Adver News: MacDonald's budget blow

[Batch]

I'm not sure that bandying figures, that we haven't a clue about helps much.  What we do know is that spending has been out of control, and needs to be curtailed. We also know that means getting the wage bill in line with the 60% cap, which is normally achieved by moving on higher earners where possible, and preferably prudent player sales...avoiding if at all possible a fire sale.

well said. We don't know what reduction means.

[Flashheart]

Anybody know what our break even point is roughly?

I did try to work it out myself but unlike fabasher I have only one brain and the one I do have is currently suffering from a rather acute hangover.

[Barnard]

Anybody know what our break even point is roughly?

I did try to work it out myself but unlike fabasher I have only one brain and the one I do have is currently suffering from a rather acute hangover.

Back in the Sir Seton Wills days I seem to remember the break even crowd figure being touted as approx 7500. With ticket prices that are around the same as then, but increased player wages (I'm assuming), the break even must be loads higher now.

[Samdy Gray]

I think Jezza Wray once said that breakeven was around 10,000 attendance.

[horlock07]

I think Jezza Wray once said that breakeven was around 10,000 attendance.

And therein lies the crux of the matter, with the cost of modern football (player wages etc even at our level) it just doesn't work sustainably and until something quite huge happens (I don't know what) it never will.

We lived way beyond our means for around 18-24 months and we got a taste of being in many's eyes a 'big team' (some of the comments during that period on forums were embarrsingly Leedsesque), and now the shock of returnig to our level is happening.

Say we play an average of 28 games at home a season (inc cups) and our average crowd is say 7,500, averaging ticket prices to £20 (I know some are higher some lower, season tickets etc) that comes in at around £4.2m a year ticket revenue - it just doesn't ass up does it. As noted above if break even if 10k crowds we are operating around 20-25% below that.

The new board worry me on a number of levels, but until they actually answer some questions I don't know what to think or speculate. Many fans seem to be angry that they a) won't throw £5m a year at the club just to sustain it and b) want some form of return on investment or a salary?

The whole thing does look ever more shambolic but what else do we have sadly, Black was going and no one else was there were they....

[Paolo69]

I'm not sure that bandying figures, that we haven't a clue about helps much.  What we do know is that spending has been out of control, and needs to be curtailed. We also know that means getting the wage bill in line with the 60% cap, which is normally achieved by moving on higher earners where possible, and preferably prudent player sales...avoiding if at all possible a fire sale.

Well said Reg and well done for outing things in context. Who do we have to pay off as being useless then KR? (I'll ignore the Roberts comment as Chalkies Shorts is paying for him).

[kerry red]

Well said Reg and well done for outing things in context. Who do we have to pay off as being useless then KR? (I'll ignore the Roberts comment as Chalkies Shorts is paying for him).

I was referring to the players brought in by PdC in his early days, Easyjet, Magera,  Kerrouche and others I can't even remember now, who all had to be paid off

That sort of expenditure wont be needed again

[Benzel]

Fuck me I've stumbled onto thisis

The old budget wasnt sustainable, a reduced budget makes absolute sound business sense

NO IT DOESN'T WE'RE GOING TO BE STARTING WITH BEDWELL IN GOAL IN THE CHAMPIONSHIP NEXT SEASON AND NO RECOGNISED FIRST TEAMERS. WE ARE FUCKED. THE END IS NIGH.

[Paolo69]

I was referring to the players brought in by PdC in his early days, Easyjet, Magera,  Kerrouche and others I can't even remember now, who all had to be paid off

That sort of expenditure wont be needed again

Ahhh, ok my bad. I misread amongst the seemingly endless posts of speculation and conjecture.

[RobertT]

I'm not sure why everyone goes mental when this sort of stuff comes out.  The club accounts tell us all we need to know.

Under the SSW regime, we slashed costs as much as possible but had no income outside of match day sales (with season ticket sales around the 2k mark).  By the time Fitton and Wray came in we were losing around £2m a season which extended to £3m when they started putting in place new budgets.  This was done on the basis that new income streams were found, and in fact they managed it for the first time in 20 odd years.

A lick of paint, some new tables and chairs and imaginative season ticket deal meant we pushed out income levels up to around £5m-£6m in a year.  Unfortunately, the costs of running the club were still too high and for the past 3 or 4 years we have been losing £1m-£1.5m a year still (the only year of profit was on player sales) on normal trading.  Once the player sales dried up, and small increase in wage budget was given for PDC, you can imagine that stretching back out towards £2m and the next accounts will probably reflect that.  This is all in the public domain.

So, we sold Ritchie and the new board confirmed they'd keep the budget in place for this season.  It was pretty inevitable that next season we'd have to reduce wage spending if we were in this league again - for a start, we won't be allowed to spend what we did this year as we can't add equity into the equation like we did this year.

Basically, in L1 we will lose upwards of £1.5m if we spend like we have this year.  That needs addressing.  Kerry, we might make some money from concerts and we won't spend on PDC, but that all still adds up to a £1m loss.  We cannot afford it.

Finally, if we are in L1, just having a £1m reduction in the wage bill does not equal a backwards step or a lack of ambition.  At least two of the clubs above us would had lower wage bills this season and plenty sniffy at the edge of the play offs are well below what we could spend even allowing for a bit of an adjustment.

If we go up, I'd assume a lot of number crunching would be needed.  We will not be able to get anywhere near the other clubs wage bills, so we shouldn't try.  The best chance of staying up would be to try something completely different as it seems the out of ordinary works for a while as other clubs can't get their heads around it.  Ossies team for example played a formation and style not seen in the league before and it worked, but then everyone worked out his style as his time at Spurs went on and he and it were dropped.  Hoddle went for the 5-3-2, same thing happened and he took it to Chelsea and had some success with a few clubs copying for a while, again it got found out and adapted to.  So, we could keep wages down, do something out of the ordinary and build from that, just got to keep on changing, which is the tough bit.  If we hang on in there for a couple of seasons, we have a club that could adapt and grow like Swansea, if we spend too much doing the same old things, everyone else will be better at it with bigger budgets and we'll be back in L1 pretty sharpish.

[Simon Pieman]

£3m loss in the 2011/2012 season Rob.

I think you're spot on about everything. Can't believe some people want the new board to throw money at us, especially after the last ownership almost ended in administration.

[kerry red]

I don't think people want them to chuck money at the club - just have enough to run it properly whilst giving us, the fans, a glimmer of a hopeful future

[Flashheart]

The board shouldn't have to 'have enough money to run it'. Expenditure should ideally be based on revenue, making the board's wealth irrelevant.

It's their ability to generate revenue and maximise the available budget that should really be the focus.

[RedRag]

I don't think people want them to chuck money at the club - just have enough to run it properly whilst giving us, the fans, a glimmer of a hopeful future

Agreed.

When we hit the unexpected with the transfer tribunal fees being payable in one season rather than two, we were able to cope because there was a pot to piss in.  

Robert Ts post was great but whilst we all go on about what will happen when the Muff Chairman takes his money back, it seems to me that owners without dosh want to take money out of the club by awarding contracts to themselves and their mates.  

So my fear is that something like a summer concert will see board members earn money for themselves and that STFC may underwrite the risk of a loss etc.  Only a fear but I don't trust a board that won't talk

[ghanimah]

£3m loss in the 2011/2012 season Rob.

I think you're spot on about everything. Can't believe some people want the new board to throw money at us, especially after the last ownership almost ended in administration.

The reduction of the budget is no surprise and reflects the realities of lower league football, my concern is that I remain far from convinced that the current owners have the competence or nous to run a relatively successful club on a tight budget.