Bluedell

Last year's expenses in the 2nd half of the year were �£23.0m compared to �£23.7m in the first half. This year's expenses for the 1st half of the year were �£30.0m. I don't see any reason to think that expenses in the second half of the year will not be of a similar size. We made a loss of �£5m in the second half of last year. We will get some more income from the UEFA and the 2 domestic cups, but not enough to offset the increase in expenses, so my �£5m loss figure for the second half of the year looks very conservative. I just can't see any way we will break-even before Hutton and Cousin. Agreed.

Had a further think about this. Perhaps the prevous policy was to estimate the value of the player at the end of the contract, and write off the difference bewteen the cost and the value, and this was changed? It would kinda fit in with what you are saying. I'll see if I have any accounts from the 90s in the house and check....although the chances of me finding them are slim.

What you say rings a vague bell with me as well, but it's not the case. The 2007 accounts themselves confirm that "the costs...are capitalised..and are amortised over the period of the respective contracts." The 2007 accounts show a value for players of �£9.8m in the balance sheet, which is after �£3.8m being written off in the year.

I enjoyed replying, mate It's always good to have someone question your analysis as I may have missed something. I still may have done due to the extreme lack of information in our accounts. I do feel a little pessimistic about the whole thing. We broke even 2 years ago after qualifying from the CL. I thought the CL income had increased and our cost base had decreased so we should have been looking at a small profit pre-Hutton. However it seems that our cost base has started to increase again, unless the club have written off more of the transfer fees than I think.

I'd like to rebut your rebuttal if that's OK? The cost of the players purchased does not hit the P&L immediately. The cost gets capitalised and written off over the period of the players contracts. If we say that we spent �£12m on players in the summer and the average length of a contract is 4 years then the amount charged to our profit for the 6 months is �£1.5m (12m/4 years * 0.5 of a year). Given that this is the position then the profit of �£2.3m looks less impressive. I don't have the exact figures of the total spend and the length of players contracts, but hopefully you get the idea. The Hutton deal is certainly impressive from a financial viewpoint. My issue with it is that it is a one-off gain. If we are can come up with a Boumsong or Hutton every season then we don't have anything to worry about, but I don't believe that we can. I am more concerned about the underlying situation, looking at future years, which is a bit concerning. We wil make a profit this year but that's against the general trend. Yes, we have a net spend on transfers and a profit equvalent to most of the Hutton transfer (as this is where it is coming from), but it's concerning that we are having to rely on Hutton to make a profit. No. We would be looking at making a loss this year with the CL and without the Huttton transfer. Even with the Hutton transfer, I suspect that our debt may be slightly worse at the year-end (but it's difficult to assess due to the lack of information). To be able to finance an annual net spend of �£5m on players, we would need to be looking at an annual profit of �£5m and unfortunately we are not close to achieving that. I hope that you are correct and I am wrong, and we will have a far better idea when we see the year-end accounts come out, but I believe that your analysis is flawed in that you are assuming all of the summer spend has already hit the P&L account.

My pleasure, mate. Cheers.

Davis shaded it for me.

Negotiations are still to take place on that one...

I wouldn't hold my breath to wait to find out.