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1 hour ago, Midlands Yellow said:

Undo a button on your 501s. 

image.jpeg

Pop a bung in one's mouth and you'd be airtight......

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6 hours ago, horsefly said:

let's assume we could have offered £50k a week, Villa were offering £80k; would you be happy to lose out on £30k a week? Not only that, Villa have a billionaire owner who for now is spending money like water and building a squad to challenge for European places. We simply are not in that financial league. Farke has been very clear that he would have loved Buendia to stay but the player was very much determined to leave. That's a real ****, but since that's where we found ourselves I for one am glad they got the issue sorted quickly so we have created maximum time to respond to his loss.

I did say admittedly we were still miles off Villa at £50k. I was just trying to expand on why I said the auctioning off of Buendia would’ve been easier to swallow last year than this year. The comparable wages from a PL NCFC and champs NCFC is still obviously a big increase.

Certainly still plenty of time for the sale to be vindicated with some new additions this window.👍

 

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6 hours ago, Badger said:

I've got nothing against Jim, but I'm not sure that he always engages fully in debate. He has made some good points on this thread, but he has also just ignored some very pertinent questions - just a many of the negative posters tend to do.

I asked him repeatedly about his understanding of the impact of debt upon expenditure. I even gave a couple of example (there are others):

1. Watford - £111 million in debt, 78 million to their owners who charge LIBOR+ 5.3% (from memory) and the rest will be more than this.

2. Southampton are in a worse position - again from memory, they have debt of over £100 million including 25 million plus, which they borrowed at about 9.3% and have to pay back in 2025.

What impact do you think that paying this interest and capital back, will have on their overall transfer spending and wages? I've asked several times without answer, and then a few pages later, they become someone to be jealous of again. 

 

I think with sustained PL football it could eventually put us closer to those two sides. Though I can’t imagine our wage bill or transfer budget ever reaching their level. I’m sure we could see ourselves competing as a Newcastle / Burnley financially in the next couple of seasons. 

It’s just that initial getting our foot in the door that we have struggled with. Other clubs are obviously much more willing to live outside of their means, with mixed results. 

Clearly the high amounts of interest expenditure is not a particularly efficient way of operating, but Watford and Southampton appear to still be able to maintain far bigger budgets than us in spite of the interest / debt. So at what what point does it come to a head for them? It certainly didn’t for Watford when they were relegated last year. 

Plenty of clubs appear to be able to continue racking up debt without any real consequence, of course plenty have also faltered and fallen away.

The way we are currently operating ensures we should always be there or thereabouts (well for the foreseeable), with our low risk approach to financing meaning the highs probably don’t go so high, but more importantly  the lows not so low either. It certainly gets no complaints from me anyway 👍

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20 hours ago, king canary said:

What I do understand is that the model we operate under is relatively unique so as fans we may need to learn to 'expect the unexpected' as we'll be doing things a bit differently to  most. However it is still quite jarring when it happens like this, so I'm not surprised people haven't just moved on as @BigFish seems to want.

No disagreement there KC, although the jarring effect rather makes my point. That is caused by the difference between reality and what some posters want reality to be. Easier to change yourself, than change the (football) world.

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7 minutes ago, BigFish said:

No disagreement there KC, although the jarring effect rather makes my point. That is caused by the difference between reality and what some posters want reality to be. Easier to change yourself, than change the (football) world.

I think the point I'm making is the 'reality' in this case is pretty new and unique to us. So you can say it is the way the football world is but I'm not sure I agree- it is the way the Norwich world is. 

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33 minutes ago, king canary said:

I think the point I'm making is the 'reality' in this case is pretty new and unique to us. So you can say it is the way the football world is but I'm not sure I agree- it is the way the Norwich world is. 

Possibly, other posters have pointed out it was pretty unique for a relegated club to hold onto to a player like Buendia. Covid could well be an explanation there.

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6 minutes ago, BigFish said:

Possibly, other posters have pointed out it was pretty unique for a relegated club to hold onto to a player like Buendia. Covid could well be an explanation there.

I know its boring to keep hashing these things out but I also don't think it was that unique. Clubs who go down usually sell some players but not everyone.

There seems to be a narrative gathering that we fought to keep him last season and turned down multiple bids. From my memory there was rumours of interest but never anything that really became concrete. In fact I think @Bethnal Yellow and Green said that his understanding was that Buendia gave an interview about how he wanted to play in the Premier League to try and stimulate interest as clubs hadn't been bidding for him. 

Now it could be that those didn't turn concrete due to us giving signals that we weren't open to selling (which feels unlikely) or us saying we wanted £30m+ and clubs not wanting to pay even close to that (feels much more likely). 

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9 hours ago, Hank shoots Skyler said:

I think with sustained PL football it could eventually put us closer to those two sides (note the two clubs in question were Watford and Southampton). Though I can’t imagine our wage bill or transfer budget ever reaching their level. I’m sure we could see ourselves competing as a Newcastle / Burnley financially in the next couple of seasons. 

Below is a table of the wages spent in 19-20, our last season in the premier league. Even with our young and cheaply assembled squad, our wage bill was only £7 million less than Watford's which was full of players who had been recruited whilst in the Premier League. I would expect after after a few years in the Premier League, ours would exceed theirs. This would be quite affordable to us as we generate more income and don't carry the debt that Watford do. Southampton cannot afford their wages as I will show below.

Image

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6 minutes ago, Badger said:

Below is a table of the wages spent in 19-20, our last season in the premier league. Even with our young and cheaply assembled squad, our wage bill was only £7 million less than Watford's which was full of players who had been recruited whilst in the Premier League. I would expect after after a few years in the Premier League, ours would exceed theirs. This would be quite affordable to us as we generate more income and don't carry the debt that Watford do. Southampton cannot afford their wages as I will show below.

Image

You appear to have missed the disclaimer at the bottom of the graph.

Ours covered 13 months, Watford apparently didn't. That suggests our wage budget was nearer the £82/83m market, putting us £13m lower than Watford.

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9 hours ago, Hank shoots Skyler said:

I think with sustained PL football it could eventually put us closer to those two sides. Though I can’t imagine our wage bill or transfer budget ever reaching their level (Watford and Southampton).

Southampton's revenue was only slightly higher than ours last year and if it had not been for their higher TV revenue because they finished lower than thus, ours would have been higher! They are £100 million in debt, most of it at over 9% pa and due repayment in 2025. This is not sustainable. My understanding is that the MSD loan is already secured against the assets of the club (including the name, I think) - they cannot keep on borrowing - so how do they continue to afford their wages bill? Player sales coming and wage reduction - they are in a similar position in that they have to sell high and buy cheap, but they have to do so with a interest burden of £10 million pa and the need to pay back £80 million in 2025. If we stay up, we could afford to pay similar or higher wages that Southampton (I recall, I think, that the recommended max is about 70% of turnover).

If we had finished higher, we would have overtaken several of the clubs above us + their revenue figures were also higher because of player sales.

Note - the list is made up those club who had published their accounts at the time in places so explaining one or two apparent anomalies

Image

 

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6 minutes ago, king canary said:

You appear to have missed the disclaimer at the bottom of the graph.

Ours covered 13 months, Watford apparently didn't. That suggests our wage budget was nearer the £82/83m market, putting us £13m lower than Watford.

In actual fact the like for like figure is closer than the £7 million I claimed as Watford's wages include 6.7 million for compensation payments to coaches, so their actual like for like wage bill was the same as ours, but yes, was for 13 months, so the 7 million figure I put was about right! If you put every single point of detail in it makes it even more complicated.

The point remains valid - after a few years, with a squad fill of players recruited in the Premier league + looking at our stronger revenues, our wages are likely to be higher than Watford's and affordably so. The negativity is ill-informed.

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1 hour ago, king canary said:

I think the point I'm making is the 'reality' in this case is pretty new and unique to us.

In  what ways is it unique and other than soundbites to manage fan expectation (+ other reasons) what evidence do you have to support this?

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6 minutes ago, Badger said:

In  what ways is it unique and other than soundbites to manage fan expectation (+ other reasons) what evidence do you have to support this?

I think I've been pretty clear about this.

It is unique in that no other newly promoted team has had to sell their best player. 

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12 minutes ago, Badger said:

In actual fact the like for like figure is closer than the £7 million I claimed as Watford's wages include 6.7 million for compensation payments to coaches, so their actual like for like wage bill was the same as ours, but yes, was for 13 months, so the 7 million figure I put was about right! If you put every single point of detail in it makes it even more complicated.

The point remains valid - after a few years, with a squad fill of players recruited in the Premier league + looking at our stronger revenues, our wages are likely to be higher than Watford's and affordably so. The negativity is ill-informed.

You have definitely shown that we are much closer to those teams than I had thought, so fair enough. 

But everything that's been put out into the public from Webber since joining is that we are a club with very limited financial resources, a club which consistently has to go about things differently to other clubs in order to survive, a club which basically accepted a relegation when nearly every other club would've rolled the dice at least a little bit.

The belief that we are out-of-our-depth financially has come from his words, so has he been tapering our expectations somewhat?

And I don't think its negativity in the sense you put it, I was initially stating it as a compliment to Webber and Farke. 

There's plenty of positive posters on here who also think the 18/19 promotion was out of nowhere, that we have been punching way about our financial weight, that we can't really compete on a level playing field with the other prem sides. In fact I would say the vast majority would previously have seen us in this way. 

Its nothing to do with any deliberate negativity. 

Edited by Hank shoots Skyler

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33 minutes ago, Badger said:

Southampton's revenue was only slightly higher than ours last year and if it had not been for their higher TV revenue because they finished lower than thus, ours would have been higher! They are £100 million in debt, most of it at over 9% pa and due repayment in 2025. This is not sustainable. My understanding is that the MSD loan is already secured against the assets of the club (including the name, I think) - they cannot keep on borrowing - so how do they continue to afford their wages bill? Player sales coming and wage reduction - they are in a similar position in that they have to sell high and buy cheap, but they have to do so with a interest burden of £10 million pa and the need to pay back £80 million in 2025. If we stay up, we could afford to pay similar or higher wages that Southampton (I recall, I think, that the recommended max is about 70% of turnover).

If we had finished higher, we would have overtaken several of the clubs above us + their revenue figures were also higher because of player sales.

Note - the list is made up those club who had published their accounts at the time in places so explaining one or two apparent anomalies

Image

 

Looking at that does justify Arsenal and Spurs classing themselves as part of the 'big 6'. I didn't realise that it was such a stark jump in revenue at that point!

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1 hour ago, cornish sam said:

Looking at that does justify Arsenal and Spurs classing themselves as part of the 'big 6'. I didn't realise that it was such a stark jump in revenue at that point!

I take you point, but

1. It is one year - a snapshot - if Arsenal had qualified for the Champions league and Liverpool hadn't etc etc.

2. The lowest of the 6 (Spurs) still have twice the revenue of the 7th team - West Ham.

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1 hour ago, Hank shoots Skyler said:

Its nothing to do with any deliberate negativity. 

Sorry HSS, I wasn't referring specifically to you. Some of the usual suspects have abandoned the thread once facts are put on the table, any you have been quite reasonable in what you have said. (It is a issue of message boards - it is not really a "dialogue" as others are involved).

Webber has talked about this a lot - which is true. I think there are several explanations of this:

1. When he came we were in a far worse position due to the loss of financial discipline in McNally's later period. Discipline had to be restored hence the "cold bath" rhetoric. It is not unusual in the corporate world, when a new CEO sometimes "kitchen sinks" the bad news - i.e. throws everything in.

2. The above is partly an exercise in expectations management - difficult times ahead etc. Again not uncommon in the corporate world - getting shareholders ready for lower dividends.

3. It is also a useful negotiating tactic vis player and wage negotiations - although one that I suspect will become less effective.

4. It might just be me, but I think that are beginning to see a slight change in rhetoric now, compared to 2019. 

To my mind, the key thing is to maintain our discipline now. Despite what some people seem to think, football clubs can't keep borrowing indefinitely and a few chickens are already coming home to roost.

Edited by Badger
Tried to clarify something
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This argument would be academic if we had a stinking rich Chinese owner, which eventually we will all come to realise is the only realistic way for the club to thrive long term 

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1 hour ago, king canary said:

I think I've been pretty clear about this.

It is unique in that no other newly promoted team has had to sell their best player. 

1. That is a very narrow definition of unique - but fair enough.

2. With regards to its accuracy, it does rely to an extent upon pettifogging. I haven't had the inclination to look at all teams, but we already know of several teams that sold their best players before getting promoted, which for some reason, you seem to think is better. On top of this, in the case of Palace and Zaha, they lost him for their return to the Premier League, so it's no better surely?

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Another aspect of "self-sustainability" which I don't think many appreciate or understand is access to cash. A simple sum shows our wages at £85m against income of £120m (both approx), but the TV money, like incoming and outgoing transfer payments, comes in lumps whereas that £85m is pretty regular. Cashflow, as any accountancy student or wannabe business person will know is the absolute driver in any type of sustainability or indeed planned expansion.

The sale of Buendia gave us some much needed early breathing space in the transfer market. 

A stinking rich owner gives almost every other club access to cash which we don't have, whether it's a loan or whether it's a guarantee. That gives them an advantage over us.

That Southampton and Watford (and others like them - Everton for instance will be almost £600m in debt very soon) will struggle to repay their loans is a consideration only if their own specific rich owners are no longer prepared to fund them. 

For us to get anywhere near these clubs in practical terms we would need to build up a cash pile as well as survive for 3 or 4 years in the PL running at a surplus. Clearly we can only do that through player trading; buying low and selling high. The definition of "buying low" though will change - at the moment it's a max of perhaps £10-12m; that figure will increase the longer we can stay in the PL.

If the first part of the journey was getting to the PL in a reasonably financially strong position, we were not there in 2019-20 but we are now on the second part, which is survival. The third part is staying there and the fourth is having that cash pile in order to compete higher up the league.

The business model is we have to keep finding those gems, and we have to keep selling them on. So Cantwell for £35m is actually a no-brainer. 

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4 minutes ago, Badger said:

1. That is a very narrow definition of unique - but fair enough.

I don't see how but each to their own.

4 minutes ago, Badger said:

2. With regards to its accuracy, it does rely to an extent upon pettifogging. I haven't had the inclination to look at all teams, but we already know of several teams that sold their best players before getting promoted, which for some reason, you seem to think is better. On top of this, in the case of Palace and Zaha, they lost him for their return to the Premier League, so it's no better surely?

I really don't think it relies on that at all (thanks for the new word by the way, had to  google it). Circumstances obviously change based on seasons, the divison you're in and what you're trying to achieve. I didn't object to selling players like Maddison, Murphy, Godfrey etc as they were players who wanted to play in the Premier League and we wanted the money.

As I mentioned before, newly promoted teams are generally looking to use their increased revenue to help add to the players they already have, rather than feeling the need to sell their players to give them cash to strengthen. 

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24 minutes ago, sgncfc said:

A stinking rich owner gives almost every other club access to cash which we don't have, whether it's a loan or whether it's a guarantee. That gives them an advantage over us.

That Southampton and Watford (and others like them - Everton for instance will be almost £600m in debt very soon) will struggle to repay their loans is a consideration only if their own specific rich owners are no longer prepared to fund them. 

Everton, I think, may be in a slightly different category, but the point you make about the other two clubs is almost certainly inaccurate.

1. If Southampton's owners are happy to just casually "chip in" why would they take out a loan of nearly £80 million at over 9% against all the clubs assets (including intangibles. I believe).

2. The Watford owners are not stinking rich. I have seen estimates for the family of between £80 million and $120 million (£86 million). This is actually less than the value of Watford's debt. It is true that most of Watford's debt is owed to the Pozzos but they charge LIBOR+ 5.25% for the loan. There is no way that they can just write off their loan. This is a higher rate than a recent loan that we have paid.

Cash flow is important, I agree, but we would have very little problem getting short-terms loans secured against guaranteed TV revenues. (Think of it like a bridging loan).

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5 minutes ago, king canary said:

I really don't think it relies on that at all (thanks for the new word by the way, had to  google it). Circumstances obviously change based on seasons, the divison you're in and what you're trying to achieve. I didn't object to selling players like Maddison, Murphy, Godfrey etc as they were players who wanted to play in the Premier League and we wanted the money.

As I mentioned before, newly promoted teams are generally looking to use their increased revenue to help add to the players they already have, rather than feeling the need to sell their players to give them cash to strengthen.

1. It is quite a new word for me, as well - great word isn't it 😃 I have finally got round to reading Trollope and had to google it as well! I'm delighted to have the chance to use it.

2. I think that we do intend to add to the players that already have. I think that the reason we needed to sell Emi was because he wanted to go, not to give us cash. Do you think that we would have forced him out if he hadn't wanted to go? (I don't.)

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20 hours ago, Badger said:

I've got nothing against Jim, but I'm not sure that he always engages fully in debate. He has made some good points on this thread, but he has also just ignored some very pertinent questions - just a many of the negative posters tend to do.

I asked him repeatedly about his understanding of the impact of debt upon expenditure. I even gave a couple of example (there are others):

1. Watford - £111 million in debt, 78 million to their owners who charge LIBOR+ 5.3% (from memory) and the rest will be more than this.

2. Southampton are in a worse position - again from memory, they have debt of over £100 million including 25 million plus, which they borrowed at about 9.3% and have to pay back in 2025.

What impact do you think that paying this interest and capital back, will have on their overall transfer spending and wages? I've asked several times without answer, and then a few pages later, they become someone to be jealous of again. 

 

Always happy to have a debate but am not going to respond to you pointlessly and repeatedly asking me the same stupid question (to which the answer was obvious) in order to try and score some kind of point. The implication being that I got some reason think you don’t have to repay debts? 

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9 minutes ago, Badger said:

2. I think that we do intend to add to the players that already have. I think that the reason we needed to sell Emi was because he wanted to go, not to give us cash. Do you think that we would have forced him out if he hadn't wanted to go? (I don't.)

No I don't think we'd have forced him out if he didn't want to go, but that doesn't prove there wasn't a possibility that we could keep him either.

Plus Webber's comments in the press at the start of the window were not specifically about Buendia, they were about all of our star youngsters.

The reason we 'forced him out' is because Buendia subsequently had the most interest from potential suitors, not Cantwell or Aarons. You would be saying the exact same thing about those two right now too if we had sold them instead, yet they're still here and we look likely to keep hold of at least one of them (hopefully both).

I'm sure both Cantwell and Aarons would be happy to move on if the right offer came in, like Buendia, only that level of interest has not transpired as yet. So should we try to force those 'wantaway' players out too? 

Incidentally , how many players do you think in any side would jump at the chance to play at a higher level as well as earning a hell of a lot more money?

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17 minutes ago, Jim Smith said:

Always happy to have a debate but am not going to respond to you pointlessly and repeatedly asking me the same stupid question (to which the answer was obvious) in order to try and score some kind of point. The implication being that I got some reason think you don’t have to repay debts? 

The answer was not obvious to me at all, Jim. There are plenty of posters on this message board who think that most investor owners just give the club their money and don't charge them interest on it and don't expect it back and have said so explicitly. Fair play to you if you recognise if this is not the case - I don't understand why you wouldn't say so.

Given that you know that clubs pay interest on debt and have to pay money back, how do you justify the following?

 

On 26/07/2021 at 16:59, Jim Smith said:

I think do show the limitations of our model once we get to this division, namely:

1. That every other club in the division can outbid us for players if they want them.

How can Watford, over £100 million in debt and a multi-million pound interest bill each year  (with extended owners, I suspect) outbid us for players. How can Southampton, again £100 million+ in debt, including a near £80 million loan at over 9% pa, due for repayment in 202o outbid us? How can Burnley, following a leveraged buy-out, again paying debt at 9%+ oubid us for players. They can only do so, if they think that they are worth more than we do - if it came to a straight race, we have greater financial resource than they do, but we may chose not to use it to avoid the mess that I suspect Southampton and Burnley are likely to be in within a few years.

Do you also acknowledge that we are able to access bridging finance, quite cheaply as it happens, I suspect, guaranteed against TV money. This would negate you cash-flow point.

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3 minutes ago, Badger said:

1. It is quite a new word for me, as well - great word isn't it 😃 I have finally got round to reading Trollope and had to google it as well! I'm delighted to have the chance to use it.

2. I think that we do intend to add to the players that already have. I think that the reason we needed to sell Emi was because he wanted to go, not to give us cash. Do you think that we would have forced him out if he hadn't wanted to go? (I don't.)

No I don't think we would have forced him out.

My view is that Webber probably thought we needed to sell a 'crown jewel' to give him the kind of transfer budget he was after and do it early enough that he had time to use the cash. I think initially he'd hoped that would be Aarons who is likely the most replaceable, hence the 'Aarons has been told he can leave' stories that were doing the rounds earlier this window. When that interest didn't materialise but it was clear Emi had people willing to make concrete bids he decided that was the best way forward.

All conjecture of course.

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54 minutes ago, Hank shoots Skyler said:

No I don't think we'd have forced him out if he didn't want to go, but that doesn't prove there wasn't a possibility that we could keep him either.

 

19 minutes ago, king canary said:

My view is that Webber probably thought we needed to sell a 'crown jewel' to give him the kind of transfer budget he was after and do it early enough that he had time to use the cash.

Both reasonable points of view, but  as you say, conjecture. I don't know either, but my view is that whilst losing 1 of the 3 was useful, I think that Buendia would have been the last that they wanted to leave. but that when concrete interest came up and the player wanted to go, they had little choice.

But this is just conjecture as well.

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