Where does money go?

[Dean Coneys boots 1,531]

I’ve read that promotion to premiership is worth £170million. We have had that twice but lost some parachute payments so you can’t just double it. But nevertheless we have cleary raked in a lot of cash in last three years. 

We spent around £23 million this year - when sales are deducted from spend. We spent less than a million first time promoted. This equates to £12million for each promotion then. Not quite the high ambition sold to us fans. 
 

Obviously wages take a chunk…but it still begs a question - are we getting bang for our buck? How was there no money for January?  
 

People often say you don’t get it at once- but we must now be in receipt of first windfall at least. And there was big money made from Godfrey et al…yet still we seem unable to up the wages to premiership level. Any better fag packet accountants than me able to shed light?

 

[hogesar 10,762]

There's already been countless threads on this but essentially all you need to do is look at the accounts.

[wcorkcanary 4,783]

9 minutes ago, hogesar said:

There's already been countless threads on this but essentially all you need to do is look at the accounts.

Don't  be sensible,  there is much more to be gained by posting, reposting ,and re re re posting the same thing over and over and over and..

 .. ad infinitum. I'm so glad I'm not stuck  in some kind of of Groundhog day like Bootso.

[PurpleCanary 6,381]

I have said it before but this site urgently needs more Reaction options than just the five. One symbolising a prolonged primal scream of pent-up frustration would certainly be well-used...

[BroadstairsR 2,273]

Football clubs bleed money.

[Wings of a Sparrow 1,708]

"...wages take a chunk..."

[BigFish 2,282]

41 minutes ago, wcorkcanary said:

Don't  be sensible,  there is much more to be gained by posting, reposting ,and re re re posting the same thing over and over and over and..

 .. ad infinitum. I'm so glad I'm not stuck  in some kind of of Groundhog day like Bootso.

Agree with this, don't be sensible. Posters have every right to repeat threads in the hope that this time there might be a different answer.

[cambridgeshire canary 7,797]

52 minutes ago, wcorkcanary said:

Don't  be sensible,  there is much more to be gained by posting, reposting ,and re re re posting the same thing over and over and over and..

 .. ad infinitum. I'm so glad I'm not stuck  in some kind of of Groundhog day like Bootso.

How dare you perfectly sum up my posting habbits

[TheGunnShow 7,377]

Considering that wages tend to be between 50-80% of all turnover generated, player wages are more than just a "chunk". Chuck in bonuses, other staff wages, property maintenance of the stadium / training ground (and indeed upgrading the training ground) and what should be clear is this: thinking something is askew with our use of finance compared to the dysfunctional window-licking crapfest that is the overly debt-based model many use just shows how skewed the world of football finance is.

[TheGunnShow 7,377]

55 minutes ago, PurpleCanary said:

I have said it before but this site urgently needs more Reaction options than just the five. One symbolising a prolonged primal scream of pent-up frustration would certainly be well-used...

We need one with an eyeball and a pile of dog excrement to represent deja vu. Or indeed deja p-o-o (where have I seen this s-h-i-t before?)

Edited March 18, 2022 by TheGunnShow
P-o-o gets hit by the censors?? Really, guys???

[Badger 2,745]

1 hour ago, Dean Coneys boots said:

Obviously wages take a chunk

In 18-19 that "chunk" was 116% of turnover as we made an operating loss of just under £40 million. We spent £51 million on wages and had a turnover of £33.7 million.

In 19-20 the chunk was £74.5% of turnover (£88.9 million on a turnover of £119.4 million) however we started the year with debt of £22.6 million. Wages + debt repayment accounted for 93.4% of our revenue.

Our wages in 20-21will be higher than 18-19 (championship) and the wages in 21-22 will be higher than 19-20 (EPL).

So the short answer to the question title of the thread is, mainly on wages.

 

 

[A Load of Squit 6,260]

1 hour ago, Dean Coneys boots said:

Any better fag packet accountants than me able to shed light?

 

Get on Twitter and follow SwissRamble, you'll see how all clubs deal with their finances when they are published.

It's incredible what it takes financially to be even a mid table Premier League team.

[BurwellCanary 255]

2 minutes ago, A Load of Squit said:

Get on Twitter and follow SwissRamble, you'll see how all clubs deal with their finances when they are published.

It's incredible what it takes financially to be even a mid table Premier League team.

There is an old saying " The only way to make a small fortune from football is to start by investing a big one "

[A Load of Squit 6,260]

6 minutes ago, BurwellCanary said:

There is an old saying " The only way to make a small fortune from football is to start by investing a big one "

You may want to check with the Glazers at Man Utd to see if that's still true. 

 

[BigFish 2,282]

16 minutes ago, BurwellCanary said:

There is an old saying " The only way to make a small fortune from football is to start by investing a big one "

 

8 minutes ago, A Load of Squit said:

You may want to check with the Glazers at Man Utd to see if that's still true. 

 

United are nearly half a billion pounds in debt, not difficult to see where the Glazer's have made their money.

Not through football, through financial engineering.

[Badger 2,745]

1 minute ago, BigFish said:

 

United are nearly half a billion pounds in debt, not difficult to see where the Glazer's have made their money.

Not through football, through financial engineering.

New owners at Burnley are doing essentially the same. They bought Burney using a combination of Burnley's own cash and debt which Burnley FC have to pay the interest on and is secured against Burnley's stadium and assets. Yet this is what some on here want for us????

[Icecream Snow 777]

56 minutes ago, Badger said:

In 18-19 that "chunk" was 116% of turnover as we made an operating loss of just under £40 million. We spent £51 million on wages and had a turnover of £33.7 million.

In 19-20 the chunk was £74.5% of turnover (£88.9 million on a turnover of £119.4 million) however we started the year with debt of £22.6 million. Wages + debt repayment accounted for 93.4% of our revenue.

Our wages in 20-21will be higher than 18-19 (championship) and the wages in 21-22 will be higher than 19-20 (EPL).

So the short answer to the question title of the thread is, mainly on wages.

I thought in 18/19 we still had the hangover from Naismith, Klose and Pinto's wages.

I think there were a few elements that could have been deferred to the next financial year, but I think  because we'd made a large profit in the previous financial year, we made sure to post a loss to reclaim the corporation tax.

[hertfordyellow 462]

1 hour ago, Badger said:

New owners at Burnley are doing essentially the same. They bought Burney using a combination of Burnley's own cash and debt which Burnley FC have to pay the interest on and is secured against Burnley's stadium and assets. Yet this is what some on here want for us????

So interestingly, under the recommendations in the Government white paper for a licence based governing body to be introduced to the pyramid, this type of thing would be very difficult to do. There has to be proof of funds and for funds to be placed in a neutral account prior to purchase.

[hertfordyellow 462]

1 hour ago, TheGunnShow said:

Considering that wages tend to be between 50-80% of all turnover generated

It should but quite a few clubs are over that 80%. https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/sports-business-group/deloitte-uk-annual-review-of-football-finance-2020.pdf

 

[chicken 3,083]

3 hours ago, hogesar said:

There's already been countless threads on this but essentially all you need to do is look at the accounts.

And it always seems to be the same people saying it every year... 

[chicken 3,083]

1 hour ago, BigFish said:

 

United are nearly half a billion pounds in debt, not difficult to see where the Glazer's have made their money.

Not through football, through financial engineering.

Chelsea are a billion in debt... 

[chicken 3,083]

3 hours ago, Dean Coneys boots said:

I’ve read that promotion to premiership is worth £170million. We have had that twice but lost some parachute payments so you can’t just double it. But nevertheless we have cleary raked in a lot of cash in last three years. 

We spent around £23 million this year - when sales are deducted from spend. We spent less than a million first time promoted. This equates to £12million for each promotion then. Not quite the high ambition sold to us fans. 
 

Obviously wages take a chunk…but it still begs a question - are we getting bang for our buck? How was there no money for January?  
 

People often say you don’t get it at once- but we must now be in receipt of first windfall at least. And there was big money made from Godfrey et al…yet still we seem unable to up the wages to premiership level. Any better fag packet accountants than me able to shed light?

 

Simply with very rough figures.

A season in the PL is said to be worth £80-100m, give or take depending upon number of televised games. The rest is parachute payments spread over the next three seasons with the first being something like 50ish %. 

So £170million is way off from the start as we have had one season of parachute payments so far, not 6.

Knock that down to say £200m.

As has been pointed out already, our PL wages come in at around £55-60m I believe. So you have that twice. Leaves about £80m.

This season we spent(most commonly reported fees):
Sargent £8m
Rashica £8m
Tzolis £9m
Lees-Melou £3.5m
Gunn £5m
Gibson £8m
Giannoulis £6m
Total of around £45m.

Then the loans of Kabak, Normann, Williams and Gilmour.

Which then leaves around £35m.

We also spent money on - Dowell, Placheta, Hugill, Mumba and Sorensen.

We also lost around £20-30m revenue in the 2019-20 PL season. And again some last season.

That is just basic knowledge without going into the accounts.

There is no one stealing any money. As others have said, all of the information you need is in the annual accounts. If you don't look at them, don't expect other people on here to do so for you.


 

[TheGunnShow 7,377]

15 minutes ago, hertfordyellow said:

It should but quite a few clubs are over that 80%. https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/sports-business-group/deloitte-uk-annual-review-of-football-finance-2020.pdf

 

Absolutely, that was why I said "tend".

[Nexus_Canary 1,206]

Petrol?
Prices are bleeding stupid, a full tank of diesel to get the boys to Leeds and back must have cost us a decent Centre Back. 

[Bonzo 198]

£170m includes two years of parachute payments.

The reality is that the financial beneficiaries of the game are the players and their agents.

The bulk of Football's huge revenues goes to the playing staff.  

Most clubs don't make a profit and many are hugely in debt.

All Premier League players are multi millionaires and a good proportion of Championship players are millionaires.

But don't worry they are very good at doing stuff for poor kids and the local community. Which is nice. 

 

Edited March 22, 2022 by Bonzo

[chicken 3,083]

Bonzo is right...
https://www.goal.com/en/news/what-premier-league-parachute-payments-how-much-teams-get/ndpbojgz6szj1ojgn3p7jlbuo

So for us it's two seasons - which according to the above article acounts for roughly £75m. £40m the first season and £35m in the 2nd.

[BigFish 2,282]

2 hours ago, chicken said:

Chelsea are a billion in debt... 

Not really the same, Chelsea owe that money to Roman Abramovich. He was underwriting the club, pretty much as the Qataris are with Man City. The Glazers forced United to borrow on the money markets, often at high interest rates. The Glazers didn't use any of their own money to buy or support United, they only take money out.

[Tetteys Jig 851]

6 hours ago, Dean Coneys boots said:

I’ve read that promotion to premiership is worth £170million. We have had that twice but lost some parachute payments so you can’t just double it. But nevertheless we have cleary raked in a lot of cash in last three years. 

We spent around £23 million this year - when sales are deducted from spend. We spent less than a million first time promoted. This equates to £12million for each promotion then. Not quite the high ambition sold to us fans. 
 

Obviously wages take a chunk…but it still begs a question - are we getting bang for our buck? How was there no money for January?  
 

People often say you don’t get it at once- but we must now be in receipt of first windfall at least. And there was big money made from Godfrey et al…yet still we seem unable to up the wages to premiership level. Any better fag packet accountants than me able to shed light?

 

Note that this seasons money hasn’t hit the coffers yet.

The main problem is we have nobody to underwrite this “future money” which would enable a bigger spend that is required that first summer.

 

Look at Leeds for example, spent £100m upon promotion on a couple of international centre backs (Koch, llorente) a highly rated winger (Raphinha) and a seasoned international striker/AM (Rodrigo) as well as a not insignificant amount of money on youth punts like Meslier, Struijk, Geldheart amongst others.

They went up with a side in many ways about as good as ours upon promotion and we’re able to properly build on that rather than sell their best player immediately. You don’t do all that without an ambitious board that believes it belongs in that league.

If it had gone **** up at Leeds then I’d imagine their ownership would have taken the hit and they’d have sold what they could under not too much pressure to and given it another go.

That happens to us after lobbing £100m and wages at it and it’s curtains (or at least a complete fire sale and everything that comes with that.)

somewhere along the line, we need someone on our board that is prepared to stomach the best part of £50m that first season up and gamble that we can survive and in doing so, keep our best players and also patch up where the championship quality needs to be converted to premiership quality. It might only be 3 or 4 players but it makes an absolutely massive difference as Newcastle have shown this season.

All our summer business for all the money spent was back of the queue, bargain basement punts that were always likely to not be good enough. We desperately needed 1 or 2 of them to defy the odds and carry this side much like Buendia did and as expected, none of them did.

The other issue we have is some people may have said, why spend £60m on 6 players rather than £60 on 3 better players?

Well, those guys don’t want to play for us as they know it’s unlikely we can survive so they pick to go elsewhere. Sure we could have afforded Ajer, Hughes, Olise but fact is they don’t want to play for us. Means we are left with far less proven players who can’t get moves to better clubs. It also means these guys can hold us to ransom a bit more as well.

This self funding model is doomed to failure (if regular prem football is even the goal). We need a more powerful ownership model in place should we dare tickle the premiership elites again. Until that materialises, I’m just no longer invested in the club ethos. Supporting my local lower league side will be far more fulfilling.

[Mello Yello 2,572]

Where does money go?

To Ham bags an' the Glad Wags?......

Edited March 18, 2022 by Mello Yello

[hertfordyellow 462]

1 hour ago, Tetteys Jig said:

Note that this seasons money hasn’t hit the coffers yet.

The main problem is we have nobody to underwrite this “future money” which would enable a bigger spend that is required that first summer.

 

Look at Leeds for example, spent £100m upon promotion on a couple of international centre backs (Koch, llorente) a highly rated winger (Raphinha) and a seasoned international striker/AM (Rodrigo) as well as a not insignificant amount of money on youth punts like Meslier, Struijk, Geldheart amongst others.

They went up with a side in many ways about as good as ours upon promotion and we’re able to properly build on that rather than sell their best player immediately. You don’t do all that without an ambitious board that believes it belongs in that league.

If it had gone **** up at Leeds then I’d imagine their ownership would have taken the hit and they’d have sold what they could under not too much pressure to and given it another go.

That happens to us after lobbing £100m and wages at it and it’s curtains (or at least a complete fire sale and everything that comes with that.)

somewhere along the line, we need someone on our board that is prepared to stomach the best part of £50m that first season up and gamble that we can survive and in doing so, keep our best players and also patch up where the championship quality needs to be converted to premiership quality. It might only be 3 or 4 players but it makes an absolutely massive difference as Newcastle have shown this season.

All our summer business for all the money spent was back of the queue, bargain basement punts that were always likely to not be good enough. We desperately needed 1 or 2 of them to defy the odds and carry this side much like Buendia did and as expected, none of them did.

The other issue we have is some people may have said, why spend £60m on 6 players rather than £60 on 3 better players?

Well, those guys don’t want to play for us as they know it’s unlikely we can survive so they pick to go elsewhere. Sure we could have afforded Ajer, Hughes, Olise but fact is they don’t want to play for us. Means we are left with far less proven players who can’t get moves to better clubs. It also means these guys can hold us to ransom a bit more as well.

This self funding model is doomed to failure (if regular prem football is even the goal). We need a more powerful ownership model in place should we dare tickle the premiership elites again. Until that materialises, I’m just no longer invested in the club ethos. Supporting my local lower league side will be far more fulfilling.

This is a very good indication of the reality of our situation. The other thing to add is Leeds and other clubs are able to waiver or dilute relegation wage reduction clauses. We can't and it is increasingly a factor in transfers. Will Hughes refused to sign a contract with one in.