I actually think GH in the Bougy thread is valid in the questions he raises.
On dropping out the prem, we raised £20m in player sales and reduced our wage bill. In the twelve months that have followed we have raised a further £5.5m in player sales, and a £15m converible bond issue. We have reduced our wage bill still further, and at present (as far as i know) have only one player left on stand-out premiership wages. We also have had two parachute payments now worth £22m. On the other side, since relegation, we have spent circa £7m in players.
I don't think shouting 'where has the money gone' is particularly necessary, because if it was there we know our board would supply it. I've no doubt as well that the money has by and large gone on the early repayment of debt and the shortfall in the lack of tv money.
What i also don't think also is fair any more is blaming certain managers on who they bought, and whether they reckless with it. They were deals that were fully sanctioned by the board.
What i DO think is a fair question is were the board too reckless in what they sanctioned, not just in the last two seasons in the prem, but also last season ? Should greater financial controls have been insisted to avoid this current assumed 'black hole' ?
No one supports our chairman and board more than i do, and i would not swop them for the world. But we were fortunate in getting the very top of market value for Darren Bent, which it appeared the original overspend was guaranteed against, and given what we have raised in total i certainly wouldn't have expected us out flashing the cash around, but i would have thought the need for enforced sales would of abated.
views ?
0
Comments
- actually top market value was the £17.5m we accetped from West Ham
- I think the club only received 10 to 11 million for Dazza, sine Ipswich took a quarter and the full price was composed of add ons, so we sold the debt. SO did we really rake in £20M when we wnet down?
That's kind of the point i was getting at though.
At the back of the mind in the last season in the prem there should have been a bit more caution that there was a great possibility in us dropping (pundits, bookies and fans all feared it).
And last season, there was a very good chance when the season was slipping away and we were't going to make it, yet we brought in for example two left wingers on loan at the same time, both on decent money, with what appears on the outside the mindset that if we didn't have them they would of gone to a rival (which one eventually did). But it now appears we weren't really in a good enough financial position to be so clever in our approach.
Fair, or am i nit-picking ?
I subscribe to the mailing list and a well known and respected poster Bryan Matthews posted some figures relating to the clubs debt (not net debt) including that in 07 accounts they stood at £45M.
I posted this information on Reams site because of the usual/understandable clamour for new signings. Somebody has shown this to the club and somebody called "director", not named, has posted back to say
"the debt is currently 30mn pounds in total 7mn mortgage ,15mn directors convertible investment and 8mn of short term debt,being reduced by player sales at present.
Those are the facts and new management of Chappell ,Waggert and Whitehand are working hard to balance books."
He goes on to say
"if Directors convert to Equity there will only be 15mn of debt,half of which is long term mortgage.
At 7% interest rates only 1.1mn of interest to cover a year.
Club will be sound and is sound if managed prudently,thats all for now. "
What this seems to show is that those running the club have managed to sort out the clubs finances and trim the debt level significantly (I can only assume this has been by the cost cutting measures undertaken plus the player asset sales made).
I take great heart from this because to survive we need to get costs under control and costly debt payments would just add to that.
My reading of the situation is that the Directors have taken some really tough decisions to make sure the club can survive into the long term. It doesn't mean the club can't sign players but they have decided to get back to a Championship level size of club before they commit much in the way of player purchases. Thats the reality and we better get used to it.
On the positive side though,
We have some great youngsters coming through,
We have some overseas development with the kids from the Ivory Coast due in a couple of years
We still have a strong squad
We have a decent manager
We have a board who will keep the club well run and focussed
We have a decent stadium
We have a fantastic Community Trust reaching out into the area
Taking all this into account yes, I hope we are promoted this year (I think we'll be there or thereabouts come May 09) but whatever happens, the club is relatively in decent shape.
Theres really two schools of thought when it comes to relegated clubs getting promotion back to the PL.
1) Gamble on a swift return;
Pro) You only lose out of on a years TV revenue and are in a pretty strong position to retain your PL status.
Con) You don't get promoted, still have to sell all your PL "stars", but their asset value is reduced, and have PL overheads with CCC revenue.
2) Cut costs immediatley;
Pro) Long-term stability and security of the club. Still a decent chance of being promoted
Con) You don't get promoted, but have CCC overheads more inline with CCC revenue.
What you also have to factor in is how long the relegated club have spent in the PL. i.e. Charlton 98/99 season were a lot different business to Charlton 06/07.
Personally I'd much rather the prudent approach. An approach I think the club are taking and follows their general approach to the security of CAFC.
However saying we are potless aint going to get the share price up either.
Well you might be right but it came after one of the posters on there said that he had spoken to somebody senior within the club who was concerned that the figures being bandied around were wide of the mark, so it could all be b*llocks or it's true and the bloke just can't spell. I felt it had a ring of authenticity despite the spelling error. (After all Henry has not been able to spell Semedo correctly in over a year and he is a "Director" of the club.) Lets not forget that the club already posted a total debt of £45M in its 07 Accounts. Lets also not forget that this is not net debt (debts less assets), this is only what the club owes, in other words if you've just bought a house for £300K with a mortgage for £300K and you have other debts of £15K, your total debts are £315K but your net debts are only £15K
No it doesn't.
Neithe does selling our captain and best player mid-season to ensure we stay in the ccc.
Their hearts are in the right places but they have made some terrific balls ups the last few years.
Remember £30M is not net debts, the club has assets like the freehold of the ground etc which will almost certainly be in excess of that figure, so it ain't that worrying and half of those debts are to directors who almost certainly wont ever have them repaid unless the club is sold when they'll convert their debt to equity.
Throughout the last ten years we are told we are a well managed club, and in the black or breaking even. Spending our premier league money as wisely as possible to maintain our status.
We then gamble a bit, spend next years transfer money underwritten by sale of DB if it goes pair shaped, which it does and he is sold to cover this.
Upon relegatation we trim our squad of a large number of premier level players bringing in a good deal of revenue and some go due to contract clauses; we cut other costs by £16m and embark on a 2 year plan to go back up. All good we are thinking.
We flog Diawarra at the start of the season (a bit of a surprise) which causes a bit of defensve problem if not crisis, then half way through the season we flog our remaining premier level player despite being in the mix for promotion and all of a sudden we are told there are financial issues, despite buying a new striker.
This is followed by a conversion of external debt to equity in the form of a share issue.
Later after missing out on promotion we then proceed to trim the squad further and are seen to be selling all our saleable assets and some less so, and are stuck with one or two bits of deadwood on silly money.
We purchase some non leaguers and a free transfer at nominal costs (so far). Whilst maintaining a fairly average championship squad with one or two major holes that need plugging.
In conclusion
It seems to me there has been a 'sea change' from the Board halfway through the last season - if not a withdrawal of financial backing - accompanied by the resignation of our long standing CEO Peter Varney, and a reshuffle at Chairman level.
The overall strategy appears to be cut our losses and pair the club down to a more sustainable long term view, with promotion purely a bonus and arguably not a serious objective - other than employing Alan Pardew who has a record for promotions on a shoe string? Of course the other argument is that the current board are happy to tread water at this level whilst waiting for big backer to come in.
However, what I do know is, I would much rather be in our current situation than that of Southampton - four corners of the ground closed, a squad that if you believe the new unknown coach, will be made up of around 50% youngsters and real possibilty of relegation this year.
We shouldn't knock the board for closing our stable doors before the horse bolts.
We all want players in, we all know that we are short in midfield and at the back. I think we would all agree that our moves in the transfer market last year weren't the best - I'm talking left-sided loan signings.
At present we don't look to have a squad capable of getting us straight up. A couple of tweeks and the right players hitting form and who knows?.
I hope we do add to the squad, but I don't want players for the sake of getting a body in - who can forget the panic signings that were Robbie Mustoe & Jesper Blomquvist?. I think we are a bit better than that these days.
Welcome back Clem and a top post imho. This ain't a board who haven't backed the club with their own money or taken money out of the club. They have made mistakes, they backed Curbs with some cash and then Dowie with a lot more, knowing they could survive. There are no guaranties of success. Who's have thought that in the year prior to the play off win, we'd be challenging for promotion and three seasons later we'd finish in the highest spot in the top league since God was a boy.
I trust the people running this club and even with mistakes made (and openly acknowledged) I still think we have a club which will move forward in the next few years, even if we miss out this coming season.
What we are seeing now is a reallignment more on the lines of sustainability at this level.
I still think the strategy was confused last year however, but how much of that is down to the Manager and how much was down to the Board is open to question.
The £5m figure seems to have been plucked from the Bloggers night, and then built up by a post that Wyn Grant made after the meeting.
From my memory of the meeting, we will be net sellers this summer, which is no real surprise and that the £5m is the difference between the target and the money raised in the Bond issue. How that money is got wasn't just going to come from player sales.
Financially I don't think we're in the tank, we own the ground, most of the debt is directors debt, and the mortgage on the Covered End will probably be covered. However if we don't go up, I get the feeling we'll return to the club we were just before the first promotion. Well managed, financially sound, spend what we have and have a team of decent Championship players/top of League 1 players. The board are doing the sensible thing now and preparing for that if it happens.
Add to that, I get the feeling that something will happen with the structure of the Football League and the Premier League in the next 5 year, which for a club like us will be probably be for the good long term.
Have just checked the official site, and they are on four and three-year contracts respectively - both of which come to an end next summer, at which time we could presumably end up getting precisely nothing for them!
Given that they could do well to manage the 46 league games between them, is it safe to assume that their wages are now more in line with Championship pay packets?
As far as the overall financial position is concerned, I think it's good news that we seem to be have more than half an eye on the 09/10 season and the loss of the parachute money, because at the moment I'd think promotion would be a big bonus as opposed to a realistic prospect or expectation.
Spot on Rothko. Realistic and right.
If you look at the other established premiership teams that find thereselves getting relagated almost all the clubs that have then struggled have all ended up under new ownership .
Personally I feel it's so important that we get off to a good start otherwise there could be some troubled times ahead especially at the home games.
I live in Norwich and there has been a story of a muti-millionaire businessman wanting to invest upto £20M in Norwich City. After alot of press speculation and at the instigation of Norwich Union, one of the clubs main sponsors, he met with Delia Smith and her Husband who are the clubs main shareholders. Basically he couldn't/wouldn't cough up enough to take the club over, so nothing came of it.
Fans think that there will always be leemings around every corner wanting to fling them selves off the football owning cliff. It just ain't so and people like Ambramovich and those who bought into QPR are very few and far between and getting even less numerous because they all hope to put a club into the FAPL with a view to assaulting the summit only to find the mountain just gets higher and higher and the likely outcome they seek is almost certainly out of reach.
I know it all sounds a bit 'pat on back' style, but i think it is a credit to the intelligence of our support that they have never come in for virtually any stick.
Can't think of many other clubs that would of got off as fairly as ours have had in the past two years.
Regarding Norwich what happens if they struggle this season Delia and her Board are going to cop it big time off disgruntled fans who have brought into this idea of some Billionaire owning them.
Wasn't that clever for
Sheff Wed, Leicester, Southampton, Nottingham Forest, Barnsley ...... the discrepancy between the prem and the Championship makes even the best run clubs (Leicester our role model) crash, hopefully ours is a short term shock rather than the semi terminal some have suffered.
............
I'm not sure we had £30m debts, unless you include everything from mortgages etc which are secured.
We might have played in the Prem for eight years, but wage inflation and the cost of buying players and building a squad that could compete meant that for many of those eight seasons and particularly the last couple we were running to stand still.