Our money tree and the MASSIVE money tree

[I should coco]

I know that plenty on here think 'we pay our fair share through the gate' but here is a classic example of the madhouse that is football economics:

"In accounts published this morning, Sheffield Wednesday made a loss of £9.8m, up from £4.5m. Operating losses rose from £3.9m to £9.7m over the same period.

However, turnover for the year rose by £7.1m to £22m due to reaching the play off final at Wembley, an increase in the average league attendance from 21,997 to 22,641 and improved revenue generated by the commercial activities of the club."

https://www.insidermedia.com/inside...ire_news_tracker&utm_medium=top_story_article

They have gone for the 'shit or bust' option of promotion at all costs. I wouldn't expect our tunover to be as high as theirs (lower ticket prices) but our wage bill will certainly be lower, even if we buy two or three more players.

We will still end up with a loss but it's likely to be in the low single figure millions rather than £10m at the Massive. As always, they are bigger than us in all they do........

 

[Barney]

Something tells me this, is in the wrong section...

 

[Revolution]

I know that plenty on here think 'we pay our fair share through the gate' but here is a classic example of the madhouse that is football economics:

"In accounts published this morning, Sheffield Wednesday made a loss of £9.8m, up from £4.5m. Operating losses rose from £3.9m to £9.7m over the same period.

However, turnover for the year rose by £7.1m to £22m due to reaching the play off final at Wembley, an increase in the average league attendance from 21,997 to 22,641 and improved revenue generated by the commercial activities of the club."

https://www.insidermedia.com/inside...ire_news_tracker&utm_medium=top_story_article

They have gone for the 'shit or bust' option of promotion at all costs. I wouldn't expect our tunover to be as high as theirs (lower ticket prices) but our wage bill will certainly be lower, even if we buy two or three more players.

We will still end up with a loss but it's likely to be in the low single figure millions rather than £10m at the Massive. As always, they are bigger than us in all they do........

Their owner is a billionaire. He can afford it.

 

[I should coco]

Their owner is a billionaire. He can afford it.

As I said, their money tree is bigger than ours.

And more deluded.

And hopefully less patient....

 

[Alfreton14Blade]

And despite all their tuna-based millions, they're beset by infighting & moaning (despite their play-off spot).

Fantastic watching the whining & the fighting amongst themselves on twatter these days!

 

[Harrisblade]

I know that plenty on here think 'we pay our fair share through the gate' but here is a classic example of the madhouse that is football economics:

"In accounts published this morning, Sheffield Wednesday made a loss of £9.8m, up from £4.5m. Operating losses rose from £3.9m to £9.7m over the same period.

However, turnover for the year rose by £7.1m to £22m due to reaching the play off final at Wembley, an increase in the average league attendance from 21,997 to 22,641 and improved revenue generated by the commercial activities of the club."

https://www.insidermedia.com/inside...ire_news_tracker&utm_medium=top_story_article

They have gone for the 'shit or bust' option of promotion at all costs. I wouldn't expect our tunover to be as high as theirs (lower ticket prices) but our wage bill will certainly be lower, even if we buy two or three more players.

We will still end up with a loss but it's likely to be in the low single figure millions rather than £10m at the Massive. As always, they are bigger than us in all they do........

That doesn't sound very good (to me, anyway)
Sales (turnover) up by £15 million, but operating losses (wages,admin) up to £10 million with the total loss on the business also £10 million.
Not sure if this is right, but if you take in £22m and end up with -£10m, haven't you spunked away
£32 million?
Money gone to Chansiri?

Just as light relief:

"An operating loss indicates that a company's core operations are not profitable and that changes need to be made either to increase revenues or to decrease costs. An operating loss is sometimes expected for certain start-up companies which incur high costs in an attempt to grow quickly.

In most other situations, an operating loss is a sign of potential distress at a company. An operating loss can be a particularly dire indicator for a company heavily financed with debt because the company has lost money even before considering interest payments, which may be substantial."

Read more: Operating Loss - OL Definition | Investopedia http://www.investopedia.com/terms/o/operating-loss.asp#ixzz4ZyqIryaf
Follow us: Investopedia on Facebook

 

[Lower Drop Blade]

Their owner is a billionaire. He can afford it.

Is he?

 

[itsinyerblood]

The overall consensus by those who are damned by their S6 loyalties seems to be overly enthusiastic joy at spending what they consider mega amounts on the likes of Rhodes. Good luck to 'em I say, as luck they'll need. There appears to be no balance when it comes to decision making, at least by their supporters, it's all about spending because they can. As anyone with an ounce of fiscal literacy will know, the likelihood of this returning to bite their arses is high. Look at Bolton, their stay at the top table meant they accrued wages, fees, and whatever other financial outlay that goes with attempting to compete, and now this financial weight is dragging the trotters on a downwards spiral that they will struggle to adjust to.

I want United to be a successful team, but at any cost? No thank you, it's not worth the front (another cute term for arrogance) that brings you to the Premiership in the first place. By all means I hope that long-term we do strive to clinch a Premiership place, but only after we've done careful planning with a squad that's good enough and the awareness of what's ahead.

 

[BushBlade]

Are there any clubs in the championship that aren't running at a loss? I'm concerned that after a couple of seasons iof losing money in the championship the Prince might have had enough. He's already lost a fair bit. I don't think he or KM have any appetite to sub us indefinitely in the hope we might one day go up.

I heard recently that Ipswich were losing £6m a year. I don't know if it's true because I heard it on Talksport and they have little inclination to ever check anything but if it is, fuck. They spend very little for a Championship club.

 

[I should coco]

Not sure if this is right, but if you take in £22m and end up with -£10m, haven't you spunked away
£32 million?

That's right. An income of £22m becomes a loss of £10m becasue you have £32m of costs.

Shame that, what with them being such a Massive club and all that.

To get it back to the Blades though, it gives you some idea of what we might be up against next year. Big clubs with deluded foreign owners chcuking money to get to the promised land. I believe it is know as 'financial doping'.

Give it time and there will be plenty on here questioning why McCabe and the Prince don't 'invest' £10m per season to match our city rivals. Only in football is spunking money known as 'investment'.

 

[madeinsheffield]

Takings were also up because they sold the dream and a lot of season ticket holders took out 2 year deals, meaning there will be a big drop in sales come June/July time, especially if they don't go up.

 

[grafikhaus]

The overall consensus by those who are damned by their S6 loyalties seems to be overly enthusiastic joy at spending what they consider mega amounts on the likes of Rhodes. Good luck to 'em I say, as luck they'll need. There appears to be no balance when it comes to decision making, at least by their supporters, it's all about spending because they can. As anyone with an ounce of fiscal literacy will know, the likelihood of this returning to bite their arses is high. Look at Bolton, their stay at the top table meant they accrued wages, fees, and whatever other financial outlay that goes with attempting to compete, and now this financial weight is dragging the trotters on a downwards spiral that they will struggle to adjust to.

I want United to be a successful team, but at any cost? No thank you, it's not worth the front (another cute term for arrogance) that brings you to the Premiership in the first place. By all means I hope that long-term we do strive to clinch a Premiership place, but only after we've done careful planning with a squad that's good enough and the awareness of what's ahead.

I'd agree with much of that. On the one hand, the PL is based on the same type of bribery as the EU. 'You're welcome to join the club, but it will cost you a fortune.' (Oh, and 'most of you will be in debt to support a few at the top') and on the other it's 'Emperor's New Clothes'. No amount of deep-voiced ads. for Super Sunday, Miracle Monday (or Wank Wednesday ) on Sky will disguise the fact that at least half of the teams in the PL are dross. I generally turn off after half of MoTD because, let's face it, who gives a fuck about Bournemouth, Watford, Palace, WBA. After around 3 years in the PL, the novelty of getting beaten (and paying a fortune for the priviledge of watching it) soon wears off. As does the sight of outrageous refereeing decisions to protect the chosen few.

I'd suspect Newcastle fans are enjoying this (successful) season a whole lot more than the misery of struggling last season. The 'spend it, fuck it' model suits Wednesday. They're like the council estate chav who wins the lottery. They're too thick to know what to do with it. Would I want a squillionaire such as Man. City's to buy United out? Not for a second.

 

[1danewhitehouse]

How on earth can they be losing £10million a year and comply with FFP? Surely, if they don't go up this year there will be sanctions?

 

[Sheffsteel]

Only in football is spunking money known as 'investment'.

It always confuses me a little when you hear

Coventry and Charlton fans complaining that their owners are the devil in disguise because they won't invest.
but doesn't invest means "reckless gambling and run up massive debts"? That's what they want
But then when that club is in a situation like Portsmouth, Bolton etc the same fans then have a go at the board for doing what they asked the board to do.

At the end of the day the bottom line seems to be league position

The US owner of Southampton was on the radio yesterday and he was receiving massive praise about
how they are a template to being such a well run club.
Their owner said they work to a budget and try to make a profit every year so this means they sell all their best players because they refuse to meet their wage demands then scour the world fo value for money replacements. They also invest in their Academy and sell off their best players at a profit.

By the looks of it the Southampton owners DO NOT invest and DO NOT gamble
But because they are near the top then their fans are happy always selling off their best players

Take a Sheff Wed as another example.
Their owner doesn't listen to fans, he's put up prices for everything, changed the kit dumping the traditional stripes, Got rid of Owls logo around the stadium replacing it with his name, overspending buying luxury players they don't need. It all seems a big vanity project for Chansiri but believe or not many Wednesday fans think he's great.

The only reason is because they lie in the playoffs.
But if they never get promoted and run up debts similar to Bolton then after the event many Owls will be wanting sympathy for their Thai owner being foreign, having no knowledge of football and ruining their club.

 

[itsinyerblood]

I'd agree with much of that. On the one hand, the PL is based on the same type of bribery as the EU. 'You're welcome to join the club, but it will cost you a fortune.' (Oh, and 'most of you will be in debt to support a few at the top') and on the other it's 'Emperor's New Clothes'. No amount of deep-voiced ads. for Super Sunday, Miracle Monday (or Wank Wednesday ) on Sky will disguise the fact that at least half of the teams in the PL are dross. I generally turn off after half of MoTD because, let's face it, who gives a fuck about Bournemouth, Watford, Palace, WBA. After around 3 years in the PL, the novelty of getting beaten (and paying a fortune for the priviledge of watching it) soon wears off. As does the sight of outrageous refereeing decisions to protect the chosen few.

I'd suspect Newcastle fans are enjoying this (successful) season a whole lot more than the misery of struggling last season. The 'spend it, fuck it' model suits Wednesday. They're like the council estate chav who wins the lottery. They're too thick to know what to do with it. Would I want a squillionaire such as Man. City's to buy United out? Not for a second.

Agree with much of that graf. I tend to be addicted on the 'lesser' teams, mainly because I like to watch those players who shine amongst lesser mortals. It tells me that there's enough talent floating between clubs - WBA's Brunt, ex-Wendy I know, but a decent player all the same - that if the financial will is there there are players who could be had that enable a club to have the quality they'll need. By the time we get there there'll be a different set of players, but the same issues will exist.

I agree that the Championship does offer reasonable football, but being one step away from the Premiership will eventually be too much to resist. Of course the getting there is the problem. We've struggled for six seasons in this division, so no holding of breath when we're in the Championship, it may take longer than any of us can imagine if our ambition is to get promoted.

 

[Alfreton14Blade]

Let the superb traditional football club (with an excellent, down-to-earth, home-grown manager) that is Burnley be our inspiration, for how to succeed by doing things properly.

Controlling costs, not paying over the odds, not getting giddy what the money starts rolling in. Also, vitally, when they've sold very good players over recent years, as they've had to (e.g. Danny Ings), they've replaced them with very good players (e.g. Andre Gray).

http://swissramble.blogspot.co.uk/2016/04/burnley-seasons-in-sun.html

 

[Sean Thornton]

Takings were also up because they sold the dream and a lot of season ticket holders took out 2 year deals, meaning there will be a big drop in sales come June/July time, especially if they don't go up.

I'd expect that money not to be included in turnover as its for a future accounting year and would normally be shown as a balance sheet accrual. Normally.

 

[Sheffsteel]

How on earth can they be losing £10million a year and comply with FFP? Surely, if they don't go up this year there will be sanctions?

That seems that's why the £7 million rising to potential £10 million transfer of Jordon Rhodes is only a loan for this season. The trasfer will go over to next years finances.

Agree Wednesday are risking it and need to get promoted this year or next
Otherwise they will be in trouble and no doubt want sympathy (like Coventry and Charlton fans).

 

[Scooter_mcgavin]

All this proves to me, is what I always thought.....

The stupid piglets are actually footing the bill for the overspending on average players, they even admit as much themselves.

One of my mates said he would have no qualms at spending 50 quid a match if it meant getting better players in and it seems his views are joined by 22k other stupid idiots.

Chansiri is totally screwing the fans over....and they're happy to bend over for it lol

 

[Sheffsteel]

Let the superb traditional football club (with an excellent, down-to-earth, home-grown manager) that is Burnley be our inspiration, for how to succeed by doing things properly.

Controlling costs, not paying over the odds, not getting giddy what the money starts rolling in. Also, vitally, when they've sold very good players over recent years, as they've had to (e.g. Danny Ings), they've replaced them with very good players (e.g. Andre Gray).

http://swissramble.blogspot.co.uk/2016/04/burnley-seasons-in-sun.html

The owner of Southampton was on Talksport yesterday saying they are run to the same business principles stated above. The panel praised them for being such a well run club and a model for every one else.

However dozens of clubs are run to the exact same business principles but withot over spending it inevitably means a struggle. Let's be honest most fans don't want their club being run like a Burnley, Southampton or Sheff Utd. It's ironic that Coventry and Charlton are being run as a business so are unlikely to go bust unless everyone stops going. As their matchday income reduces (due to lower gates) then the owners of Cov and Charlton simply cut the player budget. This leads to lower crowds, so their players budgets will be cut again next season.

They would prefer a club run like Portsmouth, Bolton or Sheff Wed
Gamble everything for success and worry about it later.

 

[I should coco]

Takings were also up because they sold the dream and a lot of season ticket holders took out 2 year deals, meaning there will be a big drop in sales come June/July time, especially if they don't go up.

As Sean says, the element relating to future seasons would be held back from this year's accounts (accrued) to count as turnover next year.
From a cash flow point of view however the club can spend the money and they do not have to hold it over. Thus, if they go bust you are another unsecured creditor.

In the same way, paying £9m for a player on a 3 year deal, only £3m is charged as an expense to the profit and loss account.

 

[Esablade]

To put this into perspective a bit and keep a Blades link, check out these two articles on our former manager at Burton:

http://www.burtonmail.co.uk/burton-albion-news/story-29773880-detail/story.html

http://www.dailymail.co.uk/sport/fo...pionship-wage-bill-five-cent-Newcastle-s.html

Their budget is around 5 or 10% of Newcastle's and before promotion they had never spent more than £20,000 on a player...they made a profit of £162,372 when they went up last season with a wage bill of £3,641,823 (including non-playing staff)

 

[I should coco]

The stupid piglets are actually footing the bill for the overspending on average players, they even admit as much themselves.

They are not paying anything like the whole bill though, which is why they lost £10m and Chansiri is funding this loss.

One of my mates said he would have no qualms at spending 50 quid a match if it meant getting better players in and it seems his views are joined by 22k other stupid idiots.

Their wage bill is that high that even with greatly increased ticket prices, they still have a £10m shortfall. Your mate would need to be spending a fair chunk more than £50 per game if Chansiri left and they kept the same playing squad. Simply put, a £10m loss spread over 23 games and 22k porcine fans, is an average of £ 19.76 each on top of what they currently pay.

 

[northsomersetblade]

The price of tuna is going up

 

[Bladesman]

All this proves to me, is what I always thought.....

The stupid piglets are actually footing the bill for the overspending on average players, they even admit as much themselves.

One of my mates said he would have no qualms at spending 50 quid a match if it meant getting better players in and it seems his views are joined by 22k other stupid idiots.

Chansiri is totally screwing the fans over....and they're happy to bend over for it lol

My mate stopped going, he couldn't justify the cost.

From what I hear it has priced out some genuine Wednesday fans. Some of those fans just go to the away matches now.

 

[Scooter_mcgavin]

Whilst I agree that he's still footing the bill, he's making sure the fans foot a decent proportion of it. As has been pointed out, most clubs run at a loss, so he's minimising his losses by offloading it onto the stupid, over expectant, infatuated idiots.

 

[Scooter_mcgavin]

Sorry coco, was supposed to quote you in there too lol

 

[Alfreton14Blade]

The owner of Southampton was on Talksport yesterday saying they are run to the same business principles stated above. The panel praised them for being such a well run club and a model for every one else.

However dozens of clubs are run to the exact same business principles but withot over spending it inevitably means a struggle. Let's be honest most fans don't want their club being run to a tight budget like a Burnley, Southampton or Sheff Utd.

They would prefer a club run like Portsmouth, Bolton or Sheff Wed
Gamble everything for success and worry about it later.

Yeah, you're probably right. But grossly overspending doesn't guarantee success either, just makes it more likely & raises expectations accordingly.

Vital to the Burnley/Saints/Blades way though is having the right manager, not only good in himself, but the right fit for the club & its ethos too. And, in Southampton's case, the ability & wherewithal to pick another right manager when the initial one leaves. Maybe, add Swansea to the list too (until recently - although with Clement, they seem to have found the right fit again.)

 

[Revolution]

To put this into perspective a bit and keep a Blades link, check out these two articles on our former manager at Burton:

http://www.burtonmail.co.uk/burton-albion-news/story-29773880-detail/story.html

http://www.dailymail.co.uk/sport/fo...pionship-wage-bill-five-cent-Newcastle-s.html

Their budget is around 5 or 10% of Newcastle's and before promotion they had never spent more than £20,000 on a player...they made a profit of £162,372 when they went up last season with a wage bill of £3,641,823 (including non-playing staff)

We were generous enough to loan them a good player...

 

[UnitedBlade]

How on earth can they be losing £10million a year and comply with FFP? Surely, if they don't go up this year there will be sanctions?

Because you are allowed to make a loss of up to £13M a year for 3 years (i.e. A max of £39M).

The regulations change again next year but I bet the thresholds increase. So rich blokes can chuck £40M into a gamble of getting into the Premier League. Fine if you get there and you then have the massive cushion of £100M parachute payments. Not good if they fail and piss off leaving supporters with a ruined club.

Wednesday are fine if they keep qualifying for playoffs or god forbid get promoted but not fine if they start failing.

Wages went up 44% and are 90% of turnover. Chansiri's "loans" are up to £17M. Will be a worry if he has another couple of years of this.

Let's hope he fucks it up.