BSH: Warning of Further Losses

Birmingham International Holdings today confirmed that they expect to record a substantial increase in loss for the year ending June 2017. The increase of operating costs including spending on player’s registration and player wages was largely blamed for the increase.

Hong Kong Stock Exchange

The full announcement can be viewed here.

What does this mean for Birmingham City?

On the one hand, this should not be a surprise.

The Blues board spent money on transfers and wages both in the summer and particularly in the January window as they hoped to build a side capable of promotion.

While that dream of top flight football faded quickly to dust under the reign of Gianfranco Zola, the money spent was always going to show on the balance sheet.

What needs to be taken into account is this substantial increase in loss doesn’t include the raft of money spent this summer to rectify those mistakes.

How much is this loss and how does it affect FFP?

Until the results come out, we don’t know for sure.

The previous year showed a loss of HK$59million or so (about £6million) so we know that the figure will be higher than that.

While these figures are useful as an indication of the club’s finances, they’re not exactly the same as they are for the whole group rather than just the club, and there will be a small portion of the accounts which has nothing to do with the club.

Throw in the fact that an “FFP result” is different from the club accounts too as it disregards certain spending and I think you can understand why I would not like to even think about where Blues stand from this announcement alone.

Is this something to worry about?

I think much depends on the kind of person you are.

Some people are happy and content to watch the football on the pitch and not concern themselves with the way the club is run – and for them, this means nothing.

I’d like to warn people who are happy with things the way they are in advance not to read any further for fear I’m going to piss on their chips.

I fall into a different category of fan. As much as I’d like to be able to enjoy the rebirth of the club under Harry Redknapp and the new players he’s brought in I can’t help but wonder about how this will affect us down the line.

For me, best case scenario is I’m wrong about TTA not putting money into the club, and the club is massively in hock to someone who while having a massive paper-trail online showing his business and investments, is an anonymous body as far as the club is concerned and who seems to have Blues as just part of a massive business portfolio.

Worst case is I’m right about TTA not putting the money in we’re massively in hock to someone who we have no idea to the identity of – which I’m going to admit worries me just a bit.

For me the most important thing these results could show is how the holding company intends to continue funding the club. I would like to see a diversification in revenue streams that mean the club isn’t so dependent on a rich benefactor – but I’m not holding my breath.

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