Minority Report 2019-20 Talking Finance 4

My guess is that the free transfers you are referring to are players who were released in the summer and still do not have clubs. These are players who nave not played since May at the latest. They will not be match fit. No other club thinks they are good value for money. I am not sure why we would.

The stated policy is not to use loans because they do not offer us any chance of making money on them. Any development that they get by playing for and being coached by us is reaped by the club that owns their contract, and who can sell them on for profit.

The transfer market is an efficient one. If a player was valued more highly by another club, the player would be transferred to them instead.

Player are constantly made aware of their current value by their agents. That is part of an agents job. Maximising his clients career earnings. He is unlikely to accept a deal for less than his current value unless he is putting himself in the shop window.

Every club have players that do not meet their expectations, whether they are older players or whether they are younger players. It is part of football.

I do not agree that our squad is too big. We struggled to field a team for the Wigan game.

There is no doubt that the new system makes some players redundant. However, the system used by Daniel Stendel was too open for the Championship. Clearly, it was not working.

I'm sorry, but my maths is not highly inaccurate. You can complain about my assumptions if you like, and I have given you a way out of that, but my maths and my logic is accurate.

 

I am not clear why I have to do the things that you list. Please explain.

 

Bad guess. Every summer there are players running down their contracts looking for a move. Tom Eaves is a prime example. Wages, I couldn't tell you, but if you're saving money on a transfer fee, you can shift from essentially CapEx to a revenue cost. We don't do that because we have a notional wage cap that doesn't tend to consider anything other than signing ever younger players that require fees.

You seem bound by the clubs ideology. We have other options available and they aren't even being considered.

I don't agree with your assessment of our system being the issue. We've conceded a lot of goals from poor concentration, poor decision making and poor attitude. Add in a vast amount of errors that have ended with goals against. On the flip side, how many really good chances have we missed that would have changed games? I didn't see the game on Friday, but I saw Johnsons comments of direct play to try and get at our defence. That doesn't suggest a back 5 is helping, and i've seen numerous comments about Cavare. Which is no change from the last 2 years.

The assumptions are flawed, and therefore, the maths is irrelevant, but the consequence is the outcomes you come to are highly misleading.

 

Because your (a generic not individual your) mind is confined by what you now see.

If you take it all away and then put in place what the club needs to be successful, on the pitch, then you might have less self limiting concepts. Most instances where someone follows something already in existence, they get something very similar to what was there already.

So my challenge to you.

Come up with an alternative ideology that is fiscally sound that doesn't require us to sign huge amounts of extremely young and/or inexperienced players 1 in every 3-4 transfer windows.

 

Yes I agree with that but it’s impossible to play everyone, I just find it a bizarre way of running a club of our size signing players for substantial fees who can’t play yet losing our best players for a couple of grand a week (in some cases).

 

Surely Capital Expenditure becomes a revenue cost when the transfer fee is written off. Have you read all of my Taking Finance pieces. The previous one explains the logic of pay controls and the second shows the huge gap between what we can afford and what the rest of the Championship is spending. The thing about all of your suggestions is that you assume that they would produce a better result than the one we have. I'm afraid that there is no evidence to suggest that they would. You are effectively calling out our directors on the basis that they do not know what they are doing. You are effectively suggesting that they spend their money differently, with absolutely no evidence that it would result in a better outcome. You are asking me to believe in you, even though you have not thought it through, and you do not have a fully costed plan. If you come back at me with a plan, then I will do my best to comment upon it, but I am not going to formulate a different plan for you, because just like you, I can't think of a better one

 

My role is to comment on plans that exist. If you come up with a plan, I will certainly comment upon it. Personally, I cannot think of a better plan, but I do know this. Patrick Cryne wasted a lot of money searching for one.

 

Are you absolutely sure that any of those players would have stayed for a couple of grand a week.

 

I'm not asking you to believe me. And I'm not assuming having a handful of free transfers, retaining players longer and a couple of loans would be more successful. But are we successful now? No. Are we likely to be. No. And after 2 years, plus Crynes latter tenure, this just seems like the wheel we're on. Just a turning wheel.

I've spent much of my career advising businesses to grow, generate more money, deliver better service, shape products and sales packages and manage people more effectively.

So.… I'm pretty comfortable when it comes to understanding businesses, how they work, how they can be better and what might not be effective.

We are currently failing. Aren't we? If the objective is having a decent football team. We're abjectly failing. We go through coaches at pace. We lose players by the bucketload. We get nominal fees here and there to allow the wheel to keep turning, but nothing progresses us, despite some excellent opportunities to do better.

But yes, I am calling out our directors. They don't know what they are doing.

By all means, provide me with accurate data and I'll analyse it. But coming up with assumed figures that are a million miles from accurate really aren't fully costed at all.

 

Thanks for the in depth look at all that RR, appreciate the work and being cross examined by danny wiisons love child. Good debate guys.....the bit i get and i presume your figures are from last years accounts, is we need to sell £1 million per year to break even.
Interesting....so anything above £1million in player sales would be deemed to be profit.
There also, as mentioned is no allowance for factoring in free transfers...which i have mentioned before.

 

That was why I was careful to only put in some cases. I know we could’ve never kept Hourihane, Winnall etc but people supposedly in the know reckon Scowen for example would’ve signed a new deal for 8k a week. When you consider how much we paid for an inferior player in McGeehan that looks a snip.

 

That I agree with you on. He wasted vast amounts. But what he also did was switch to pretty severe extremes and rarely did he tweak. That would suggest he could be impatient (I don't know him) but he went through huge amounts of managers and flitted from foreign players, all english players, expensive loans, lower league players, young loans, to his final effort of young and hungry players. Sadly the current owners have taken that plan and made it more extremist.

And I think I come at things a different way. I don't look at something and feel shackled by its confines and bound to merely comment on that. I look at something and assess if its effective. How could it be better. Whats working and what isn't. Whats possible and what isn't. What order do things need to done. Big changes, little changes. Things to stop, things to evolve.

But that's not only how my mind works, but its the business environment I've been in for decades.

My assessment of our current ideology is not a positive one. Its likely to improve modestly, but the mix of administration, communication and the resource and goodwill this ideology burns makes it a very high risk one, even though it doesn't seem it on the face of it.

 

I judge businesses by different criteria. The criteria that I use is profitability and cash flow. Any business that loses money each and every year is on its way to Administration. Any company that does not closely watch its cash flows is bound to run out of money with the same result. A company that runs a football club can run that football club successfully in a lower division than the Championship. Loads of companies do it. You are not judging the football club or the company on its financial success, you are judging it as a fan, on the basis of the results on the pitch. That is fine, but it is not what my original post was about.

 

That is all fine, but you still need a plan. A way of doing business profitably, and so far you have not offered anything that looks like a plan.

 

Neither have our owners if we’re going to be critical here

 

I'm judging the ideology on its potential for both financial success and on the pitch.

If a football club wants growth, its not going to get it in League 1. The football league structure has steps, rather than linear progression. I agree a company/club has to be solvent and have liquidity. Profitability and cashflow are a consequence of actions and decisions. They are just a record for history after the event of your choices. Important yes, but not the driver for development and improvement.

But why can a club only be solvent by signing unknown kids who aren't ready? You could save a huge amount of money and just play your kids from the academy. I'm not saying it would be successful, but neither is this. Is Jared Bird so much worse than McGeehan? Is Mottley Henry so much worse than say Wilks?

 

This isn't a plan. Its ideology.

You could easily put together a team for £10-12m a year without resorting to signing players that aren't ready.

 

Could put one together for half that and be competative.

 

In answer to that one, I have to refer to how much every other club in the Championship is spending. They have owners who are willing to subsidise clubs that are technically bankrupt. My guess is that you would like to see our owners throw money like that at our club, but that is hardly a business plan is it. Competing with other club owners throwing money down the drain, by throwing your own money down the drain. It is senseless and I am pleased that we are not doing it. If that is your plan to keep our place in the Championship, then I do not agree. If you have a different plan, then I am anxious to hear it.

 

Where is your £10-12m coming from. The players are not ready, I agree. They have been bought according to the plan. The plan is buy young, improve and sell on. That has always been our plan throughout my time as a fan. We are buying younger, we are putting the players on longer contracts so that we do not come under pressure to sell quite so soon after purchase. The plan is a long term plan. It involves having a squad of 24 player under staggered 4 year contracts so that the maximum number of contracts maturing at any transfer window is just 3. That means that we are not faced by replacing 12 players in a single window like we were this summer. The problem at the minute is not just the youth of the squad. The problem is that they have not been together long enough. If that is your long term plan, you need to start somewhere, you need to take a few punches on the nose in order to begin the plan. That is what I think has happened. I obviously have no proof. Just faith in people who have made a lot of money in the past, and hope that they have not lost the ability.