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Paul101

Our Rich friends down south

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It turns out our rich friends down south want the board to account for every penny

https://www.twtd.co.uk/forum/421125/so-none-of-it-invested-into-the-first-team-then./#24

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Steady, old fellow.... you''ll be upsetting some of bin folk who frequent this forum (and some of our own which is often the case)Still it''s nice to see our usually ''not too bright'' neighbours are finally questionng their club and checking that the numbers don''t add upThis has been all too obvious to anyone who bothered to lookUnfortunately too many of these simple folk have notAfter all, Evans is an hinvestor innit, pumping money in ... bah blah blah

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I think that you are taking a bit of a risk criticising investors in this forum Paul. It is a well known fact on here that having an investor means that you are "modern" and able to keep all your players who attract premier league interest as you follow a smooth path to inevitable promotion, because investors are happy to pour their money into a club indefinitely without seeking any reward for it.Clearly you know nothing of modern football.

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But I though it was only foreign investors that were bad?

There seems to be a lot of people who would only be happy if Delia sold out to somebody local... isn''t that what Evans is?

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All these investors/benefactors owning a club are only in it for money apparently.

The foreign ones are all money laundering crooks or asset strippers, the local ones are all chancers.

Don''t you realise the only sensible ownership model is one where your club is used as an inheritance gift?

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By definition, investors, whatever their nationality, take a financial interest in a club with the aim of taking money out of the club in the long run.Benefactors are harder to come by, and usually have some form of local connection. Whilst this form of ownership control may be preferable to someone simply looking to profit from their involvement, it is not the guaranteed success that some seem to think it is. You only have to compare our (i.e. Norwich''s) fortunes with Ipswich''s in recent years to see this. It''s hardly been strong supporting evidence for the anyone but Delia crew, with, in some but not all cases, a simplistic understanding of finance and investment.

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The thing is we can both cherry pick examples.

You say ''Coventry'' I say ''Bournemouth, you say ''Orient'' I say ''Watford'' etc etc.

Each individual case has to be taken on their own merits and that includes both our current ownership and our owner-in-waiting.

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[quote user="king canary"]

You say ''Coventry'' I say ''Bournemouth, you say ''Orient'' I say ''Watford'' [/quote]Mmm, catchy. Can we work this into a proper song in time for Saturday?

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Yes, what you say is true KC. But I would add to that:1. Carrying huge amounts of debt on your balance sheet makes a club very vulnerable if things don''t go as hoped for.2. There are far more clubs with external investment that are not promoted than are.3. Several of the clubs that have had a sh*t or bust go at promotion which did not work out, have reverted to a sustainable model in the long run - but with tens of millions of pounds of debt.4. In the long run, even those clubs who enjoy success with investors have struggled to defy the laws of football gravity - following this, those with the heaviest debt, find it hardest to readjust. It just doesn''t make financial sense in the long run. It''s just a "bubble" - as with all bubbles, it may be ok if you get in early and get out in time. People lose their heads when they think there''s easy money to be made, but things come down with a crash when common sense reasserts itself.

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You''re of course right that things can go wrong.

Yet I''m not sure that means we have to settle for a model that makes success extremely unlikely. The inconvenient truth is not that we''re not able to keep up with the likes of Chelsea or Man City, it is that (once we''ve steadied the ship and got to our ''self funded state'') is that we''ll be out bid by clubs like Derby, Fulham, Villa, Sheffield Wednesday and possibly even Barnsley.

Even one of the worst run clubs in the last 20 years (Portsmouth) have managed to rebound and will possibly be playing at the same level as us next season.

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[quote user="Rogue Baboon"]So its better to have no money and no chance of promotion than money and a chance at promotion?[/quote]Neither is true. We have above average turnover for the championship and no external debt to finance. Our natural position should be in the top half of the championship and if we get things right have every chance of promotion. The same as it ever was...

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''We have above average turnover for the championship and no external debt to finance''

And how much longer do you really expect that to be the case?

We have seen just by the amount of empty seats that ticket sales will fall, to make up for that the club has been lowering ticket prices so we won''t be able to rely on that.

Player sales are ok, but eventually you run out of players to sell, plus players that are sold need replacing

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Our turnover is above average but as mentioned before our wage budget will probably need to sit at about 60-70% of that turnover tops.

So would a wage budget of £18m (assuming a turnover of £30m) be particularly competitive at this level?

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[quote user="king canary"]Our turnover is above average but as mentioned before our wage budget will probably need to sit at about 60-70% of that turnover tops.

So would a wage budget of £18m (assuming a turnover of £30m) be particularly competitive at this level?[/quote]depends on the players, not the budget

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Well yes, but the budget obviously affects the type of players we can get.

Small budgets mean our margin for error gets even smaller, so everything has to be spot on.

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[quote user="king canary"]Well yes, but the budget obviously affects the type of players we can get.

Small budgets mean our margin for error gets even smaller, so everything has to be spot on.[/quote]maybe that''s what''s been needed

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I would argue that the last thing you would want to cut is our Cat 1 academy. If you accept that the current financial model is the most sensible, and that we will be operating under it for the foreseeable future then we need to be unearthing more players of the ilk of the Murphys, Ben Godfrey, Jamal Lewis, nurturing them and selling them for large sums. Equally important is investment into the scouting network, again to increase our chances of snapping up "hidden gems"......

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Exactly king.

Let’s just say our turnover is 30million. Can we afford to put 10% of our turnover into the academy? Especially when the playing squad is thin at best and we cannot afford to sign players?

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[quote user="Rogue Baboon"]Let’s just say our turnover is 30million. Can we afford to put 10% of our turnover into the academy?[/quote]Jacob, Josh, Jamal. As long as the academy is producing, it will pay for itself.

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High wage bills are no guarantees of success - often they are bloated by unsuccessful signings that the club can''t get off the books as we know. It''s another reason for the young and hungry model.Nottingham Forest are a good example - they had a wage to turnover ratio of 173% for 15-16 - the last figures I have but they have hardly pulled up trees! If we spent only 18million on wages, this would be below average for the championship but I suspect that the plan is to subsidise the wage bill through player trading, as a lot of clubs do. I also hope that we move away from the idea of buying "established players" who have peaked and go no further and just sit on high wages. I accept that "buying well" is hard but hope that the structure put in place will facilitate this. It is certainly a more sustainable model than the sh*t or bust model of "going for it" and sitting with tens of millions of debt on the balance sheet. Thank goodness that we dodged McCormick who so many on this board were desperate for last year!

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I don''t know, he''s barely kicked a ball for us.

The scouting of younger players seems to have gone better than the scouting of seniors though.

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