Thetownend.com

Sorry to bring everyone down from your respective highs but...

was listening to the radio this morning, some commentary on the Rangers situation and there was some guy talking about the sustainability of clubs, comparing their wage bills with their incomes. For example he said, there are 7 Championship clubs whose wage bill is greater than their income. He also said 90% of all league clubs are effectively insolvent.

Got me thinking about our situation, I would have thought our wage bill was pretty high and even though our gates are fairly high for the league, I still wonder whether our income is greater than our expenditure.

Obviosly fa cup and jpt revenue helps, but are we still balancing the books, or are speculating to accumulate?

I won't say I know for sure but pretty certain that the club is more secure now than it has ever been.  The management have clear business plan for sustainability and even though they may appear to be buying the league I doubt our outgoings this season are more than last.

I addition we have higher attendances, higher ticket prices, progressed to a cup final, progressed to round 4 of the FA cup and look set for promotion.  

My finger in the air guestimate is that we will turn a profit this year...

The one thing you can't put in the accounts is the unbelievable amount of positivity surrounding the club - seen nothing like it since 93... and I expect our accounts looked a lot worse then despite our league position

Football clubs are a business - like any other. Businesses invest in assets to produce profits and sustainability - whether that is in plant and machinery or its employees skills

Our assets are the players we have - if Ritchie was valued at around £1m by Bournemouth and then you look at the others, our assets are quite formidable.

Obviously losing your assets usually equates to reduced performances and likely relegation, which is why when things are good a club like ours you just have to sit back and enjoy the ride whilst it lasts.

Better to have loved and lost blah, blah blah

It's a good point, though.  Membership of TrustSTFC was up at around the 1,000 mark a few years ago, and scrutiny of the board and its dealings by the fans in general was far greater...as it had to be.  But that's not to say that the fans should let their guard down completely now that we appear to have more trustworthy owners.

The next set of financials are due out soon, I believe, and should make for interesting reading.  I suspect that costs will have crept up, but only marginally so.  (The clearing out of the deadwood at the end of 2010/11 needs to be considered along side the spending in 2011/12.)  Revenues, on the other hand, must have grown strongly this year.  Financially, I don't think relegation has hurt us at all.

And aren't we obliged to stay within the 60% salary cap? Under the financial fair play rules, isn't that formula due to be extended to the rest of the FL? By when?

Wasn't it reduced to 55% this year?

Just listening to Brian Moore on talksport about this subject .... Apparantly the preferred creditors ruling doesn't apply in Scotland which on Rangers list of creditors puts HMRC top ..... Oh Dear .....

I know we have had our issues in the past, but I am growing increasingly pissed off with the way football clubs are being run.  I probably shouldn't say it but am I the only one in thinking it needs HMRC to take one or two of these clubs to town so the rest get the message .... Or as has just been suggested are HMRC viewing Rangers as a test case and if they get there money out of them could then go after the rest?

I ran my own business in the past and paid my PAYE, and other trade and non creditors as I would expect of anyone else who runs a decent business.  I find potentially owing £70m hugely insulting, as we all know that in any 'normal' business the HMRC would have you shut down in seconds for owing less than 1% of that figure!

Totally agree,  that's why the Trust have the aim of getting/ controlling by proxy a stake in the club. Fortunately the current owners are amenable to the idea, & to that end the first tranche of shares was bought by the Trust last year.

Let's not also forget income from the sale of Austin and possibly Tozer ?

That should make a huge difference to the balance sheet....

And Henshall? And did we get anything from Liverpool for Jamie Stephens?

Did we get money for Sean Morrison as well? Or was that further back?

The board have worked very hard to reduce costs and improve earnings opportunities.

By wiping out the historic debts we are now operating on an even keel. Yes, we owe money back to the investors, but I much rather that than owing it to the bank and the tax man.

It does seem like we are spending a lot of money on transfer fees to try and achieve promotion this season, but as MacPhlea points out we have substantial income. Even if we are spending in excess of our earnings, I am not concerned (at the moment) that it will have any long term implications and neither am I concerned that we're trying to do it on a 'buy now pay later' basis like so many other clubs do (badly). Any business with aspirations for growth will need some capital outlay to achieve those goals. The board clearly have a plan in place to get the club into a position where it can be profitable without the constant need to generate additional monies from transfer fees.

I have no doubts that the current model is sustainable.

I am sure it was mentioned we got £100k up front with add ons for Stephens.

With the wage cap surely that isnt an option?

Also is the 55% purely for playing staff or do PDC and his staff have to be included in that figure?

Wages are capped, transfer fees are not. There's no rule to say we couldn't go out and spend £5million on transfers if we wanted to.

I believe it's only players wages.

The Salary Cost Management Protocol does only include player salaries not off-the-field staff.

A couple of interesting articles on the SCMP here one Plymouth and one Notts County.

http://www.thisisplymouth.co.uk/League-salary-cap-reduced/story-12673447-detail/story.html

http://www.dailymail.co.uk/sport/article-1209093/The-cap-doesnt-exactly-fit-Notts-County-keeper-Kasper-Schmeichel.html

The current board - at least on the face of it - seem to have had a good handle on the club's finances and their strategy for making us sustainable from day one. Unless I've read them completely wrong they do not come across as a group looking to just make a personal profit out of the club at the expense of Swindon Town FC.

Whilst I'm sure we've gambled quite heavily on promotion this season in terms of transfer fees etc, the words and actions of the board so far in terms of ground redevelopment, sponsorship deals, other revenue streams outside of football etc seem to lend credence to their stated aims of making us as close to a self sufficient club as possible.

As mentioned this has probably been helped a lot this season by the two good cup runs, and one would hope once we get to where we should be at the top end of League 1 or in The Championship, with steadily increasing gates, that we won't see the club slip into the financial difficulties we were unfortunately so used to under previous regimes.

Unless it's changed there is an overall cap, I think 75% which includes management & off-field staff too.

We'd be right up shit street if the board decided to jack it in here. That said it doesn't look likely.

What about staff who sit in the stands ?