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pete

Championship financial crisis

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Read BBC Sport Football for interesting article regarding how championship clubs chasing promotion to PL are running to financial ruin.

https://www.bbc.co.uk/sport/football/50674331

See table for finances for 2018/9 where 22 of 24 clubs spent more than they earned except for Norwich and Hull profits of £18m and £23m.

If true why did we need the £24m for maddison at end of that season.

 

 

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52 minutes ago, pete said:

Read BBC Sport Football for interesting article regarding how championship clubs chasing promotion to PL are running to financial ruin.

https://www.bbc.co.uk/sport/football/50674331

See table for finances for 2018/9 where 22 of 24 clubs spent more than they earned except for Norwich and Hull profits of £18m and £23m.

If true why did we need the £24m for maddison at end of that season.

 

 

For 17/18 we needed to run a profit because we lost the parachute payments for 18/19 which meant our income dropped off a cliff the next year and we were stuck with ongoing player wages for contracts like Naismith.  And I'd guess the £18m included some or all of the money for Maddison, otherwise we'd have made a loss and would have had to have a genuine fire sale the next season.

 

Looking back we were incredibly lucky to sell him for £24m which allowed us to assemble a decent squad the next season that won promotion.  Yes we made some incredibly good buys such as Pukki but if we'd had to balance the books by another £24m there's no way we'd have been able to get a squad anywhere near as good.

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But why is it lucky? We were brave enough to outbid the others in signing Madders.

One mans luck is another mans just reward and another mans plans working out.

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2 hours ago, pete said:

See table for finances for 2018/9 where 22 of 24 clubs spent more than they earned except for Norwich and Hull profits of £18m and £23m.

 

 

Just to be pedantic, it was 18 teams that had a loss, 5 that had a profit and Bolton didn’t submit any figures.

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The “parachute payments unfairly benefit relegated clubs” argument is flirted with again, if not explicitly stated. Which is just not true in most cases, because relegated clubs are almost always saddled with debts as a result of trying to stay up in the PL. We may be the exception that proves the rule though IF we go down.

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1 hour ago, nutty nigel said:

But why is it lucky? We were brave enough to outbid the others in signing Madders.

One mans luck is another mans just reward and another mans plans working out.

A fair point but he was a rather eccentric signing by Alex Neil among lots of other players in a similar position and then loaned out, and made a rather surprising breakthrough into the first team under DF. Then he had a significant injury near the end of the season which could have kiboshed any transfer and without selling Maddison no one else would have been saleable for that sort of amount. So elements of good fortune I’d say.

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I don’t see how our scouting system identifying and valuing him correctly, thus outbidding other clubs, is good fortune? Whether Neil played him or not isn’t relevant to whether the club is doing things right with its recruitment of young players.

 

And I would argue the injury thing is more an absence of bad luck than the presence of good luck.

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13 hours ago, nutty nigel said:

But why is it lucky? We were brave enough to outbid the others in signing Madders.

One mans luck is another mans just reward and another mans plans working out.

 

12 hours ago, Nuff Said said:

I don’t see how our scouting system identifying and valuing him correctly, thus outbidding other clubs, is good fortune? Whether Neil played him or not isn’t relevant to whether the club is doing things right with its recruitment of young players.

 

And I would argue the injury thing is more an absence of bad luck than the presence of good luck.

 

Exactly - nothing to do with luck. Players are the club’s assets. Buy cheap with potential, sell for a profit and reinvest. If you come across hard times and your squad is full of 35 year old journeymen you don’t get out of trouble. If it’s full of young exciting players who you’ve helped improve significantly, then you do. 

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17 hours ago, Nuff Said said:

The “parachute payments unfairly benefit relegated clubs” argument is flirted with again, if not explicitly stated. Which is just not true in most cases, because relegated clubs are almost always saddled with debts as a result of trying to stay up in the PL. We may be the exception that proves the rule though IF we go down.

Last time we went down we had spent silly money trying to stay up which left us struggling. Naismith cost around £6m and earned £3m a year so cost us in excess of £15m. This time round we will be in a better position and have saleable assets. Unfortunately we may lose 3 British players and we'll be forced into the home market to replace them. 

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You'd hope this sort of news story would mean people appreciate the approach we've taken this season and why we've done it; and how it could put us in a very strong position longer term.

I mean, it won't. But you'd hope.

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20 hours ago, pete said:

Read BBC Sport Football for interesting article regarding how championship clubs chasing promotion to PL are running to financial ruin.

https://www.bbc.co.uk/sport/football/50674331

See table for finances for 2018/9 where 22 of 24 clubs spent more than they earned except for Norwich and Hull profits of £18m and £23m.

If true why did we need the £24m for maddison at end of that season.

 

 

The three clubs making the biggest losses were the three that went up that year. The three that used their losses to give them the competitive advantage. 

There is the problem. Those three will feel it was worth it. 

 

 

Edited by Graham Paddons Beard

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7 hours ago, Graham Paddons Beard said:

The three clubs making the biggest losses were the three that went up that year. The three that used their losses to give them the competitive advantage. 

There is the problem. Those three will feel it was worth it. 

 

 

Yet two of the three went straight back down, and this season one is currently 11 points off the top two and the other is outside he playoffs. If we go down, are we going to do any worse than that?

If Cardiff and Fulham don’t go back up this year (less so Cardiff financially but still probably both), then where does that leave them? The parachute payments alone surely aren’t enough to cover the sort of wages Fulham must be paying.

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10 hours ago, dylanisabaddog said:

Last time we went down we had spent silly money trying to stay up which left us struggling. Naismith cost around £6m and earned £3m a year so cost us in excess of £15m. This time round we will be in a better position and have saleable assets. Unfortunately we may lose 3 British players and we'll be forced into the home market to replace them. 

Not necessarily. By next season we may have 3 more British players who have come through our youth system who are good enough for a Championship squad. Adam Idah would hopefully be one. 

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9 minutes ago, Thirsty Lizard said:

Not necessarily. By next season we may have 3 more British players who have come through our youth system who are good enough for a Championship squad. Adam Idah would hopefully be one. 

Not sure, but isn’t he Irish?

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19 hours ago, Graham Paddons Beard said:

The three clubs making the biggest losses were the three that went up that year. The three that used their losses to give them the competitive advantage. 

There is the problem. Those three will feel it was worth it. 

 

 

The relevant point here is that those clubs losses were increased, just as NCFC’s losses did last summer, as a consequence of promotion to the Premier League. Contractual promotion bonuses to players and transfer payments bonuses due to other clubs became payable. These bonuses are now typically in the region of £15m as a consequence of promotion.

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This all points to one huge issue, players wage, about time the greedy agents and players had a set of financial restrictions placed on them, the FFP doesn’t go far enough to stop clubs going into big losses.

Set the wage budgets to limit to a maximum of 12 million a year for each club, with not one player able to earn more than 15K a week, it’s still a huge wage for the work they do and will see them live the life of luxury.

Its a no brainier if the authorities really want to control these massive financial issues for all clubs.

Edited by Indy

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1 hour ago, GMF said:

The relevant point here is that those clubs losses were increased, just as NCFC’s losses did last summer, as a consequence of promotion to the Premier League. Contractual promotion bonuses to players and transfer payments bonuses due to other clubs became payable. These bonuses are now typically in the region of £15m as a consequence of promotion.

True , but Wolves made a loss of £57m according to the article and we don't really need telling Wolves splashed the cash to get promoted.  Fulham £45m loss and £39m Cardiff.

 

Interesting for me that QPR and Birmingham both lost £37m, I mean where did that go ?

 

So if we assume the promoted clubs paid out £15m due to promotion bonuses etc, then there were also several Champs clubs that made similar losses without getting close to promotion.

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