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

[No Hoops]

What If Ledge's undisclosed fee was £3m

What if Shane's new contract put him on £25k / week

All I know is that the club is run with everybody's best interests at heart. The fact the Sir John is at the helm can only be a benefit. Imho

[Royal Rother]

Depends what you can get the auditors to agree to. They're capital assets, but I think they depreciate very quickly - just over the length of their remaining contract.

Indeed. Wickham's current valuation would not feature in the accounts at all. I don't think it's anything to do with the auditors at all - the policies are that the cost of a player is amortised (written off) over the period of their contract. Wickham presumably didn't cost them anything so he wouldn't have a valuation.

Players cannot be revalued in the accounts so they couldn't suddenly say "Ah, this fella's worth £10m so we'll put that in so things don't look so bad". However they CAN (and I should imagine WILL) put a note in the accounts to the effect that they have players whose value is £xxx, and that they anticipate this fee would be realised in the next 12 months.... (something like that anyway). That is only right and fair because someone reading the accounts should not be misled by their content, whether that be favourably or the opposite.

[DOYLERSAROYALER]

Portsmouth have agreed a deal to sign former Ipswich captain David Norris on a free transfer

...shame we missed out on this free transfer ...11 goals last season in an average team as well ...would have been a good replacement for Howard...

[Hoop Blah]

I'm not arguing that we were or are right or wrong to have the current change in policy, I was just pointing out that there was one because RR can't see any difference in the way the clubs run now that 10 years ago.

Are we argeed that he's wrong then?

[Ian Royal]

I'm not arguing that we were or are right or wrong to have the current change in policy, I was just pointing out that there was one because RR can't see any difference in the way the clubs run now that 10 years ago.

Are we argeed that he's wrong then?

Can we leave it as he's not right, but the approach isn't a great deal different?

[Victor Meldrew]

So we have had 4 or 5 pages on the old ground (again and again) about how well or otherwise the club is run.
As a fan who has no influence over any of that other than by paying for a season ticket every year there is no point in speculating how wealthy or how liquid in terms of cash our chairman is so all I want to know is about the outgoings and incomings of players.
So far it seems as though there are no incomings and much speculation about outgoings.
Presumably if Mills and Long go for about £3 million each and Fed and Kebe for about £1 million each plus a few quid that we might get for Howard or Tabb that leaves around £8 million of receipts and therefore to compensate for the loss of those players something like £5-6 million to be spent on proven and speculative buys with the club in capital terms being £2 million or so ahead and some wages (including Ivar's) off the books.
I look forward with interest to seeing who these 4 or 5 new players turn out to be.

[RoyalBlue]

What If Ledge's undisclosed fee was £3m

What if Shane's new contract put him on £25k / week

All I know is that the club is run with everybody's best interests at heart. The fact the Sir John is at the helm can only be a benefit. Imho

What if Reading won the PL in two seasons time!

Both the scenarios you suggest have to be a joke! If they paid £3M for Legs (view from supporters at Loftus Road is that the fee was £500K, which would be sensible and fit RFC's spending patterns) then the club is run by idiots.

And there is absolutely no way that the Chairman would sanction wages of £25K per week!

As for everyone's best interests at heart it's impossible to do and some people's interests are always more important than others.

[Royal Rother]

I'm not arguing that we were or are right or wrong to have the current change in policy, I was just pointing out that there was one because RR can't see any difference in the way the clubs run now that 10 years ago.

Are we argeed that he's wrong then?

Neverrrrr!!!

Anyway did I really say that? I don't think I went any further than suggesting that the principles and policies remain pretty much the same and that it is the Academy producing fruits that has enabled us to move to greater self-sufficiency in terms of playing staff which inevitably has an impact financially as well.

When we weren't generating our own players we had to buy them in. Now we don't have to, as often. Whether SJM had deeper pockets at this time wouldn't necessarily have any impact on how we operate because getting into this position was always his vision and stated aim.

[Royal Rother]

Here's an interesting little piece / interview with SJM from 2003.

http://www.independent.co.uk/sport/foot ... 90086.html

[Snowball]

Excellent article. An excellent club with excellent management.


So why do the bleaters continue to bleat? The last ten years has been amazing

2010-11 5th. FA Cup Quarter Final, Play-off Final,
2009-10 9th. FA Cup Quarter Final, 9th Championship
2008-09 4th. Championship Play-offs
2007-06 Relegated on GD from Premiership (18th)
2006-07 8th in Premiership
2005-06 1st. Winners of Championship with record points.
2004-05 7th in Championship. (Short by 3 points) Still there for last game.
2003-04 9th in Championship. (Short by 3 points)
2002-03 4th in Championship
2001-02 2nd, Promoted to Championship


And prior to this a new stadium, 2 League Cup Quarter-Finals, winning the
third tier, second in the second tier a PO final (and 95-96...)

[brendywendy]

shirley no one can call out JM on that evidence. clearly the club is run in a fantastic fashion.
the improvement is immense since 2000/2001,

[Extended-Phenotype]

and welcome to the board.

good to see some sensible reasoned argument regarding the other view on finances on here
your lack of shrieking and hand wringing is commendable.

still wrong though

Ha! Well, cheers Brendy. I’ll take this compliment in the same way I took my estranged friends welcome the other day: “I barely recognise you! You look great!” Er, thanks. I think.

Anyways, there have been a lot of strong countering points made since my last post which seem reasonable arguments. But they all still fight on three premises:

a) that the alternative to being financially secure is huge debt

b) operating in an economical manner has seen us do reasonably well and;

c) a chairman using his own finances equates to “throwing money away”, therefore should not be expected


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.

Regarding (b), this I guess is a matter of perspective. You could argue that, from where we were in the days of Elm Park, our position is grand and we have always been in the top mix of the second tier. Or you could argue that the past shouldn’t justify a lack of further ambition, and that if we are fractions from going one tier better, why not push more for it?

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.

But then again I might just want the moon on a stick.

[Svlad Cjelli]

.....

With regards to (a), I would argue that we walked into the league 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 first point is invalid. We had debts of about £2M at the start of last season, which would have more than doubled by the end of that season. The offer we got for Gylfi was much too good to turn down at any time, but without it we'd have been in real financial trouble at some stage last season.

Oh, and we'd not have been able to get Harte or Zurab, so the season would probably have ended in a very different way.

[Extended-Phenotype]

The first point is invalid. We had debts of about £2M at the start of last season, which would have more than doubled by the end of that season.

I don’t buy this as a rejoinder. We are on the brink of selling more players, are we not? Thus the terror inducing 4m debt is an anomaly.

The idea Zurab, Harte and 2m on a replacement for our best player would have placed us in “financial trouble” is a touch hysterical.

[Snowball]

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.

[Svlad Cjelli]

The first point is invalid. We had debts of about £2M at the start of last season, which would have more than doubled by the end of that season.

I don’t buy this as a rejoinder. We are on the brink of selling more players, are we not? Thus the terror inducing 4m debt is an anomaly.

The idea Zurab, Harte and 2m on a replacement for our best player would have placed us in “financial trouble” is a touch hysterical.

We are now, but 12 months ago we weren't. 12 months ago Gylfi was about the only saleable asset.

And at that time it was clear that debts now of over £4M would be causing significant problems, with no clear ways of paying them off, and only a prospect of the debts getting bigger at a rate of over £2M a year. Don't forget the previous year we needed to pay off the bank overdraft - so we couldn't just let that build up again (especially as that's the most expensive way of borrowing!) If you don't have credit facilities or source of income it doesn't matter how much you owe - an unpayable debt is an unpayable debt.

That's over £2M+ losses a year just on basic running costs, we'd have had £4M+ debt without us buying anyone - if Gylfi hadn't been sold we'd just not have bought Zurab and Harte. Full stop!

[Extended-Phenotype]

Snowball:

Ok, I guess I am taking things at face value. However, I’m arguing a strong replacement for Gylfi as an alternative to Manset, Morrison and Williams “buying for the future”, so their inclusions are invalid in a counter argument.

New contracts don’t just pop into life randomly, I’m sure they are accounted for. I don’t think we walked into the start of the season thinking “oxf*rd! We need 7m and fast! The club is about to fall through the surface of the earth!”. In which case a 7m windfall would have been a bonus, not an essentiality, and hence I don’t see why a fair percentage couldn’t have been spent on replacing a key player.

But I guess this all comes back to the argument of ambitious strategy vs economic strategy. Perhaps as an impulsive person, I favour the former.

[Extended-Phenotype]

We are now, but 12 months ago we weren't. 12 months ago Gylfi was about the only saleable asset.

We acted conservatively because we didn’t believe our performance that season would garner interest and/or value in our team? Don’t you think there is something wrong with that?

Ambition vs caution, again. Both equally valid, but only one is my bag.

[Who Moved The Goalposts?]

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.

[Svlad Cjelli]

We are now, but 12 months ago we weren't. 12 months ago Gylfi was about the only saleable asset.

We acted conservatively because we didn’t believe our performance that season would garner interest and/or value in our team? Don’t you think there is something wrong with that?

Ambition vs caution, again. Both equally valid, but only one is my bag.

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

What we knew this time 12 months ago was that -

- we had a manager who'd been in post 6 months,
- no-one knew who our forward line would be,
- we had a young and largely untested defence and midfield,
- we had a couple of highly-paid foreign players who we had to get rid of but didn't know how we would,
- the loan player who'd helped us so much the previous season had left,
- season ticket sales were down.
- we were starting the season with a deficit of £2M and our projections were for it to end at least double that.

Are you saying that we should have put into the accounts projections for increased value in our largely untested and unrated players?

Do you think the auditors would have actually allowed such accounts to be signed off?