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Juggler

Can Anyone Help Me With My Sums?

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We''ve just seen a loss of £3.9million (excluding contract settlements) in a season when average home gates exceeded 20,000 and we reached the fifth round of the FA Cup. But we''re also told that "The situation is manageable within the 1st Division budgetting to finish in mid table and going out of the cups in the first round". Increasing the ground capacity to 25000 will only help if we fill the ground. If we finish every season mid table with ist riund cup exits I doubt that the average crowd would be above 16000. On this basis an annual loss of £5million would seem to be the likely outcome and if you look back over the last 4 years accounts this seems to be so. The only times we haven''t had those losses were in were in 2001 when we sold Craig Bellamy and 2002 with ITV digital and play off income. So if we carry on making those losses surely our debt will increase accordingly (you can only do so many share offers).The only way that I can think of to cover the losses/debt from a mid table position is by developing and selling young players, a policy that will certainly keep us in mid table! The other problem with that is the current state of the transfer market. I haven''t seen too many cases lately of 1st division players moving for £2million or more so that means selling two good players each season to cover the losses. (Nottingham Forest)

Am I missing something obvious here. Help me out before my brain or my calculator explode. I used to think our club was in pretty good hands financially but I''m not so sure now. Has anyone see a financial forecast for the next 3 to 5 years?

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Yes! with the present careful attempt at managing our finances by our board, if we have no big outside financial input or grant from an investor who is not interested in a return for his money. If there is no return to premiership football with little prospect of stopping there. By the year 2008 we shall be about £30.000,000 in debt. With the miracle chance that we go up this year, and manage by the skin of our teeth to stop there in the lower half of the prem until 2008. By then and using the finances wisely we could break even and maybe show a small profit again if we keep in the prem till 2010.
Realistically we are such a small club, and the gates will never be big enough to pay the huge wages of the top prima-donnas, who will therefore, never be available to our club, therefore a struggle will always be on the cards. Take as much comfort as you can from the likelyhood that there are other clubs in this division who will not make it to 2008. I forecast that unless government support is forthcoming for football the 1st 2nd and third divisions will not be able to exist in the present form until 2008. It will surprise me if there are more than two professional divisions in this country and they will only be clubs that can attract the minimum gates of 25000. The reason for this is the outrageous wages demanded by the football players and their own system of negotiating. They have destroyed the roots of football in this country.

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Can''t see anything wrong with your sums. The answer? Simple I think. The wages of the players were hugely inflated when the ITV Digital money came along. Now its gone we''re left with contracts to fulfill based on that money which is no longer there. So, next time the players'' contracts are up for renewal (as several of ours are this summer) they''ll get nothing like they were on last time. Practically no-one in the first division will offer it anyway. So they either move to the Prem (if they''re good enough), to Wigan (yeah, right) or accept the lower offer. Actually I expect the bottom half of the Prem will start to tighten their belts now too, as they can''t all go on racking up the losses like they are.

Give it five years and only the players at the top 5 clubs will be on silly wages. The rest will be far more sensible, and those clubs that didn''t rack up the huge debts (and Norwich''s debts are NOT huge by Prem or even most 1st div standards) will come back all the stronger....

Ama

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"The outrageous wages demanded by the football players " were negotiated on the basis of TV income. That is no longer there.

New contracts will reflect that. With clubs slimming down to cope with the current loss ie high wages lower income it is inevitable that there will be a sufeit of players.

Demands will be far more realistic.

Until all contracts are based on present incomes it is inevitable that we will be running at a loss.

Expect less long term contracts and more loans. Pay the player when he is playing well and show him the door when not.

I believe the current problen is not helped by the players and, more so, their agents recognizing this and trying to wring as much out as possible before the gravy train slides off the rails.

Fear not, football has gone through problems like this before. It''s had it''s doom mongers, it''s had it''s new found fans (Davids Mellor & Baddiel) and it''ll have more problems.

But like life us fans are stuck with it and so will put up with anything rather than walkaway.
(MasterGreen in a philisophical mood)

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I agree with what you''re saying abouit players'' contracts but does that mean that Francis, Edworthy and Brennan are now getting considerably less than the other players whom were on contract before the ITV Digital collapse. If not when do we start reducing the payments?

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Most likely so. Two were frees and would have to accept the best of what came along and Francis was not with a high income club.

It will revert more to a buyers market as players and agents recognize the changing circumstances.

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