Championship bubble

[FMBlade1]

Championship a 'bubble waiting to burst'

BBC Radio 5 Live's Investigations Unit explores the financial picture of the Championship - with one former chairman saying "thank God we're out".

www.bbc.co.uk

Thank **** we're not in that league for now

Interesting that we made a loss of £2 million. The other team in Sheffield are in big trouble

 

[Houston_Blade]

If we're not in that league it probably means it's not Blades related and therefore the posts already in the 'other football' area would be enough

 

[Sheene7]

South Barnsley!

 

[BLADES1988]

Well they wouldnt be in trouble if they wernt spending stupid MUNNEH.

 

[CityInPeace]

Mental League financially- the most mental! Has been for some while.

We actually made a £12m profit last year- but that was only after selling players for £38m profit on transfers! Your neighbours should take note- our profit on that enabled by the sale of players was very similar to their 'sale' of something quite a bit less honourable. Sell and reinvest some, sell and reinvest some- seems the only real way to run a tightish or at least acceptable ship in the Championship- certainly if towards the top end. Reasonably low running costs help though- some clubs seem to have these- such as Preston and seemingly in 2017/18, yourselves?

 

[Sheffsteel]

That video is like listening to the wife of someone who has gone on a credit card spending rampage.
The wife has been on several cruises, bought designer clothes and drives a fancy car.

Now they are being told they are £30,000 in debt.
In the real world they should have the book thrown at them for spending money they don’t have
but instead Wednesday fans are wanting sympathy for being held back by FFP. which is in effect a credit card limit.

Imagine the world with no credit card limits and anyone could accrue as much debt as they wanted? It would be chaos.

The answer is
1: All owners should be forced to wipe off any personal debts attached to a club or the owners are forced to give a large security bond to the EFL before taking over.
However this won’t ever be voted in by club owners. Chansiri isn’t investing in SW because of any affection for their club. He’s hoping to make profit...he’s speculating to accumulate....he’s at the roulette table.... put millions on red and lost.....but instead of calming down and developing a long term strategy he’s come back to the roulette table with someone else’s money (5 year advance season ticket sales) and lost again. He‘s getting himself deeper into debt and doesn’t seem to be learning.

2: Another option Is to do what the German league do. They also have a version of FFP but the league has their own auditors that continuously check every clubs finances through the year. I believe Steve Gibson (the Boro chairman) suggested this last year but the clubs rejected it.

The real arguement that SW fans have is the perceived unfairness is Sky money which is roughly

Every league 2 club receives £500,000 per season from Sky
Every league 1 club receives £1 million per season from Sky
Every Championship club receives £6 million per season from Sky
Every Premier League club receives £120 million per season from Sky.

The real issue is that there are 2 separate organisations, the Premier League and the EFL.
The PL league brings in massive income from all around the world so those clubs deserve a share of the profits.
The EFL is a bit like the Scottish league....in that viewing figures/ publicity are very low, so economics suggest rewards for EFL clubs should also be low.

There’s also the factor of a weird logic in the SW fan argument.
Remember the EFL work for the clubs and enforce the rules agreed by the club.
So if 1 club is caught cheating the rules......then you can‘t after the event...use the excuse that you cheated because the rules are unfair.

 

[Sheffsteel]

Another point that is quite bizarre.
There are calls from SW fans for the EFL “to do something to stop the Championship bubble from busting”.

The simple solution is to be tougher on clubs that are effectively cheating the other member clubs by overspending.
If the EFL give SWFC a 21 point deduction then it will benefit English football by showing that the EFL won’t tolerate clubs accruing larger than allowed debts.

Remember FFP is still not a level playing field because it’s based on profit, so it allows the bigger club with higher incomes to still pay bigger wages.
All FFP was designed for was to protect fans from Irresponsible reckless owners chasing the dream of the PL riches.

Before FFP loads of club went into admin and were threatened with going bust. Since FFP going into admin has become very rare.
The future of the game is more important than individual clubs who can’t gain promotion.
Looking at the facts FFP has been a success, in fact one could argue that allowing clubs to overspend by 30 million over 3 years is too high.

 

[Balham Blade]

Mental League financially- the most mental! Has been for some while.

We actually made a £12m profit last year- but that was only after selling players for £38m profit on transfers! Your neighbours should take note- our profit on that enabled by the sale of players was very similar to their 'sale' of something quite a bit less honourable. Sell and reinvest some, sell and reinvest some- seems the only real way to run a tightish or at least acceptable ship in the Championship- certainly if towards the top end. Reasonably low running costs help though- some clubs seem to have these- such as Preston and seemingly in 2017/18, yourselves?

Our low running costs were based on a low wage bill - high by League One standards when we came up but bottom 6 by Championship standards. Keeping the nucleus of players from L1 together and not bringing in new signings on silly money allowed us to keep the costs down in 17/18 and 18/19. The figures for 2018/19 (when they come out) will be skewed by any promotion bonuses.

On a separate note:

One thing that's interesting (for me) is that the profile of the players we're signing on permanent deals has changed over the past four years. We've always been about picking up the best players from the league below but this season the average age has dropped and therefore theoretical resale value has risen. Players in bold made started more at least 50% or appeared in at least 75% of the games in the season they signed and can be considered first team players.

16/17 - average age 26.8 (first team players 27.0)
Synopsis - complete squad overhaul
Summer (average age 26.9): O'Connell 22, Lavery 24, Fleck 25, Moore 25, Hussey 27, Lafferty* 27, Wilson 27, Wright 30, Clarke 31, Duffy 31
Winter (average age 26): Carruthers 23, Hanson 29
*loan made permanent in January

17/18 - average age 26.4 (first team players 25.5)
Synopsis - freshened up for post-promotion season with good young players from the division(s) below but also added some experience
Summer (average age 26.5): Lundstram 23, Thomas 23, Baldock 24, Heneghan 24, Stevens 27, Ched Evans 28, Stearman 30, Donaldson 33,
January (average age 26): Lee Evans 24, Leonard 25, Holmes 29

18/19 - average age 27.3 (first team players 28.0)
Synopsis - surgical additions of quality experienced players to secure promotion
Summer: Bryan 22, Egan 26, Washington 26, Norwood 27, McGoldrick 31, Cranie 32
January: no permanent signings

19/20 - average age so far 26.0 (skewed by Jagielka - without whom it's 24.4; first team players 23.3)
Synopsis - building for the future
Summer: McBurnie 23, Mousset 23, Verrips 23, Robinson 24, Osborn 25, Morrison 26, Freeman 27, Jagielka 37

 

[Canterbury Blade]

Didn’t see many pigs crying into their beer, whinging about finance and trying to change the law when they were sploshing the dosh and spunkin the munneh on pricey non proven no marks.. Mind the Gap grunters I think it’s going to get bigger!!!

 

[Blade56]

Championship a 'bubble waiting to burst'

BBC Radio 5 Live's Investigations Unit explores the financial picture of the Championship - with one former chairman saying "thank God we're out".

www.bbc.co.uk

Interesting that we made a loss of £2 million. The other team in Sheffield are in big trouble

They made a £2.6 million profit all credit to them

 

[GymClassHero]

If we're not in that league it probably means it's not Blades related and therefore the posts already in the 'other football' area would be enough

Yawn

 

[bromtom]

They made a £2.6 million profit all credit to them

Thanks to a D Taxi Delorean.

 

[JPBrods]

1. Get to Championship
2. Spend within your means
3. Wait for everyone else to go pop
4. ...
5. Lap up promotion for nowt as everyone else gets huge points deductions and has to get rid of all their expensive players

 

[Harry's Game]

This narrative the Pigs (and a few others) have that Parachute payments should be scrapped as it’s a reward for failure is the most ridiculous argument ever as it ignores the fact that you have to actually GET promotion first.

Its a reward for success and helps clubs to build a platform for development if used wisely (see Burnley)

 

[Beans]

This narrative the Pigs (and a few others) have that Parachute payments should be scrapped as it’s a reward for failure is the most ridiculous argument ever as it ignores the fact that you have to actually GET promotion first.

Its a reward for success and helps clubs to build a platform for development if used wisely (see Burnley)

It also ignores that plenty of teams have got promoted without them in the last few seasons, us included of course. Parachute payments have been around for 13 years and are no guarantee of success - just look at the three relegated teams last year, or this year. WBA made the playoffs last year, probably only one relegated team will make it this year (Fulham), but they're not going to finish anywhere near the top two.

"Reward for failure" is utter nonsense. It's your reward for getting promoted, just spread out over a longer period. Try getting promoted and see if you think it's unfair then...

 

[BushBlade]

Sharpe is glad to have got rid of Wigan because his grandad couldn’t afford to subsidise them at around £10m a season. Other owners are happy and able to do so. So when the report talks about ‘losses’ the only people losing are the owners that keep pouring money in.
So, an owner has a simple choice - subsidise the club, or cut to your length of cloth.
And like any business, just pumping money in won’t guarantee success, you have to improve working practices too, like recruitment, coaching, the basics.
There is enough historical data available for any potential owner to assess exactly what they’re getting into. If a potential owner doesn’t understand the risk, the potential levels of loss and what is required to turn a club round, then he or she is an idiot and it’s very difficult to protect against rich idiots.

 

[Sheffsteel]

This narrative the Pigs (and a few others) have that Parachute payments should be scrapped as it’s a reward for failure is the most ridiculous argument ever as it ignores the fact that you have to actually GET promotion first.

Its a reward for success and helps clubs to build a platform for development if used wisely (see Burnley)

The financial gap between the PL and Champiomship has been growing for years and I agree it creates all sorts of potential problems.

The teams that are relegated from the PL desperately need some financial protection otherwise they might go bust.
A solution given in the early days was to create a PL2 with no relegation/ promotion to the EFL and give PL2 teams more money,

This was never agreed by the PL clubs however an alternative solution was parachute payments to soften the blow of having to pay out massive contracts.
Parachute payments was voted in as the best solution to protect their clubs and
a big positive is that it also encourages clubs that are promoted from the Championship to dish out big player contracts in an attempt to be competitive.

Without parachute protection most promoted clubs would struggle to attract any decent players as they would never join if relegation clauses were mandatory.
This would make the image of the PL suffer when promoted clubs are thrashed 4-0 every week and ending up with 20 points at the end of the season.

People seem to forget that the PL and EFL work for the clubs, major decisions need to be democratically agreed.
Parachute payments and FFP aren’t designed to benefit or punish individual clubs. They are a set of rules agreed before the competition starts.
They were brought in to protect the image and integrity of the league, that’s why the clubs owners voted to agree them.
FFP also allows the bigger clubs a slight advantage as they are allowed to spend more then smaller clubs.

 

[Grizzly blade]

The solution is to have more stringent controls coming in every year for several years until you can’t make losses at all.
Plenty of warning, clubs would have to plan for it accordingly.
Wages across all football league clubs would have to fall, contracts would have to include relegation clauses, and regardless of what happens elsewhere it’s likely the use of academy players will have to increase.

That would have to be an improvement for the game overall.
Yes, those clubs with bigger incomes would have an advantage, but that’s always been the way anyway. It would be up to clubs to increase revenues and attract the fans!

 

[boss hog]

I watched the Derby piggies match the other night and my conclusion is there are alot of very very average players getting ridiculous money,draining the life out of the clubs who are stupid enough to pay em.
Both teams had rich men playing who didn't give a fuck.

 

[Balham Blade]

It also ignores that plenty of teams have got promoted without them in the last few seasons, us included of course. Parachute payments have been around for 13 years and are no guarantee of success - just look at the three relegated teams last year, or this year. WBA made the playoffs last year, probably only one relegated team will make it this year (Fulham), but they're not going to finish anywhere near the top two.

"Reward for failure" is utter nonsense. It's your reward for getting promoted, just spread out over a longer period. Try getting promoted and see if you think it's unfair then...

You got me thinking here Beans so I did a bit of research. Since the parachute payments came in, 26 clubs have been relegated a total of 36 times (Hull lead the way with three demotions). Clubs have been promoted back within their parachute payment period 11 times - roughly 30%. The vast majority of those promotions came in the first year of receiving the payments (8/11) - the only sides to get back after spending one season back in the Championship but still getting parachute payments were Fulham and Cardiff in the fourth year of four (relegated 2013/14, promoted 2017/18) and Villa last season.

The system was changed in 15/16 so teams spending one year in the top flight get 2 years parachute payments while more 'established' clubs get three years. Since then, only two of the 9 clubs relegated have been promoted back up and one of those (Villa) snuck up through the play-offs in the last season of payments.

Newcastle are the only side to have been promoted within their parachute payments twice. Villa, Fulham, West Ham and Cardiff have all done it the one time they had chance to.

I'm not including last season's relegated clubs in the table below as they've not had chance to get promoted yet.

 

[BushBlade]

The solution is to have more stringent controls coming in every year for several years until you can’t make losses at all.
Plenty of warning, clubs would have to plan for it accordingly.
Wages across all football league clubs would have to fall, contracts would have to include relegation clauses, and regardless of what happens elsewhere it’s likely the use of academy players will have to increase.

That would have to be an improvement for the game overall.
Yes, those clubs with bigger incomes would have an advantage, but that’s always been the way anyway. It would be up to clubs to increase revenues and attract the fans!

So no owner would be allowed to invest a penny in improving a club?

 

[Sharp as a blade]

You got me thinking here Beans so I did a bit of research. Since the parachute payments came in, 26 clubs have been relegated a total of 36 times (Hull lead the way with three demotions). Clubs have been promoted back within their parachute payment period 11 times - roughly 30%. The vast majority of those promotions came in the first year of receiving the payments (8/11) - the only sides to get back after spending one season back in the Championship but still getting parachute payments were Fulham and Cardiff in the fourth year of four (relegated 2013/14, promoted 2017/18) and Villa last season.

The system was changed in 15/16 so teams spending one year in the top flight get 2 years parachute payments while more 'established' clubs get three years. Since then, only two of the 9 clubs relegated have been promoted back up and one of those (Villa) snuck up through the play-offs in the last season of payments.

Newcastle are the only side to have been promoted within their parachute payments twice. Villa, Fulham, West Ham and Cardiff have all done it the one time they had chance to.

I'm not including last season's relegated clubs in the table below as they've not had chance to get promoted yet.

View attachment 66506

I'd be interested to know how many teams that have previously received parachute payments went on to get relegated before they were promoted.

Us, Sunderland, Portsmouth, Blackpool off the top of my head?

 

[Grizzly blade]

So no owner would be allowed to invest a penny in improving a club?

improving what?
If its players then yes, provided they can raise the income to pay for them and afford them long term with their income. Loans to the club in the way a bank may loan is fine, with interest and a repayment term, assuming the club can service the loan within their income. Of course clubs can also raise cash from sales of players they have developed and then reinvest the money into the wider team. That’s also investment is it not?
Investing in property and facilities is different, it’s adding value to something, raising the value of the asset and will therefore add balance to the books. This can be done by way of mortgage as well rather than an owner.

personally don’t see the issue with this, it’s how it used to be done. Owners didn’t throw millions into a club to lose it, quite the opposite.
there needs to be some balance brought in so that all the money in the game isn’t just thrown at players and agents, but invested in the game as a whole and those that pay their money every week to watch it.

 

[BushBlade]

improving what?
If its players then yes, provided they can raise the income to pay for them and afford them long term with their income. Loans to the club in the way a bank may loan is fine, with interest and a repayment term, assuming the club can service the loan within their income. Of course clubs can also raise cash from sales of players they have developed and then reinvest the money into the wider team. That’s also investment is it not?
Investing in property and facilities is different, it’s adding value to something, raising the value of the asset and will therefore add balance to the books. This can be done by way of mortgage as well rather than an owner.

personally don’t see the issue with this, it’s how it used to be done. Owners didn’t throw millions into a club to lose it, quite the opposite.
there needs to be some balance brought in so that all the money in the game isn’t just thrown at players and agents, but invested in the game as a whole and those that pay their money every week to watch it.

If its players then yes, provided they can raise the income to pay for them and afford them long term with their income.

Which is what they’re effectively doing now. They’re spending more than their income and the owners are covering the difference.

 

[Niceguyeddie]

Aren't parachute payments just the money you would recieve up front anyway but held back to help you pay the wages if you go down ?

So if they were scrapped you'd still get the share of the tv money you were entitled to anyway

 

[Balham Blade]

I'd be interested to know how many teams that have previously received parachute payments went on to get relegated before they were promoted.

Us, Sunderland, Portsmouth, Blackpool off the top of my head?

You're missing Charlton, Blackburn and Wolves.

Sunderland and Wolves off the top of my head managed to get relegated while receiving PPs.

 

[sjl]

Mental League financially- the most mental! Has been for some while.

We actually made a £12m profit last year- but that was only after selling players for £38m profit on transfers! Your neighbours should take note- our profit on that enabled by the sale of players was very similar to their 'sale' of something quite a bit less honourable. Sell and reinvest some, sell and reinvest some- seems the only real way to run a tightish or at least acceptable ship in the Championship- certainly if towards the top end. Reasonably low running costs help though- some clubs seem to have these- such as Preston and seemingly in 2017/18, yourselves?

As a bit of an alternative view; Whilst ever premier league teams are allowed to stock pile any players with a modicum of ability, and rape lower league academy talent, the possibility of a profitable sell on is getting fewer and further between.

 

[Canterbury Blade]

I may be missing something here. But sound financial management seems the answer. Also about choices...

Each year. Me and our lass pick a holiday. We look at the holiday jar and say right that’s Ingoldmells then. Or I go to the bookies and put all our jar on a bet. If it comes in, then Vegas it is. If it doesn’t we have another year doing the garden and the DIY.

Of course, we look at the bright lights in Vegas and think what may have been. But we don’t whinge, cause we knew what we were doing.

Piggies you put your Ingoldmells money on the wrong horse, so now stay at home and get the paint open (possibly the Hammerite rust eater) but please cease the whinge..

 

[Grizzly blade]

Which is what they’re effectively doing now. They’re spending more than their income and the owners are covering the difference.

Yes they are, but there’s no possibility of it ever being repaid. If they say “loaned” a club £20m...at a rate of 5% interest over 20 years then a repayment of £100k a month and could meet the repayments within their incomings then again that’s fine. But if they can’t afford to repay the loan and all it does is make debt grow then it shouldn’t happen.

If that’s a loan to build a new stand with business revenue to cover it then again that’s fine, if it’s £20m to buy 3 players hoping to gain promotion to pay for it then it shouldn’t be allowed as that income is far from assured.

it’s moved away from managers going a good job, coaching a team and building to get somewhere to half wit millionaires/billionaires thinking they can just buy someone else’s hard work and throw em together on a pitch just for shit and giggles. If it fails, sack a manager, but more players and carry on!
That clown at the pigs is the worst of them all, believes he can just do what he wants and rules don’t apply to him. Typical arrogance of his type. Don’t get me wrong, I love it, but would be gutted if he was our owner. Names on shirts, stands, fake companies, interfering...all for his own Ego.

 

[BushBlade]

Yes they are, but there’s no possibility of it ever being repaid. If they say “loaned” a club £20m...at a rate of 5% interest over 20 years then a repayment of £100k a month and could meet the repayments within their incomings then again that’s fine. But if they can’t afford to repay the loan and all it does is make debt grow then it shouldn’t happen.

If that’s a loan to build a new stand with business revenue to cover it then again that’s fine, if it’s £20m to buy 3 players hoping to gain promotion to pay for it then it shouldn’t be allowed as that income is far from assured.

it’s moved away from managers going a good job, coaching a team and building to get somewhere to half wit millionaires/billionaires thinking they can just buy someone else’s hard work and throw em together on a pitch just for shit and giggles. If it fails, sack a manager, but more players and carry on!
That clown at the pigs is the worst of them all, believes he can just do what he wants and rules don’t apply to him. Typical arrogance of his type. Don’t get me wrong, I love it, but would be gutted if he was our owner. Names on shirts, stands, fake companies, interfering...all for his own Ego.

Sorry I’ve got no idea what you’re saying. The owners aren’t (or shouldn’t) expect the money to be repaid, they’re not making loans to the club, or if they are, it’s just an accounting convenience, like the loans McCabe made to us.

They are putting money into the clubs to cover the trading losses the clubs are incurring, which they see as an investment. If they get promoted, they win, if they don’t, they lose. If they can afford to lose, there isn’t a problem. The ones that can’t, like Dave Whelan, are getting out.

There’s an element of sensationalism about these articles. Most of the losses shown in the accounts have been covered by owners like Morris and Chansiri. If they want to chuck their money away, they can. They’re already protected from themselves by P&S but they’re so desperate to throw more money at it they’re trying to circumvent the rules. Other club’s losses will be balanced by future player sales, by the clubs that have to balance their books.
The clubs are only at risk if the owners throw their toys out of the prom and refuse to keep covering the losses, which most are loath to do as it means the club goes into liquidation and they walk away with nothing.