Question Why've we a larger wage bill than clubs in higher divisions when we lose £1.2m pa?

[Beefy]

losing 100k a month since tara got here. how many home games have we played in that time?! the majority have been called off so all the extra income has been wiped out. plus season ticket money. i doubt we're really losing that a month on average over the season....if we are then god help us.

That is substantially less than we've been losing for the past few years. Not many football clubs won't lose £100k per month.

The problem isn't that we're losing £100k per month, it's that we've got no reserves of cash to use to cover those loses and no assets to sell either.

 

[choggy]

Excuse the cynicism, but Is that 100k loss per month actual cashflow or just a P&L line which may include invoices that RM bills the club for 'consultancy fees'?

 

[pringlejon]

That is substantially less than we've been losing for the past few years. Not many football clubs won't lose £100k per month.

The problem isn't that we're losing £100k per month, it's that we've got no reserves of cash to use to cover those loses and no assets to sell either.

It's an unfathomable amount to me hence my cynacism...i don't like spending 15 quid on a tshirt!!! I know it's been discussed at length in the finance forum so i may have to have a read in there for more detail. Shocks me how we can lose that/why we continue to lose so much when we had the majority of players off the wage bill at the beginning of the season. If we set a wage budget at x amount knowing we will lose at least 50k a month, why do it?! I know we need to compete but financially as a business model, it is dreadful.

I know the majority of lower league clubs run at a loss, but if they all change their stance, then player wages will drop...of course this will never happen and will prob only get worse until clubs find ways to get other income streams.

 

[Pubey]

It's an unfathomable amount to me hence my cynacism...i don't like spending 15 quid on a tshirt!!! I know it's been discussed at length in the finance forum so i may have to have a read in there for more detail. Shocks me how we can lose that/why we continue to lose so much when we had the majority of players off the wage bill at the beginning of the season. If we set a wage budget at x amount knowing we will lose at least 50k a month, why do it?! I know we need to compete but financially as a business model, it is dreadful.

I know the majority of lower league clubs run at a loss, but if they all change their stance, then player wages will drop...of course this will never happen and will prob only get worse until clubs find ways to get other income streams.

But the business model is just a model, gates appears to have been lower than accounted for. It will have been hard to to predict how many would have bought ST's, and how many would return this season after relegation and all the off pitch stuff. This isn't to say RM is blame free, he's always seemed to hope for quite high gates to meet his break even point. Plus my guess is that Sturrock will have hoped to have not need to dip into the loan market quite as much due to some unfortunate injuries, and I guess he will have hoped to have moved on a couple of players.

 

[soul DJ]

In the mid 90's I worked at the club and I asked about wages, I was told that because of our location, the cost of houses if the move to the area, or the drive to the area, they had to pay over the top to attract players.

 

[Beefy]

I know the majority of lower league clubs run at a loss, but if they all change their stance, then player wages will drop...of course this will never happen and will prob only get worse until clubs find ways to get other income streams.

Absolutely, and it's that attitude that Clubs need to change although we as supporters need to change with it. It's too easy to get carried away when things are looking alright and give your captain a massive pay rise and a five year contract to keep him away from your local rivals but if your local rivals can afford it and you can't then maybe the better option is to let him go and stop trying to compete financially with them.

 

[mattytheshrimper]

i was thinking the same thing, how can we have such a large wage bill. yes we have paterson probabaly on quite a lot and i reckon spencer and grant are but apart from that no players from last season except crawford and herd who I doubt earn too much. So this means we have brought players in who are costing us quite a lot and not really justifying their worth considering being i think 15th. also looking at fact that quite a few players had been released or had come from non-league football. doesn't really make sense to me to be honest.

 

[Beefy]

The wage budget for the year was reported in the Summer as being £1.3m. Presuming that's right then that works out pretty much exactly the same as, or slightly higher than, our income through the turnstiles will be (based on 5,000 people paying £13 each 25 times a year minus VAT). Then you've got all the other costs of running the business (admin expenses, PAYE contributions, Police costs, maintenance of a 55 year old football ground, etc) which will be far higher than our remaining income.

And this is us with a wage bill half of what it was last season.

It's just a fundamentally flawed business model. We're trying to minimise the cashflow deficit by reducing our expenditure but that results in a lower standard of player, lower standard of football and a drop in attendences (and therefore income) which then necessitates further cuts (redundancies or players leaving) which causes gates to fall again.

 

[EastStandBlue]

Absolutely, and it's that attitude that Clubs need to change although we as supporters need to change with it. It's too easy to get carried away when things are looking alright and give your captain a massive pay rise and a five year contract to keep him away from your local rivals but if your local rivals can afford it and you can't then maybe the better option is to let him go and stop trying to compete financially with them.

Indeed. Only the other week BarnaBlue was lamenting us not investing in the squad, and it's a common theme. When a side isn't doing well, the instant response is to throw new players into the equation, usually a striker, and that was certainly how Tilson responded to a crisis. Bring a striker in on loan and hope the problem goes away.

I'd recommend everybody read "Why England Lose, & Other Curious Phenomena", As there's a fantastic chapter on Lyon's rise from regional alsorans to the Kings of France. Their chairman speaks at length as to how the club benefits from a largely affluent fan base who don't call for new, expensive signings every other month, allowing them to buy players in their early twenties, and sell them for mass profit as they reach their peak around their late twenties. Transfer policy will always be debated in football.

As for our £100k losses, I can't say I'm surprised that we're making a loss, but I'm a little concerned that is that high. I'd imagine that moving Spencer and, perhaps, Paterson on may ease the wage budget ever so slightly, but those losses despite RM gutting the club over the summer make it fairly clear that staying at Roots Hall isn't a viable option for the future.

It also makes you wonder the calibre of footballer we'd be able to tempt to Roots Hall if we were looking to be financially self-sufficient, too.

 

[Yorkshire Blue]

I will state now ( and actually I don't give a toss about a law suit on me) ..Tara is another muppet hooked in by RM the salesman...he is here to recover his loses.He is a Portsmouth fan trying to salvage some of the monies he lent RM.



I am with Ken tomorrow night for a chin wag with Tara....

If that is the case, I'm actually quite encouraged. If he's investing (and even if the money he's put in is the money Ron owed him that he wasn't going to get back otherwise, he's investing his time) that must mean that he thinks it's a viable business plan.

 

[pringlejon]

Our reported current wage budget = £1.3m which equates to about 108k a month.
Removing players such as Paterson and Spencer, even if they are on 2k a week each (just under 9k a month), will not go anywhere near removing the monthly loss.
If all players and staff agreed to cancel their contracts for zero fee and SZFC stepped in to play for nothing then we would be in profit (and i'm sure many would argue crowds would increase too due to the free flowing attractive football they play). Of course this isnt feasible so the only way we can go any way towards making a profit is to increase alternative revenue streams...hence new stadium.

 

[united we stand]

What he said was 100% totally meaningless , becasue none of us know waht he meant (cricko could you ask tonight?).

As someone else has said /hinted he didn't say we are on target to loose 1.2 million for the year which is what a lot of people are assuming. He said we have been loosing £100,000 a month since he has been here. If we really are on target to loose £1.2 million then the crowd predictions in the budget must have been pure fantasy and/or we have deliberaetly broken our wages budget for a lot of players . OR this figure is within budget , what we expected, hence the drawdown facility with Sansburys.

As ever a one line statement from the club actually raises more questions than answers

 

[tottenham541]

Can someone please explain this to me.

all this talk about us losing all this money makes me wonder, i can remember around two years ago we were making great strides in reducing our out goings and we were making profits in some areas of the club, since then we have got the big earners off the books and have made so many cutbacks so how the hell is the club losing 100k a month when not so long ago we were getting profits from certain areas, being a shareholder i have looked at the paper work side of things and their has been hell of alot of money go missing and ron martin has kept his mouth shut for far to long over the past few months and it dont take that much brains to realise money is getting taken out of the club by somebody, someone is telling pork pies somewhere still.

 

[EastStandBlue]

all this talk about us losing all this money makes me wonder, i can remember around two years ago we were making great strides in reducing our out goings and we were making profits in some areas of the club, since then we have got the big earners off the books and have made so many cutbacks so how the hell is the club losing 100k a month when not so long ago we were getting profits from certain areas, being a shareholder i have looked at the paper work side of things and their has been hell of alot of money go missing and ron martin has kept his mouth shut for far to long over the past few months and it dont take that much brains to realise money is getting taken out of the club by somebody, someone is telling pork pies somewhere still.

The only year we've made a profit in recent memory was the year in which we sold Eastwood IIRC, and even then it was nominal to the say the most.

 

[Beefy]

What he said was 100% totally meaningless , becasue none of us know waht he meant (cricko could you ask tonight?).

As someone else has said /hinted he didn't say we are on target to loose 1.2 million for the year which is what a lot of people are assuming. He said we have been loosing £100,000 a month since he has been here. If we really are on target to loose £1.2 million then the crowd predictions in the budget must have been pure fantasy and/or we have deliberaetly broken our wages budget for a lot of players . OR this figure is within budget , what we expected, hence the drawdown facility with Sansburys.

As ever a one line statement from the club actually raises more questions than answers

It doesn't raise more questions. It's pretty clear. You only have to look at what has been happening with the Club and do some rough numbers like I did a few posts ago to see what's going on. We're losing a certain amount of money because our income doesn't match our expenditure. The Sainsburys facility is in place in order to cover the cashflow deficit. I think we all knew that anyway, TB has just spelt it out.

We have a wage budget which is a lot lower than it's been previously but it was never a wage budget that was going to see us break even - it was just about minimising loses.

 

[tottenham541]

The only year we've made a profit in recent memory was the year in which we sold Eastwood IIRC, and even then it was nominal to the say the most.

if we are losing 100k a month what are other clubs in our division losing ? we have an average 5,000 fans at home games other clubs get less than half and compete more than we do in the transfer markets, dont believe everything you hear on the radio as he is ron martins no 2 and they do tell you what you want hear after all.

 

[Rob1920]

Havent read all the posts but like any club who has a fairly rapid decline, we're still paying for the past few seasons on a vastly reduced income. I don't confess to know exactly who finances the club, probably a mixture of Sainsburies, RM, TB, other directors and the bank. But I do know no one lends the sort of money we must have borrowed to stay afloat without some serious interest payments being involved. I wouldn't mind betting that accounts for a large part of our on-going losses. You may say why would RM, TB & the rest finance the club but then pay themselves interest as it would be like giving with one hand & taking back with the other. The thing is they probably don't take the money (interest on loans) but it still shows as owing on the balance sheet, which means its included in the accounts as an outgoing. Their plan being to take the interest owed at such a time in the future when the club can hopefully afford it.

I daresay we're no longer making a huge loss on a simple incomings / outgoings basis, its the baggage from recent years thats costing us.

Thats my theory anyway!

 

[Blue_Wes]

Another point is that we shouldn't exclude the ST money from the monthly losses. With the introduction of the Direct Debit payment scheme, we will still be receiving ST ticket money on a monthly basis. With this in mind I would imagine the gate receipts are a lot closer to full attendence than we give them credit for. Also this would mean we are still receiving some ticket money even when the games haven't been taking place.

A further concern is if we're losing 100k p.m. whilst the season is in full swing. How much will we be losing when we hit the close season when we're not reciving gate receipts? Presumably the bulk of wages will still be paid during this period. The ST holders will inevitably re-new over the course of the close season, but this will be in dribs and drabs and depending on our performance in the second half of the season could increase, or god forbid decrease further. But we won't be getting the 1.5k (I think this is the figure I saw earlier) worth of £13/16 per fortnight either. This in itself could mean the yearly operating losses are in excess of the 1.2m (12x100k) being quoted on here.

If only we knew where the Eastwood money went!!!! :whistling:

 

[Firestorm]

I believe that the shortfall may be partly down to the season tickets, in previous years we have borrowed against them , but this season the company Chapterhouse (? ) took us to court so I guess that this years season tickets sales were used to pay back the loans as before but the ability to borrow against next seasons sales will have been compromised so we may not have been able to do it

Also falling season ticket sales (plus reduced prices) will have have meant that there was insufficient funds available from ST sales alone to pay back the loan.
Somewhere in the past (the first year we got the loan facility) we used two seasons ST sales in one year (that seasons revenue and the loan against the next seasons) and have been operating "in arrears" ever since

 

[Fairport]

Brady has quoted that our wage bill is among the top seven clubs in this division, I wouldn't dispute this. However, nobody from the club has clarified if this wage bill relates to just the playing staff or is it the wage bill for SUFC in general. Of course, this would include, coaching staff, groundsman, ticket office staff, chairman's secretary etc. etc. I seem to remember someone on here saying that the club employs around 90 people, this is probably a little less these days. However, it appears that the actual playing staff makes up around 25% of the staff employed. To get a clearer picture, we need to know how much the actual players wage bill is compared to other clubs. This would also go some way in helping to resolve the argument among fans about players wages under Tilly which may or may not have contributed towards the cash-flow problems and subsequent court appearances. I would expect that they were paid on average significantly more than the current squad but then there were less of them. The squad is now well over 20 compared to smaller numbers employed in the past.
Maybe someone can produce the broken-down wage bill figures from previous sets of accounts. I understand that the last set of accounts due have still not been filed!