[Archived] Summer Spending

[Parsonblue]

I thought it was an excellent article by John Williams and one that spells out quite clearly the financial situation at Ewood Park.

I think Tris has covered all the main points very well in his post.

I think the most telling statement for me was towards the end of the interview when John was asked for his prediction for this season. "To aim high without risking the financial health of the club, but not to be too disappointed if we don't make it." He suggests mid-table and a good Cup run would be a decent outcome. I think his point that we are now embarking upon our longest run in the top flight since 1936 is well made. Talk of continually challenging for a top seven place is simply not realistic anymore. Yes, there may be seasons when be overachieve and other clubs underachieve to enable us to clinch a European spot, but I would suggest that those seasons are not going to be a regular occurance.

The fact that the club have been unable to reduce the wage bill merely underlines how difficult it is for a club like the Rovers to operate in the Premier League.

When you look at what has happened at Leeds, Southampton, Norwich, Charlton and Newcastle in the past, and what is happening at Portsmouth at the moment, I think we are very fortunate to have a chairman who, while still harbouring ambitions on the field, is also aware of his greater responsibility which is to ensure the long term financial future of the football club.

[OscarRaven]

"In summary the maths works as follows - money in from transfers #26 million, money out incl agents fees, levies etc is #13.5 million, head count like for like and wages like for like.

Where has the #12.5 million gone? 7.5 million has gone to last seasons profit and loss as explained, and 5 million to support this seasons wage bill"

So the inevitable has happened, we can no longer sustainably provide for wages (i.e. compete) in the Premier League.

A direct result of 1 bad season (appointment) and other clubs being managed unsustainably. The end is nigh.

[tcj_jones]

Not meaning to flog a dead horse here, but I wonder if this article will have opened certain people's eyes to the importance of a player's potential re-sale value?

By the way, that isn't a criticism of Allardyce, as he's brought in some good young players and promoted Hoilett to the first team squad, but sometimes it can be dangerous to rely on older players such as Chimbonda and Salgado who won't have cost a bomb in transfer fees, but will undoubtedly be on big wages that will never be recouped.

[Boz]

There are already some wrong numbers and misquotes in the posts above - it's probably worth people reading the article before starting to chuck mud!

Budget for 08/09 was based on finishing 9th (2 places down from previous season) and wages of around 44 million (10% increase on previous season).

08/09 we finished 15th (not beating West Brom cost #1.5 million), and wages had gone up above budget to around 46 million due to Givet, Diouf and new management.

There was a drop in TV revenue against budget, so overall the shortfall was 7.5 million quid. This was covered by half of the 15 million received up front for Roque Santa Cruz.

This season, the plan was to budget for a 13th place finish on a wage bill of 41 million, hence the figure already in the public domain of needing to save 5 million off the 46 million wage bill for 08/09.

They have failed to do that "so we have filled the resulting #5 million hole with the difference in transfer fees between Stephen and Pascal"

"In summary the maths works as follows - money in from transfers #26 million, money out incl agents fees, levies etc is #13.5 million, head count like for like and wages like for like.

Where has the #12.5 million gone? 7.5 million has gone to last seasons profit and loss as explained, and 5 million to support this seasons wage bill"

"I suppose the most sobering thing about this is that even if we stretch ourselves to achieve break-even at operating level, that still leaves nothing for player acquisition. So trading is the name of the game"

A very sensible quote Tris, although posted a tadge too early for the doom merchants on here, who would have taken a great deal of satisfaction from a days woe is me.

[braddock]

I don't get why everyone on here seems to think they are financiers.

Can we not just drop it?

They aren't gonna turn around and say, 'oh you found our missing £5million. it was all a test, but now you have found it let's go blow it on whoever you want, because you know best!'

[G Somerset Rover]

So should we finish 13th this season then we're in a position whereby we must sell to bring in anybody?

Odds on Samba and Givet being on their bikes next summer (if not before) must be very short.

[Miker]

Jesus christ. None of you are actually RUNNING this club. The numbers and opinions being thrown around is nothing short of hilarious. I'm sorry, but none of you know exact figures besides what John has said.

You have no idea what Chimbonda and Salgado are being paid and likewise you have no idea if it's financially viable for the club to have them. Wow I'm sure John Walker hadn't realised the benefit of re-sale value, thanks for pointing that one out. Now he can go about his job differently and save us millions of dollars!

[LeChuck]

So should we finish 13th this season then we're in a position whereby we must sell to bring in anybody?

Actually...if we've had to take £4 million (ish) from transfer fees to pay the wages this year, then surely we're going to have to sell someone for a similar amount to balance the books before we can even think about bringing people in?

I suppose the only way we can avoid that is by not renewing contracts for Reid and Dunn.

[den]

A very sensible quote Tris, although posted a tadge too early for the doom merchants on here, who would have taken a great deal of satisfaction from a days woe is me.

and you don't think that's gloomy Boz?

I haven't read the article yet, because it's not on line, but a point or two:

That's a very narrow summary. What happened the season before, when we sold Bentley and Brad and finished above our budgetted position?

and

How do the posters who were happy to go along with the selling of our best players - all in as short a time scale as I can remember - and were happy because we were paying off the debts, feel now that we are, I assume, still in as much debt as before?

and

What happens when we have no-one left of value?

Yes, we can be happy that JW has tried to explain the situation, but that simply leaves so many other questions.

I can now fully understand why Hughes and Bowen were looking for out when the Newcastle job was up for grabs.

Oh and Braddock, you should be interested in how the finances work at our football club. There's nothing at all wrong with that.

[Sparky Marky]

Wow I'm sure John Walker hadn't realised the benefit of re-sale value, thanks for pointing that one out. Now he can go about his job differently and save us millions of dollars!

WTF?

[G Somerset Rover]

Actually...if we've had to take £4 million (ish) from transfer fees to pay the wages this year, then surely we're going to have to sell someone for a similar amount to balance the books before we can even think about bringing people in?

I suppose the only way we can avoid that is by not renewing contracts for Reid and Dunn.

I hadn't thought of that. It's even more depressing then.

So our two options are: sell somebody for around £4 million to 'wipe the slate' or release the players out of contract.

We're certainly running out of asset's to cash in on.

[Hughesy]

This season, the plan was to budget for a 13th place finish on a wage bill of 41 million, hence the figure already in the public domain of needing to save 5 million off the 46 million wage bill for 08/09.

Wages like for like.

I am shocked if we are at a like for like on wages - the club have shifted out 15 players and brought 9 in. Salgado must be on a big, big wack!

What happened the season before, when we sold Bentley and Brad and finished above our budgetted position?

I assume, still in as much debt as before?

2 very good questions which need answering!!

Say we are reducing the wages to 41m (eventually) - how much will that leave us with once all the other expenditures hit us?? Anything?

WE NEED NEW OWNERS!!!

[CrazyIvan]

and you don't think that's gloomy Boz?

I haven't read the article yet, because it's not on line, but a point or two:

That's a very narrow summary. What happened the season before, when we sold Bentley and Brad and finished above our budgetted position?

and

How do the posters who were happy to go along with the selling of our best players - all in as short a time scale as I can remember - and were happy because we were paying off the debts, feel now that we are, I assume, still in as much debt as before?

and

What happens when we have no-one left of value?

Yes, we can be happy that JW has tried to explain the situation, but that simply leaves so many other questions.

Oh and Braddock, you should be interested in how the finances work at our football club. There's nothing at all wrong with that.

It seems the business model (until new investment is found - if ever) is to do what the likes of Crewe and West Ham have done for years (before the last 3). Develop players bought or in-house development of youth and sell them for a good profit for example Dean Ashton and Rob Hulse at Crewe, Rio Ferdinand and Frank Lampard at West Ham. Crewe has fallen off that model a lot recently since they've had the long-term manager move upstairs and are down in the 2nd Division again. West Ham tried to compete by buying in expensive players and totally failed and are slowly working their way out of it by selling or getting rid of expensive players like Neill. This requires a manager who can see talent that can be developed and an extremely good scouting system and academy. Have we got that? With a manager who can see talent, I think so but I'm not fully convinced. A good scouting system? Possibly. A good academy? I wouldn't say that yet. It's not a negative comment but we need to get some success out of academy in the next couple of years.

[LeChuck]

A quick question about 'wages' - who exactly does this cover?

Apparently we're spending £46 million on wages? For a first team squad of 30, that averages out at about £30k per week each which is massively over what it will really be.

Does this figure include everyone at the club from the board to the tea lady? I'm just struggling to think how it's that high.

[Hughesy]

LeChuck - it must include all staff I think. Like you say, we cant have 30 players on 30k+.

[tcj_jones]

Jesus christ. None of you are actually RUNNING this club. The numbers and opinions being thrown around is nothing short of hilarious. I'm sorry, but none of you know exact figures besides what John has said.

You have no idea what Chimbonda and Salgado are being paid and likewise you have no idea if it's financially viable for the club to have them. Wow I'm sure John Walker hadn't realised the benefit of re-sale value, thanks for pointing that one out. Now he can go about his job differently and save us millions of dollars!

Fact is, many on here were mocking the importance of a player's potential future value when we needed to bring in a striker, but Williams' own comments - 'trading is the name of the game' - show that it is a very real and important consideration.

I'm not suggesting that I do know the ins and outs of the club's finances, I'm just giving my perfectly reasonable opinion on the current situation. There's a high probability that Salgado and Chimbonda will be on high wages and an extremely high probability that neither will bring in any future fees. Likewise, our wage bill is higher than what we budgeted for, hence having to allocate transfer fees to cover for over-spending.

There's no need to post in the tone that you have, prick.

[Tris]

I am shocked if we are at a like for like on wages - the club have shifted out 15 players and brought 9 in. Salgado must be on a big, big wack!

2 very good questions which need answering!!

Say we are reducing the wages to 41m (eventually) - how much will that leave us with once all the other expenditures hit us?? Anything?

WE NEED NEW OWNERS!!!

On Bentley and Friedel -

"the Bentley and Friedel monies were used to fund incoming transfers"

On the owners -

"In fairness to them, and contrary to some uninformed opinion, they are not taking money out either. There is an agreement to repay a small fixed term loan but they have agreed to fund an important strategic land acquisition for us.

Our relationship with the trustees remains good. To be fair they have never interfered, they know the lack of funding is a source of frustration for the board but we just have to get on with it"

[Stuart]

If we hadn't sold Warnock, and therefore not have raised the cash to fill the 'hole'. What would have happened?

E.g. would we have gone into administration?

[braddock]

Oh and Braddock, you should be interested in how the finances work at our football club. There's nothing at all wrong with that.

don't try find the answers to the question on a site full of people who don't know their arse from their elbow

i trust the chairman to do right for the club, and the amount of people on here who seem to know exactly where all the money is being spent is ridiculous. surely there are other places this question can be answered, away from the idiot scare mongers who jump on the bandwagon of every slightly negative comment.

the chairman has spoken, deal with it. if you want to know more your best off taking it up with the man himself

[Hughesy]

There is an agreement to repay a small fixed term loan but they have agreed to fund an important strategic land acquisition for us.

What land is that Tris? The old church grounds?

[Big Fat Sam]

"In fairness to them, and contrary to some uninformed opinion, they are not taking money out either. There is an agreement to repay a small fixed term loan but they have agreed to fund an important strategic land acquisition for us.

Our relationship with the trustees remains good. To be fair they have never interfered, they know the lack of funding is a source of frustration for the board but we just have to get on with it"

Don't suppose you know what the land acquisition is??? It sounds intriquing.

[Sparky Marky]

don't try find the answers to the question on a site full of people who don't know their arse from their elbow

Don't think that's entirely fair...there are a decent amount of informed people on this site...

[mogster]

The link (it may have already been posted)

http://www.lancashiretelegraph.co.uk/sport..._transfer_cash/

[Craigman]

Interesting that he says he has nothing concrete on the takeover front, seems as though something might be going on behind the scenes, although I have probably just read something into that !

[Guest charlie1]

The big question here is what happens when we go down.