http://swissramble.blogspot.co.uk/2016/05/bournemouth-welcome-to-pleasuredome.htmlThis article, dated Tuesday, May 17, 2016, is about Bournemouth, with a lot of comparative stuff about Championship clubs.
For most categories, Blackpool and Bolton figures not included, as accounts not available. Note also there are probably some differences in the way different clubs treat some costs, revenues, etc.
Charlton headlines:
22nd of 22 (lowest) on broadcasting revenue
21st of 22 on wages
19th of 22 on commercial revenue
16th of 22 on player amortisation (write-down of value)
14th of 22 on matchday revenue
13th of 22 on ratio of wages to turnover
13th of 24 on attendances
10th of 22 on profit from player sales
8th of 22 on profit/loss (loss £4million; 6 made a profit; Ipswich top with £5 million)
8th highest of 22 on debt (£49 million; obviously Bolton would beat that; don't know about Blackpool))
7th of 22 on EBITDA (Earnings Before Interest, Depreciation and Amortisation; i.e. 7th best performance, loss of £5 million with only 3 clubs breaking even)
Comments
It's scary that we're 7th best on EBITDA with a £5m loss. Remind me again, with three team a year being promoted to the Prem and the three coming down with tens of millions in parachute payments, how this model is sustainable?
When they are eventually reported, Charlton's figures for 2015/16 will look even worse than last year's (subject to player sales) and turnover will go off a cliff next season, with nearly £4million lost in broadcasting and solidarity payments alone. Add in the toxic relationship with the majority of supporters and the loss of sponsors etc. and you can see that Duchatelet is heading for a humongous loss in 2016/17. Moreover, it is one that will continue each season unless there is a huge turnaround in fortunes.
He would obviously want to improve his negotiating position in any sale of the club through a successful season but, by the time it's over, he'll have flushed away another £8 million or so down the pan. The capital expenditure on the training ground - assuming that's proceeding - presents Duchatelet with a further dilemma. All in all, a bleak picture.
I agree with everything else you say, although I am not the only one to suspect he must have some short-term motives like tax breaks, as well as getting the interest on loans, so this isn't hurting him as much as it hurts us.
2013-14 Charlton were 20th of 24, with wages bill of £12 million (includes unknown for Yeovil, but I assume their wages bill would be less than ours).
2014-15 Charlton were probably 22nd of 24 (as I assume Blackpool's wages bill was less, but Bolton's more), with wages bill of £11 million.
However, in 2013-14, "only" 10 clubs had a wages bill of £18 million or more; the following year, it was 15 clubs (possibly 16, if Bolton topped that figure). In other words, in the first year, our wages bill was reasonably competitive with over half the Championship; in 2014-15, it was only competitive with the bottom third.
Obviously I accept that over time there is a substantial correlation between spending and performance. But for example Charlton did not have the largest wage bill in League One in 2011/12 and in fact set out to reduce their wage bill substantially from 2009/10 and 2010/11, although the final figure was skewed by promotion bonuses. Nevertheless they significantly outperformed their 2010 and 2011 finishing positions in 2012 (in 2011 they substantially underperformed their spending) and significantly outperformed a number of clubs with higher wage bills, as they did again in the Championship 2013. That points to a premium for spending the available money well and a penalty for spending it badly. In 2009/10, in particular, Charlton were locked into expensive contracts for players they may have preferred to release, so it is not always a matter of choice.
Regardless of that, common sense tells you that if you spend the money badly (Sarr, Ceballos, Bergdich, Johnson, Reza, Ba in 15/16, add others of your own choice in the previous two seasons) - and waste it on paying off contracts (Bikey, Polish Pete, etc) then it must skew the relationship between your spending and performance away from the mean. Paying large sums to players who do not feature cannot contribute to performance under any rational interpretation.
More generally, a club's wage bill is not just it's football staff. For example, Charlton's fell in 14/15 because of the outsourcing of catering, while other clubs will employ staff on other aspects of their operations, so the published figures are a bit broad brush to be taken too literally, even though football costs will usually be the main element. For example, I've estimated before that at least £3m of Charlton's wage costs are either non-football staff or academy and young players.
It follows as a reasonable assumption that, if Charlton's wages bill was static or reducing, while those of other Championship clubs were generally significantly increasing, the general increases weren't on catering staff, etc, but on players. Therefore, the tendency to fall behind was even more acute than appears at first sight. I suspect that will be proven to be even more starkly true for the season just finished (apart form the last-ditch effort to turn things around with loanees, etc).
Rotherham have proved that you can survive with a wages bill that looks uncompetitive, but then what they really proved is that you just need to loosen the purse strings enough to recruit one man (plus any support staff he brings) for a few months, providing you choose someone who can dig you out of a hole. 9 times out of 10, that wouldn't work.
And yes obviously just spending money on any random players doesn't equal good performance. That's why I made the point about players' wages. But even then, look at the player armotisation in that article, once again we are towards the bottom of the league.
And bringing in non-playing staff wages into this is completely pointless but I understand you have an agenda to keep up.
How long is "long term" and how many clubs do you need to make your point, because the longer it is and the more clubs involved the less useful it is to understand what may happen at one club in one season? The evidence at Charlton in the last decade simply does not support the idea there is a "direct correlation" over time. Moreover that thinking underpins the lazy Meire proposition that if the club spends what it did in 2011/12 it is likely to be in contention for promotion, taking no account of the club's ability to spend the money well.
In 2014/15 Charlton carved a bit out of their wages costs by outsourcing catering and hospitality, which while it shouldn't be overstated means that the consequential change in staff costs has no effect whatsoever on performance on the pitch. It's not relevant whether this was a good decision or whether the club should be spending more or less on that, it's the fact that there is no like-for-like comparison, either year on year or between clubs. Similarly, in 2013/14 the club paid significant FA Cup bonuses, which again impact on the relative position.
How significant any of this is would require more analysis of what other clubs do, but it's reasonable to assume that if, for example, Rotherham's commercial income is double Charlton's, and Norwich's is five times Charlton's, then they must incur additional salary costs to service that.
Player amortisation is a reflection of transfer fees paid historically, which in the Bosman era is not necessarily meaningful in terms of squad value. You'd also expect a club with a strong youth development component in the squad to have lower amortisation since it wouldn't have paid fees for those players. The 2015 figure will to some extent reflect the lack of transfer spending under the previous regime 2012-2014, but it's the 15/16 spending decisions that caused relegation.
If you look at the previous year, according to Swiss, the bottom clubs in the Championship for commercial revenue (in rising order of revenue) were Wigan, Millwall, Yeovil, Bournemouth, Barnsley, Charlton and Doncaster. I think it's hard to see any structural pattern in that, or, if there is one, it's one of smaller provincial towns and cities, with us and Millwall and arguably Wigan also in there.
I think that suggests there is a failure on the part of Charlton regarding commercial revenues, but it is a repeated failure by consecutive regimes. We should not be in the same category as Yeovil, Barnsley, newly-emerging Bournemouth and Donny (no disrespect).
EDIT: according to Swiss, Palace's commercial revenue in their last year in the Championship was £4.4 million, compared to our £2.5 two years later. Is that structural?
The C&B business was badly hit by cuts to Greenwich Council budgets, etc, because the public sector used the Valley facilities for conferences, events, meetings.
I believe Charlton's matchday income, especially season ticket sales, has created overstated expectations for the wider business and may even have misled buyers about the potential for commercial growth. For example, retail has always been a big weakness relative to attendance, in my view because there hasn't been a significant pool of non-attending supporters to buy. You can't address that by improving the retail offer.
We need to bear in mind that Charlton's commercial income now has cost of sale in both retail and catering stripped out.