In June 2011, Good Finance presented bankruptcy proceedings, a former suspension of payments, with a ‘withdrawal’ of 49 million on the principal of a debt that was at that time in the almost 150 million , a very high figure for a team whose total income is around 30 million annually.
The club committed itself with its creditors
In the agreement subsequently approved, to return the remaining debt in eight years, or, in the case of the equipment being dropped to the second division, in twelve, thanks to an additional moratorium.
According to the accounts that the club has just presented, regarding the season ended on June 30, 2012, it seems that it will not be easy to meet these commitments, since it closed last year with losses of 20 million euros , which means that, instead of being reduced, your debt has continued to increase.
The accounting. A mirage
More than one can be called attention that speaks of losses since the official result of the past year, as it appears in the profit and loss account of the club, is a benefit of twenty million six hundred thousand euros. Accounting stuff, which the devil charges. Good Finance effectively loses 20 million , but as a result of accounting as income from the aforementioned ‘take off’ of debt for 49 million, it gives a profit of 29 million, which once the corporate tax is deducted remains at 20, 6 that I tell you.
Unfortunately, the aforementioned 49 million have not entered, as they suppose, in the cashier at the club, but almost 15 million net (20 million losses, less amortization), at a rate of more than one million on average a month. Therefore, the first challenge faced by Good Finance managers is to balance income and expenses to start generating cash, which they must do sooner rather than later, given the obligations arising from the agreement with their creditors.
The accounts are very clear
Good Finance entered a little less than 27 million euros last season and only in salaries of players, and other personnel, was spent more than 25, so little was left to face the 15 million expenses of exploitation and the 5 you need to amortize the investment made in staff.
The problem seems to become even more complicated when we observe, in the data provided by its report on the maturity of the debt, that before June 2013, Good Finance will have to return to its creditors a figure greater than 16 million euros.
The report also shows that the money is owed by Good Finance mainly to public administrations, including social security, finance and local entities, to which it owes 35 million, to other clubs, 23 million, to financial institutions, about 18 million , already players and other squad, 15 million. The amount that is missing up to 100 million is borrowed from group companies.
As it does not seem that the sales of players and other assets can contribute significant income to the team, someone will have to contribute money so that they can get out of this complex financial situation.