The Swiss Ramble

[ClaretKent]

I've been reading his analyses for a while now. Recent financial news prompted me to share this in case anyone hadn't heard of his insights. The Burnley report is a little old now but worth reading in conjunction with the Bolton and Blackburn ones found in the right hand side links. What a great time to be a Claret! UTC
http://swissramble.blogspot.co.uk/search/label/Burnley" onclick="window.open(this.href);return false;

[Royboyclaret]

Swiss Ramble has been a brilliant source of information for a number of years.

They do some great work.

[ClaretKent]

Totally agree royboy. Very thorough and insightful and explains a lot of the dynamics of running a football club. It shows how well clubs are run and how badly. I also think this is why hard decisions were made to turn us from a selling club which we have historically been into one that isn't. In my view this is key. UTC

[Royboyclaret]

Absolutely........and in all my years following Burnley I really believe that, if we survive the dreaded drop this season, we can lose the tag of 'selling club' even if it might only be temporary.

Even that will be a massive achievement.

[Sidney1st]

That's a good site, I use it when I'm bored and want to go fishing on FB.

Boro fans point blank refuse to accept some of the figures and don't care that Gibson has possibly written off approx £80 million.

[ClaretKent]

This is a sea change in the history of our club. Get this right, which I think we are doing and the future is amazing. No longer selling to balance the books. Keeping our best players and moving forward. I am massively impressed by our board our management our team and our fans. UTC

[Royboyclaret]

Again, I agree entirely, with one small caveat and that's the lack of communication from the men at the top.

We went from no AGM, to no informal shareholder's meeting to delays in releasing the accounts.

On the basis that the accounts were completed, audited and signed off by the directors many weeks ago, there really is no justification in holding back their release until the time for submission to Companies House.

Other than that, everything in the garden is rosy.

[aggi]

It's possible they may be showing significant cash reserves and the club have decided to hold them until after the transfer window.

We're still a selling club, it's just that we have the ability to push for better deals nowadays as we're not desperate for the money (which is obviously a much better position for us).

[minnieclaret]

I pray that whilst we are so into the black Sky go tits up and only the top6 with their billionaire foreign owners can compete with us.

[claptrappers_union]

The money will only get bigger... wait until the new kids on the block come in with their offers- Google, Amazon, Facebook etc... they will blow Sky out of the water when it comes into buying the rights next time round.

[ClaretKent]

Exactly. It's like the opposite of the maximum wage which scuppered our club. If we can get it right our relative small size can be irrelevant. UTC

[TheAngryPixie]

Just signed up, although i've been a 'browser' since the opening day of UpTheClarets, to say that its worth looking at the recent article on Brighton. I was amazed to read that Tony Bloom has put in a quarter of a BILLION pounds into BHA since taking over!! I appreciate that its his money and he can do what he likes with it but wow, a quarter of a billion pounds.

[Sidney1st]

Brighton owe Bloom £150 million I think it is plus they pay rent for the Amex and training ground.

Brighton fans don't see an issue with it, Bloom is a life long fan and it's his money etc etc.

See Bolton, Boro, Rovers etc for similar opinions.

[TheAngryPixie]

It does look as though it may well finally pay off for him and BHA this season, although i really hope it doesn't, as they will then throw large amounts at staying up which of course guarantees nothing but it will potentially make things harder for us to survive again next season assuming we stay up this season. I find the whole world of football finances extremely interesting but very depressing too.

[Redbeard]

Never mind the Ramble - we're on a Swiss Roll.

Sorry.

[Culmclaret]

That article should be required reading for Clarets fans. It shows that over the past few years we have been an outstanding example of adopting sound principles and sticking to them. In the late 60s when we were the last survivors of the small town clubs at the highest level the Chester Report on English football concluded that Burnley Football Club was a phenomenon only explicable in terms of superb mamanagemt. How much truer is that today when we are competing unaided against plutocrats in the world's richest league!

[evensteadiereddie]

Post of the Week so far, Culm. Absolutely bang on.

[Royboyclaret]

Not exactly unaided Culm, in fact 90% of our income this year will be from outside revenue streams.

Back in the 60's the club were totally reliant on matchday receipts for income whereas this season they are a mere drop in the ocean.

Such is the changing world of football but I take the point that Burnley are a unique football club and should endeavour to remain so no matter what.

[Morgan]

The money will only get bigger... wait until the new kids on the block come in with their offers- Google, Amazon, Facebook etc... they will blow Sky out of the water when it comes into buying the rights next time round.

Quite why folk think the astronomical money for broadcasting rights will keep going up is beyond me. Sky's football viewing figures have dropped alarmingly because so many viewers are finding ways to watch without paying. They might be the ones currently supplying 32 cameras to cover each and every game but Rupert's not going to do that ad infinitum if he starts to lose out. Whether the names you mention will pick up the baton (and pay a shed load more?) Is open to question.

Try reading Jim White's article in the Final Whistle column in today's telegraph. Sorry, no good at posting links.

[aggi]

There's a whole load of exploitation that has barely been touched.

The next model will be PPV/subscription internet viewing. Subscribe to watch all your team's matches for the year, an extra £5 for Champions League games, etc, etc.

Things like Spotify and Netflix (or even Sportsmania) have shown that if you present an easy to use product then a lot of people will pay the money and use it rather than go to the extra effort of hunting around online for pirate versions.

My tip for the next big money entrant is Disney (who are already involved via ESPN) plus someone like Facebook for highlights.

The biggest threat to Burnley is the unbundling of TV rights. If Man Utd, Liverpool, etc are allowed to sell their rights individually we'll quickly end up with a situation like the historic Spanish League position with the big clubs getting the lion's share of the money. When Atletico Madrid won the league they still got a €100m less than Real and Barcelona,

[No Ney Never]

Investing in improving revenue from sources other than tv income, such as an improved corporate offering, should be 2nd only to investment in improving the playing squad now that training facilities have been taken care of. Maybe this could be extended to buying hotel and leisure facilities, or other lines of business that could provide the club with income paid out of profits generated.
The collapse of itv digital left us with a bit of a headache, so lessons learned from that would be a good place to start.

[ClaretKent]

Agreed Culm. When I see the whinging and moaning about the board and management on here I just want to ask them to read the Bolton Blackburn and Burnley articles mentioned above. There couldn't be a starker contrast if you tried to make it up. I am very proud of my club and the way it is being run after all those dark days in the past. I think we are a shining light of how to run a football club properly. UTC

[Royboyclaret]

I doubt you'll find anyone who disagrees with that sentiment ClaretKent.

However, their biggest challenge lies ahead, in the summer, if we retain our PL status.

That's when the really big decisions need to be made (when Income increases from £39million to £120million) and whether they match the ambitions of the rank and file supporters. Let's see if they pass that big test.

[Walton]

Quite why folk think the astronomical money for broadcasting rights will keep going up is beyond me. Sky's football viewing figures have dropped alarmingly because so many viewers are finding ways to watch without paying. They might be the ones currently supplying 32 cameras to cover each and every game but Rupert's not going to do that ad infinitum if he starts to lose out. Whether the names you mention will pick up the baton (and pay a shed load more?) Is open to question.

Try reading Jim White's article in the Final Whistle column in today's telegraph. Sorry, no good at posting links.

It's Premier League Productions (part of IMG) who provide the cameras etc for the majority of games, and then Sky and BT provide them for the games they bought the rights to.

[claptrappers_union]

Quite why folk think the astronomical money for broadcasting rights will keep going up is beyond me. Sky's football viewing figures have dropped alarmingly because so many viewers are finding ways to watch without paying.

PPV streaming and instant highlights is how we will watch football in the near future. Facebook have trialled live coverage with Wayne Rooney's testimonial.

I think we are seeing the beginning of the end of SkyTV, they are just playing catch up with the likes of Netflix and Amazon, they are struggling to even give their service away, its only the football that has any real pulling power for subscription now.

The likes of Apple, Google, YouTube, Twitter, Facebook, Disney etc, they are just waiting for viewing behaviours to change and they will take their opportunity. Who really under the age of 40 really watches television anyway? I don't watch television anymore, I come in from work and hope there's a decent episode of The Simpsons on and if that is post 2000 I'm surfing channels again. All the stuff I watch is online now.

[ClaretKent]

Just read the Boro Everton and Bournemouth articles.
Hi
Boro - Sidney, I had no idea how much Gibson was putting into Boro in the championship

" Of course, many clubs in the Championship have built up substantial debt with Boro’s £77 million only the 6th highest behind Bolton Wanderers £195 million, QPR £185 million, Brighton £131 million, Ipswich Town £86 million and Blackburn Rovers £80 million."

Without Gibson it is difficult to imagine how Boro could possibly compete in the Championship, as he essentially puts around £1 million into the club every month to cover its losses. "

Unbelievable Jeff.

Everton -
Moshiri explained his managerial choice thus, “For our club to compete in the north-west of England, which is the new Hollywood of football with Guardiola, Mourinho, Klopp, we needed a star to stand on the touchline, so I got Koeman.”

Certainly, Moshiri is talking a good match: “The way to compete is to build a big stadium, to increase our merchandising and commercial income. That is what we will do.”

He added, “We needed a strong balance sheet, so I paid off the debts."

So he paid off the debts. Simple as that. Btw I wonder if Hollywood extends to't Turf?

Bournemouth -
Mostyn referred to this tricky balance in the last accounts: “The club is aware of the risk associated with reliance upon finance from its parent company to fund operations. However, the directors are confident that this risk is minimal based on the ongoing commitment from its investors and recent positive developments within the business.”

Demin has indeed provided significant financial support, amounting to around £63 million over the last four years in the form of loans and new preference shares. That has helped to cover large losses that culminated in a £7.6 million fine for breaking Financial Fair Play (FFP) regulations in the 2013/14 promotion season.

That fine contributed to Bournemouth’s loss before tax rising from £10.3 million to a hefty £39.1 million in 2014/15."

Howe's that?

[Sidney1st]

Like I said, Boro fans won't listen when asked about it.

Gibson is given god like status up there and with good reason, he saved the club from literal extinction in the 80's.
Boro fans just trot out the same line as Bolton fans, our owner will look after us, we will be fine.
He created a parent company for the club and his haulage firm so he can offset the clubs losses against the haulage firm to a degree.

Either way the Boro fans just say they've got no debt because Gibson said so recently, but he meant external debt.
Boro fans just ignore what the club owe Gibson.

Its a common theme nowadays, like Brighton, Derby etc.
Part of me would love to see them collapse financially like Bolton, it would be hysterical.

[2510]

The bit that sums it up for me is our 85% reliance on TV revenue.

Shows how far the Manager/Board/Team have taken Burnley FC Deep joy!

[Goalposts]

Some very interesting analysis done by this guy recently on championship clubs and there reliance on there owners continued financial support....the championship is more of a basket case than the prem....and a lot of clubs ability to continue to exist without a beneficial owner..is interesting

[Goalposts]

https://twitter.com/SwissRamble/status/ ... 24363?s=19" onclick="window.open(this.href);return false;

[Royboyclaret]

Some interesting reading there Goalposts, clearly identifies this continuing desperation of Championship clubs to make it to the Big league. The contrast between these figures and the one's produced last week for the PL could not be more stark.

Fascinating that two years ago when ClaretKent started this thread, we were debating the prospects of Burnley retaining our PL status and here we are three seasons later clinging on to those massive financial benefits.

[Montevideo]

Very interesting analysis over the last week of both Prem and Championship cashflows.

The Premier League appears , at least on this evidence , to be a cash generator which will be an obvious attraction of ownership.

So obvious in fact that Championship owners are prepared to bankroll clubs in an attempt to get there( The Championship cannot recompense these levels of indebtedness ) .

You can more easily see why relegated Prem clubs can fall through the leagues particularly if a club's ownership is not prepared to go from cash benefactor to cash cow in any fall from grace.

I fear Burnley would be particularly vulnerable to such challenges.

Additionally , it does raise the question of us fishing for talent in possibly the most cash desperate League in Europe . The indebtedness of clubs inevitably manifests itself in higher transfer fees and it is questionable whether ' value for money ' , a primary Burnley transfer objective , can be achieved in the Championship transfer market.

[Royboyclaret]

.........."I fear Burnley would be particularly vulnerable to such challenges"...........

Not sure that's a fair comment, at all. Last relegation we bounced back immediately.

[Lancasterclaret]

I'd be wary of thinking that we could manage it this time.

The squad is aging, and we need a couple of transfer windows whilst in the prem to achieve the refreshments of squad that we need.

[aggi]

I fear Burnley would be particularly vulnerable to such challenges.

It's a potential issue. We've been fairly conservative and built up a bit of a rainy day fund to sustain us if we went down. So long as we bounced back within a couple of seasons (and we'd probably have the budget to compete with almost any team in those few years) we'd be OK.

Any longer than that and we'd start to seriously struggle.

[Devils_Advocate]

It's a potential issue. We've been fairly conservative and built up a bit of a rainy day fund to sustain us if we went down. So long as we bounced back within a couple of seasons (and we'd probably have the budget to compete with almost any team in those few years) we'd be OK.

Any longer than that and we'd start to seriously struggle.

What kind of wage budget would we be looking at if we went down, used up all the parachute payments and non of the Directors put their own money into the club? Im thinking we would be the equivalent of a Rotherham or Millwall especially as a lot of other Championship clubs are heavily funded by owner investment or are bigger than us in terms of fan base

[SGr]

I’ll be fascinated to see what the soon to be released accounts from last year show.

I expect wages to have increased - and a large bonus payout obviously, but transfer expenditure will have gone down by a significant amount. Hard to say obviously with undisclosed fees but I think we made a profit in summer 2017 what with the Gray and Keane sales.

Should be a healthy profit reported. In normal time Garlick has usually commented on the club’s financial position by now - but after the disaster that was the summer transfer window, I think he knows such a statement would not be taken well by supporters. Rightfully so.

[Royboyclaret]

What kind of wage budget would we be looking at if we went down, used up all the parachute payments and non of the Directors put their own money into the club? Im thinking we would be the equivalent of a Rotherham or Millwall especially as a lot of other Championship clubs are heavily funded by owner investment or are bigger than us in terms of fan base

That's a good question, but every reason to believe a 50% cut would happen immediately, as we've done before.

Then shrewd use of the parachute payments plus cash reserves and the military style precision of a Sean Dyche assault on the Championship should see us in prime position for a swift return. The last two promotions of same number of wins, draws, defeats and even goals scored would provide optimism he could work the oracle again.

Also D_A, although we might not have the wealtiest BoD, at least they played their part previously with loans at critical times.

[Royboyclaret]

I’ll be fascinated to see what the soon to be released accounts from last year show.

I expect wages to have increased - and a large bonus payout obviously, but transfer expenditure will have gone down by a significant amount. Hard to say obviously with undisclosed fees but I think we made a profit in summer 2017 what with the Gray and Keane sales.

Should be a healthy profit reported. In normal time Garlick has usually commented on the club’s financial position by now - but after the disaster that was the summer transfer window, I think he knows such a statement would not be taken well by supporters. Rightfully so.

Don't hold your breath SGr, another three months wait for the information you want. That said, we have a pretty good idea how the P/L account is going to look, as we've discussed previously on here.

[TVC15]

I’ll be fascinated to see what the soon to be released accounts from last year show.

I expect wages to have increased - and a large bonus payout obviously, but transfer expenditure will have gone down by a significant amount. Hard to say obviously with undisclosed fees but I think we made a profit in summer 2017 what with the Gray and Keane sales.

Should be a healthy profit reported. In normal time Garlick has usually commented on the club’s financial position by now - but after the disaster that was the summer transfer window, I think he knows such a statement would not be taken well by supporters. Rightfully so.

I think wages in the next accounts will be between £70m and £75m and I think we will make a profit of between £20m and £25m....as the accountants will have been hard at work finding ways to minimise our net profit figure (and tax bill).

[SGr]

Don't hold your breath SGr, another three months wait for the information you want.

Now that you mention it...

[SGr]

I think wages in the next accounts will be between £70m and £75m and I think we will make a profit of between £20m and £25m....as the accountants will have been hard at work finding ways to minimise our net profit figure (and tax bill).

Agree entirely

[Claretforever]

I think wages in the next accounts will be between £70m and £75m and I think we will make a profit of between £20m and £25m....as the accountants will have been hard at work finding ways to minimise our net profit figure (and tax bill).

The easiest way would be ground improvements, which is why I’m bemused why we haven’t begun ground improvements on the Bob Lord and Cricket Field Stand. I’m sure it would save us money to do it now rather than later, but we will have to do it.

[aggi]

What kind of wage budget would we be looking at if we went down, used up all the parachute payments and non of the Directors put their own money into the club? Im thinking we would be the equivalent of a Rotherham or Millwall especially as a lot of other Championship clubs are heavily funded by owner investment or are bigger than us in terms of fan base

Yep. Worst case scenario (used up our extra cash and the directors can only add a bit of extra money here and there) which would probably be after four years or so trying to compete in the championship would put us on a budget of bottom end of championship/top end of league one I'd guess.

[Devils_Advocate]

That's a good question, but every reason to believe a 50% cut would happen immediately, as we've done before.

Then shrewd use of the parachute payments plus cash reserves and the military style precision of a Sean Dyche assault on the Championship should see us in prime position for a swift return. The last two promotions of same number of wins, draws, defeats and even goals scored would provide optimism he could work the oracle again.

Also D_A, although we might not have the wealtiest BoD, at least they played their part previously with loans at critical times.

There was no agenda to my post just a genuine question. We are very proud (and rightly so) that we dont rely on directors sticking their personal wealth into the clubs coffers.I was just wondering that if we rigidly stuck by the strategy to live within our natural means then if we dont get back up during the parachute payment years where would it leave us

[Royboyclaret]

I think wages in the next accounts will be between £70m and £75m and I think we will make a profit of between £20m and £25m....as the accountants will have been hard at work finding ways to minimise our net profit figure (and tax bill).

Can't resist a smile at the Net Profit figure, we'd need magicians not accountants to reduce it to that level.

The profit on sale of Keane & Gray will be more than the £25m alone, plus at least as much again in Operating profit.

[TVC15]

We’ll see !

[Quickenthetempo]

We would be favourit's to win the championship seeing as we have the last two championship top scorers, Vokes who has plenty of goals in that league and 90% of the squad really good championship players who would slot straight back in.
Apart from the goalkeepers, Defour and maybe Lennon I can't see any of our lads staying in the prem.

I presume we could survive the first season wages wise.

[Colburn_Claret]

The last 2 promotions were helped with a massive promotion bonus, to compensate the comparative lower wage. It's a great incentive to roll your sleeves up.
IF we do stay up, we need to start reducing the age of the squad over the next few windows. Stoke have loads of experience, but you need that hunger when you are punching above your weight. Dwight McNeil is a perfect example of, if youre good enough, you're old enough.

The bottom line is you have to trust the men who are in the know, the board. Who after all are just as big a fan of the club, as the rest of us.

[Bfc]

Royboyclaret, re the profit from any players sales, isnt the likely £25m transfer profit going to be distorted, if the buying club spread the payments and don’t pay the full transfer fee in Burnley’s financial year?.