The Sun on Sunday and Maddison

[Hairy Canary 704]

My sort?

[kirku 1,332]

The OP''s post indicated there is a £23.5m deficit in the budget, not that we owe that figure.

The petty squabbling and level of pedantry on this board has become ridiculous.

[Parma Ham's gone mouldy 2,220]

http://services.pinkun.com/forums/pinkun-forums/cs/forums/1/3584076/ShowPost.aspx#3584076

Here is a simple breakdown of the £23.5m figure and how it is arrived at. There were multiple finance threads - including a very good one from Purple - earlier in the season outlining the numbers in more detail.

Parma

[Bill 1,788]

[quote user="kirku"]The OP''s post indicated there is a £23.5m deficit in the budget, not that we owe that figure.

The petty squabbling and level of pedantry on this board has become ridiculous.[/quote]

That was the point. Challenging sweeping statements about what players we sell based based on a lie is hardly pedantry - and does also suggest something odd when others attempt to deflect by claiming that lie is somehow merely inaccurate figures.The club does not owe £23.5m and it is incumbent on those who claim it does to show us where in club accounts that it does, or owes any figure deemed similar.

[Badger 2,405]

Thank you for the link Parma. As I understand it,  you suggesting sustainable revenue is £23.5m as per the figures below.PH - "Sustainable Revenues are broadly 25k x £20 average returns per customer x

23 +/- cups + £8m off-field*+ TV = (£0.5m x 23)= £11.5m + £8m+ £4m

Total £23.5m

(Off-field income may not decline if sporting level drops).

"If this is your case, this seems significantly low to me. The shareholder''s meeting gave the following figures for the 17-18 season:Broadcasting 38mGate receipts 9.7mCommercial & media 7.3Catering 4mOther income 0.7mTotal 59.7mWe expect to lose about 31m from broadcasting, which will be the main area of loss, leaving us with 28.7 million. Even a pessimistic 10% drop in ticket sales etc etc would leave us with 26.6 million. On top of that the figures provided reveal that we committed to 8m on player payments "after 2017-18" but expect to receive 10.6 million over the same period. This before the sale of Pritchard.Even without the sale of Madison, which I still expect, our turnover is likely to be nearer 30million that 23.5. The Pritchard money should go some way towards a further smoothing of the transition.What we don''t know is the current wage bill - although as I stated above - it was reported as currently 32 million (how reliable, I know not) with some obvious savings available (Tettey/ Hoolahan) + others that will have to be worked hard at (Martin; Wildshutt; Naismith etc). Things will be tight no doubt, but not quite as desperate as some suggest. A lot will also depend upon the scope for reducing other (non football?) costs, currently standing at 17.4m.

[king canary 7,606]

There is an impoprtant distinction between saying we ''owe'' and seeing we need to ''save'' £23m. Nobody has claimed the former, Parma has claimed the latter.

What we do know is...

The wage bill at the last set of account was £55m

According to the AGM we cut that wage bill by £9m in the summer.

Our TV revenue will drop from £38m (which includes those final parachute payments) to about £7m.

Our income for this season was forecasted at just under £60m.

So some basic maths on what we know seems to suggest...

Our income will be down by £31m (the difference in TV revenue) to about £29m (provided there were not any other sources of income that dropped)

Our wage bill as of September would be around £46m.

This leaves a £17m black hole to be filled.

Now what we don''t know is...

How much money was saved with the incomings and outgoings in January.

How much of the profit made on the summer and winter windows has gone into filling said black hole.

How much we can save with Tettey and Wes out of contract.

How much the wage budget needs to be cut to remain sustainable.

Have at it.

[king canary 7,606]

Oh bloody hell, I go to all that effort and Badger has beaten me to it.

I am a bit skeptical about that £32m figure though- doesn''t really fit with any of the numbers out there.

[PurpleCanary 5,562]

[quote user="Basil Brusque"][quote user="kirku"]The OP''s post indicated there is a £23.5m deficit in the budget, not that we owe that figure.

The petty squabbling and level of pedantry on this board has become ridiculous.[/quote]

That was the point. Challenging sweeping statements about what players we sell based based on a lie is hardly pedantry - and does also suggest something odd when others attempt to deflect by claiming that lie is somehow merely inaccurate figures.The club does not owe £23.5m and it is incumbent on those who claim it does to show us where in club accounts that it does, or owes any figure deemed similar.[/quote]I know it is going to be a mistake getting into this, but as far as I can see no-one on this thread has said the club owes £23.5m or said anything that could reasonably be interpreted that way.

[Badger 2,405]

KC - I don''t know about the £32m wage figure either - I read it last week on a thread but can''t find it now - it was reportedly made at a meeting with the exiled canaries. The 17-18 operation budget gives a figure of £38.9 for Football department costs. There was also an explanation that we had reduced the wage bill by 173K per week with summer trading, which would be nearly 9 million pa, but for all I know, the budget I gave above may have already be adjusted to include this figure.You would have expected some net savings from the January window too.

[king canary 7,606]

Yes, although we have to factor in the potential that Martin, Naismith and Wildschut all return after their loan spells and any savings we made on them were only temporary.

I think the really big question is what level of wage budget can we afford to remain sustainable. £30m income doesn''t mean we can spend £30m on wages. If we decided a 70% wage/turnover ratio is acceptable then we''re looking at getting the wages down to £21m before we''re done cutting.

[Monty13 2,234]

Only way he stays is if he wants to stay, which isn''t out of the question.

If he wants to go to the PL he''s gone, its just a question of how much can we get for him.

[Diane 500]

[quote user=" Badger"]KC - I don''t know about the £32m wage figure either - I read it last week on a thread but can''t find it now - it was reportedly made at a meeting with the exiled canaries. [/quote]

Steve Stone said at the fans groups meeting which I was at, a couple of weeks ago that our wage bill for yr ending June 17 which was £55m  will be £32m  for yr ending June 18, but he''d like it to be reduced further.

[Parma Ham's gone mouldy 2,220]

Here is the breakdown thread for context from ‘Ipswich AGM’

The fact that the estimated revenues for 2018/19 are defined at £23.5million is coincidental to the maths that show net reductions will need to be c£23.5m

As Diane notes, Steve Stone himself has identified this figure.

13/12/2017, 2:31 PM

Parma Ham''s gone mouldy is not online. Last active: 09/04/2018 17:36:37 Parma Ham''s gone mouldy

Top 500 Posts

Joined on 13/11/2003

Posts 1,422

Re: Ipswich AGM tonight

Nutella,

We have higher gates and higher off-field revenues so we can arguably offset those gains against Evans’ £6m pa losses.

Sustainable Revenues are broadly 25k x £20 average returns per customer x 23 +/- cups + £8m off-field*+ TV = (£0.5m x 23)= £11.5m + £8m+ £4m

Total £23.5m

(Off-field income may not decline if sporting level drops).

Recent Wage drops from c£55m to c£36m. Overdrafts and previous loss tbc. Other Operating costs to add.

In the summer costs will need to be cut a net c£23m. This is only an additional c£10m above what cutting wages to the benchmark level alone would require.

Sustainability means all costs fitting within the (say) c£23.5m figure. This can be player sales, wage reductions, sales or cuts of other assets. Any reduction (or increases) in average gates, average spend and off-field revenues would further reduce the sustainable pot.

Reducing squad size, selling players without replacing them, would be an obvious methodology. Increasing reliance on a limited pool of players, encouraging greater reliance on youth system to fill injury gaps. Naturally the limited pool of players will include any existing players that cannot be sold.

Please note that this does not take any account of buying new players, or paying their wages. This new net figure must also be amortised, this requiring equivalent further cuts to the same level to maintain sustainability.

Parma’

Also for context see the excellent ‘Sustaining the Future’ thread:

http://services.pinkun.com/forums/pinkun-forums/cs/forums/1/3557672/ShowPost.aspx#3557672

Selling Maddison may therefore avoid the need to aggressively cut the existing squad to find the necessary c£23m savings. This is an unforeseen and extremely welcome turn of events that can be presented as a Ronaldo-United-to-Real ‘outgrown us’ outcome, camouflaging the reality of what would have occurred without such an unbudgeted (pre season) high value sale.

Parma

Parma

[Parma Ham's gone mouldy 2,220]

Further note the reported £7m overdraft is beyond zero-sum sustainability.

It may be that it can roll over indefinitely, though this is not assumed.

Parma

[Van wink 2,994]

Cheers Parma

[Parma Ham's gone mouldy 2,220]

Again from 2017 further broad brush stroke data that indicates the position and adds context to the workings:

08/11/2017, 8:59 PM

Parma Ham''s gone mouldy is not online. Last active: 09/04/2018 17:36:37 Parma Ham''s gone mouldy

Top 500 Posts

Joined on 13/11/2003

Posts 1,424

Re: Foreign Ownership/Investment

The issue facing us now is not one of Philosophy, but of maths.

Our turnover will drop to around £25m and our playing wage bill will need to drop to (say) not far beyond £20m (from a recent high of £55m).

We can finance immediate losses via player sales, though such players will need to be replaced at some cost unless Academy or U23 players are promoted. Squad numbers are already considered tight, so squad fat has already been trimmed.

If some high earning players cannot be moved on, these will eat heavily into the wage budget. Naismith, Klose, Pinto at £40k p/w= £2m pa = £6m total + Jarvis, Tettey, Hoolahan, Pritchard, Hanley, Jerome, Oliveira at £30k p/w = £1.5m pa = £10.5m = £17.5m already, so such players are largely unsustainable moving forwards.

Pritchard, Oliveira, Murphy and perhaps Klose and Pinto may have sales value, though in the latter cases vultures will know their wages will cripple us after the first couple of jewels are gone. Why will offers then be generous?

Other Championship clubs lose millions every year. It is not clear that we will be in a position to sustain this via input of shareholder funds or a return to bank debts.

Ironically Murdoch’s millions sustained the position of the existing board better than the new structure may. If it is either loss-making beyond even the very short term or suffers a severe drop in competitive sporting level - the market competition is not standing still, but moving in the other direction note - then within a very short timeframe the club may be more vulnerable to a takeover than at any point for almost a decade.

Parma’

The successful embracing of the Tifosy model has allowed for infrastructute spending without incurring external debt. It does however indicate that the commitment to zero-sum sustainability is real.

Living within your revenue-generated means exactly that. It is not that the model cannot be successful in the medium term, rather that the cost-cutting necessary this year will be severe to arrive at a balanced position.

In this context selling a single Maddison to fund c£23m of reductions to balance the sustainable equation is vastly preferable to finding such sums via wage cuts, sales of good (but less valuable) players and further reductions in squad size.

Filling such gaps with Academy players is laudable, in line with philosophy and (new) Capital Investment plans and (predominantly) cost-saving.

Parma

[PurpleCanary 5,562]

[quote user="king canary"]Yes, although we have to factor in the potential that Martin, Naismith and Wildschut all return after their loan spells and any savings we made on them were only temporary.

I think the really big question is what level of wage budget can we afford to remain sustainable. £30m income doesn''t mean we can spend £30m on wages. If we decided a 70% wage/turnover ratio is acceptable then we''re looking at getting the wages down to £21m before we''re done cutting.[/quote]I have looked back as far as 2007 to see what we spent on wages (taking the figure for overall staff costs, which is the one generally used). Because we have been yo-yoing up and down the football pyramid our wages have often been a division out of sync, up or down, with the income we have got, especially given parachute payments. So I could not find an obviously similar season to the one coming in 2018-19.The only time we spent virtually all our income on wages (92 per cent) was trying (successfully) to get straight back up in 2014-15. The lowest percentage (49 per cent) was in the 2011-12 season, when we had PL income and squad that could remember being in League One two years earlier.But perhaps the seasons in the Championship in 2007-08 and 2008-09, when we had been in that division for some time, so with no parachute payments or inherited top-heavy wage bill, give the closest guide. In those two we spent respectively 71 per cet and 75 per cent of income on wages.

[Parma Ham's gone mouldy 2,220]

£16m wage savings identified by Stone + £7m overdraft = £23m

Revenues predicted at c£23m as per working means the above cost reductions must come on top of existing activities.

Therefore: Sale of players + plus reductions in wages must equal £23m

Note the £23m must be a net reduction figure after any new purchases or new wages paid out are included

That would be a zero-sum sustainability position as defined.

Parma

[Bill 1,788]

Blimey, talk about the Emperors clothesWhat a load of muddled headed guff !"Pritchard, Oliveira, Murphy and perhaps Klose and Pinto may have sales

value, though in the latter cases vultures will know their wages will

cripple us after the first couple of jewels are gone. Why will offers

then be generous?"Are we to take this seriously ?The reality is that we had a PL wage bll with one season of parachute payments left 2017-18. It does not take a genious to work out that the wage bill would need to be drastically cut as most of those on PL contracts have gone, and Tettey/Wes are out of contract in June.However money from the sale of Murphy, Dorrans, Howson, Pritchard, Jerome will have gone some way to ensuring there is a cushion to cover any difference between the wage bill that remains in Sept 2018 and the projected income.The notion that Maddison has to be sold to cover some invented loss of £23.5m is nonsense. Maddison will not leave for that reason, as he did not in January. What Parma has done is used guesses to come up with guff that does not fit with how we really stand. Unlike some on here I don''t profess to know either contracts or transfer fees, however I will challenge those who do and thus their fag packet calculations. What I do know however, is what I read in the club''s audited accounts. A shame others on here don''t stick to those figures rather than making up stuff so they can speculate about how bad it all is.

[FenwayFrank 2,459]

👍

[Parma Ham's gone mouldy 2,220]

Not everything can be shared, but a drop from £36m to £20m in wages alone is significant.

This is either achieved paying people less or is made up for via player sales until such high earning players run out of contract.

If there is no Maddison sale, then these funds of net £16m (not just £16m note) have to be found. To put it into context you could simply allow Tettey at £30k p/w and Wes at £30k p/w to leave and not replace them. This would save you £1.5m each per annum, for a total of £3m.

But you need a net £16m according to Stone. You could sell Maddison for £20m, make (say) £15m profit and you are now £2m ahead, though you have no Wes, Tettey or Maddison anymore.

You can however now buy a player for £1m and pay him £20k p/w or two players for £0.5m and pay them £10k p/w.

Parma

[Mello Yello 2,293]

Pritchard departed in January.......if Maddison had also departed in January as well, I''m sure the sale of season tickets may have been affected.....

[BroadstairsR 2,166]

"James Maddison, the highly rated young Norwich City attacking midfielder, is at the centre of a tug of war between six Premier League clubs for his signature.

The 21-year-old has emerged as one of the country’s most promising talents after impressing for Norwich this season en route to being named in the PFA Championship team of the year.

Maddison, who has scored 15 goals for Norwich this term, including a hat-trick in a 4-3 win at Hull City last month, is valued at around £25 million and is attracting interest from a host of top flight clubs.

Tottenham, Arsenal, Everton and newly crowned Premier League champions Manchester City are jostling for his signature. But Southampton and Brighton are also believed to be in the hunt for Maddison, even if their prospects could be damaged if either club suffer relegation to the Championship this season."

THE BIG BOYS ARE IN ON THE RACE THEN:

This thread started with the Sun having his value at £17m and I believe that it was Leicester that were involved.

Yesterday''s Telegraph online now hints at an auction with even Man City involved and £25m seemingly the starting point.

We don''t want to lose him, but if we have to then let''s get the biggest windfall possible.

[Van wink 2,994]

As said on another thread, we should be looking for at least £25 million.

[BroadstairsR 2,166]

If Citeh want him then the sky''s their limit, if only to deny their rivals.

Also, I believe a move to the Manchester club would be our best bet for getting him back on loan for one more season, such is their array of talent.

We just need Man U and Liverpool to be involved and we''ll have the full house of top clubs.

Recognition by Southgate would also add a few bob to the sale.

[Van wink 2,994]

👍

[king canary 7,606]

Any team that signs him and loans him out will want him playing in the Premier League. Another season of Championship football isn''t in anyones interest.

[BroadstairsR 2,166]

I genuinely do not think it will make much difference KC. The Championship is very competitive in it''s own way and offers as much to JM as playing in a struggling PL side fighting off relegation, which is the likely outcome.

Besides, I have always been unhappy with loans between teams in the same league.

[whoareyou? 0]

Regardless of where he ends up next season he needs to be playing football every week. He is guaranteed that here. Hopefully he has some say on where he goes and who he is loaned to.

[king canary 7,606]

Well I''m sure they''ll take your unhappiness into consideration...

And yes it does make a big difference- JM has never played at the top level and needs to prove himself in that league.

If Man City sign him (I doubt they will but you never know) they''ll want him playing at Premier League level, either to prove he can break into there team, or the show he is good enough at this level that they can then sell him on to other Premier League teams. We all already know he can do it in the Championship, there is zero point in him having another season there aged 21/22.