
  • However, what is not covered in David Joyes’s article  is that the same FFP framework also allows a Championship club to invest a further £5M this season (giving a total of £8m allowed) via a ‘non-returnable’ equity investment, which therefore does not add to the overall debt level Perhaps, space permitting, this angle can be explored in further programme articles by David Joyce?


 The Club have set out their stall, and set budget limits on spending.

  • CAFC lost £6.0M in 2012-2013 with an FFP result of £3.8M – these losses are coming down.
  • David Joyes mentions this is in line with the average in the Championship for last season – we cannot comment on that yet as other clubs results are not yet publicly available
  • We estimate that CAFC are to lose c. £4.5M for the season 2013-14 – a 25% reduction.  When we discount the Academy and Valley depreciation then the FFP result is losses of just £2m. Of course this forecast is six months earlier than last season - we won’t know where it is going for certain until we see whether players come and go in January and how Jenkinson and Elliott do and how the crowds hold up
  • We believe that the level of spending on the squad may be determined by the club’s funding model, i.e., by way of loans only which restricts this to £3M this season, as per FFP.
  • However the level of losses could allowably increase up to a total of £8m and still be compliant with FFP if the Club’s Board or new investors were willing to inject equity,


We will attempt to further analyse the Club strategy in Part II coming soon