Ron speaks

[Richard_Cadette]

What's incomprehensible is looking at revenue streams without also considering the out-goings.

We might have had massive increases in revenue, but we've also had massive increases in costs (namely wages - we won the league one title paying league two wages, since relegation we've been paying championship wages in league one). I suspect the increase in costs was greater than the increase in revenue.

The club hasn't been on a good financial footing for years, probably not even in my life time. Ron maybe could have done some things differently (as I've argued before, I think he got too swept away with the back-to-back promotions and thought the success would always come) but ultimately this club would be in crisis regardless of ownership.



It's what went wrong with Luton and Leeds, who IIRC were relegated from the championship with us. It's happening at Southampton, Stockport and countless other clubs. It happened at York, Scarborough, Barnet, Halifax, Aldershot, Maidstone etc etc

We won't be the last club this season to go through this.



Your neighbour seems to have a very strange attitude. Ron Martin may not have any money, but expecting wealthy individuals to prop up failing football clubs seems odd to me.

I am sure our costs did increase over that period, but let's look at how the club is running at the moment - the average attendance is around 8,000, a figure which it has remained above for the last 4/5 seasons. I doubt very much if the level of merchandising the club sells is sufficiently less than it was before, and everything that brings money into the club on a matchday will again, be as it was. Yes, we have had a decrease in commercial activity, but enough to put the club into this position? IMO, I doubt it. Even when you consider the loss in TV revenue, that can easily be countered with the additional funds received in players sales, cup runs, and one off TV apperances. To be in this position now, IMO, is bad management of our football club.

In reference to my neighbour as you put it, his comments were not based around the fact Ron was not a multi billionaire arab business man, more to do with what he brings to the club as opposed to what the club brings to him.

 

[Yorkshire Blue]

I am sure our costs did increase over that period, but let's look at how the club is running at the moment - the average attendance is around 8,000, a figure which it has remained above for the last 4/5 seasons. I doubt very much if the level of merchandising the club sells is sufficiently less than it was before, and everything that brings money into the club on a matchday will again, be as it was. Yes, we have had a decrease in commercial activity, but enough to put the club into this position? IMO, I doubt it. Even when you consider the loss in TV revenue, that can easily be countered with the additional funds received in players sales, cup runs, and one off TV apperances. To be in this position now, IMO, is bad management of our football club.

You are only looking at one side of the equation. It doesn't matter how much revenue increases if costs increases by more.

And it's not as if we were previously profitable, excluding one-off windfalls (Man Utd/Freddy).

 

[Richard_Cadette]

You are only looking at one side of the equation. It doesn't matter how much revenue increases if costs increases by more.

And it's not as if we were previously profitable, excluding one-off windfalls (Man Utd/Freddy).

Well it does matter actually, because if both costs and revenue increase, then assuming they do so in step, you ought to be no worse off than you were previously. They are intrinsinctly linked.

We must now have the lowest wage bill in League One, yet most of our revenue streams remain the same - I'm not suggesting for one moment we ought to be rolling in it, or bringing in players for £1m a pop, but we really should not be in this position, and I fail to believe that bad management of the clubs finances are not to blame.

 

[ElstreeBlue]

You are only looking at one side of the equation. It doesn't matter how much revenue increases if costs increases by more.

And it's not as if we were previously profitable, excluding one-off windfalls (Man Utd/Freddy).

YB - You're right. It's about looking at costs and revenues, not just one side of the equation.

But WHY have costs increased so much? We have a tiny squad. We don't even have to pay rent, as we would presumably have to do at the new stadium. On the other side, we've had much better success on the pitch, cup draws, TV money and bigger crowds than we previously had before Tilly became manager - so revenues have gone up compared to a few years ago.

Whatever the size of revenues/clubs, every business must live within its means, whether Chelmsford City or Manchester United. We can't be incurring £2.4m losses a year, and expect to stay in business! This was not the fault of the credit crunch. We're talking about huge, unsustainable losses - not a few cash flow issues. Why have the costs been allowed to soar to such levels that lead to these amount of losses? At best, this has been dreadful financial management. Where has the money gone? Where have the "costs" and "expenses" been incurred? The accounts don't clearly explain. Has all the money that has led to the £2.4m annual loss been spent on things which were necessary for the football club's best interests?

If every lower league club was run this way, there wouldn't be a lower league at all.

 

[Yorkshire Blue]

Well it does matter actually, because if both costs and revenue increase, then assuming they do so in step, you ought to be no worse off than you were previously. They are intrinsinctly linked.

Did you read what I wrote?

We must now have the lowest wage bill in League One, yet most of our revenue streams remain the same - I'm not suggesting for one moment we ought to be rolling in it, or bringing in players for £1m a pop, but we really should not be in this position, and I fail to believe that bad management of the clubs finances are not to blame.

We now probably do have the lowest wage bill in League One, but our problems pre-date that.

What happened is that we got promoted to the championship and we then started paying championship wages. This was a big increase in our costs (previously we'd been paying league two wages in league one). When we got relegated we were still paying championship wages, but our income was less. We managed to off-load a few players: Paynter, Ricketts, JCR, Harrold and then later Hammell and Foran but we'd have still been paying championship wages (or at least wages that we couldn't sustain without championship status and TV and commercial income) to the likes of Peter Clarke, Simon Francis and Alan McCormack.

If there was financial mismanagement it was in authorising the signing of the likes of Clarke (a double whammy as wages and transfer fee), Hammell, Francis etc but few opposed us splashing the money and people protested when we tried to lower the wage bill.

This is the same sort of financial problems that have befallen Leeds, Southampton, Luton and I'm sure others who have been relegated from the championship in recent years.

Our problems have been compounded because previously we were being bank-rolled (we were making a loss even before promotion) by Ron Martin's company's overdraft. The collapse of the credit and property markets meant that this option was no longer available to fund the club in the short to medium term whilst waiting for the stadium project to be completed.

 

[Yorkshire Blue]

YB - You're right. It's about looking at costs and revenues, not just one side of the equation.

But WHY have costs increased so much? We have a tiny squad. We don't even have to pay rent, as we would presumably have to do at the new stadium. On the other side, we've had much better success on the pitch, cup draws, TV money and bigger crowds than we previously had before Tilly became manager - so revenues have gone up compared to a few years ago.

Promotion to the championship and the increase in wages and squad size.

The fact that we now have a tiny squad is a red herring, we've had a far bigger (and certainly more expensive) squad for the last few seasons than we did when we were promoted.

Whatever the size of revenues/clubs, every business must live within its means, whether Chelmsford City or Manchester United. We can't be incurring £2.4m losses a year, and expect to stay in business! This was not the fault of the credit crunch. We're talking about huge, unsustainable losses - not a few cash flow issues. Why have the costs been allowed to soar to such levels that lead to these amount of losses? At best, this has been dreadful financial management. Where has the money gone? Where have the "costs" and "expenses" been incurred? The accounts don't clearly explain. Has all the money that has led to the £2.4m annual loss been spent on things which were necessary for the football club's best interests?

If every lower league club was run this way, there wouldn't be a lower league at all.

Only a few clubs are profitable. Most operate at a loss. This has happened throughout history, when teams have been repeatedly subsidised by philanthropic chairmen.

The reason the credit crunch has hurt us, is Ron's plan was for his company to fund us whilst the stadium, which was hoped to provide long term stability, was being constructed. The credit crunch means that he's no longer able to do so.

 

[GBJ]

YB - You're right. It's about looking at costs and revenues, not just one side of the equation.

But WHY have costs increased so much? We have a tiny squad. We don't even have to pay rent, as we would presumably have to do at the new stadium. On the other side, we've had much better success on the pitch, cup draws, TV money and bigger crowds than we previously had before Tilly became manager - so revenues have gone up compared to a few years ago.

Whatever the size of revenues/clubs, every business must live within its means, whether Chelmsford City or Manchester United. We can't be incurring £2.4m losses a year, and expect to stay in business! This was not the fault of the credit crunch. We're talking about huge, unsustainable losses - not a few cash flow issues. Why have the costs been allowed to soar to such levels that lead to these amount of losses? At best, this has been dreadful financial management. Where has the money gone? Where have the "costs" and "expenses" been incurred? The accounts don't clearly explain. Has all the money that has led to the £2.4m annual loss been spent on things which were necessary for the football club's best interests?

If every lower league club was run this way, there wouldn't be a lower league at all.

You're asking the main question that needs a detailed answer. And there is only 1 man who can give that detailed answer.

There is no two ways about it, vast sums of money are disappearing somewhere. I fail to believe it's "the general running of the club".

Working it out mathematically, it just doesn't add up. We make roughly £3m per year from home matches; tickets, food, drink etc, we make at least £50k from merchandise. Then in the last few years we've had the big transfer fees, the big games, the tv etc, which would make up at least £4m upwards.

So why, are we constantly turning out £2m+ loss every season?

And before anyone says it, can someone actually describe it detail what "the running of the club" entails

 

[Yorkshire Blue]

You're asking the main question that needs a detailed answer. And there is only 1 man who can give that detailed answer.

There is no two ways about it, vast sums of money are disappearing somewhere. I fail to believe it's "the general running of the club".

Working it out mathematically, it just doesn't add up. We make roughly £3m per year from home matches; tickets, food, drink etc, we make at least £50k from merchandise. Then in the last few years we've had the big transfer fees, the big games, the tv etc, which would make up at least £4m upwards.

So why, are we constantly turning out £2m+ loss every season?

And before anyone says it, can someone actually describe it detail what "the running of the club" entails

Is that £3m revenue, or £3m profit?

How much are the wages we are paying the players?

Can you show me a football club, other than maybe Man U, that is being run profitably?

 

[BrettieAngell]

Is that £3m revenue, or £3m profit?

How much are the wages we are paying the players?

Can you show me a football club, other than maybe Man U, that is being run profitably?

Is that the Man U with £800 million of debts?

 

[canveyshrimper]

Is that £3m revenue, or £3m profit?

How much are the wages we are paying the players?

Can you show me a football club, other than maybe Man U, that is being run profitably?

While you can't dispute that the main wage earners are the players / stroke management. If you look at the accounts the club has over 90 employees. Therefore there must be over 60 employees who aren't players or coaches/managers.

To answer your question Matt, are Man U profitable considering the Glazers have saddled them with 800million worth of debt when they bought the club?

The only club who say they aren't losing money I think maybe Burnley.

 

[Hotman]

Is that the Man U with £800 million of debts?

Man U would be in a far better position to repay the £800 million that we are to pay off the £600k or so

 

[Yorkshire Blue]

Is that the Man U with £800 million of debts?

1. I think the debt is actually the Glazers'
2. That's the balance sheet rather than it's profit and loss

 

[Yorkshire Blue]

While you can't dispute that the main wage earners are the players / stroke management. If you look at the accounts the club has over 90 employees. Therefore there must be over 60 employees who aren't players or coaches/managers.

To answer your question Matt, are Man U profitable considering the Glazers have saddled them with 800million worth of debt when they bought the club?

The only club who say they aren't losing money I think maybe Burnley.

Let's see if Burnley are profitable once they get relegated.

 

[Hotman]

To answer your question Matt, are Man U profitable considering the Glazers have saddled them with 800million worth of debt when they bought the club?

To answer your question canveyshrimper, quite possibly. Only the finance servicing costs will hit the p+l

 

[BrettieAngell]

1. I think the debt is actually the Glazers'
2. That's the balance sheet rather than it's profit and loss

It was taken against the club wasn't it?

And I know the difference was making the point that even clubs who turnover loads of money still have debt whether its the owners or not.

 

[canveyshrimper]

Let's see if Burnley are profitable once they get relegated.

If they use the parachute payments wisely, and they haven't signed players who are locked into Premier League contracts there's no reason that they shouldn't be.

 

[BrettieAngell]

If they use the parachute payments wisely, and they haven't signed players who are locked into Premier League contracts there's no reason that they shouldn't be.

West Brom are a good model to follow, if Hull go down surely they will be in trouble? At least we can hope so.

 

[canveyshrimper]

West Brom are a good model to follow, if Hull go down surely they will be in trouble? At least we can hope so.

Good point on both Rich. Possibly Middlesbrough as well as they've sold off most of their real high earners.

 

[Yorkshire Blue]

It was taken against the club wasn't it?

And I know the difference was making the point that even clubs who turnover loads of money still have debt whether its the owners or not.

I think it was whitewashed and the club used as security for the debt.

Good point on both Rich. Possibly Middlesbrough as well as they've sold off most of their real high earners.

Possibly West Brom, but I can't agree that the Middlesbrough model is a good one. Selling off the high-earners is necessary, but it depends on people being willing to take them on. When we transfer listed Peter Clarke there were no takers!

We tried to get rid of Foran and no-one wanted him either.

 

[BrettieAngell]

Good point on both Rich. Possibly Middlesbrough as well as they've sold off most of their real high earners.

Yeah Middlesbrough should be alright depends if they go up this year or not I guess, will crowds start to drop off? Of course forgot to mention our old mates from Upton Park!