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The Judge

Doncaster - "Financial Panacea to clubs woe's" !!

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[quote user="BlyBlyBabes"][quote user="a1canary"][quote user="mystic megson"]

Am I missing something?  I thought the parachute money was in effect a bonus on top of our normal income, and that for the past two seasons we''ve had money that most other clubs in this division haven''t.  The club has misused it appallingly, but we should not be in a worse position than 17 other Championship clubs next season (assuming we stay in this division of course), and probably better off than many.  If we run into major money problems it is purely down to incompetent financial management.

In other words, Neil & Co, it''s your fault.  Stop bleating and SORT IT OUT!

 [/quote]


Get real mystic - do you think Ashton and Earnshaw, two consecutive record smashing signings, are appalling misuses of money? Or that signing them would have been remotely possible without using the money from the prem and the parachute payments following relegation? The parachute payments are absolutely critical to promoted clubs. Without them they wouldn''t be able to strengthen at all to try and compete. As it is even with them they are limited to who they can buy. Yet you seem to be suggesting the clubs don''t use them!! Or that if they do it''s a misuse of the money. If we had the time again, you wouldn''t do anything different in respect of those signings which were made possible by the prem and parachute monies.
[/quote]

Get real?

1] Ashton was bought with Prem money.

2] Earnshaw was bought with some of the Ashton money.

3]The parachute payments have been wasted on (a) the obscene wage payments post-Prem &           (b) the purchase/lease of Worthington''s ill-chosen journeymen & loanees.

4] This year''s Cup run proceeds (essentially bonus unbudgeted income) will be frittered away mostly on the shortfall being experienced in financing scenario 3] above. Grant may be given a slice* of these for the football side (*by definition less than a quarter). Source: Roger Munby.

The huge error post-Prem was the strategy of trying to finance a quick return to the Prem through an obscene wage bill. All players (pre-promotion) should have been put on contracts which immediately put them back on pre-Prem wages upon relegation. And significant payment bonuses should have been in place for the post-Prem triggered by (a) a top 6 finish and (b) even more so by automatic promotion.

It would be interesting to know if  the ruinous post-Prem player payment stategy echoed the then management team''s personal contractual arrangements. If so, then both players and management would have existed post-Prem in unearned personal financial comfort zones.

The parachute payments (14m pounds!!!) should never have been used to finance recurrent expenditure. They should have been isolated and cocooned for capital (investment) expenditure on the football department only - mainly player purchasesb and staff performance incentives.

 We would then have had a lean and fit club geared for further success.

The present situation is that we are under very real threat of relegation back to the third division for the first time in 46 years - yes, 46 years.

This is not negativity, it''s cold stark realism.

I hope & pray that Peter Grant can work a miracle on a shoestring, but fear that if he does so the same soft-nosed lot will make the same errors again. But I do believe that his heart and head (together with those of Hucks & Dion) are in the right place - so good luck Peter, and bring us back that warm & fuxxy feeling we love so much.

And that''s the reality, my friends.

One love.

OTBC..............and never mind the danger.     

[/quote]

Point three strikes to the root of our current problems, although, arguably, some of the decisions made 12 months earlier in the Premiership, didn''t help either.

However, more importantly, just compare our purchases pre-season after relegation (Louis-Jean, Thorne, Jarrett, Hughes and Colin) and compare them to Birmingham just 12 months later with the likes of Jerome, McSheffery and Neil Danns. There''s just no comparison and we''re paying a hefty wage bill to go with it [:(]

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3[quote user="BlyBlyBabes"][

The huge error post-Prem was the strategy of trying to finance a quick return to the Prem through an obscene wage bill. All players (pre-promotion) should have been put on contracts which immediately put them back on pre-Prem wages upon relegation. And significant payment bonuses should have been in place for the post-Prem triggered by (a) a top 6 finish and (b) even more so by automatic promotion.

It would be interesting to know if  the ruinous post-Prem player payment stategy echoed the then management team''s personal contractual arrangements. If so, then both players and management would have existed post-Prem in unearned personal financial comfort zones.

The parachute payments (14m pounds!!!) should never have been used to finance recurrent expenditure. They should have been isolated and cocooned for capital (investment) expenditure on the football department only - mainly player purchasesb and staff performance incentives.

 We would then have had a lean and fit club geared for further success.

The present situation is that we are under very real threat of relegation back to the third division for the first time in 46 years - yes, 46 years.

This is not negativity, it''s cold stark realism.

I hope & pray that Peter Grant can work a miracle on a shoestring, but fear that if he does so the same soft-nosed lot will make the same errors again. But I do believe that his heart and head (together with those of Hucks & Dion) are in the right place - so good luck Peter, and bring us back that warm & fuxxy feeling we love so much.

And that''s the reality, my friends.

One love.

OTBC..............and never mind the danger.     

[/quote]

Just a point to think about Bly.

How many of our Prem signings would have actually signed if a wage reduction had been in their contracts?

Would we have got Earnie if we hadn''t offered a competetive wage?

All these were gambles the management had to take in order to use the Prem Parachute to try to get back quickly. Unfortunately the gamble has failed.

Having already spent or committted that money on a failed gamble you can hardly expect the cash to still be there in some cocooned bank account.

Had the gamble succeeded we wouldn''t be having this discussion.

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[quote user="a1canary"][quote user="mystic megson"]

Am I missing something?  I thought the parachute money was in effect a bonus on top of our normal income, and that for the past two seasons we''ve had money that most other clubs in this division haven''t.  The club has misused it appallingly, but we should not be in a worse position than 17 other Championship clubs next season (assuming we stay in this division of course), and probably better off than many.  If we run into major money problems it is purely down to incompetent financial management.

In other words, Neil & Co, it''s your fault.  Stop bleating and SORT IT OUT!

 [/quote]


Get real mystic - do you think Ashton and Earnshaw, two consecutive record smashing signings, are appalling misuses of money? Or that signing them would have been remotely possible without using the money from the prem and the parachute payments following relegation? The parachute payments are absolutely critical to promoted clubs. Without them they wouldn''t be able to strengthen at all to try and compete. As it is even with them they are limited to who they can buy. Yet you seem to be suggesting the clubs don''t use them!! Or that if they do it''s a misuse of the money. If we had the time again, you wouldn''t do anything different in respect of those signings which were made possible by the prem and parachute monies.

[/quote]

a1, we bought Earnshaw after selling Ashton at a considerable profit.  We bought Earnshaw primarily because we saw the opportunity to make a profit out of him too, not because we thought replacing a big striker with a little one would be a good idea.  None of the parachute money needed to be used, except possibly as a temporary measure to ease cash flow.

You say that parachute payments are absolutely critical to "promoted clubs".  I don''t understand.  Do you mean "relegated clubs"?  In any event, we didn''t strengthen and we didn''t compete, despite having this money.  

This club made a net profit of over £2 million last season (after Gordon Brown had taken his cut of £600,000 or so), putting us well up in the Championship top six in terms or profitability.  Birmingham, who are undeniably a bigger club than us, made a profit of £2.6m in their relegation season, paltry compared to £7m+  that we made in ours (after another £2m went to Mr Brown - I wonder if he is becoming a Norwich fan?).

We are a BIG club . . . but only in terms of profit, compared with our contemporaries.  I simply don''t understand why we are supposedly so hard up.  Oh . . . yes I do.  We''re also a BIG club in terms of debt - NONE of which has been incurred through expenditure on players.

Another poster commented that over the past six years we had spent roughly £750-800,000 more on players than we had made from selling them.  Don''t you see, that is the bloody problem!!  It''s a pathetically small amount!  This is a FOOTBALL club!!  Is it any wonder we are where we are, when breaking even on player transfers has become an end in itself!  Ask yourselves how we made a profit of £7m and received parachute payments of £14.2m.  From buying and selling players, or from a season in the top flight? 

Based on our recent experience, footballing success and financial success are not an either/or, as the board would like us to think (or perhaps that''s what they really DO think - how scary is that?).  It''s what the fans want to see, and it makes financial sense too, so everyone should be happy.  Personally I could live with being a yoyo club, I don''t buy all that "we belong in the Premiership" stuff.  The wider world of football would have to change for that to happen.  I''d settle for a season or two in the top flight every six or seven years, PROVIDED we are always fully focused on and committed to finishing in the top six in the Championship every season.  I don''t think my expectations are excessive or unrealistic.

Trouble is, it involves taking a teeny tiny risk now and again.  If our board of directors are so risk averse, they shouldn''t be running a football club.  They should also take note that making a profit is not the primary aim. 

 

 

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The poster formerly known as ? wrote

We didn''t have the parachute money for years yet still managed to pay a full squad without sinking into tens of millions of debt.

 Since we''ve had the PM we''ve sunk into debt to the tune of approx £20 mill whilst paying a smaller makeshift squad. And if you take out the stand money we''ve effectively stood still instead of posting a £7+£2.5 mill profit (before anyone says).

That is mismanagement at Board level. Its undeniable!

 

Unfortunately this myth makes a good story but is Totally deniable when supported by the facts.

At the end of the season 2003/04 (accounts page 5) We had a net debt of £18.1 million

Thats before any SKY or Parachute money.

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[quote user="ricardo"][quote user="Mr.Carrow"][quote user="mystic megson"]

Am I missing something?  I thought the parachute money was in effect a bonus on top of our normal income, and that for the past two seasons we''ve had money that most other clubs in this division haven''t.  The club has misused it appallingly, but we should not be in a worse position than 17 other Championship clubs next season (assuming we stay in this division of course), and probably better off than many.  If we run into major money problems it is purely down to incompetent financial management.

In other words, Neil & Co, it''s your fault.  Stop bleating and SORT IT OUT!

 

[/quote]

Im glad you made this point mystic as im getting tired of stating the bleeding obvious....The team has been allowed to drift backwards over a spell when the club has been recieving huge extra income ON TOP OF normal income. Parachute payments,land deal money,hotel money,G.Watlings 1.5m loan written off, share offer money and just as icing on the cake, a massive profit on transfers. No doubt someone will bring up the wage bill for the last financial year however,if you include the 6m profit made on transfers (treated as "exceptional" in the accounts) the player wage bill is less than one third of overall income-most clubs run at over 50% of income on player wages. Dont forget many of the higher earners have now left.

So here we have a club which has been raking in the cash, with a paper thin first team squad devoid of investment and struggling near the foot of the table and a chairman who admits the club is "obsessed" with off-pitch issues. I think im starting to see a picture emerging here, can anyone else see it??

[/quote]

That is an interesting way to read the accounts. Transfer income or expenditure is such a variable item that it would no sense to include it in any argument that shows wages as a percentage of turnover. Doubly so when a large portion of transfer fees are phased payments.

However on page 8 of  the 2006 Report it clearly states £6.1 million in player purchases and £10.1 million in player sales. It also says that we have in fact paid out £781,000 more than we recieved last year.

The main thrust of the transfer information is to show that over the last 6 seasons we paid £17.1 million for new players and recieved £16.6 million for those we sold. That represents a half million deficet. So where is this mythical pot of gold you seem to believe exists?

 The only silver lining I can detect in these figures is that we are still owed nearly £3.6 million in phased payments (presumably for Ashton & McKenzie). Peoples perception of big profits from transfer income do not seem to be backed up by the figures in the accounts.

 

[/quote]

Ricardo, on page 9 of the accounts under "exceptional items" it records a £6.15million profit on "player trading" in the last financial year. I must admit that the discrepency between the two figures is puzzling and i am by no means an expert on accounting so an explanation would be helpful.

I still think,even using the p.8 figures that my main point holds true. They seem to suggest that the club made a £4million profit on player sales and are still owed over £3million in phased payments over the next few seasons. If you bear in mind the Green/Mckenzie sales and the fact that some major transfers were funded by the share issues i think its obvious that the club has actually made a substantial overall profit in transfers whilst receiving all the extra income i listed earlier. And just look at the result-not pretty.

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[quote user="Mr.Carrow"][quote user="ricardo"][quote user="Mr.Carrow"][quote user="mystic megson"]

Am I missing something?  I thought the parachute money was in effect a bonus on top of our normal income, and that for the past two seasons we''ve had money that most other clubs in this division haven''t.  The club has misused it appallingly, but we should not be in a worse position than 17 other Championship clubs next season (assuming we stay in this division of course), and probably better off than many.  If we run into major money problems it is purely down to incompetent financial management.

In other words, Neil & Co, it''s your fault.  Stop bleating and SORT IT OUT!

 

[/quote]

Im glad you made this point mystic as im getting tired of stating the bleeding obvious....The team has been allowed to drift backwards over a spell when the club has been recieving huge extra income ON TOP OF normal income. Parachute payments,land deal money,hotel money,G.Watlings 1.5m loan written off, share offer money and just as icing on the cake, a massive profit on transfers. No doubt someone will bring up the wage bill for the last financial year however,if you include the 6m profit made on transfers (treated as "exceptional" in the accounts) the player wage bill is less than one third of overall income-most clubs run at over 50% of income on player wages. Dont forget many of the higher earners have now left.

So here we have a club which has been raking in the cash, with a paper thin first team squad devoid of investment and struggling near the foot of the table and a chairman who admits the club is "obsessed" with off-pitch issues. I think im starting to see a picture emerging here, can anyone else see it??

[/quote]

That is an interesting way to read the accounts. Transfer income or expenditure is such a variable item that it would no sense to include it in any argument that shows wages as a percentage of turnover. Doubly so when a large portion of transfer fees are phased payments.

However on page 8 of  the 2006 Report it clearly states £6.1 million in player purchases and £10.1 million in player sales. It also says that we have in fact paid out £781,000 more than we recieved last year.

The main thrust of the transfer information is to show that over the last 6 seasons we paid £17.1 million for new players and recieved £16.6 million for those we sold. That represents a half million deficet. So where is this mythical pot of gold you seem to believe exists?

 The only silver lining I can detect in these figures is that we are still owed nearly £3.6 million in phased payments (presumably for Ashton & McKenzie). Peoples perception of big profits from transfer income do not seem to be backed up by the figures in the accounts.

 

[/quote]

Ricardo, on page 9 of the accounts under "exceptional items" it records a £6.15million profit on "player trading" in the last financial year. I must admit that the discrepency between the two figures is puzzling and i am by no means an expert on accounting so an explanation would be helpful.

I still think,even using the p.8 figures that my main point holds true. They seem to suggest that the club made a £4million profit on player sales and are still owed over £3million in phased payments over the next few seasons. If you bear in mind the Green/Mckenzie sales and the fact that some major transfers were funded by the share issues i think its obvious that the club has actually made a substantial overall profit in transfers whilst receiving all the extra income i listed earlier. And just look at the result-not pretty.

[/quote]

Yes Mr. Carrow I also find page 9 a bit contradictory to page 8. Perhaps an email to Doncaster might clear this up. It definetely states on page 8 that we are 0.5 million in defecit on the last 6 years transfers. Whether that includes or excludes the £3.581 million still owed is not very clear. If it excludes it we are indeed over £3 million in profit but would you advocate spending it on new player(s) before we actually recieve it?

The main thrust of Neil Doncasters comments, both recently and in the ''06 Accounts seems to be that the board are concerned that the loss of the parachute payments lead them to take an even more prudent view of the finances than they have this season. We can all make arguments that money has been unwisely spent on average players but we can all be clever after the event. I agree that the result is "not pretty" but without a Sugar Daddy what do we do?

I fear we are in for a long hard slog.

 

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