I see sense in some of Bing's and some of Colin's points. I think the truth lies somewhere in the middle - yes, we were on a slippery investment slope, but we were counting on still being in the Prem for season 2007/8 and all the money from the new TV deal. We gambled on that by giving Dowie the money, and haven't really stopped gambling since.
We got relegated at the worst possible time - the closest comparison (which I dread making) is to look at Luton who were relegated after c ten years in Div 1 the season before the Premiership gravy train came along.
[cite]Posted By: ColinTat[/cite]We are a small business albeit in a unique environment, over spends often occur but it's the blind wasting of resources for many years to come. If managers on average last 1.73 years in the job why offer them more than a two year contract? If there is relegation why is there not a clause if promotion is not met? Why do we give Pardew a payoff when he's been a complete failure? Why have the contract written totally in favour of the manager, if he can not achieve second position with the second biggest budget then he deserves nothing. Still if you just have a contract that rolls every two years that is fair time for a man to prove himself. Who get's a massive payoff for running a minor AIM size business? Why is a youngster signed to a four year contract? We still gain a fee if he's a player below the age of 23, who leaves whilst out of contract.
A lot of very thoughtful points there but we need to remember the context in which Pardew was appointed. Not much more than six months earlier he had taken the Spammers to the FACF and 9th in the PL and many people felt he was harshly dealt with by getting the sack.
The point is that when he came to us we were rock bottom and had just sacked the nice but inept Les Reed whereas he was, relatively speaking, one of the brightest English managerial prospects in the game. We needed him a lot more than he needed us, I think it is fair to say.
As a result, with 30 million quid riding on the outcome, Charlton (as any other club would have done) bent over backwards to give him the deal he wanted in the hope that he kept us up. He didn't and now we have to pay the price.
The bottom line is that football is not a rational business - the fans definitely are not - so clubs will take lots of decisions that are beneficial in the short-term but potentially hazardous in the long-term. Why? Because so often all that matters is next weeks result not what bills come in the post in three years time.
Interesting post Colin particularly your stat from football economy re Curbs in 2005/6 spending 79.7% of Turnover on wages. I didn't know that in all honesty.
However whilst agreeing with the general principle you state that such a ratio is unsustainable at least Curbs/Varney mitigated the problem to some extent by having the prudence to insert relegation clauses into players' contracts. Dowie and Pardew do not appear to have done this as far as I can see (we may well still be paying part of Faye for example even though he has been at Stoke virtually all season!) and it is that recklessness which has brought matters to a head in my opinion.
The bottom line is that football is not a rational business - the fans definitely are not - so clubs will take lots of decisions that are beneficial in the short-term but potentially hazardous in the long-term. Why? Because so often all that matters is next weeks result not what bills come in the post in three years time.
[cite]Posted By: Ormiston Addick[/cite]Charlton (as any other club would have done) bent over backwards to give him the deal he wanted in the hope that he kept us up. He didn't and now we have to pay the price.
Agree with that 100%. And would also add they did pretty much the same last season in the hopes we went up. Offloaded players he didn't want and let him bring in loads he did.
[cite]Posted By: ColinTat[/cite]bingaddick remind me never to go anywhere near you business/gamble choices. If I had to look through your idea of the utopian company I don't think I'd bother. Just by speaking to you within minutes I'd know you weren't an investment, and any positive returns you'd made was not down to business skill but sheer luck.
We can all have bad luck and good luck. Sustaining a business and sustaining the long term future of a business is not down to chance or gambling. It is your duty as an investor to have full knowledge of the investment and the nature of the business; that ain't me that's Keynes who's Oxford fund returned profit year after year apart from cataclysmic cycles like in '32. Now cataclysmic events like the crash of last year or relegation from the prem is hard to manage. But that's exactly why you don't have a majority of your money in highly leveraged business/vehicles. In 2005/2006 we had an aging squad of mainly poor-average prem players and our wages turnover percentage was 79% - fact:
It is impossible to run a business successfully with that philosophy. Regarding the fact we significantly upped our spending the next season no doubt wages turnover percentage was probably much higher. There is no gamble there that is bankrupt business. The facts are in the accounts, a virtual 12 mill loss in 2006, it's not even that you have to go looking for them like Ashley should have. Because Ashley operates a leveraged buyout of bankrupt business it's not a surprise he doesn't do due diligence correctly. Off balance sheet accounting is highlighted all through accounts. Why do you think accountants were flagging Madoff's returns as impossible ten years ago?
So don't tell me business is gambling. Getting up in the morning and finding my favourite shoes is chance. I don't consider something a gamble when I know it's probability and there is a great chance for success. Charlton's business model post the 2000/2001 season was no gamble but definite bankruptcy at some time in the near future. Once you go way above 60% turnover it's over unless you get a mental sovereign wealth fund. Fortunately we were lucky to get big money for Parker and Darren Bent, but rarely did we nurture youth between 2002-2006. The investments strategy was for developed players and thus their overblown wages for their small talent.
When Pardew thinks a million quid in wages to a nothing teen is good investment, that is not a gamble but bankrupt business. Managers need to work within a budget, the board were wrong with the budget but Pardew wasted it moronically. 22 grand on Weaver when he'd ostracised Mhyre who was no doubt on much smaller wages. Mhyre is a better keeper but not the 'name' he wanted. It is up to the chairman to set a fiscally sound budget if a manager has not brought to you an intelligent strategy on how to allocate it then don't employ him.
We are a small business albeit in a unique environment, over spends often occur but it's the blind wasting of resources for many years to come. If managers on average last 1.73 years in the job why offer them more than a two year contract? If there is relegation why is there not a clause if promotion is not met? Why do we give Pardew a payoff when he's been a complete failure? Why have the contract written totally in favour of the manager, if he can not achieve second position with the second biggest budget then he deserves nothing. Still if you just have a contract that rolls every two years that is fair time for a man to prove himself. Who get's a massive payoff for running a minor AIM size business? Why is a youngster signed to a four year contract? We still gain a fee if he's a player below the age of 23, who leaves whilst out of contract.
When I gamble I gamble with little thought on the probability. When I invest I research as much as possible. With knowledge I reduce the probability of failure. I don't back fund managers as they barely ever repeat their success - a few in a generation. That is why you have a system that means a bad choice leaves the majority of your investment unaffected. If you're paying out a couple of percent of turnover to an unproven asset like Christensen, that is no gamble.
If you believe it is a gamble then gawd I'd hate to see your informed investment choices. Just imagine if insurance companies were run on your business model? A one line derivative calculation with gamble written in greek on it? Anyone can make a mistake but without a considered approach you'd be doomed in boom and doomed in depression. If you want to see an informed approach to player acquisition then read Michael Lewis' book on Billy Bean. I'd doubt if the Charlton board ever thought of approaching investment anywhere near as intelligently as Billy Beane; well we know that for a fact as they employed Dowrie, Reed, Profligate Pardew and Parky.
Total waffle I'm afraid.
What do people who read the Racing Post do? Study the form, follow the jockeys who have good records, look at the going. Those are decisions which they hope will narrow down the chances of losing over a period.
What do people who speculate on the stock market do? They buy shares at one price hoping that they can make money as the value of shares goes up. THERE IS NO GUARANTEE THAT IS WHY ITS A GAMBLE.
" to do something risky that might result in loss of money or failure, hoping to get money or achieve success:
Anyone who gambles on the stock exchange has to be prepared to lose money....."
I cannot believe that you have gambled your valuable time on this when you should be risk managing your investment portfolio.
Oh by the way, I worked in insurance for many years. There is a huge difference between insurance risks and speculative risks.
Insurance risks are governed by the common law principle of indemnity - putting the insured person back to the same financial position they were in before the loss occurred by payment or replacement of the loss. It's loss or no loss.
Speculative risks are gambles because they are about loss, break even or gain. Try explaining that to the investors in Lehman Brothers for example.
Risk management is about evaluation, management, control and where possible, the avoidance of risk. Business risks are that part of the risks which are impossible to avoid completely and are essentially about uncertainty which makes them speculative, i.e there is an uncertainty that will people keep buying my product or service?
As for the rest of your posts, well nobody including the Board denies that they made some errors. What you are doing is applying the principle of 20/20 hindsight and taking them to task once you know the outcome. I'm sure those who invested in Lehman Brothers or who lent money to them would love to have that perspective now. Decisions have to be made in business every single day that can effect the chances of whether that business remains successful and goes on to greater things or declines gradually or quickly.
Directors have a duty to run the business as effectively as they can on behalf of shareholders but they do not have the wisdom of hindsight.
From what I can gather, risks were taken in the Dowie era to try end ensure that the club would remain in the Premier League to benefit from the new money which was coming in. Risks of financial disaster were mitigated by the knowledge,
1. The value of players assets (i.e. Darren Bent and one or two others) was significant
2. The principle Directors collectively had finance available to keep the club afloat.
IT WAS A GAMBLE but with the risks minimised per 1. & 2. Dowies appointment was a mistake, the gamble failed, we replaced Dowie by first Reed and then Pardew.
Money was given to Pardew to re-build a team capable of getting us back up to the Premier League. THAT WAS A GAMBLE AS WELL. Pardew had a reasonable track record of success and thus they thought they had minimised the risks of failure. They got it wrong. They now have faced a choice between investing more money now in a new management team with a track record and new players, or appointing Parky (an untried manager at this level). They chose the latter. ITS A GAMBLE with their own money because if Parky fails to keep us up, they may well need to put more money in to prop up the club. That's the choice they have made. Neither choices guarantee the outcome, it's just that the one they have chosen requires less stake money and arguably saves their stake money for the future.
There have been a few references on here to Peter Varney in relation to players' contracts.
On a point of fact, the board did not allow Peter as chief executive to oversee the football budget and he did not have that responsibility. This changed when Steve Waggott was appointed.
Responsibility for overseeing the manager's spendng prior to last summer sat squarely with the plc directors.
[cite]Posted By: Airman Brown[/cite]There have been a few references on here to Peter Varney in relation to players' contracts.
On a point of fact, the board did not allow Peter as chief executive to oversee the football budget and he did not have that responsibility. This changed when Steve Waggott was appointed.
Responsibility for overseeing the manager's spendng prior to last summer sat squarely with the plc directors.
So it would be fair to surmise that the perceived lack of prudence following the departure of Curbishley is down to the PLC directors alone (ie not Henry:-) ) until the end of season 2007/8?
Ah but reading the racing post is not informed decision is it? It's not knowledge of what's happening inside a stable, or what the vet thinks of the health of the horse is it? I'm not saying my business decisions have full knowledge but if I invest I do a hell of a lot more research than reading the Investors Chronicle; I attempt to get the most knowledge possible. The Racing Post analogy is as bankrupt as Charlton.
As for you Mr Irving. Club! I don't believe myself to be more intelligent than the market. So rarely do I beat the market. Most of my money is invested in a variety of investments, some risky some with supposedly no risk. But I run it with an investment philosophy that I won't lose it all; which means I'm not leveraged over thirty times on my investment and way more than half of it will be fully around next year. So I'd thought it'd be quite clear from that, that my investments are mainly very boring with about 20% in stocks and shares. And yes my average brain let my portfolio take a massive hit last year. But I'm still very financially buoyant, unlike Pardew left us.
As for clubs run within sound budgets it would be clubs like WBA and Bolton (between the years of 2002-2006), whilst abroad the Villareal and Celta Vigo model; yes Vigo went bankrupt, I don't deny this happens but boy did they have a team a bit better than ours for a fraction of the amount. Yes things go wrong, and yes you can go through hard times but their budgets went on top players who were either free or little money; whilst still being a possible transfer asset in the future. I doubt if Bolton are run like this now but after their yo-yo years they attempted to keep their wage turnover % below or around 60%; with big short term contracts for great players, smaller contracts for squad players like Poole and Barness and good wages for proved youth players. That is a model that can be quite fluid in it's response to a loss of turnover. If we go into receivership we're lumbered with a lot of proved nothing over paid dross.
Well with such an obtuse definition of gambling that pretty much proves my point that you think every decision in your life is a gamble bingaddick. I don't tend to gamble on anything, with significant amounts of money, that I don't understand unless it's just for fun. Hence if I employed a manager I would find it unacceptable if he outlayed huge amounts and banished them to the reserves neglecting that asset. Buying two forwards for a possible 4 million, who barely scored ten goals in 100 champ matches would be questioned by me. That's not speculation/gambling but just blind fool waste.
Glad to see you were in insurance. The pricing of insurance has nothing to do with the common law principle of indemnity. The common law principle of indemnity is the legal process/contract of whether compensation should be paid from insurer to insured. They calculate the price of your insurance by the probability for payout to you, cost to them and profit margin. Sure they get it wrong when they neglect say the costs of asbestos payouts but at least it's run on a model that attempts to turn a profit and manage the risk of payouts. The way Charlton has been run for quite a few years, the club could not cope without the god send of a Parker or Darren Bent, let alone the tragedy of relegation.
I am not against the board speculating say Parker's money on investment. I am against them trying that for three seasons on the trott with no return. If you do not work to a profitable budget and employ a sensible acquisition policy then it is gambling; 2.5 mill for M Bent, Traore and Faye was questioned by most of us and Allardyce would only have touched them if they were free transfer. But three years of it is just beyond madness. If you want your club run like that and your investments looks like you got it. Personally I would want someone in charge of my money with nous and a player acquisition policy like Billy Beane. Whether you see it as a gamble or not I'd want someone with a brain and a plan in charge. It is not 20/20 hindsight to demand a sound financial footing. Even with that you might go bankrupt like Celta Vigo.
'So it would be fair to surmise that the perceived lack of prudence following the departure of Curbishley is down to the PLC directors alone (ie not Henry:-) ) until the end of season 2007/8? '
How about Andrew Mills involvement in new player contracts during the time of the Dowie ? I thought that was his job.
I understand you can’t go into specific details here but when you say the respective managers are also culpable are you suggesting that because, obviously, they decided to spend large amounts of money on players that frankly weren’t worth it or are you suggesting that they also had a role in discussing the lengths of contracts and even remuneration levels?
I had assumed the latter would be almost entirely down to the directors? There is no doubt the vast amount of money wasted by Pardew and Dowie shouldn’t have led to us being bottom of the Championship.
But the fact salaries are 100% of turnover and we have been unable to afford a new management team is clearly due to decisions made by some of those in the boardroom who control the books?
Len, Henry Irving might be involved you know. He may have had to nip out to WH Smiths to get some new biros in when all those exorbitant contracts were signed…
Len, Henry Irving might be involved you know. He may have had to nip out to WH Smiths to get some new biros in when all those exorbitant contracts were signed…
Sorry Ben, just a little jape ;-)
Why would I go to WH Smith's when the club shop is much nearer ; - )
Manager are culpable because they advise the board how to spend the money and clearly they have not advised them very well, not just in terms of remuneration but also the people they have brought in. I'm sure we'd all think the Christensen deal was a good idea if he was our star player now, so it's no good looking at the deal in isolation.
Andrew Mills is a complete red herring and always was.
[cite]Posted By: ColinTat[/cite]Ah but reading the racing post is not informed decision is it? It's not knowledge of what's happening inside a stable, or what the vet thinks of the health of the horse is it? I'm not saying my business decisions have full knowledge but if I invest I do a hell of a lot more research than reading the Investors Chronicle; I attempt to get the most knowledge possible
Insider trading on the stock market is illegal, in case you hadn't noticed. So you can't possibly get enough information from Investors Chronicle to make your investment decisions based on certainty. As I said before anything that is not based on certainty is defacto a gamble..
As for your investment strategy, well bully for you, your gamble failed to pay off. Res ipsa loquiter!
The use of the collective noun to describe Charlton suggests that it was your money you invested in Charlton, not the twenty-five million plus that the Board have invested of their money. So if it was your money, how would you have spent it? Who would you have got in as a manager after Curbishley? You're very cautious and risk averse so maybe Jose Mourino? Perhaps though you couldn't afford his premium?
What players would you have spend your fortune on eh? Ah yes risk free players who would guarantee scoring twenty plus per season.
I have been critical of the Board and some of their decisions but I recognise that I don't:
1. have all the facts at my disposal
2. have a significant proportion of my personal fortune on the line
3. have to make decisions at the club based on any number of risks
Fortunately armchair warriors such as yourself see things only one way because, thank God, they have not been in the real thick of things helping to steer a football club across very choppy waters.
Oh by the way the pricing of Insurance has everything to do with the fundamental principle of indemnity otherwise the premiums would be much greater as they would need to collect more money to pay out rewards as well as merely indemnify.
[cite]Posted By: Airman Brown[/cite]And the managers. But not the chief exec.
And one might surmise that it was once the Chief Exec came to understand some of the dreadful decisions that had been made that he decided he wished to spend more time with his family?
Wouldn't blame him...I'm certainly thinking of spending more time with mine rather than watching and desparing at all this. It's starting to feel uncannily like 1985 all over again. It hurts.
It's interesting you seem to be implying that messrs Dowie and Pardew might have had a say in how much an individual player might earn? I'm finding it hard to get my head round that, not sure that is wise if true!
Nevertheless, the finances are not the direct responsibility of a football manager and clearly, and sadly, Richard Murray, if it was he and there appear to be few other candidates until recently, should have known where the line needed to be drawn as regards wages, squad numbers and transfer fees year-on-year.
[cite]Posted By: Sailor Browneye[/cite]It's interesting you seem to be implying that messrs Dowie and Pardew might have had a say in how much an individual player might earn? I'm finding it hard to get my head round that, not sure that is wise if true!
that's standard football procedure though. Manager forwards on his wish list, chairman says player is asking for x a week, do you think that's fair value for the player, manager will give opinion based on what it will leave him elsewhere in the budget, and how important he feels the addition of the player would be.
[cite]Posted By: Airman Brown[/cite]And the managers. But not the chief exec.
And one might surmise that it was once the Chief Exec came to understand some of the dreadful decisions that had been made that he decided he wished to spend more time with his family?
Wouldn't blame him...I'm certainly thinking of spending more time with mine rather than watching and desparing at all this. It's starting to feel uncannily like 1985 all over again. It hurts.
As I posted on the Annual Report thread one also wonders why Greg Bone decided to resign.
It seems to me that one of the reasons for having a Director of Football with a footballing background is so that the Board can refer to somebody at a strategic level who can advise the Board on footballing matters. Our club seems to have operated with Richard Murray fulfilling that role yet he has no better chance of ensuring that the right players are signed than me or you. Isn't this the fundamental problem with the way not just Charlton, but most other clubs are run, namely the reliance on one individual, namely the manager to advice the board on individual player signings? The Board are then faced with a problem, do they back the manager with funds or not?
In the Curbishley era, they employed a manager who, certainly at face value, treated the clubs money as if it was his own and was very cautious in whom he signed. I suspect that Richard Murray's relationship with Curbs was such that he was able to impose limits to spending both transfer fees and wages which by their long-standing relationship, Curbs understood and could work within.
They brought in Dowie, gave him certain assurances and a budget. Did he work within those limits? No, clearly he approached the Board for funds greater than he was orginally given and they backed him. The dynamics of the Murray/Curbs relationship had fundamentally changed and they had no mechanism in place to manage that effectively other than the word "no". When Pardew was appointed, I've no doubt that he took the job on the understanding that he had complete control over the footballing side of the club (subject to Board approval for funds) and in a changed financial position, he still was able to push beyond the limits agreed. I suspect that in the end, this is why we have ended up with Chappell and his "matrix". It was their way of imposing a financial discipline on the manager which, unlike Curbs, his personal discipline did not produce.
Has this financial disciplinary regime produced a better team than the indisciplined one? Well clearly not but I suppose it's a bit like turning round a Oil Tanker, you have to start somewhere. What I think the Board needs to balance though, is slavish adherrance to the rules versus pragmatism? Rules are for the obedience of fools and the guidence of wise men. I hope our signing policy in this window allows some flexibilty.
I suppose the thing is we are going back at least two years, say to summer 2006, when things really went pear-shaped and yet, like most clubs, we allegedly had salary ceilings in place. Even if that plonker Dowie said to Murray 'oh yes, Djimi Traore is deffo worth 30K a week' that shouldn't really matter, in principle, should it because, as you say, the manager should then have less to spend elsewhere??
Somewhere, alongside the Sky money, ticket revenue, sponsorship etc. the figures became badly out of line with realistic affordability. So did we put the desire for the player above the fact we were now going out on a limb?
I actually think we did well to get shot of a fair few big earners in the summer of 2007 and more were successfully loaned out (Bent, Faye). We weren't saddled last season with a vast number of Premier League earners and as you have said in the thread regarding our annual report we have lost a surprisingly heavy amount of money.
It is a sad fact Curbishley, years ago in an interview in Voice of the Valley (I think), said he spent the club's transfer budget like it was his own money. Guess he really was one in a million...
The disciplined approach produced a better team under Curbs!
The crux of the matter in my view is that they (the Board) were spoilt with 15 years of Curbs and didn't know how to react to new managers who operated very differently.
Hindsight tells us that they went too far in trying to accommodate two managers who, truth to tell, were not up to the job despite both their penchants for self-publicity.
Parky (or somebody of his ilk, a man of proven loyalty at Reading) is far more suited to a Charlton than "Bertie Big Bollox" types. We were entitled to think that Pardew, as a former player, understood CAFC but being at a "big club" like West Ham evidently inflated his ego sky high.
Comments
Why not offer your investment advice and some of the many millions you must have made following it to the club.
We got relegated at the worst possible time - the closest comparison (which I dread making) is to look at Luton who were relegated after c ten years in Div 1 the season before the Premiership gravy train came along.
A lot of very thoughtful points there but we need to remember the context in which Pardew was appointed. Not much more than six months earlier he had taken the Spammers to the FACF and 9th in the PL and many people felt he was harshly dealt with by getting the sack.
The point is that when he came to us we were rock bottom and had just sacked the nice but inept Les Reed whereas he was, relatively speaking, one of the brightest English managerial prospects in the game. We needed him a lot more than he needed us, I think it is fair to say.
As a result, with 30 million quid riding on the outcome, Charlton (as any other club would have done) bent over backwards to give him the deal he wanted in the hope that he kept us up. He didn't and now we have to pay the price.
The bottom line is that football is not a rational business - the fans definitely are not - so clubs will take lots of decisions that are beneficial in the short-term but potentially hazardous in the long-term. Why? Because so often all that matters is next weeks result not what bills come in the post in three years time.
However whilst agreeing with the general principle you state that such a ratio is unsustainable at least Curbs/Varney mitigated the problem to some extent by having the prudence to insert relegation clauses into players' contracts. Dowie and Pardew do not appear to have done this as far as I can see (we may well still be paying part of Faye for example even though he has been at Stoke virtually all season!) and it is that recklessness which has brought matters to a head in my opinion.
Out of interest, what football clubs could you name that are not run on your basis of a 'bankrupt business' ??
Agree with that 100%. And would also add they did pretty much the same last season in the hopes we went up. Offloaded players he didn't want and let him bring in loads he did.
Total waffle I'm afraid.
What do people who read the Racing Post do? Study the form, follow the jockeys who have good records, look at the going. Those are decisions which they hope will narrow down the chances of losing over a period.
What do people who speculate on the stock market do? They buy shares at one price hoping that they can make money as the value of shares goes up. THERE IS NO GUARANTEE THAT IS WHY ITS A GAMBLE.
See the link to this definition
Cambridge Dictionary
" to do something risky that might result in loss of money or failure, hoping to get money or achieve success:
Anyone who gambles on the stock exchange has to be prepared to lose money....."
I cannot believe that you have gambled your valuable time on this when you should be risk managing your investment portfolio.
Insurance risks are governed by the common law principle of indemnity - putting the insured person back to the same financial position they were in before the loss occurred by payment or replacement of the loss. It's loss or no loss.
Speculative risks are gambles because they are about loss, break even or gain. Try explaining that to the investors in Lehman Brothers for example.
Risk management is about evaluation, management, control and where possible, the avoidance of risk. Business risks are that part of the risks which are impossible to avoid completely and are essentially about uncertainty which makes them speculative, i.e there is an uncertainty that will people keep buying my product or service?
Directors have a duty to run the business as effectively as they can on behalf of shareholders but they do not have the wisdom of hindsight.
From what I can gather, risks were taken in the Dowie era to try end ensure that the club would remain in the Premier League to benefit from the new money which was coming in. Risks of financial disaster were mitigated by the knowledge,
1. The value of players assets (i.e. Darren Bent and one or two others) was significant
2. The principle Directors collectively had finance available to keep the club afloat.
IT WAS A GAMBLE but with the risks minimised per 1. & 2. Dowies appointment was a mistake, the gamble failed, we replaced Dowie by first Reed and then Pardew.
Money was given to Pardew to re-build a team capable of getting us back up to the Premier League. THAT WAS A GAMBLE AS WELL. Pardew had a reasonable track record of success and thus they thought they had minimised the risks of failure. They got it wrong. They now have faced a choice between investing more money now in a new management team with a track record and new players, or appointing Parky (an untried manager at this level). They chose the latter. ITS A GAMBLE with their own money because if Parky fails to keep us up, they may well need to put more money in to prop up the club. That's the choice they have made. Neither choices guarantee the outcome, it's just that the one they have chosen requires less stake money and arguably saves their stake money for the future.
On a point of fact, the board did not allow Peter as chief executive to oversee the football budget and he did not have that responsibility. This changed when Steve Waggott was appointed.
Responsibility for overseeing the manager's spendng prior to last summer sat squarely with the plc directors.
So it would be fair to surmise that the perceived lack of prudence following the departure of Curbishley is down to the PLC directors alone (ie not Henry:-) ) until the end of season 2007/8?
As for you Mr Irving. Club! I don't believe myself to be more intelligent than the market. So rarely do I beat the market. Most of my money is invested in a variety of investments, some risky some with supposedly no risk. But I run it with an investment philosophy that I won't lose it all; which means I'm not leveraged over thirty times on my investment and way more than half of it will be fully around next year. So I'd thought it'd be quite clear from that, that my investments are mainly very boring with about 20% in stocks and shares. And yes my average brain let my portfolio take a massive hit last year. But I'm still very financially buoyant, unlike Pardew left us.
As for clubs run within sound budgets it would be clubs like WBA and Bolton (between the years of 2002-2006), whilst abroad the Villareal and Celta Vigo model; yes Vigo went bankrupt, I don't deny this happens but boy did they have a team a bit better than ours for a fraction of the amount. Yes things go wrong, and yes you can go through hard times but their budgets went on top players who were either free or little money; whilst still being a possible transfer asset in the future. I doubt if Bolton are run like this now but after their yo-yo years they attempted to keep their wage turnover % below or around 60%; with big short term contracts for great players, smaller contracts for squad players like Poole and Barness and good wages for proved youth players. That is a model that can be quite fluid in it's response to a loss of turnover. If we go into receivership we're lumbered with a lot of proved nothing over paid dross.
Well with such an obtuse definition of gambling that pretty much proves my point that you think every decision in your life is a gamble bingaddick. I don't tend to gamble on anything, with significant amounts of money, that I don't understand unless it's just for fun. Hence if I employed a manager I would find it unacceptable if he outlayed huge amounts and banished them to the reserves neglecting that asset. Buying two forwards for a possible 4 million, who barely scored ten goals in 100 champ matches would be questioned by me. That's not speculation/gambling but just blind fool waste.
Glad to see you were in insurance. The pricing of insurance has nothing to do with the common law principle of indemnity. The common law principle of indemnity is the legal process/contract of whether compensation should be paid from insurer to insured. They calculate the price of your insurance by the probability for payout to you, cost to them and profit margin. Sure they get it wrong when they neglect say the costs of asbestos payouts but at least it's run on a model that attempts to turn a profit and manage the risk of payouts. The way Charlton has been run for quite a few years, the club could not cope without the god send of a Parker or Darren Bent, let alone the tragedy of relegation.
I am not against the board speculating say Parker's money on investment. I am against them trying that for three seasons on the trott with no return. If you do not work to a profitable budget and employ a sensible acquisition policy then it is gambling; 2.5 mill for M Bent, Traore and Faye was questioned by most of us and Allardyce would only have touched them if they were free transfer. But three years of it is just beyond madness. If you want your club run like that and your investments looks like you got it. Personally I would want someone in charge of my money with nous and a player acquisition policy like Billy Beane. Whether you see it as a gamble or not I'd want someone with a brain and a plan in charge. It is not 20/20 hindsight to demand a sound financial footing. Even with that you might go bankrupt like Celta Vigo.
How about Andrew Mills involvement in new player contracts during the time of the Dowie ? I thought that was his job.
I understand you can’t go into specific details here but when you say the respective managers are also culpable are you suggesting that because, obviously, they decided to spend large amounts of money on players that frankly weren’t worth it or are you suggesting that they also had a role in discussing the lengths of contracts and even remuneration levels?
I had assumed the latter would be almost entirely down to the directors? There is no doubt the vast amount of money wasted by Pardew and Dowie shouldn’t have led to us being bottom of the Championship.
But the fact salaries are 100% of turnover and we have been unable to afford a new management team is clearly due to decisions made by some of those in the boardroom who control the books?
Len, Henry Irving might be involved you know. He may have had to nip out to WH Smiths to get some new biros in when all those exorbitant contracts were signed…
Sorry Ben, just a little jape ;-)
Why would I go to WH Smith's when the club shop is much nearer ; - )
Andrew Mills is a complete red herring and always was.
Insider trading on the stock market is illegal, in case you hadn't noticed. So you can't possibly get enough information from Investors Chronicle to make your investment decisions based on certainty. As I said before anything that is not based on certainty is defacto a gamble..
As for your investment strategy, well bully for you, your gamble failed to pay off. Res ipsa loquiter!
The use of the collective noun to describe Charlton suggests that it was your money you invested in Charlton, not the twenty-five million plus that the Board have invested of their money. So if it was your money, how would you have spent it? Who would you have got in as a manager after Curbishley? You're very cautious and risk averse so maybe Jose Mourino? Perhaps though you couldn't afford his premium?
What players would you have spend your fortune on eh? Ah yes risk free players who would guarantee scoring twenty plus per season.
I have been critical of the Board and some of their decisions but I recognise that I don't:
1. have all the facts at my disposal
2. have a significant proportion of my personal fortune on the line
3. have to make decisions at the club based on any number of risks
Fortunately armchair warriors such as yourself see things only one way because, thank God, they have not been in the real thick of things helping to steer a football club across very choppy waters.
Oh by the way the pricing of Insurance has everything to do with the fundamental principle of indemnity otherwise the premiums would be much greater as they would need to collect more money to pay out rewards as well as merely indemnify.
And one might surmise that it was once the Chief Exec came to understand some of the dreadful decisions that had been made that he decided he wished to spend more time with his family?
Wouldn't blame him...I'm certainly thinking of spending more time with mine rather than watching and desparing at all this. It's starting to feel uncannily like 1985 all over again. It hurts.
It's interesting you seem to be implying that messrs Dowie and Pardew might have had a say in how much an individual player might earn? I'm finding it hard to get my head round that, not sure that is wise if true!
Nevertheless, the finances are not the direct responsibility of a football manager and clearly, and sadly, Richard Murray, if it was he and there appear to be few other candidates until recently, should have known where the line needed to be drawn as regards wages, squad numbers and transfer fees year-on-year.
that's standard football procedure though. Manager forwards on his wish list, chairman says player is asking for x a week, do you think that's fair value for the player, manager will give opinion based on what it will leave him elsewhere in the budget, and how important he feels the addition of the player would be.
As I posted on the Annual Report thread one also wonders why Greg Bone decided to resign.
In the Curbishley era, they employed a manager who, certainly at face value, treated the clubs money as if it was his own and was very cautious in whom he signed. I suspect that Richard Murray's relationship with Curbs was such that he was able to impose limits to spending both transfer fees and wages which by their long-standing relationship, Curbs understood and could work within.
They brought in Dowie, gave him certain assurances and a budget. Did he work within those limits? No, clearly he approached the Board for funds greater than he was orginally given and they backed him. The dynamics of the Murray/Curbs relationship had fundamentally changed and they had no mechanism in place to manage that effectively other than the word "no". When Pardew was appointed, I've no doubt that he took the job on the understanding that he had complete control over the footballing side of the club (subject to Board approval for funds) and in a changed financial position, he still was able to push beyond the limits agreed. I suspect that in the end, this is why we have ended up with Chappell and his "matrix". It was their way of imposing a financial discipline on the manager which, unlike Curbs, his personal discipline did not produce.
Has this financial disciplinary regime produced a better team than the indisciplined one? Well clearly not but I suppose it's a bit like turning round a Oil Tanker, you have to start somewhere. What I think the Board needs to balance though, is slavish adherrance to the rules versus pragmatism? Rules are for the obedience of fools and the guidence of wise men. I hope our signing policy in this window allows some flexibilty.
I suppose the thing is we are going back at least two years, say to summer 2006, when things really went pear-shaped and yet, like most clubs, we allegedly had salary ceilings in place. Even if that plonker Dowie said to Murray 'oh yes, Djimi Traore is deffo worth 30K a week' that shouldn't really matter, in principle, should it because, as you say, the manager should then have less to spend elsewhere??
Somewhere, alongside the Sky money, ticket revenue, sponsorship etc. the figures became badly out of line with realistic affordability. So did we put the desire for the player above the fact we were now going out on a limb?
I actually think we did well to get shot of a fair few big earners in the summer of 2007 and more were successfully loaned out (Bent, Faye). We weren't saddled last season with a vast number of Premier League earners and as you have said in the thread regarding our annual report we have lost a surprisingly heavy amount of money.
It is a sad fact Curbishley, years ago in an interview in Voice of the Valley (I think), said he spent the club's transfer budget like it was his own money. Guess he really was one in a million...
The crux of the matter in my view is that they (the Board) were spoilt with 15 years of Curbs and didn't know how to react to new managers who operated very differently.
Hindsight tells us that they went too far in trying to accommodate two managers who, truth to tell, were not up to the job despite both their penchants for self-publicity.
Parky (or somebody of his ilk, a man of proven loyalty at Reading) is far more suited to a Charlton than "Bertie Big Bollox" types. We were entitled to think that Pardew, as a former player, understood CAFC but being at a "big club" like West Ham evidently inflated his ego sky high.