The Summer clearout / Coming in thread. Updated 27/8

[Duke the Dog]

You can play with the numbers as much as you like. The bottom line is Mr Mad isn't going to spend more than he has to. He never has unless he can see a clear and tangible invesment (ie Academy, Stadium, Hotel etc). To be fair he's been consistent and open about it. He's no Abramovich, or rich Sheik with vast wads of cash ready to be "lost". Lets face it he's no Walker, Whelan or Hayward either (you ask any of them - well, those still with us of course!) if they're making any money from owning and bank rolling a club.

I'd like a benevolent chairman with lots of money, but it has to be real (not like the consortiums that are popping up and promising everything, only to turn out to be borrowing money based on the value of the club - Man Utd, Liverpool). My concern is that when these benefactors get bored, will they want all, (or even some) of their money back? You need another person to come in and bail you out. Failing that it's administration or liquidation (although how clubs manage to avoid liquidation is amazing, even R&D are carrying on).

[Svlad Cjelli]

You can play with the numbers as much as you like. The bottom line is Mr Mad isn't going to spend more than he has to. He never has unless he can see a clear and tangible invesment (ie Academy, Stadium, Hotel etc). To be fair he's been consistent and open about it. He's no Abramovich, or rich Sheik with vast wads of cash ready to be "lost". Lets face it he's no Walker, Whelan or Hayward either (you ask any of them - well, those still with us of course!) if they're making any money from owning and bank rolling a club.

I'd like a benevolent chairman with lots of money, but it has to be real (not like the consortiums that are popping up and promising everything, only to turn out to be borrowing money based on the value of the club - Man Utd, Liverpool). My concern is that when these benefactors get bored, will they want all, (or even some) of their money back? You need another person to come in and bail you out. Failing that it's administration or liquidation (although how clubs manage to avoid liquidation is amazing, even R&D are carrying on).

All that - plus it's not just when they they get bored. How about when they die or their other businesses collapse? It's all risk, and the higher the debt the less chance a club has or recovering from it.

Which begs the age-old question yet again - why would a benevolent chairman loan money and not just give it?

[Extended-Phenotype]

Why would we think with enough certainty to risk the club's future on it that our performance would garner interest and or value?

Because we ended the season strongly, scoring plenty of goals and according to you/those on your side of the argument, were fighting other clubs off with big pointy sticks. I was about to say the old ‘cake and eat it’ axiom, but my gran used to say that, and I never understood why you would want a cake other than to eat it. Stupid gran.

Auditors have little to do with any of this. You either operate on worst case scenario or with positive outlook. It’s a little baffling that you suppose we handle the club on the premise none of our players are ever going to be wanted.

My concern is that when these benefactors get bored, will they want all, (or even some) of their money back?

In my admittedly economically retarded mind, investment is different to personal funding. But both would have impact on club value, which would be the figure the owner would (try) and sell for. If JM bought a player at 2m instead of 200k simple maths would suggest the club’s value is 1.8m higher. But then it isn’t always simple maths of course.

However, any investment/funding isn’t debt, unless you think the ‘ambitionists’ are asking chairmen to buy players made of ice and leave them next to a radiator.

[brendywendy]

With regards to (a), I would argue that we seemed to walk into the season well prepared and financially comfortable. We then accepted a last minute whopper of a fee for Gylfi, our best player. I don’t see how recycling 2-3m of this fee would suddenly be bankrupting us. Ok, money doesn’t always buy you goals, but it most certainly increases the pool.

the figures have been given. we were 2 million in debt. with the prospect of that happening every year, without buying anyone.with the slight restructuring of wage bill, and sale of gylfi, we were pretty much sorted, with enough money to buy in some much needed defensive experience. it took a couple of months to reshape our system, but after that it didnt seem to have affected us too much.
and we HAVE recycled 2-3 million of that gylfi money already in loans, wages, fees etc as described. im not sure how else it can be put to convince you tbf.

With (c) I would remind people that the club books aren’t the only financial ins/outs observed by owning a football team. These millionaires aren’t burning their own money, it’s a leverage to themselves and every other business they have. So do I think it’s ridiculous wishing for personal funding from the chairman? No. It happens because it IS financially beneficial, and not only that, they are spending on their hobby. Again, I’d rather have a chairman who runs the club closer to a passion than a business, and a wee bit more flexibility in the transfer market might have seen our amazing form bettered.

i disagree- id massively prefer JM than someone who will let his heart and emotional attachment to the club force him into the kind of wrong decisions that you seem to want.

and in general i laugh at the comments about leverage.
you dont spend millions of your own money without getting it back except for some etherial value in leverage. what is leverage, what is it worth?
or is it to feed his ego and get him on TV? its just not worth a fraction of the millions hes spent just getting us to this point, let alone what you are asking him to spend on top of that.
you are asking a business man to throw away 2 million a year+ .i just cant see it.

[Svlad Cjelli]

Auditors have little to do with any of this. You either operate on worst case scenario or with positive outlook. It’s a little baffling that you suppose we handle the club on the premise none of our players are ever going to be wanted.

I, and the club, work on the premise that they have to be accounting law and teh auditors - they can't just arbitrarily assign a value to players without good reason.

Think back 12 months. Forget what you know *now" - just work on what you knew "then*.

What would be your valuation on Shane Long? What would be your valuation on Simon Church? What would be your valuation on Alex McCarthy? What would be your valuation on Alex Pearce?

You just can't add book value to players on the basis of what you hope might be.

[brendywendy]

With regards to (a), I would argue that we seemed to walk into the season well prepared and financially comfortable. We then accepted a last minute whopper of a fee for Gylfi, our best player. I don’t see how recycling 2-3m of this fee would suddenly be bankrupting us. Ok, money doesn’t always buy you goals, but it most certainly increases the pool.

We were 4M in debt before the sale.
Soon after Gylfi we offered new contracts to some players. Increased Cost?
We took on L-wood's wages. Increased Cost?
We signed Manset. Transfer Amount plus extra wages? (Up to 440,000, so say 200/250K up front?
We signed Morrison. Transfer Amount plus extra wages?
We signed Brett Williams. Transfer Amount plus extra wages? 50K
We were, presumably running another 4M deficit in 201-011.
We purchased L-Wood for (allegedly) about 1 Million.

4,000,000 B/F
4,000,000 2010-11 ongoing shortfall
1,000,000 Elwood
0,500,000 Extra Wages
0,250,000 Morrison
0,200,000 Manset
0,050,000 Williams

TEN million (less 7M if we got it all)




Salaries, I'm guessing, but Elwood 8K. Morrison & Manset 4K,Williams at least 1K? times 26 weeks 17 x 26K 442K
and presumably we paid something to the two Aussies and the two Canadians signed. Change out of 500K?

EDIT. Now add Zurab's wages and Harte's fee and wages.

Some selective figures there.

We were 4m short **before the season started** not before the sale of Gylfi. You would also have to factor in the sales of Cisse and Marek, and then on top the wages of said two plus Raziak and any others we got rid of. That's a pretty huge chunk of cash you've not accounted for.

actually i think the 4 million was projected debt for the beginning of this coming season.
we were 2 million down before last season, (and for every following season run at that level)
so +5M after the sale of gylfi
2 million for this seasons debt = 3 million
and we spent about that in wages, loan fees, and transfers.

which is why i think youll see us spending the majority of incoming money this summer, because players out will be going cos we cant really stop them, not cos we want them gone.

and now that weve got rid of long, rasiak, cisse, matejovski, ivar, our wage bill will be more like the level that we can afford without incurring new debts

[Vision]

Did we sell anyone in January?

I only ask because if not it means that the last 5 actual transfer deals we've done are all buying rather than selling.

Harte,Manset,Morrison,Williams,Liegertwood.

Prepare for the exodus!!!

[Barry the bird boggler]

Did we sell anyone in January?

I only ask because if not it means that the last 5 actual transfer deals we've done are all buying rather than selling.

Harte,Manset,Morrison,Williams,Liegertwood.

Prepare for the exodus!!!

We've had outgoings by releasing players though; Ingimarsson, Davies, Kelly etc.

[Vision]

Did we sell anyone in January?

I only ask because if not it means that the last 5 actual transfer deals we've done are all buying rather than selling.

Harte,Manset,Morrison,Williams,Liegertwood.

Prepare for the exodus!!!

We've had outgoings by releasing players though; Ingimarsson, Davies, Kelly etc.

True but I was referring specifically to transfers since Gylfi was sold which is why I didnt include Zurab in on loan. Its just there seems to be an assumption that we only ever seem to sell players. Yet our last 5 deals have all been inward. Williams is a complete punt but I'd suggest that the likes of Morrison and Manset would be the type of players we'd be looking to bring in this summer had we not already gone and got them.

Manset has played a bit part in a few games and despite pretty ropey levels of fitness has come off the bench and made a positive impact in a couple of games.
I do however feel that the club will look at both him and Morrison as signings for this season really.

Trust trying to steer the thread back to its original idea.

[Royal Rother]

Auditors have little to do with any of this. You either operate on worst case scenario or with positive outlook. It’s a little baffling that you suppose we handle the club on the premise none of our players are ever going to be wanted.

I, and the club, work on the premise that they have to be accounting law and teh auditors - they can't just arbitrarily assign a value to players without good reason.

Think back 12 months. Forget what you know *now" - just work on what you knew "then*.

What would be your valuation on Shane Long? What would be your valuation on Simon Church? What would be your valuation on Alex McCarthy? What would be your valuation on Alex Pearce?

You just can't add book value to players on the basis of what you hope might be.

Indeed, and, as I said yesterday, I don't think clubs are actually allowed to carry out a revaluation of players for inclusion in their Balance Sheets. It would just to be too arbitrary and open to massive abuse.

The simple rule is that, whatever the players cost, that cost is written off in equal yearly amounts during the life of their initial contract. I don't think contract extensions have an impact on that. So if a player signed for £3m on a 3 year contract, it will be written off at £1m a year, regardless of whether he signs an expension after 1 year. (But I could be wrong on that last bit tbh.)

Revaluations are just too subjective to include in Football Clubs' accounts which are notoriously difficult to get to grips with anyway.

[Extended-Phenotype]

im not sure how else it can be put to convince you tbf.

Well perhaps I’d rather we spent on replacing our best player, rather than turn the dressing room into Last of The Summer Wine.

i disagree- id massively prefer JM than someone who will let his heart and emotional attachment to the club force him into the kind of wrong decisions that you seem to want.

Meh, they are wrong in your opinion. You are happy playing safe and hitting promotion out of luck. I say open up and increase the chance of reward.

you dont spend millions of your own money without getting it back except for some etherial value in leverage. what is leverage, what is it worth?

You have no concept of the values in publicity, prestige, influence and impression? Listen, do you think JM bought RFC because he loves you?

People who buy football clubs aren’t doing it for profit. They are doing it for leverage, whether you understand that or not. So lets not boo our eyes out for poor JM if Reading ends up costing him a buck or two. He’s got what he wanted.

I, and the club, work on the premise that they have to be accounting law and teh auditors

Sure nobody would have then expected to sell Long for say 3-4m, but then neither did we expect Gylfi would sell for 7! If you don’t want to contradict yourself, you should argue the additional value was a bonus, not an essentiality.

You are still looking at this like my argument was to sign Messi. There is no chance in oxf*rd anybody would look at our squad back in August of last year, and not think we could recoup 2m+ in player sales. Again, as your ‘team’ have already argued, JM was fabulous enough to let us keep sought after players (Feds? Jobi? Kebe?) Don’t you think it’s a contradiction to praise him for that but then excuse a tight transfer policy because our players are worthless?

[Terminal Boardom]

This isn't Football Manager. HTH.

[Svlad Cjelli]

You are still looking at this like my argument was to sign Messi. There is no chance in oxf*rd anybody would look at our squad back in August of last year, and not think we could recoup 2m+ in player sales. Again, as your ‘team’ have already argued, JM was fabulous enough to let us keep sought after players (Feds? Jobi? Kebe?) Don’t you think it’s a contradiction to praise him for that but then excuse a tight transfer policy because our players are worthless?

But what if you don't recoup £2M in player sales? What if your star, saleable, player breaks his leg on the first day of teh season? Then you're in twice as much financial trouble as you would have been otherwise.

You can't budget for things you're not certain of - full stop. Unless you "live the dream" like Geoffrey Richmond did at Bradford and get carried away by optimism..
And if you want to compete, that extra £2M you're spending is a drop in teh ocean - you're competing with more than 3 clubs that are spending £10-15M more than you and there are only 3 promotion places available. So why spend the extra money to only increase your chances of success very marginally? That's like borrowing money to bet on a 100/1 outsider.

[Red]

What if your star, saleable, player breaks his leg on the first day of teh season?

You can't budget for things you're not certain of - full stop.

Insurance companies allow you to do exactly this.

Admittedly won't cover everything in your post though.

[Svlad Cjelli]

What if your star, saleable, player breaks his leg on the first day of the season?

You can't budget for things you're not certain of - full stop.

Insurance companies allow you to do exactly this.

Admittedly won't cover everything in your post though.

Only if an injury is career-ending, and you might not know until several years later.

And there are a multitude of other ways a player might lose the value that you're trying to assign to them.

[brendywendy]

im not sure how else it can be put to convince you tbf.

Well perhaps I’d rather we spent on replacing our best player, rather than turn the dressing room into Last of The Summer Wine.

i disagree- id massively prefer JM than someone who will let his heart and emotional attachment to the club force him into the kind of wrong decisions that you seem to want.

Meh, they are wrong in your opinion. You are happy playing safe and hitting promotion out of luck. I say open up and increase the chance of reward.

you dont spend millions of your own money without getting it back except for some etherial value in leverage. what is leverage, what is it worth?

You have no concept of the values in publicity, prestige, influence and impression? Listen, do you think JM bought RFC because he loves you?

People who buy football clubs aren’t doing it for profit. They are doing it for leverage, whether you understand that or not. So lets not boo our eyes out for poor JM if Reading ends up costing him a buck or two. He’s got what he wanted.

I, and the club, work on the premise that they have to be accounting law and teh auditors

Sure nobody would have then expected to sell Long for say 3-4m, but then neither did we expect Gylfi would sell for 7! If you don’t want to contradict yourself, you should argue the additional value was a bonus, not an essentiality.

You are still looking at this like my argument was to sign Messi. There is no chance in oxf*rd anybody would look at our squad back in August of last year, and not think we could recoup 2m+ in player sales. Again, as your ‘team’ have already argued, JM was fabulous enough to let us keep sought after players (Feds? Jobi? Kebe?) Don’t you think it’s a contradiction to praise him for that but then excuse a tight transfer policy because our players are worthless?

1.clearly our finish showed that we didnt need to replace him, but what we really needed to do was make the 1st team less green, and defensively sounder
2.its not playing safe, or anything to do with luck. its running things properly, and succeeding through good management.
3.no not at all,i couldnt care less if he loves reading the town club, or me.i certainly have no love for him. i expect he took over as he thought with a bit of investment he could make a profit. which he will.the leverage thing is shit imo-but not in yours, lets leave it at that
4.that last bit is all over the place- dont really now what you are saying.

[Extended-Phenotype]

What if your star, saleable, player breaks his leg on the first day of teh season? Then you're in twice as much financial trouble as you would have been otherwise.

Aye, don’t get me wrong – I appreciate it’s a risk, and that is why all along I have been referring to my opinion as the risky option.

So why spend the extra money to only increase your chances of success very marginally?

I don’t think looking at it in these terms is helpful. I’m asking that when we sell a player valued for his creativity and goals at 7m, who is our best on the pitch, you should try to replace him with immediate effect, and expect that to cost you a little more money. We should have been looking for ‘Sig 2’, not buying ‘Church 2’.

And I’m not sure what is insane about my position - lets say we are now at one end: “economical”, and Ipswich are at the other: “mental”. This is a scale, not on/off switch – surely there is sanity in arguing sliding somewhere inbetween.

1.clearly our finish showed that we didnt need to replace him, but what we really needed to do was make the 1st team less green, and defensively sounder
2.its not playing safe, or anything to do with luck. its running things properly, and succeeding through good management.
3.no not at all,i couldnt care less if he loves reading the town club, or me.i certainly have no love for him. i expect he took over as he thought with a bit of investment he could make a profit. which he will.the leverage thing is shit imo-but not in yours, lets leave it at that
4.that last bit is all over the place- dont really now what you are saying.

1. How do you mean? We missed him for the first half of the season, and who is to say we wouldn’t have fared even better in the latter half if we still had him? This point doesn’t make any sense.

2. Of course it’s playing safe. And if one of the cutprice players suddenly turns into Tevez, fabulous – ride on his shirttails until the window opens, then get out the pricing gun.

3. I’m not sure why you think this leverage thing is 'shit'. To give you an idea of the value of publicity, a single 20 second commercial on prime time television can range between 200 – 500k. During major sporting events, it can cost between 1 – 3m. That’s one advert. I don't think I need to elaborate.

4. Seems in English to me, but simplifed: the argument “Don’t knock JM for selling top players when offers were ignored at the start of the season” contradicts “you can't expect to recoup expenditure later with player sales, when at the start of the season they were worthless”.

[Duke the Dog]

Have there been any owners of clubs who have made a profit from a club? I know some owners "buy" clubs for a nominal fee, but they agree to take on the debts (like the last Pompey owner, Bates at Leeds etc). I guess some must at least get their money back. But it's hardly a sound investment is it?

It has to be an egotistical or hopefully some element of altriusm in there somewhere (I did say hopefully!).

I was totally in favour of capping costs and how much people put into clubs, until I saw Sugar's program about it a few weeks ago. I then realised that actually football isn't a business in a true sense, never has been and never will be (well, I hope not now). But the sheer numbers involved are so eye-watering it's unbelievable (how much was Torres? Carroll anyone? Even £7M for Gylfi - unknown Icelandic kid, do us a favour!).

Sorry, this thread has been completely hijacked. Um, no one in or out today then (June is so boring!)

[Svlad Cjelli]

So why spend the extra money to only increase your chances of success very marginally?

I don’t think looking at it in these terms is helpful. I’m asking that when we sell a player valued for his creativity and goals at 7m, who is our best on the pitch, you should try to replace him with immediate effect, and expect that to cost you a little more money. We should have been looking for ‘Sig 2’, not buying ‘Church 2’.

But what if the management looked at the squad and said "Yes, Glyfi's a loss, but out top priority is the defence, so we'll use the money on a goal-scoring left-back and a loan centre-back"? You don't need to replace like-for-like if the gaps in the squad are elsewhere and you think you have enough cover for the player lost.

And I’m not sure what is insane about my position - lets say we are now at one end: “economical”, and Ipswich are at the other: “mental”. This is a scale, not on/off switch – surely there is sanity in arguing sliding somewhere inbetween.

There is, but what I'm saying is that because the "insane" (and those with parachute payments) are spending so much massively more than us, that spending even a little bit more than we have makes no difference. Again, its not transfer fees that are the issue, it's salaries- and increasing our salary bill by something like £2M gains so little competitive advantage against the insane spenders that it's not worth taking that risk. We're talking about competing with people spending over £20M on salaries.

And don't forget that we are losing money now - about £2M a year, so in a way you have your wish just to keep us still..... and the £2M we stand to lose each season now could easily push us under - you can go insolvent for any sum of money if you don't have that sum.

[brendywendy]

EP-
1.i dont think we did- it was defensively where we were weak. later on long came up trumps, so we didnt miss him at all. but tbf whos to say that if wed kept sig, and not got the defenders in we wouldnt have gone down, with 4 extra million in debt
2.you say playing it safe- i say running it how it should be run. not sur we are going to agree on it, since i think your viewpoint is stupid, and you think mine is.
3.at least you are trying to put some sort of value on it i guess. personally i think his printing busines, or his building business will get no leverage out of JM owning some tiny football club that never won owt-you disagree. hoorah.
4.no-its still gibberish.thanks for trying though, very accomodating
ill have one last try to explain why i dont get wht you are aying, or why.- imo they dont contradict, and also no one has said the second bit, they said that you cant just have what you think a player is worth on the accounts, its the cost, over the period of contract. which is totally different