This new lad “Debt” seems to be having a good game

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It’s that time of year when geeks like me get excited and football fans become finance experts with the release of Wigan Athletic’s latest set of annual accounts. The good news is that the key stat of Wages to Turnover has reduced from 91% to 79%. This is due to increase in revenue from the new TV deal whilst retaining a steady wage bill.

The increased loss of £7.2m versus £4.0m the previous year is almost wholly driven by the timing of activity in the transfer market. If, for example, Charles N’Zogbia had been sold before 31st May 2011, the loss may have been reduced to something close to breakeven. However, the bulk of the profit on sale of N’Zogbia was in theory reinvested in Al Habsi and wee Albert so the whole thing moves in perpetuity.

I’ll not go down the line of explaining the complexities of amortisation of intangible assets here just reiterate what the CEO said about not needing to sell to break even. Clearly in this current season we have a lower value squad and a lower wage bill versus nine months ago which will filter through to next year’s results. The unfortunate side effect of this is that it makes us weaker off the pitch as we have chosen to use the extra TV money to reduce losses whereas other clubs may be able to use it to spend more.

Personally I don’t want to see Wigan Athletic get into any more debt at any price and the club’s long term sustainability must come before everything else. This unfortunately means that we are finding it harder than ever to compete, we just need to spend what we have more wisely: buy cheap, young players who we can develop and only sell for the right price.

Roberto Martinez’s activity in the transfer market has been a touch hit and miss but it sadly is also a by product of shopping in the bargain basement when even an average Premier League striker like Bobby Zamora now commands an eye popping £90,000 week.

I’m sure someone will now by mouthing the word ‘Boselli’ at me whilst reading and it certainly wasn’t Bob’s finest hour but as a football club we still have many saleable assets such as McCarthy, Moses and Al Habsi should we need to clear the residual £20m or so debts after Dave Whelan converting the other debt to equity.

That might not be an appealing prospect for Latics fans but it at least means the club will have a future regardless of what the future holds, contrary to some of the more dramatic reactions to the annual accounts. We might still be bottom of the league but when you look at famous old clubs like Portsmouth on the road to financial ruin (again) don’t ever under-estimate the gift of having a football club to watch at all.

First published in the Wigan Evening Post 12th man column on Wednesday 22nd February 2012

A more detailed financial review of the Wigan Athletic annual accounts will follow in the coming weeks here on TNS

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