How does our set of numbers stack up against Millwall or Palace for example ? Anyone know ? I notice that these results were published ahead of when expected ? Any reason for that do we think ? Just speculating of course but could it be to head off any dissent should we sell a couple of players in the window ? No choice as we're losing too much money etc or perhaps ahead of some sort of bigger announcement ? More likely I suppose that they were published when they were ready.
You could see why potential new investors/owners would be scared off by the numbers. Costs double the turnover and Directors owed £30 million if we make it to the Premier league. Any potential investors/new owners are probably looking at a minimum investment of £50 million to fund a promotion campaign in the Championship and pay off the 'friendly' debt to the Directors.
Would certainly need new owners/investors with extremely deep pockets and a lot of patience to reach the Premiership. Only then would probably be looking at a 5 year plan in that league to break even.
No doubt it will force ticket prices up and perhaps administration for many? Time for a supporters' trust?
Let's not fall into that trap. There is scope to increase season ticket prices modestly, but beyond that it's unlikely in my judgement that higher prices will yield higher revenue. As discussed on here before, there is very limited scope with match prices. Off the top of my head you'd be doing well to get an extra £300,000 from ST rises of up to £50.
Ticket revenue will be higher this season, in part because of an additional 1,000 away fans per match, which is worth about £400,000, and season tickets are up too. But that's a modest contribution given the size of the gap.
I am no financial whizz kid but it seems to me that we can't carry on in this division racking up losses of 7 to 8 million pounds a year,without the smelly stuff hitting the fan.The distribution of the sky cake is so biased towards the Premiership clubs,that it is absolutely vital for our continued existence to get to the Holy Land.The trouble is do we spend money that we haven't got in a push to get to the Premiership.Or do we carry on as we are spending very little and hoping some of our young players develop to either be sold,al la Zaha,or to push us on to the Premiership.Maybe we can pick up some decent free transfers in the close season who will propel us to the Premiership.It is certainly a difficult decision for the owners to make.
No doubt it will force ticket prices up and perhaps administration for many? Time for a supporters' trust?
Let's not fall into that trap. There is scope to increase season ticket prices modestly, but beyond that it's unlikely in my judgement that higher prices will yield higher revenue. As discussed on here before, there is very limited scope with match prices. Off the top of my head you'd be doing well to get an extra £300,000 from ST rises of up to £50.
Ticket revenue will be higher this season, in part because of an additional 1,000 away fans per match, which is worth about £400,000, and season tickets are up too. But that's a modest contribution given the size of the gap.
you may be right AB, something for the FF to discuss next month I guess.
The much maligned Michael Gliksten funded us personally much of the time and then, to the chagrin of all, sold our decent players which we saw as a poor decision preventing further progress.
I think it probable that the owners have (or had) a defined timescale whereby they will be prepared to swallow the losses.
If we don't progress within that deadline though who knows?
another question: what were FL1 average losses? I assume we have also had an increase in TV money since then, which could we assume be eated up by some increase on the wages front - could figures for FLC be similar or lower?
The unfair distribution of sky Money and high wages could wreck the game at 2nd tier level which cannot be good for the top tier
Not necessarily bad for the top tier. After a couple of seasons of the newly promoted teams being woefully uncompetative, they'll use that as the perfect excuse for the the Premier League 2, basically cutting adrift everyone below championship level. There'll be little or no promotion/relegation between the Prem 2 and the (now part-time) lower leagues, possible some sort of election, where the club coming up have to prove they have the finances, infrastructure, fan-base, etc.
1) Last year, we were a very big club when compared with most of L1, with a level of wages that few clubs in that division could get near. It wasn't hard to cherry pick the best players in that division. 2) The economics of the Championship are a disaster, with all clubs losing significant money just to stay in the division, and lose even more in an attempt to reach the promised land. One answer to this, talked about for 20 years, was Premiership Div 2, with the second tier being part of the PL, and getting more of that league's riches. The current situation isn't tenable, and the number of former PL clubs who have ended up in financial disaster after relegation is growing. 3) Commercial income is crucial
So £7.5 losses cover 10% by R. Murray (£750k) and 45% each by Slater/Cash and Jimenez (£3m each).
As long as they are able and willing to fund those sort of losses the Club is OK. And you have to give some credit to all three for pumping that money in albeit as loans it appears. That is the concern for me. Who is loaning what to who and on what terms.
Easy to say, "if we spend another £5m we could go up and reap the EPL bonaza" but as Stu and others have said plenty of other clubs have the same idea (Leicester, Cardiff) and some like Birmingham and Bristol City are failing badly.
In any case the time to spend to accumulate was the summer just gone when we had the momentum with us.
Wouldn't blame the board for a more cautious approach.
Palace seem to be taken a more realistic approach of "this is where we are and we cut our cloth accordingly. If we have to see a Clyne or a Zaha to keep going so be it but we're still strong enough to be in the top 6".
So £7.5 losses cover 10% by R. Murray (£750k) and 45% each by Slater/Cash and Jimenez (£3m each).
As long as they are able and willing to fund those sort of losses the Club is OK. And you have to give some credit to all three for pumping that money in albeit as loans it appears. That is the concern for me. Who is loaning what to who and on what terms.
Easy to say, "if we spend another £5m we could go up and reap the EPL bonaza" but as Stu and others have said plenty of other clubs have the same idea (Leicester, Cardiff) and some like Birmingham and Bristol City are failing badly.
In any case the time to spend to accumulate was the summer just gone when we had the momentum with us.
Wouldn't blame the board for a more cautious approach.
Palace seem to be taken a more realistic approach of "this is where we are and we cut our cloth accordingly. If we have to see a Clyne or a Zaha to keep going so be it but we're still strong enough to be in the top 6".
Some interesting points to ask Mr Slater tonight.
Fair enough Henry, its just that it seems to me that on the analysis provided by far better financial heads than myself that we are basically stuck in quicksand and need to find a way out sooner rather than later.
Anyone bringing in $8 million and losing $16 million every year - and that's in a pretty good year - can't keep doing that for all that long.
We know we can't shave the operating cost base much lower, so the only way to move forward is to substantially increase our revenues - and that means the Premier League.
As I say that is simplistic but I see a cash injection of $5 million and 3-4 decent CCC players as providing a much more realistic route to financial safety than relying on Paul Hart to bring in a crop of top-class youngster or for SCP to work miracles with freebies/loanees.
True, others have had the same idea, that doesn't mean they are wrong!
Once we get to the promised land and pay off debts (some due immediately I understand) how do we make profit which presumably investors require, and stay up - also vital to that profitability. Not sure its all quite as easy up there as it sounds.
An interesting piece on this subject from the BBC web site about Brighton. They are operating at approx an £8 Million loss and their chairman is a worried man. It also explains the Championship Fair Play rules which are soon to be introduced.
Once we get to the promised land and pay off debts (some due immediately I understand) how do we make profit which presumably investors require, and stay up - also vital to that profitability. Not sure its all quite as easy up there as it sounds.
Best way to do it (and I am not sanctioning the mad gamble others are) is to do what we did in 98 and West Brom afterwards and yoyo a bit. Use the cash to clear debt and build until we are able to sustain the Premiership place.
I do not miss the top league, it loses it's gloss after a while, but we need to be in it to secure the club's future.
Crazy as it sounds the most sustainable model for most clubs is to Yo-Yo. You have a squad earning just above Championship wages, but considerably less than average Prem wages, and you have alternating seasons of prem money and parachute money. That's the crazy situation the game is in, regular failure (relegation from prem) could be better than sustained success.
Is anyone able to summarise NYA's summary for me.... Wont allow me into 'online communities' at work (apart from this one).
I understand if NYA doesnt want to post here but wants to drive traffic to his site.
If we don't find multi billionaire investors happy to bankroll us for a slow and not guaranteed return and/ or we don't reach the lucrative Premiership soon it doesn't look good.
Club is running at a loss each season outside of the top flight with revenue being no where near enough to meet costs.
Going concern because (currently) owners are funding this but losing millions doing so which they won't recoup unless they sell enough assets/ sell the club (or significant shares in it) or get promoted. Time will tell how long they will be happy to do this for.
I imagine they are looking for serious investment and trying to get promotion to do this. They certainly will want us to reach the play offs re the other thread.
As I say that is simplistic but I see a cash injection of $5 million and 3-4 decent CCC players as providing a much more realistic route to financial safety than relying on Paul Hart to bring in a crop of top-class youngster or for SCP to work miracles with freebies/loanees.
True, others have had the same idea, that doesn't mean they are wrong!
It's not about them being right or wrong.
It's about taking a gamble, which is what it is, and whether you can afford that gamble if the horse doesn't come in (ie if we don't get promoted).
Long term, slow but managed growth might be a better option for CAFC than an "EPL or bust" approach" which we can't sustain without owners with very deep projects.
And I suspect that MS and TJ realise this too as they appear to be actively seeking new owners/investors while at the same time reining in spending on players.
I don't think that was the plan originally but something changed, IMHO, which was Kevin Cash no longer wanted to pump in that extra £5m or £10m needed to fund the gamble.
But if the Club do adopt a long term managed growth plan then it will be two steps forward and one step back. Players will be sold and replacements found in the lower leagues or in the academy. Personally, I don't have a problem with that but I do think the Club needs to communicate to fans that that is the way it is going to be.
Crazy as it sounds the most sustainable model for most clubs is to Yo-Yo. You have a squad earning just above Championship wages, but considerably less than average Prem wages, and you have alternating seasons of prem money and parachute money. That's the crazy situation the game is in, regular failure (relegation from prem) could be better than sustained success.
Crazy as it sounds the most sustainable model for most clubs is to Yo-Yo. You have a squad earning just above Championship wages, but considerably less than average Prem wages, and you have alternating seasons of prem money and parachute money. That's the crazy situation the game is in, regular failure (relegation from prem) could be better than sustained success.
West Brom did that for a few years didnt they?
I agree although it is not as easy to sustain as perhaps WBA made it look.
Blackpool didn't bounce back and neither have Brum.
The yo-yo model also relies on the owners being in it for the long term ie at least 6 or 7 years where it seems the plan for MS and TJ is to reach the PL and sell.
Thanks very much NYA for doing the analysis. I pretty much agreed with all of your italics as well.
What an absolute bloody mess.
Strip away the details and just look at the big ticket bits. This was at June 12, so things will have progressed significantly by then. The realistic picture at the end of this season will be the club are carrying £45-46m of debt (based on an assumed loss for this season of between £7-8m). That's doubled in just 24 months from the takeover where the picture was basically just the carry-over friendly debt and the North Stand mortgage (with Lombard i think).
How friendly is this additional bout of friendly debt the Club is now carrying, we simply don't know.
How has this additional friendly debt been funded and by who, we don't know for sure.
At present, we are in investment that looks as attractive as a two-week desert island break with Piers Morgan for company, and Susan Boyle for sexual gratification.
People think everything will be great if we got to the Premiership and got a sack of money. That to me seems just as unlikely a scenario because if we did get promoted, we would (by the looks of things) have to pay out an obscene amount of money before we even possibly considered bringing in a new player.
In my opinion, only an idiot who has no emotional connection to the club, or a mega mega rich overseas investor would ever consider taking us on in our current state or likely future state if we got promoted (and for the latter, there are dozens of more attractive offerings than us).
I honestly can't see how we can ever get out of this cycle of losing more than we earn every year.
As I say that is simplistic but I see a cash injection of $5 million and 3-4 decent CCC players as providing a much more realistic route to financial safety than relying on Paul Hart to bring in a crop of top-class youngster or for SCP to work miracles with freebies/loanees.
True, others have had the same idea, that doesn't mean they are wrong!
It's not about them being right or wrong.
It's about taking a gamble, which is what it is, and whether you can afford that gamble if the horse doesn't come in (ie if we don't get promoted).
Long term, slow but managed growth might be a better option for CAFC than an "EPL or bust" approach" which we can't sustain without owners with very deep projects.
And I suspect that MS and TJ realise this too as they appear to be actively seeking new owners/investors while at the same time reining in spending on players.
I don't think that was the plan originally but something changed, IMHO, which was Kevin Cash no longer wanted to pump in that extra £5m or £10m needed to fund the gamble.
But if the Club do adopt a long term managed growth plan then it will be two steps forward and one step back. Players will be sold and replacements found in the lower leagues or in the academy. Personally, I don't have a problem with that but I do think the Club needs to communicate to fans that that is the way it is going to be.
I am very much in the long-term, slow and steady growth category but in the current circumstances we just don't know how long we can keep losing $8 million PA.
The current owners have been here two years and have so far lost $16 million (or thereabouts) - are they willing to stick around and lose another $24 million over the next three years and lose $40 million?
There are no easy answers to any of this except a 50% wage cut for all English players in the EPL and CCC and that's about as likely as Len Glover donning lederhosen and getting a job at the EU.
And i know we are by no means alone in being in this position, but it actually makes me angry that football in general has allowed itself to get into such a greed-driven, unaccountable mess, that being run so shitilly is actually the norm.
And i know we are by no means alone in being in this position, but it actually makes me angry that football in general has allowed itself to get into such a greed-driven, unaccountable mess, that being run so shitilly is actually the norm.
Was thinking the very same reading the Hazard thread.
Call me a cynic but whilst they focus on the soap opera elements of football like that (as they do every week with some sort of self- generated scandal) it distracts and detracts from the real issues in the game like the finances.
Clubs on the brink of non existence yet everyone focuses their rage and attention on petty mountain out of molehill incidents that are completely irrelevant in the bigger scheme of things.
Pretty similar tactics that the governments use nowdays when each ridiculous "scandal" diverts our attention from the real issues.
Haven't looked on the link yet as haven't got the time to read it at the moment , but reading peoples comments about it , people seem pretty peed off , guess it explains a lack of transfer activity by the board, if we are going to gamble to get to the Prem surely its better doing business in the Summer , make sure we stay up this season and try and introduce a few more kids into the team/squad between now and the end of the season , who may / may not make the grade at least CP will suss out who can make the step up.
Comments
I notice that these results were published ahead of when expected ? Any reason for that do we think ? Just speculating of course but could it be to head off any dissent should we sell a couple of players in the window ? No choice as we're losing too much money etc or perhaps ahead of some sort of bigger announcement ? More likely I suppose that they were published when they were ready.
Would certainly need new owners/investors with extremely deep pockets and a lot of patience to reach the Premiership. Only then would probably be looking at a 5 year plan in that league to break even.
Ticket revenue will be higher this season, in part because of an additional 1,000 away fans per match, which is worth about £400,000, and season tickets are up too. But that's a modest contribution given the size of the gap.
The much maligned Michael Gliksten funded us personally much of the time and then, to the chagrin of all, sold our decent players which we saw as a poor decision preventing further progress.
I think it probable that the owners have (or had) a defined timescale whereby they will be prepared to swallow the losses.
If we don't progress within that deadline though who knows?
1) Last year, we were a very big club when compared with most of L1, with a level of wages that few clubs in that division could get near. It wasn't hard to cherry pick the best players in that division.
2) The economics of the Championship are a disaster, with all clubs losing significant money just to stay in the division, and lose even more in an attempt to reach the promised land. One answer to this, talked about for 20 years, was Premiership Div 2, with the second tier being part of the PL, and getting more of that league's riches. The current situation isn't tenable, and the number of former PL clubs who have ended up in financial disaster after relegation is growing.
3) Commercial income is crucial
So £7.5 losses cover 10% by R. Murray (£750k) and 45% each by Slater/Cash and Jimenez (£3m each).
As long as they are able and willing to fund those sort of losses the Club is OK. And you have to give some credit to all three for pumping that money in albeit as loans it appears. That is the concern for me. Who is loaning what to who and on what terms.
Easy to say, "if we spend another £5m we could go up and reap the EPL bonaza" but as Stu and others have said plenty of other clubs have the same idea (Leicester, Cardiff) and some like Birmingham and Bristol City are failing badly.
In any case the time to spend to accumulate was the summer just gone when we had the momentum with us.
Wouldn't blame the board for a more cautious approach.
Palace seem to be taken a more realistic approach of "this is where we are and we cut our cloth accordingly. If we have to see a Clyne or a Zaha to keep going so be it but we're still strong enough to be in the top 6".
Some interesting points to ask Mr Slater tonight.
Anyone bringing in $8 million and losing $16 million every year - and that's in a pretty good year - can't keep doing that for all that long.
We know we can't shave the operating cost base much lower, so the only way to move forward is to substantially increase our revenues - and that means the Premier League.
As I say that is simplistic but I see a cash injection of $5 million and 3-4 decent CCC players as providing a much more realistic route to financial safety than relying on Paul Hart to bring in a crop of top-class youngster or for SCP to work miracles with freebies/loanees.
True, others have had the same idea, that doesn't mean they are wrong!
http://www.bbc.co.uk/sport/0/football/20980190
I do not miss the top league, it loses it's gloss after a while, but we need to be in it to secure the club's future.
Wont allow me into 'online communities' at work (apart from this one).
I understand if NYA doesnt want to post here but wants to drive traffic to his site.
Club is running at a loss each season outside of the top flight with revenue being no where near enough to meet costs.
Going concern because (currently) owners are funding this but losing millions doing so which they won't recoup unless they sell enough assets/ sell the club (or significant shares in it) or get promoted. Time will tell how long they will be happy to do this for.
I imagine they are looking for serious investment and trying to get promotion to do this. They certainly will want us to reach the play offs re the other thread.
It's about taking a gamble, which is what it is, and whether you can afford that gamble if the horse doesn't come in (ie if we don't get promoted).
Long term, slow but managed growth might be a better option for CAFC than an "EPL or bust" approach" which we can't sustain without owners with very deep projects.
And I suspect that MS and TJ realise this too as they appear to be actively seeking new owners/investors while at the same time reining in spending on players.
I don't think that was the plan originally but something changed, IMHO, which was Kevin Cash no longer wanted to pump in that extra £5m or £10m needed to fund the gamble.
But if the Club do adopt a long term managed growth plan then it will be two steps forward and one step back. Players will be sold and replacements found in the lower leagues or in the academy. Personally, I don't have a problem with that but I do think the Club needs to communicate to fans that that is the way it is going to be.
Blackpool didn't bounce back and neither have Brum.
The yo-yo model also relies on the owners being in it for the long term ie at least 6 or 7 years where it seems the plan for MS and TJ is to reach the PL and sell.
What an absolute bloody mess.
Strip away the details and just look at the big ticket bits. This was at June 12, so things will have progressed significantly by then. The realistic picture at the end of this season will be the club are carrying £45-46m of debt (based on an assumed loss for this season of between £7-8m). That's doubled in just 24 months from the takeover where the picture was basically just the carry-over friendly debt and the North Stand mortgage (with Lombard i think).
How friendly is this additional bout of friendly debt the Club is now carrying, we simply don't know.
How has this additional friendly debt been funded and by who, we don't know for sure.
At present, we are in investment that looks as attractive as a two-week desert island break with Piers Morgan for company, and Susan Boyle for sexual gratification.
People think everything will be great if we got to the Premiership and got a sack of money. That to me seems just as unlikely a scenario because if we did get promoted, we would (by the looks of things) have to pay out an obscene amount of money before we even possibly considered bringing in a new player.
In my opinion, only an idiot who has no emotional connection to the club, or a mega mega rich overseas investor would ever consider taking us on in our current state or likely future state if we got promoted (and for the latter, there are dozens of more attractive offerings than us).
I honestly can't see how we can ever get out of this cycle of losing more than we earn every year.
The current owners have been here two years and have so far lost $16 million (or thereabouts) - are they willing to stick around and lose another $24 million over the next three years and lose $40 million?
There are no easy answers to any of this except a 50% wage cut for all English players in the EPL and CCC and that's about as likely as Len Glover donning lederhosen and getting a job at the EU.
Call me a cynic but whilst they focus on the soap opera elements of football like that (as they do every week with some sort of self- generated scandal) it distracts and detracts from the real issues in the game like the finances.
Clubs on the brink of non existence yet everyone focuses their rage and attention on petty mountain out of molehill incidents that are completely irrelevant in the bigger scheme of things.
Pretty similar tactics that the governments use nowdays when each ridiculous "scandal" diverts our attention from the real issues.