The slippery slope

[peasepud 59]

In some other thread I agreed to put down my reasons and thoughts on where this football club is heading. These arent based on any ITK or amazing foresight into the future merely the fact that I think I have Mike Ashley sussed.

 

This football club is a business to him, he never bought this to "have fun" as it was made out, he didnt buy us because of some boyhood love for the club. He bought us because he could see a profit to be made. Many believe that profit was to come in the form of turning a chunk of the land into a supercasino. The space above the Metro Station already having planning permission but with such a cost involved in actually building anything substantial there that it just isnt viable.

 

What he does see though is a number of revenue streams for himself. Advertising for his main business, numerous television appearances where the name is splashed everywhere, a ground full of people all forced to look directly at the name of his company. Thats more a plus point though than a reason to pay £138m.

 

Ashleys plan (and its fairly well documented by the Chairman) is to turn this club into a profitable vehicle, to do that he needs to make incomings exceed outgoings. There are two ways to do that, reduce costs and increase revenue. Unfortunately, MA only knows one option and thats to reduce the costs. Its how he operates in business, buy it cheap, pile it high and get low paid staff to push it out the door. It works to bring in the money but does nothing for brand loyalty or even image. Most people (even non NUFC fans) would agree, they feel dirty coming out of Sports Direct. Its the Netto of Sports Shops, they should sell "Svens Bookstore" carrier bags at the door to hide the SD one in.

 

This unfortunately is his view for NUFC, bring in players at a reduced cost, pay them lower wages than other clubs and hope that they come good so they can be touted to bigger clubs for a fat profit. Trouble is to do that he has to take a gamble and buy those players that come with baggage of some sort. It was questioned at the time but if Ben Arfa and Santon are such amazing prospects then how come they were sold to us so cheaply and more importantly how come nobody else was fighting us for their name?

 

In Ben Arfa its injury, he had problems before coming to us and then was unlucky to get a terrible injury early on. In Santon it appears that his heads not quite been there. Now coming to England could be just the thing to sort him but alternately it could have the opposite effect.

 

Either way with these players its a gamble, if they come good then we have to be resigned to losing them, the clubs made that clear on many an occasion, lowering the expectations and arguing that they cant compete with the "big clubs" even a chairman of this club thinking that should never be allowed. We have a wage policy that talks about removing the high earners and refusing to renew contracts that are as well paid as previously, regardless of how well the player has performed. Some see that as sensible, I see it as dangerous slope.

 

We allegedly have a wage cap now of £50k pw but have at least 2 players who are on more than that (Colo and Smith) therefore any player we look to sign has to be willing to accept lower than that. Any player worth anything will look at Smith and question why they should get less than him. We have worked now since last September to remove players that are around that amount. In each case replacing them with someone younger and on less. A year ago the average wage may have been say £50k (total guesstimate), this year it will be more like £30k. What happens then? the club will look to trim it further because there will always be players at the top end of the pay and by having them you run the risk of others wanting towards that. So you sell the highest earner who generally will be your better players (I exclude Smith from that) and purchase someone new for less. Not just that but you ensure that the difference at least covers the wages for the length of the contract. This is one of the reasons we insist on handing out 5 year contracts to new players.

 

eg

 

Player x is on £50k pw with 3 years left on contract, we sell him for £11m

 

Money in = £11m + £7.5m saved on wages.

 

Player y is then bought for £4m and given a 5 year contract on £25k pw, automatically you allocate the other £7m from the sale of player x to pay the wages of player y for 5 years (6.2m). This means that youve broken even over the entire length of their contract and can argue you dont have another £7m to spend on another player.

 

However player y, starts to play well, hes a good buy and catches the eye of a bigger club (prob Liverpool) who offer £8m for him after 1 year, making him an offer of £40k pw. Player rightly sees hes worth more than his £25k and looks for a pay increase, club says they wont be held to ransom etc and fire up the chopper.

 

Result? Player sold for £8m, club argues that he was greedy and wanted more money. Fans call him a twat.

 

£8m in and £5m of that originally allocated £6.2 is saved however fans dont know that, they knew there was no money to spend before this so now we have £8m kicking about.

 

Player z is then bought to replace player y however now we only have £8m and that has to cover 5 years wages as well. Clearly we cant afford to pay £4m for one and match the £25k wages so we spend £3m on one that accepts £20k, total outlay £8m

 

Now a player that costs £3m and is willing to accept £20k pw is unlikely to be to the level of a £10m man on £50k, yet realistically they are player x's replacement admittedly via player y.

 

At the same time, as you lower those wages you ultimately lower the wage cap, you cant justify paying some new player £40k when all the existing ones earn a max of £35k.

 

Somewhere down the line you hit break point, players you bring in are nowhere near good enough to hold their own in the Prem, I believe that is, at most, 2 years down the line.

 

Many will argue with me that we've signed some good players under this strategy and potentially we have, I say potentially because it can go either way. Cabaye has looked good so far but thats after 3 games, there was a time when Ranger looked like a prospect, now however hes a dangerous liability with little to no chance of making first team.

 

This football club is now built on lies and deceipt, "we will spend all of the Carroll money on strengthening the squad", "we tried to buy a striker" etc etc etc its one lie after another all designed however to create tension in the ranks and split the fans. When it comes to that Derek is a genius, he doesnt say much but when he does it always manages to get some people on side and some with the opposite view while online fights and arguments break out.

 

Then theres the amazing 10 year Season Ticket deals, sign up for ten years and the price is frozen even if we get Champions League. Oh and you can get out of the deal at any time, no charge, no liability. You cant lose.

 

Bollocks, there is no businessman worth his salt that would commit himself to no price increases for a decade, unless of course he knew that he could cover those losses elsewhere ie with a constant reduction in the wage bill. Forcing fans however to sign up to the "12th man" covers his options, next season there wont be an increase in ST prices however you can bet the Club Membership will increase. Its like the old "no Imcome Tax increases, oh btw weve stuck 2p on National Insurance".

 

And this 10 year deal? How well has that done to build up the famous "12th man"? clearly not very well at all, attendances are down heavily, no longer do we see 50k, this season we will see more than one sub 40k game.

 

This post has become a long rambling pile of shite tbh but the basis is that all I see in the future is constant stream of players out the door with new ones in, each time cheaper than the last. No good can come of that. Once in while we'll see some flash of brilliance pass through that revolving door, when we do someone will snap them up. Leaving us lumbered with the shite ones.

[Kitman 2207]

I certainly think there's been a concerted effort to bring down the wage bill and sign players on the cheap or for free so they can be re-sold at a profit. Some aspects of it have made sense ie not offering long contracts to old knackers and not signing old knackers in the first place. Our injury list is better too.

 

However, I can't understand the wilful neglect of the squad's needs. The absence of striking talent, the lack of cover in defence, forcing out top performers when the marginal cost of increasing their contract shouldn't exceed the signing fee of replacement players. Except they're not really replaced, and PL hardened players are replaced with unproven imports on lower wages as the OP says. It only makes sense if you take the view that the squad is being assessed from a financial rather than footballing point of view.

 

As CT is fond of pointing out, you need a lot of money to compete with the top 6 so there's no point in trying. I think that's the club's philosophy. There's no point in trying so let's make sure we make money in the process. However the overall effect is corrosive. Nobody gets too excited because there's always disappointment, cynicism and apathy are the natural mindsets. Nobody supports a club to follow the balance sheet, the grinding down of excitement and enjoyment and the absence of ambition translates into empty seats and indifference.

 

The club's heirarchy won't give two hoots of course as the money will continue to roll in. But I fear for the long term health of the club with this lot in charge, the best we can hope for is someone comes in with an offer that's too good to refuse.

[manc-mag 1]

I still think he bought it 'for fun' originally in the sense that he wanted something different to do with his 100's of £ millions. That's not to say he didn't want a profit out of it, that will always have been central, but I think that initial method was simply to buy the club cheap and sell it for double or treble a few years later. That's just what was happening in football at the time and why it would have appealed to him. I don't think his focus was on penny pinching at the very outset and I think the snapshot of transactions around that time shows this. Ditto the appointment of Keegan. Then the banks went to shit however and with it 99% of his potential buyer pool disappeared, along with the possibility he would make any money on exit. So things will have changed at that point for me.

 

The extent of the indebtedness of the club at the time of purchase/how much Ashley has put in to plug that is always going to be a source of dispute I reckon, but I'm pretty sure we're talking about significant sums. Equally whether in doing what he's alleged to be doing now (asset stripping/running it as a Sports Direct advertising hoarding) he's actually made any money overall is impossible to tell. Personally I don't think he's seen penny one yet and I don't think he'll be in 'profit' for many moons to come using the strategy. That's not a defence of his methods, just my view of the context of it all. That said he can afford to absorb those losses, which have arisen out of his own stupidity in not researching the club and bad timing (the first being his own fault and the latter being beyond the control of the speculator)

 

Think you make some interesting points on wage caps, Pud. I don't know how low he might try to drive it down further, but whats certain is we'll see the likes of Colo and Jonas leaving in the next year or so. I said that about all of the ones that went this window.

 

The vacant striker situation stands apart from anything else for me though. Any club, regardless of it's financial budget needs to replace it's main striker in that period of time, even if it's with a more economical model. To not do so at all literally takes it outside of a football economics debate. I think that's where the groundswell of opinion now lies against fatty.

[Christmas Tree 4850]

My Two Penneth

 

Background

 

Surely most can agree that prior to Ashley taking over, the club was pretty much on the slide a bar a fortunate 7th finish, the overall outlook was bottom to mid table with a lot of fans seeing relegation as inevitable. The heady days of the 90's hadnt been turned into a solid foundation for the future as had happened at Arsenal, Manchester etc.

 

Money wasn't quite flowing through the doors as it once had and a trail of mismanagement and terrible signings had left us with a financial recipe if not for disaster, then pretty close. Future sponsorship money was being used to fund even worse trophy signings, imo not to win things but to placate the masses. We'll not get into how much money was syphoned off from NUFC by the custodians and how different things could have been if this money had instead invested

 

Add to all of this mess the impending doom of world finacial markets that in various ways would effect everything.

 

Losing money

 

So this is the background for the first year or two of Ashleys takeover. Im avoiding getting sidetracked into the many other events as this is about the business side of the club and our outlook rather than a rant thread. Im also avoiding any sympathy for lack of due diligence etc.

 

We do however have a club with extremely average / ageing players on very good long term contracts and a club that is hemorrhaging money. We also have an owner who suddenly loses hundreds of millions as the stock market crashes and isnt prepared to fund us in the way Abramovich does.

 

So what next

 

There is no option, given these circumstances, than to drag the club into a financially viable operation. Banks and Sponsors are not throwing money around the way they used to and the rise in players wages has virtually negated the benefit of TV money.

 

This is probably the one area of Ashley where I simply cant understand what alternative there is to making the club financially viable.

 

What alternative is there for a none top four team other than to have a grip on wages and club finances. I dont like being in this situation but we are in it. We all hand on heart know that Freddy had lost control and didnt have an answer.

 

So without an Arab or Mega American conglomerate, what alternative is there. (And I have no argument with those that think Ashley should stick more of his own money in, but that isnt going to happen).

 

The Business Model

 

Scout quality footballers from abroad that can live within our wage structure and may well after a few years add to the profitability of the club. Not sexy but on the face of it a great idea for a club that needs to grow by living within their means.

 

Jordan Henderson v Cabaye

 

Given all our circumstances, this plan is an excellent vehicle for us to progress without horrific debt. Unearth quality champion winning internationals like Cabaye and use them to replace ageing soldiers like Nolan, then sell at some point down the line and repeat. Hopefully while you are doing this you can progress upwards and possible get European football, win a trophy etc.

 

We seem to be doing pretty well using this plan but have definitely shot ourselves in the foot over the striker. This is execution of the plan, not the plan itself.

 

A dose of realism

 

This league is on the verge of closing the door on the top four. Anyone who cant see that needs their head examining. No owner be it Ashley, Barry Mort or a Fred Shepherd consortium is going to risk the two hundred million it requires to TRY and break into the top four.

 

There is also little point in throwing vast amounts of money at trying to get into the Europa league. The payback simply doesnt warrant the expenditure. It aint going to be too long before the penny drops with Ellis Short that all his millions are just pissing in the wind.

 

Sadly, the grim reality is that it is all about surviving in the premiership. That is the first goal. Then its just a case of where you sit between8th and 15th etc.

 

Other than an Arab, I would be delighted to hear any ones view of a better business model for us to follow. Phrases like "just back the manager, give him the money etc" aint a business model btw.

[rikko 20]

That's an interesting view point, but i think it is being overly pessimistic at least i hope it is other we might as well give up now!

 

I agree with the starting view point about what going on at present but I think the ultimate aim to reach a debt free (including Ashelys Directors Loans) and then sell the club off for a ~£100mill profit. I think he got into the game when he saw the likes of Man U, Liverpool etc going for hundreds of millions and saw he could get a big side 'on the cheap' splash a little cash and flog it on for a profit a year or two later. Then he got stung by the clubs debt structures and collapse of the economy.

 

The long term money to be made from your plan is peanuts to a man like ashley, he'll be making a few million a year which compared to the £100m+ sports direct pulls in is nothing. Its like having a £100k a year job and taking on a paper round. Just not worth the time and aggravation he receives for it.

 

What he is now doing is probably his 3rd 4th or 5th choice plan and he is just fattening the club up by reducing debts whilst attempting to keep premier league status. Our aim for as long as ashley is in charge is to survive in the premier league, no more no less.

[2bias 3]

Good post Pud and an interesting read.

[Guest Your Name Here]

When FMA popped up in the away end and started flashing his lardy midriff it was clear he was a loose cannon, not the safe pairs of hands the club needed to stabilise the business in the wake of the previous regimes excesses.

 

I think PP is spot on about the fund cheaper replacements and their wages with incoming transfer fees stuff. It’s a risky strategy and a vicious circle, with the value of your saleable assets declining with each passing window. The logical extension is that you end up with a load of cheap shit / falling revenues and the club goes into free fall.

Edited September 3, 2011 by Your Name Here

[snakehips 0]

Regarding St James' being a Direct Spots advertising hoarding: This is one of the main bugbears for me. If it were a multi-national company ploughing serious dough into the club I may be able to overcome my anger at it, but, at present, it's all for a nominal sum so the fat bloke can treat the ground like a market stall ie. cheap tacky posters everywhere.

 

Due to the increased evidence of his tacky company being more and more 'in shot' and blatantly in the face of tv companies, I wonder if they [the tv companies] ever consider staying away from SJP, purely down to the fat bloke's shameless advertising? In a way, I would rather hope they do stay away - rather than give him his hard on.

[Guest Your Name Here]

Regarding St James' being a Direct Spots advertising hoarding: This is one of the main bugbears for me. If it were a multi-national company ploughing serious dough into the club I may be able to overcome my anger at it, but, at present, it's all for a nominal sum so the fat bloke can treat the ground like a market stall ie. cheap tacky posters everywhere.

 

Due to the increased evidence of his tacky company being more and more 'in shot' and blatantly in the face of tv companies, I wonder if they [the tv companies] ever consider staying away from SJP, purely down to the fat bloke's shameless advertising? In a way, I would rather hope they do stay away - rather than give him his hard on.

The question I would ask is where does it stop?

 

He could have been satisfied with defacing the Gallowgate facia and a lot of advertising hoardings, but wasn’t. He could have been satisfied with renaming the ground and splashing SD all over the atrium reception, but wasn’t. He could have been satisfied with painting SD on the roof of the Gallowgate in giant letters, but wasn’t. What’s to say the latest shit with the East Stand is the end of it? His appetite for covering SJP with SD advertising seems insatiable.

[Monkeys Fist 43108]

Regarding St James' being a Direct Spots advertising hoarding: This is one of the main bugbears for me. If it were a multi-national company ploughing serious dough into the club I may be able to overcome my anger at it, but, at present, it's all for a nominal sum so the fat bloke can treat the ground like a market stall ie. cheap tacky posters everywhere.

 

Due to the increased evidence of his tacky company being more and more 'in shot' and blatantly in the face of tv companies, I wonder if they [the tv companies] ever consider staying away from SJP, purely down to the fat bloke's shameless advertising? In a way, I would rather hope they do stay away - rather than give him his hard on.

The question I would ask is where does it stop?

 

He could have been satisfied with defacing the Gallowgate facia and a lot of advertising hoardings, but wasn’t. He could have been satisfied with renaming the ground and splashing SD all over the atrium reception, but wasn’t. He could have been satisfied with painting SD on the roof of the Gallowgate in giant letters, but wasn’t. What’s to say the latest shit with the East Stand is the end of it? His appetite for covering SJP with SD advertising seems insatiable.

"Welcome to the 2012/13 season, we here at Sports Direct United would like to remind our loyal customers that any behaviour deemed unsavoury by The Owner will result in ejection from the ground and a ban.

Please enjoy the game. "

[Christmas Tree 4850]

Be interesting to see if a better business model is offered over the weekend.

[Monkeys Fist 43108]

I believe the businessman on here has fucked off in a flounce.

[Guest Your Name Here]

Regarding St James' being a Direct Spots advertising hoarding: This is one of the main bugbears for me. If it were a multi-national company ploughing serious dough into the club I may be able to overcome my anger at it, but, at present, it's all for a nominal sum so the fat bloke can treat the ground like a market stall ie. cheap tacky posters everywhere.

 

Due to the increased evidence of his tacky company being more and more 'in shot' and blatantly in the face of tv companies, I wonder if they [the tv companies] ever consider staying away from SJP, purely down to the fat bloke's shameless advertising? In a way, I would rather hope they do stay away - rather than give him his hard on.

The question I would ask is where does it stop?

 

He could have been satisfied with defacing the Gallowgate facia and a lot of advertising hoardings, but wasn’t. He could have been satisfied with renaming the ground and splashing SD all over the atrium reception, but wasn’t. He could have been satisfied with painting SD on the roof of the Gallowgate in giant letters, but wasn’t. What’s to say the latest shit with the East Stand is the end of it? His appetite for covering SJP with SD advertising seems insatiable.

"Welcome to the 2012/13 season, we here at Sports Direct United would like to remind our loyal customers that any behaviour deemed unsavoury by The Owner will result in ejection from the ground and a ban.

Please enjoy the game. Or don’t. We don’t give a fuck as long as you pay to get in."

fyp

[sniffer 0]

Nice summary PP along the lines that most of us have been thinking. I've never believed the lack of due diligence to the extent that its been thought.

 

Much as I hate to say it, I think the FCB is a lot smarter than he's been given credit for and he probably has a decent squad of advisors that could see the purchase as a golden opportunity. Providing you merely want to survive in the league without setting the heather alight. I think relegation was unexpected but I have to wonder if he came out of that golden financially as well and then who'd have thought 35M for Carroll?

 

I think the one factor that made it the perfect storm is that its Newcastle. Huge crowds that he seems to think will naturally continue to provide additional revenue to the TV money. Then again, perhaps his advisors are these MBA types who look at trends and think they know the market. But don't know that we could just as easily drop back to 30, 000 or less one apathy really takes a hold. I wonder if that is the only way to get him out when we thick geordie bastards, as he no doubt perceives us, actually come to our senses and say enoughs enough and do something else. I've seen it many times in the past.

[ewerk 31222]

Ashleys plan (and its fairly well documented by the Chairman) is to turn this club into a profitable vehicle, to do that he needs to make incomings exceed outgoings.

 

TBF, I don't think that anyone has came out and said that was the plan. They have said that they wanted the club to be self-sustaining iirc. Though that in itself is very difficult to attain for any football club.

[peasepud 59]

Ashleys plan (and its fairly well documented by the Chairman) is to turn this club into a profitable vehicle, to do that he needs to make incomings exceed outgoings.

 

TBF, I don't think that anyone has came out and said that was the plan. They have said that they wanted the club to be self-sustaining iirc. Though that in itself is very difficult to attain for any football club.

This is the issue, for a football club to be self sustaining it has to have a good income, we dont, or at least we dont have anything like the income we had previously. Im not getting into an Ashley v Shepherd debate again but previously we had excellent income, sitting nicely in the top 20. Now we are dropping rapidly.

 

Ashleys view of self sufficiency is players in funded by players out.

 

CT your argument about the stock market crash is seriously flawed, there were few winners out of that, one of them being the fat man himself. He had floated SD and took a massive profit, that was why he decided to buy us. Then the crash came and he bought it all back at a much reduced price.

 

My argument about business models has always remained the same, you have to speculate to accumulate. Its an entertainment business, if you dont provide a good enough level of entertainment then you lose money. By that though I dont mean borrow £200m and buy the Man City first team but spend money in transfer windows. When you sell a player it should be to replace them with someone better not gamble on someone hitting the big time. Once youve got those proven players in and theyre doing a job for you then keep them, prove to them that you have ambition and work towards getting higher up the table.

 

Scout these players by all means but dont put all eggs into that basket and never ever allow your club to run without an established striker, that is simple suicide.

 

I love how the counter argument in favour of Ashleys policy is to accuse Shepherd of trophy signings, can anyone tell me who they were?

 

Shearer? Ginola? Asprilla? Solano? or are we talking Owen?

[ewerk 31222]

Going a bit Leazesesque there Pud

[Guest Your Name Here]

Ashleys plan (and its fairly well documented by the Chairman) is to turn this club into a profitable vehicle, to do that he needs to make incomings exceed outgoings.

 

TBF, I don't think that anyone has came out and said that was the plan. They have said that they wanted the club to be self-sustaining iirc. Though that in itself is very difficult to attain for any football club.

Impossible unless they are operating at the right level. Gateshead are never going to be a self sufficient PL club. MU couldn’t be self sufficient in the Conference.

 

NUFC’s natural level is probably regular European football – somewhere between habitual Europa Cup competitors and the occasional run in the CL when we are at the top end of our potential. It sure as hell isn’t just staying up.

[peasepud 59]

Going a bit Leazesesque there Pud

Its a serious question though that needs debate in itself. Is the purchase of players currently at the highest level really trophy signings or is it simply that because Owen failed?

[Park Life 71]

It's extremely difficult to make football clubs profitable.

 

The REAL issue around the health of football is the astronomical rise in player wages over the last decade. This has basically eaten up more or less most of the larger TV money.

 

Spurs managed to keep wages in check (around 60%) at a time when we were hovering around (90%).

 

At this point there is no alternative but to address this issue head on.

 

BUT not replacing a front line striker is idiocy of the highest calibre regardless of side arguments as to why.

[Christmas Tree 4850]

It's extremely difficult to make football clubs profitable.

 

The REAL issue around the health of football is the astronomical rise in player wages over the last decade. This has basically eaten up more or less most of the larger TV money.

 

Spurs managed to keep wages in check (around 60%) at a time when we were hovering around (90%).

 

At this point there is no alternative but to address this issue head on.

 

BUT not replacing a front line striker is idiocy of the highest calibre regardless of side arguments as to why.

 

And these are the hard cold facts of football today.

 

Speculate to accumulate is fine if you have a individual prepared to gamble a very large ammount of money.

 

Is speculating to accumulate working for Ellis Short?

 

The best way IMO to come to the business model for today, is to assume you have just taken control and your off to see the bank manager.

 

But it will always come bact to the fact that in the whole wages are strangling the game.

[Monkeys Fist 43108]

You had few CT?

In the hole? Strangling?

 

Really?

 

[peasepud 59]

It's extremely difficult to make football clubs profitable.

 

The REAL issue around the health of football is the astronomical rise in player wages over the last decade. This has basically eaten up more or less most of the larger TV money.

 

Spurs managed to keep wages in check (around 60%) at a time when we were hovering around (90%).

 

At this point there is no alternative but to address this issue head on.

 

BUT not replacing a front line striker is idiocy of the highest calibre regardless of side arguments as to why.

 

And these are the hard cold facts of football today.

 

Speculate to accumulate is fine if you have a individual prepared to gamble a very large ammount of money.

 

Is speculating to accumulate working for Ellis Short?

 

The best way IMO to come to the business model for today, is to assume you have just taken control and your off to see the bank manager.

 

But it will always come bact to the fact that in the whole wages are strangling the game.

But its not and you dont see that because all you associate the word "competing" with is the top 4.

 

You talk about being debt free like its something we are, yet we're in way more debt now than we ever were pre-Ashley.

 

You talk about buying players like its a dirty statement yet its the be all and end all of football, its how football clubs progress, dont do that and you stand still.

 

Every time wages are mentioned people bring into the equation the percentages, if its too high a percentage of turnover then you need to reduce wages. Theres always another way to reduce the percentage but Ashley, you and many many more dont ever see it as an option yet its how business is done in every other industry.

 

You increase the turnover, its not a difficult concept to grasp. Man United have it sussed yet they have one of the highest debts going, pay some of the highest wages and yet still manage to turn a £110m profit.

 

When the next accounts are released we will see another drop in turnover which in turn will see the wage bill highlighted as concern. Cue stage 2 of the sales process. What will that do? reduce turnover even more.

 

Gate receipts these days are not that important in the great scheme of things but theyre a oood indication of how a club is doing. We're down 6.14%

[Happy Face 29]

the next set of accounts will show increased turnover simply on being a premier league team rather than championship.

 

Probably higher than the relegation season too because the new tv deal kicked in.

[Toonpack 9973]

It's extremely difficult to make football clubs profitable.

 

The REAL issue around the health of football is the astronomical rise in player wages over the last decade. This has basically eaten up more or less most of the larger TV money.

 

Spurs managed to keep wages in check (around 60%) at a time when we were hovering around (90%).

 

At this point there is no alternative but to address this issue head on.

 

BUT not replacing a front line striker is idiocy of the highest calibre regardless of side arguments as to why.

 

And these are the hard cold facts of football today.

 

Speculate to accumulate is fine if you have a individual prepared to gamble a very large ammount of money.

 

Is speculating to accumulate working for Ellis Short?

 

The best way IMO to come to the business model for today, is to assume you have just taken control and your off to see the bank manager.

 

But it will always come bact to the fact that in the whole wages are strangling the game.

But its not and you dont see that because all you associate the word "competing" with is the top 4.

 

You talk about being debt free like its something we are, yet we're in way more debt now than we ever were pre-Ashley.

 

You talk about buying players like its a dirty statement yet its the be all and end all of football, its how football clubs progress, dont do that and you stand still.

 

Every time wages are mentioned people bring into the equation the percentages, if its too high a percentage of turnover then you need to reduce wages. Theres always another way to reduce the percentage but Ashley, you and many many more dont ever see it as an option yet its how business is done in every other industry.

 

You increase the turnover, its not a difficult concept to grasp. Man United have it sussed yet they have one of the highest debts going, pay some of the highest wages and yet still manage to turn a £110m profit.

 

When the next accounts are released we will see another drop in turnover which in turn will see the wage bill highlighted as concern. Cue stage 2 of the sales process. What will that do? reduce turnover even more.

 

Gate receipts these days are not that important in the great scheme of things but theyre a oood indication of how a club is doing. We're down 6.14%

 

How?? Revenue's which are non-TV have all but plateau'd throughout football.

 

Manchester United, Arsenal, Chelsea, Liverpool, Manchester City and Tottenham make up almost 60% of the Prem League revenues.

 

In 2009/10, the revenue for those clubs grew by 5%, which looks canny, but more than two-thirds of that increase (£56 million) came from Man City, with their “friendly” Middle East deals and there was almost no growth from Man U, Arsenal, Chelsea, Liverpool.

 

Overall Prem League revenue has risen by 77% (about £500 million) since 2004 but that's nearly all TV money and very little of that growth has come in the last three years and match day revenue growth has effectively stalled, it actually decreaased 5% in 2009/10, while commercial revenue barely grew at all (3%).

 

You can't just take turnover in isolation and using Man U as an example is extremely flawed, they are the richest club on the planet and just about the most succesfull.

 

I would also suspect that we'll actually see a record revenue for NUFC in the next accounts. Our historical high revenues were in our Champions League years, the CL money these days has grown out of all proportion from then, as has the TV deal, the clubs that have stayed in the CL are the one's who have benefitted, the money is such, that it's almost a self fullfilling prohecy.