I start this with topic with some trepidation. There is every chance it is going to turn into a trollfest - but if anybody else is interested in discussing this topic, hopefully we can ignore those posts and run a real thread in paralell...

Neil Hudgell has said he wants wants Rovers to become a self-sustaining business. A laudable, sensible and ultimately probably necessary plan. He and others have got Rovers into SL, the best place to achieve that aim, IMO. That said Rovers have run a loss since arriving. This probably isn't an immediate concern, as much of the borrowing is in the form of directors loans, I believe. However it can't continue in the long-term, I imagine.

So why are Rovers losing money? Crowds compare favourably with a number of other clubs. Do they run bigger losses or have lower overheads. How much have Rovers losses been due to one-off investment in facilities (floodlights, expansion of the East stand, the golf stand and so on) and how much is down to fundamental weaknesses? Is there potential for more revenue from bigger attendances? Could we run a cheaper squad - like Quins RL, for example - or would there be a drop in ticket sales that would make that self-defeating?

Capital investment (floodlights, east stand extension) would usually be put on the balance sheet as opposed to the P&L, therefore not effecting the profit/loss figure (except for the depreciation on the asset over the year).

you have to speculate to accumulate! Ferengi law of acquisition 123

Is there a distinction between capital investment and capital spending? Investment suggests (to me) something may generate revenue (unlike floodlights) or may appreciate in value (or at least have a resale value - unlike the extension to the East stand). I don't want to turn this into an argument about accounting technicalities, unless we really have to though (ie discussing specific figures).

You do and Rovers have. But now having got (more or less) where the club wanted to be, it needs stability. The money spent and invested in the past has earned an obvious return - but what is there to speculate for now? We can't get promoted to a higher, richer level and have to learn to live at this one.

To quote NH from the rallyround the robins interview:

'...we make losses year on year. These losses are underwritten by directors loans, sponsorship etc. Some of that has been planned as investment to get us where we are. However, that can't continue. This year, because of our well documented supply issues with Kooga and the economy in general the issue has been one the directors have prioritised. I've gone on record to say we now need to make the business self sustaining to continue the progress we have made.'

So the big question i'd be asking if i were a rovers fan would be 'what happens if the business cant become self-sustainable? Will the directors keep putting cash in or would they walk away? (or would they look to cut back on wage bills of players etc?)

Without detailed accounts it's difficult to speculate, however if you look at Hull for example, they allegedly have a turnover of £5m, with expenditure of £1.6m on players. Take off the reported £1/2m cost of the stadium and that leaves £2.9m to spend on all of the other costs. Hull have made reasonable profits up to (I believe) £300k in the last 3-4 years, leaving running costs and other expenditure around £2.5m+

Whilst each club will have a different cost base, there is obviously significant other expenditure involved in running a club.

I think one of teh biggest mistakes the RFL made was doing away with the 50% of turnover rule in the salary cap. Whilst the playing field wasn't level at least it brought about some financial prudence

I'd have thought the extension would be able to be capitalised as an improvement on an existing asset (the east stand). By depreciating the asset each month this ensures that the cost of the asset is split over its life span, possibly over 25 years, instead of taking the 'hit' to the P&L in just one period.

I agree.