Beware the cost of relegation

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No Ney Never
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Beware the cost of relegation

Post by No Ney Never » Tue Apr 30, 2019 12:35 pm

Take Sunderland for example.

Martin Bain received a £1million-plus pay-off when he left the Stadium of Light at the end of last season, the latest club accounts show.

And relegation from the Premier League left a £46million-plus TV revenue black hole in the club’s finances.

The accounts, which cover the financial year to July 31, 2018 – a period which saw the club suffer its second successive relegation, the sale to a consortium headed by Stewart Donald and Charlie Methven, and the sacking of manager Chris Coleman – show turnover collapsed by almost half, from £123,504,000 to £63,691,000, a drop of £59,813,000.

Although Martin Bain is not mentioned by name, the accounts cover payments made to directors in the period, and show the highest-paid, understood to be the former chief executive, received £1,881,478, including £1,064,498 in compensation for loss of office and £67,924 in pension contributions.

The results lay bare the huge financial impact of the club’s relegation from the top flight of English football a year earlier.

While income from gate receipts, sponsorship and royalties, and conferences and banqueting and retail and merchandising were all down, the loss of the colossal Premier League TV payments dwarfed them all and saw the amount the club received in television and media payments fall by almost £47million.

Despite finishing rock bottom in the Premier League in 2017, the Black Cats still received £95,626,000 in TV and media income.

A season in the Championship, however, saw that figure slashed to £48,849,000 including the relegation parachute payment.

Gate receipts were down from £8,943,000 to £6,559,000, while sponsorship and royalties dropped sharply, from £9,7776,000 in 2017 to £1,901,000 last year, and conference and banqueting fell from £4,440,000 to £2724,000.

Retail and merchandising income was down from £3,586,000 to £2,307,000, but other income was up slightly, from £1,133,000 to £1,351,000.

The club slashed its wage bill in the year following relegation from the Premier League, down by almost half from £82,691,000 to £46,834,000.

Loss before taxation almost doubled over the period, up from £10,248,000 to £19,912,000.

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Re: Beware the cost of relegation

Post by bfcmik » Tue Apr 30, 2019 12:55 pm

So they were loss making whilst in the Premier League? Wonder why anyone is at all surprised by them making even bigger losses when out of it.

Fancied themselves as a big club and overspent year after year.

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Re: Beware the cost of relegation

Post by jdrobbo » Tue Apr 30, 2019 12:56 pm

I’m guessing that’s why we target the players we do; why we have relegation clauses included in contracts and why we a healthy profit at the latest accounts showing. All this to go with the parachute payments.

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Re: Beware the cost of relegation

Post by Quickenthetempo » Tue Apr 30, 2019 1:08 pm

The longer we're in the premier league the higher are wage bill will go. We will soon lose money if we're not selling playes.
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Re: Beware the cost of relegation

Post by Chester Perry » Tue Apr 30, 2019 1:30 pm

see posts #951 and #957 http://uptheclarets.com/messageboard/vi ... &start=950" onclick="window.open(this.href);return false; for the Price of Football's @KieranMaguirre's analysis

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Re: Beware the cost of relegation

Post by Chester Perry » Tue Apr 30, 2019 1:32 pm

The situation at Swansea is not much better see post #944 http://uptheclarets.com/messageboard/vi ... &start=900" onclick="window.open(this.href);return false;

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Re: Beware the cost of relegation

Post by IanMcL » Tue Apr 30, 2019 3:20 pm

That is why our directors are building a war chest, in case of relegation. Massive negative impact, for all relegated clubs.

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Re: Beware the cost of relegation

Post by houseboy » Tue Apr 30, 2019 3:20 pm

Does this not show something that is glaringly obvious?

Slowly, over a period of time, the money from the PL should be reduced simply because it causes clubs to spend what they haven't got (or only temporarilly have) in order to keep that which is not guaranteed to last. The money in the PL now is beyond ridiculous but the only REAL beneficiaries are the big 6 and maybe clubs like Everton and Leicester. teams who would not normally fear relegation. Over half the clubs in the PL live in fear of relegation, not because of pride, as it used to be, but the loss of money that seriously puts many relegated clubs in financial difficulty. And the problem is, or seems to be, they never learn from clubs like Sunderland or, especially, Bolton. The longer the money in the PL keeps going up the more clubs will, potentially, go out of business or suffer serious financial difficulites if they are relegated. Even Burnley could be in trouble if we were relegated. Okay we don't spend huge amounts on players and our wages are, reputedly, the lowest in the PL, but nevertheless we will still have players on very high wages for us (and do we know for a fact that we have relegation clauses? It has been talked about on here many times but have the club ever stated openly that they exist - forgive me if I'm wrong). We have of course been very frugal whilst in the PL but remenber if we did drop at some point we have a very small fan base so the drop in income would be much worse for us than most clubs. Sunderland get bigger crowds in league one than we do in the PL and still they struggle, how much worse for us? They have averaged 10k more this season than the Turf actually holds and their biggest attendance is more than double ours.

I've said for a long time that in the long term money will kill football as we know it and things need to change before it implodes on itself in a major way.
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Re: Beware the cost of relegation

Post by Chester Perry » Tue Apr 30, 2019 3:30 pm

houseboy wrote: It has been talked about on here many times but have the club ever stated openly that they exist - forgive me if I'm wrong).

Page 6 of the accounts under Principal Risks and Uncertainties paragraph 2

https://s3.eu-west-2.amazonaws.com/docu ... cbcff86e54" onclick="window.open(this.href);return false;

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Re: Beware the cost of relegation

Post by Conroy92 » Tue Apr 30, 2019 4:32 pm

Just out of interest, what would happen if one of the big 6 ever did get relegated?! Would they get hit with FFP straight away in the championship? How would some of these big clubs get out of the myre when there posting staggering debts?

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Re: Beware the cost of relegation

Post by houseboy » Tue Apr 30, 2019 4:43 pm

[quote="Chester Perry"]Page 6 of the accounts under Principal Risks and Uncertainties paragraph 2

Sorry bud - your link doesn't open (but it DOES come up under quotes as a very long and complex series of technical jargon). Either way I trust you and thanks for that - don't need to see it as you wouldn't have posted if it didn't prove anything. I had just never personally seen any proof before. Of course it makes a lot of sense and would definitely help if the worst came to the worst. I still worry about the consequences of relegation though and it seems to get strangely worse not better the longer you have been in the PL. I suppose that is down to being used to a large income over a longer period of time, clubs possibly get a false sense of security.

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Re: Beware the cost of relegation

Post by Chester Perry » Tue Apr 30, 2019 5:14 pm

Houseboy - sorry the link to the doc at companies house didn't work, the address is ridiculously long

- the more we spend on transfers and salaries (and take contracts beyond 3 years) the greater the risk is. Amortisation of fees and long high contracts (even with relegation clauses) can be a killer and is really only rectified by player sales, which by their nature can seriously weaken the squad.

Outside of FFP upgrades to the ground and training facility, increased maintenance and depreciation kicks in, our multiple desso pitches have a finite life (they are not cheap to replace - Accy cannot afford to put one in on a league 1 budget) we even have a training pitch underheated (Accy can't afford to run that either). Also I are assume we are now close to making a decision to upgrade our Academy to Cat 1 which would see a significant up-kick in costs (perhaps more that 100% - Rovers are running theirs at bare bones for just over £4m a year I believe) with relegation and no immediate return these things can kill a balance sheet and cash flow

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Re: Beware the cost of relegation

Post by theroyaldyche » Tue Apr 30, 2019 5:33 pm

Small club

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Re: Beware the cost of relegation

Post by Chester Perry » Tue Apr 30, 2019 5:45 pm

theroyaldyche wrote:Small club


I presume you mean Accy - yes they are, but they are run the right way - the point is that these things cost a lot of money to operate and eat into cash flow which on relegation quickly becomes a challenge to keep going, and is something we have not previously had to budget for

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Re: Beware the cost of relegation

Post by paulatky » Tue Apr 30, 2019 6:16 pm

And our Directors dont take a salary out of the club,
Paying a Sunderland Director over
£1m for overseeing a loss making organisation is not only madness but also obscene

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Re: Beware the cost of relegation

Post by Chester Perry » Tue Apr 30, 2019 6:23 pm

paulatky wrote:And our Directors dont take a salary out of the club,
Paying a Sunderland Director over
£1m for overseeing a loss making organisation is not only madness but also obscene
Not paying directors is a clever distraction by Burnley - in most businesses and clubs the the CEO is on the board and therefore a Director - Dave Baldwin isn't and therefore we do not have to disclose his salary, same goes for the Technical Director Mike Rigg who certainly will not work for nothing

We are well known for not revealing anything that we absolutely do not have to

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Re: Beware the cost of relegation

Post by thatdberight » Tue Apr 30, 2019 6:59 pm

Actually, the cost of relegation seems pretty limited and Sunderland have managed that bit reasonably well. It's fair to assume year 2 outside the PL would see more cost savings. The issue is that their underlying business model must have been to lose money in perpetuity. Losing £10m in the PL is a far worse performance than losing £19M in your first year out of it.

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Re: Beware the cost of relegation

Post by No Ney Never » Tue Apr 30, 2019 8:22 pm

Too much money is taken out of football by extremely high wages and agent fees.
Not enough is ploughed back into the clubs and the communities they serve.

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Re: Beware the cost of relegation

Post by tiger76 » Tue Apr 30, 2019 10:41 pm

After tonight's results at least one or possibly still both of Portsmouth and Sunderland will be a League 1 club/s next season,cost-cutting might be in order for the pair,though on past history don't bank on it.

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Re: Beware the cost of relegation

Post by gtclaret » Wed May 01, 2019 11:03 am

So when I posted that the £34m profit we made, inflated by player sales was slightly worrying and not worthy of the celebration that was on this board, I was right, my whole post was spot on, we will have to sell players in order to pay future wages and purchase players in the Premier league

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Re: Beware the cost of relegation

Post by KRBFC » Wed May 01, 2019 11:08 am

Quickenthetempo wrote:The longer we're in the premier league the higher are wage bill will go. We will soon lose money if we're not selling playes.
Absolutely which some fail to realise, the longer we're in the PL, the bigger mess we're in once relegated which is why you see Bolton is such a mess and our situation can't be compared to theirs given we've not been in this league anywhere near the same amount of time as they were.

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Re: Beware the cost of relegation

Post by Sausage » Wed May 01, 2019 2:03 pm

KRBFC wrote:Absolutely which some fail to realise, the longer we're in the PL, the bigger mess we're in once relegated which is why you see Bolton is such a mess and our situation can't be compared to theirs given we've not been in this league anywhere near the same amount of time as they were.
I don't understand your point. Are you advocating that we get relegated sooner rather than later? Also, within the same sentence you say the Bolton situation is comparable to ours, then say it isn't. Bolton are in a mess because they ran up their debts whilst in the Premier League. Burnley haven't done that and, on current showing, won't be doing any time soon.

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Re: Beware the cost of relegation

Post by ClaretTony » Wed May 01, 2019 2:12 pm

KRBFC wrote:Absolutely which some fail to realise, the longer we're in the PL, the bigger mess we're in once relegated which is why you see Bolton is such a mess and our situation can't be compared to theirs given we've not been in this league anywhere near the same amount of time as they were.
Nothing like Bolton. They were over spending because they had a benefactor who was prepared to cover that over spending. It was the same at Sunderland with Ellis Short. Then, as we saw at both clubs, the pair decided to fund it no longer. Our club is totally different in that it isn't reliant on an individual or consortium throwing money at it. We live within our means and will continue to do so however difficult that might be. So no, we won't be in a mess if and when we go down, and it won't get worse the longer we're here.

You are miles away in thinking we can't be compared with Bolton because we haven't been in the league for the same amount of time. We can't be compared because we don't have an Eddie Davies who throws money in and then decides to call time on it.

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Re: Beware the cost of relegation

Post by TVC15 » Wed May 01, 2019 2:35 pm

Quickenthetempo wrote:The longer we're in the premier league the higher are wage bill will go. We will soon lose money if we're not selling playes.
Why do you think that ?
Our wage bill this year had a big chunk of bonuses which was directly linked to our high finishing position which was directly linked to our increased revenue.
The longer we are in the Premier League the more financially stable we become based on the last few years financial performance.
We have just had the most profitable few years in our history and built up substantial reserves and improved the assets of the club significantly on and off the pitch.

The only way things will deteriorate the longer we are in this league is if we abandon our recent approach to managing our finances and start to go down the road of what Bolton, Sunderland and many other clubs have done.

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Re: Beware the cost of relegation

Post by Quickenthetempo » Wed May 01, 2019 3:36 pm

TVC15 wrote:Why do you think that ?
Our wage bill this year had a big chunk of bonuses which was directly linked to our high finishing position which was directly linked to our increased revenue.
The longer we are in the Premier League the more financially stable we become based on the last few years financial performance.
We have just had the most profitable few years in our history and built up substantial reserves and improved the assets of the club significantly on and off the pitch.

The only way things will deteriorate the longer we are in this league is if we abandon our recent approach to managing our finances and start to go down the road of what Bolton, Sunderland and many other clubs have done.
Just based on watching every club in the premier league over the last 20 odd years. Most don't have money for transfer fees as the wage budget takes all the money.
We don't have the match day income to match most either.
Whilst we have money, agents will be trying their best to get it for their clients.

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Re: Beware the cost of relegation

Post by Spijed » Wed May 01, 2019 3:50 pm

Quickenthetempo wrote:Just based on watching every club in the premier league over the last 20 odd years. Most don't have money for transfer fees as the wage budget takes all the money.
We don't have the match day income to match most either.
Whilst we have money, agents will be trying their best to get it for their clients.
So are you saying it's financially better for us to get relegated?

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Re: Beware the cost of relegation

Post by houseboy » Wed May 01, 2019 4:00 pm

Sausage wrote:I don't understand your point. Are you advocating that we get relegated sooner rather than later? Also, within the same sentence you say the Bolton situation is comparable to ours, then say it isn't. Bolton are in a mess because they ran up their debts whilst in the Premier League. Burnley haven't done that and, on current showing, won't be doing any time soon.
I think his point is similar to the one I made, that the longer you are in the PL the less you can afford to be relegated. As in life the longer you are 'exposed' to high income the more it hurts if you lose it. Wages will continue to rise rapidly in the PL, as will transfer fees (although they are less problematic than a player on 200k per week for 4 years). It's not difficult to see how the PL money turns out to be an albatross around the neck of a relegated club because their expenditure is based on it. If an individual earns a lot of money and buys a massive house on a mortgage based on that income, and a couple of expensive cars on HP, runs up credit card bills knowing he can safely pay the bills and so on, then loses said income for whatever reason he is going to be in serious difficulties financially. The same is true of a club who spend a few years in the PL with all the riches that brings, only to have the rug pulled from under them if they get relegated. And the longer they are there the worse it will be.
Last edited by houseboy on Wed May 01, 2019 4:01 pm, edited 1 time in total.

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Re: Beware the cost of relegation

Post by Quickenthetempo » Wed May 01, 2019 4:01 pm

Spijed wrote:So are you saying it's financially better for us to get relegated?
No. But I think you know that.

If I knew a successful way of running a football club I would be running one.

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Re: Beware the cost of relegation

Post by GodIsADeeJay81 » Wed May 01, 2019 4:02 pm

Relegation from the PL after a long period is only an issue if contracts don't have relegation clauses and the club isn't prepared etc

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Re: Beware the cost of relegation

Post by Quickenthetempo » Wed May 01, 2019 4:07 pm

GodIsADeeJay81 wrote:Relegation from the PL after a long period is only an issue if contracts don't have relegation clauses and the club isn't prepared etc
How many players agree to relegation clauses?

Do all our players have one?

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Re: Beware the cost of relegation

Post by KRBFC » Wed May 01, 2019 4:13 pm

ClaretTony wrote:Nothing like Bolton. They were over spending because they had a benefactor who was prepared to cover that over spending. It was the same at Sunderland with Ellis Short. Then, as we saw at both clubs, the pair decided to fund it no longer. Our club is totally different in that it isn't reliant on an individual or consortium throwing money at it. We live within our means and will continue to do so however difficult that might be. So no, we won't be in a mess if and when we go down, and it won't get worse the longer we're here.

You are miles away in thinking we can't be compared with Bolton because we haven't been in the league for the same amount of time. We can't be compared because we don't have an Eddie Davies who throws money in and then decides to call time on it.
We are heavily reliant on player sales to make profit and spending next to nothing in the market, the longer we're in the PL, the bigger the wage budget naturally becomes, the bigger loss once relegated.

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Re: Beware the cost of relegation

Post by KRBFC » Wed May 01, 2019 4:14 pm

houseboy wrote:I think his point is similar to the one I made, that the longer you are in the PL the less you can afford to be relegated. As in life the longer you are 'exposed' to high income the more it hurts if you lose it. Wages will continue to rise rapidly in the PL, as will transfer fees (although they are less problematic than a player on 200k per week for 4 years). It's not difficult to see how the PL money turns out to be an albatross around the neck of a relegated club because their expenditure is based on it. If an individual earns a lot of money and buys a massive house on a mortgage based on that income, and a couple of expensive cars on HP, runs up credit card bills knowing he can safely pay the bills and so on, then loses said income for whatever reason he is going to be in serious difficulties financially. The same is true of a club who spend a few years in the PL with all the riches that brings, only to have the rug pulled from under them if they get relegated. And the longer they are there the worse it will be.
Thanks for clearing up a pretty obvious point, not sure if Sausage intentionally chose to miss it.

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Re: Beware the cost of relegation

Post by Conroy92 » Wed May 01, 2019 4:19 pm

I think I'll trust the board with this one. I agree that being in the prem CAN lead to a financial mess, however based on how we have operated since Coyle/Flood departed, we have nothing to fear. Provoding we stick to the model of living within our means then we will be fine.
All the more reason to be upgrading the scouting networks and looking at the over seas markets so we can find those gems at a good price.

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Re: Beware the cost of relegation

Post by GodIsADeeJay81 » Wed May 01, 2019 4:22 pm

Quickenthetempo wrote:Just based on watching every club in the premier league over the last 20 odd years. Most don't have money for transfer fees as the wage budget takes all the money.
We don't have the match day income to match most either.
Whilst we have money, agents will be trying their best to get it for their clients.
That's because clubs have allowed themselves to be dictated too by agents in regards to wages/agents fees and they've gotten used to paying over the odds for players.

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Re: Beware the cost of relegation

Post by GodIsADeeJay81 » Wed May 01, 2019 4:23 pm

Quickenthetempo wrote:How many players agree to relegation clauses?

Do all our players have one?
Our lot will all have one, it probably isn't even an option not to have one.

Sunderland were paying Rodwell a rumoured £70k a week in the championship and he wasn't even playing.

Wolves went down with an horrendous wage bill and stupid contracts last time.

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Re: Beware the cost of relegation

Post by claretonthecoast1882 » Wed May 01, 2019 4:24 pm

GodIsADeeJay81 wrote:Our lot will all have one, it probably isn't even an option not to have one.

Sunderland were paying Rodwell a rumoured £70k a week in the championship and he wasn't even playing.

Wolves went down with an horrendous wage bill and stupid contracts last time.

Remember though some on here think we will be paying Joe Hart over 100k a week next season, so not hard to imagine some will struggle with the concept of relegation clauses
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Re: Beware the cost of relegation

Post by Chester Perry » Wed May 01, 2019 4:26 pm

GodIsADeeJay81 wrote:Relegation from the PL after a long period is only an issue if contracts don't have relegation clauses and the club isn't prepared etc
Much more than that I am afraid - as I alluded to in a post above - being in the Premier League requires a whole new level of infrastructure and support staff that just cannot be afforded if a club is relegated and doesn't bounce back up - we run a tight ship with regards to staff numbers less than 200 - Swansea who are a similar sized club, but had been in the PL for longer had over 400 last season (they are in a right mess now as the owners try to claw back their money before selling up).

The adjustment, for clubs and communities is huge and painful if they have gone for it and failed.

Our saving grace is that SD is viewed as having an unattractive playing style and a good core of our players are regarded as functional over-achievers aided by the system. This allows us to minimise the level of poaching (especially the manager) and in turn maintains stability. The real hurdle comes when the pressure to be "progressive" becomes insurmountable, one bad choice at the top leads to a cascade of decisions/purchases that will lead to a downfall (See Rovers, Bolton etc yes I know they had debt but the fall from the PL had as much to do with the desire to play attractive football and the consequent change of manager).

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Re: Beware the cost of relegation

Post by Quickenthetempo » Wed May 01, 2019 4:42 pm

GodIsADeeJay81 wrote:Our lot will all have one, it probably isn't even an option not to have one.

Sunderland were paying Rodwell a rumoured £70k a week in the championship and he wasn't even playing.

Wolves went down with an horrendous wage bill and stupid contracts last time.
I'm not convinced to be honest.

In an ideal world they would have but it's not ideal.

Clubs get caught out in trying to improve.

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Re: Beware the cost of relegation

Post by GodIsADeeJay81 » Wed May 01, 2019 4:43 pm

Chester Perry wrote:Much more than that I am afraid - as I alluded to in a post above - being in the Premier League requires a whole new level of infrastructure and support staff that just cannot be afforded if a club is relegated and doesn't bounce back up - we run a tight ship with regards to staff numbers less than 200 - Swansea who are a similar sized club, but had been in the PL for longer had over 400 last season (they are in a right mess now as the owners try to claw back their money before selling up).

The adjustment, for clubs and communities is huge and painful if they have gone for it and failed.

Our saving grace is that SD is viewed as having an unattractive playing style and a good core of our players are regarded as functional over-achievers aided by the system. This allows us to minimise the level of poaching (especially the manager) and in turn maintains stability. The real hurdle comes when the pressure to be "progressive" becomes insurmountable, one bad choice at the top leads to a cascade of decisions/purchases that will lead to a downfall (See Rovers, Bolton etc yes I know they had debt but the fall from the PL had as much to do with the desire to play attractive football and the consequent change of manager).
I'm aware of all that, hence my comment about being prepared.
That's when clubs who get relegated start to struggle.
They don't have the plans in place to deal with relegation.

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Re: Beware the cost of relegation

Post by GodIsADeeJay81 » Wed May 01, 2019 4:45 pm

Quickenthetempo wrote:I'm not convinced to be honest.

In an ideal world they would have but it's not ideal.

Clubs get caught out in trying to improve.
We had them last time, we will have them this time.
After all these years of watching the club be as sensible as possible, despite the clamour from some fans to spend the dry powder store, I can't see why you're not convinced the players contracts would have relegation clauses.
At some point we will go down, any club outside of the top 6 and Everton is at risk of going down, as shown by Villa bombing out of the league.

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Re: Beware the cost of relegation

Post by TVC15 » Wed May 01, 2019 4:47 pm

Quickenthetempo wrote:Just based on watching every club in the premier league over the last 20 odd years. Most don't have money for transfer fees as the wage budget takes all the money.
We don't have the match day income to match most either.
Whilst we have money, agents will be trying their best to get it for their clients.
But isn't our wage bill without the bonuses nearer to £60m with a revenue will in excess of £100m ?
Match day income for all but a few of the big clubs isn't that relevant in the scheme of things. Even if we got an extra 10k fans to match the likes of Palace, Everton etc in overall terms its still a small percentage of overall revenue.
Not all clubs in the Premier League in the last 20 years have lived beyond their means - many have made good profits.
As said I am not sure why you think our owners / the Board of BFC will change the way we manage our club....irrespective of how much money we have or the actions of agents.
We have done it our way for the last few years at a time when there has been more money in the game than ever and we are not all of a sudden going to go from a low risk prudent strategy to a high risk one. Our increase in costs, salaries we are prepared to pay and transfer fees etc has been a gradual increase over a few years...bit like Stoke did. It might seem like astronomical figures compared to what we have experienced before but after next year the club will have generated the best part of half a billion revenue in the last 4 or 5 years which is probably more than the rest of history since we were formed !!!!

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Re: Beware the cost of relegation

Post by Chester Perry » Wed May 01, 2019 6:30 pm

TVC I would be interested to hear which clubs you think have made good profits going about their business like us without debt, so that when they eventually get relegated they remain strong - I can only think of West Brom and they came close to blowing the financials the season after announcing record profits and ended up being relegated.

https://www.theguardian.com/football/20 ... cked-wages" onclick="window.open(this.href);return false;

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Re: Beware the cost of relegation

Post by TVC15 » Wed May 01, 2019 7:38 pm

Chester Perry wrote:TVC I would be interested to hear which clubs you think have made good profits going about their business like us without debt, so that when they eventually get relegated they remain strong - I can only think of West Brom and they came close to blowing the financials the season after announcing record profits and ended up being relegated.

https://www.theguardian.com/football/20 ... cked-wages" onclick="window.open(this.href);return false;
I never said that other clubs have made good profits going about their business like us without debt.
I said plenty of other clubs have made profits and do so on a regular basis. Debt is not always a bad thing - it’s only when you over stretch yourself in borrowing too much or allowing your costs to increase by too much or in some clubs cases both of these things.
Look at what United fans thought about the debt the Glazers brought to United...few of them mention that now as it has never hindered the clubs spending and they are worth a lot more now as a club than before the Glazers took over.
It’s whatever model works for your club and how much risk you are prepared to take. Our model is no debt and a prudent approach to wages, transfer fees relative to most other teams in the league. In reality if we had say £20m of debt we would probably still be fine - even if we got relegated.
If (or when) we get relegated like nearly every club who has been in the Premier League has then we will not have to worry about some rich owner losing interest and deciding to stop the subsidies or worry about servicing debt. For us it will be about how we find the balance between going back up and reducing the wage costs over the period of the parachute payments.

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Re: Beware the cost of relegation

Post by GodIsADeeJay81 » Wed May 01, 2019 8:00 pm

Very few clubs make actual real profits.

I think it's us and Spurs? who do so on a regular basis.

The rest of them are all operating at a loss, or have massive debts.

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Re: Beware the cost of relegation

Post by TVC15 » Wed May 01, 2019 8:33 pm

GodIsADeeJay81 wrote:Very few clubs make actual real profits.

I think it's us and Spurs? who do so on a regular basis.

The rest of them are all operating at a loss, or have massive debts.
That’s just not true. The most recent Deloitte report showed record operating profits of almost a billion pounds for the Premier League and pre tax profits of nearly half a billion.
Liverpool made £125m profit. United made big profits, Arsenal nearly £50m profit, Spurs, Everton etc. Most clubs in the league are very profitable.

Plus some clubs are making very healthy profits and have significant debt - United being one of them.

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Re: Beware the cost of relegation

Post by GodIsADeeJay81 » Wed May 01, 2019 8:35 pm

So when I said real profits, that's what I meant.

We have no debts and make actual real profit, one of the few clubs to actually do so.

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Re: Beware the cost of relegation

Post by SGr » Wed May 01, 2019 8:40 pm

The cost of relegation is absolutely enormous. If there are still fans who “don’t mind” us going down, they could do with facing the facts.

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Re: Beware the cost of relegation

Post by TVC15 » Wed May 01, 2019 8:52 pm

GodIsADeeJay81 wrote:So when I said real profits, that's what I meant.

We have no debts and make actual real profit, one of the few clubs to actually do so.
Sorry - I hadn’t realised that you had made up your own definition of “real profits” which differs from every other definition in the world of real profit !!

You do actually realise that companies that have loans can make real profit?...,or do you not count that either ?
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Re: Beware the cost of relegation

Post by TVC15 » Wed May 01, 2019 8:55 pm

SGr wrote:The cost of relegation is absolutely enormous. If there are still fans who “don’t mind” us going down, they could do with facing the facts.
Not sure there are any fans who “don’t mind” us going down.
There may be some fans like me who don’t believe it will be the end of the world and that not all clubs who are relegated have to end up like Sunderland or Bolton. Like most / all Burnley fans I would still mind very much if we got relegated.

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Re: Beware the cost of relegation

Post by GodIsADeeJay81 » Wed May 01, 2019 8:59 pm

TVC15 wrote:Sorry - I hadn’t realised that you had made up your own definition of “real profits” which differs from every other definition in the world of real profit !!

You do actually realise that companies that have loans can make real profit?...,or do you not count that either ?
I'm not going to bat this backwards and forwards all evening, I really cannot be bothered so I'll lay it out for you what I actually meant.

We have no debt, all monies in the bank belong to the club and we don't operate at a loss.

One of the very few clubs in the top two divisions to do so, I think Spurs was the other one before they upgraded their stadium.
I'm aware of what's considered real profits in the real world, but it's a screwy way of looking at it.

Glad we've cleared it all up, I'll carry on with what I was doing now.

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