....and in particular Sheriff and Archerfield: "On the basis that you can't say "I would never ever work for them", and, on the assumption that, as VCs, they are only here to make money, what advice would you give to our Owners if they asked you for a 3 year strategy on the future of BFC?". Really interested in your opinion as to how you think they can meet their objectives.
Replying to this would likely require another 'war and piece' effort on my part, which I don't have time for right now. However, I have previously outlined a sustainable approach that we should adopt, which I've linked to below. To provide a bit of context, this was written towards the end of Struber's season in charge (looking back at the date, it was just prior to the Forest and Brentford miracles which kept us up, so from a perspective of being resigned to League One football). It was a response to Red Rain's original argument that the only way to compete in the Championship was for an owner to sustain huge losses doing so. Over two posts I outlined a model of relatively small tweaks to the existing model to make better investment decisions and maximise the impact of our available resources. Reading them back now, almost 2 years later, it's amazing how much the same issues I had then are being repeated and magnified now. This pre-dates knowledge of the £750k issue, so we had no knowledge at the time that the owners were directly exacerbating the financial constraints, but there's very little within either post that I would change from a strategic perspective. Ignoring the comments within it that are referencing the debate within the thread (as I'm not linking this to re-awaken that debate) there's also an eye-opening comment regarding my price-elasticity as a fan under these owners, which was being put to the test at the time. Nowadays, the whole concept of price elasticity is gone as I will not fund them any further due to the £750k issue. https://barnsleyfc.org.uk/threads/being-competitive-in-the-championship.293175/page-3#post-2508070 https://barnsleyfc.org.uk/threads/being-competitive-in-the-championship.293175/page-8#post-2508754 The content within those posts is essentially the model I would adopt to achieve stability as a Championship club in the hope of striking lucky and having a season like 1996/97 once again. As owners, the only way you make money owning Barnsley FC, other than finding ways to remove funds from it to the detriment of the football operations, is to be promoted to the Premier League. Even a cycle of profits on transfers isn't likely to generate long-term profits that they could regularly take out via dividends, as the model relies on those funds being re-invested and grown further. Only the TV revenues in the Premier League grant an immediate cash windfall and a massive increase in value that, as a VC, you presumably cash in on via your exit strategy. The irony is that I had little idea at the time of writing them, that we were about to embark on exactly one of those miracle seasons, thanks to what increasingly appears to be a one-off lucky head coach appointment, given the two that have followed it. Having done so, it is unforgiveable that we're now contemplating the future from the exact same point of being resigned to League One football that we were at time these posts were originally made.
Take whatever bid you can get for this club and leave. As most things in life you are better off sticking to what you know. Paul Conway started off as an investment banker specialising in the entertainment sector. He then managed to come up with an idea he sold to Chien Lee that European Football was ripe for investment using data as a way of delivering value on player trading. Unfortunately Europe has not turned in to the gravy train he thought, most clubs use data to a greater or lesser extent and this notion that the market was ripe for smart investors has not paid off. He will continue to peddle the success stories akin to the gambler who only talks about his wins. The fanfare of long term contracts now looks more and more like an albatross round the club's neck. I would use the Brexit card to explain why Barnsley is no longer a good fit for a lower budget player trading model and get out. For all those saying that they will only leave for profit, if they can retain some equity value on exit that is far better than the likely, leverage then default which looks like the only option as the club runs short on operating cash.
I saw your post earlier, but I decided to give @Sheriff and @Archerfield the space and time that they needed to respond. I was interested to note that @Sheriff quoted his contribution to a thread that I began 2 years ago. I have taken that as an invitation to respond. Accountants do not operate in isolation. If they are to produce anything that make sense, anything that is a feasible plan, then there are a lot of things that they must have access to. They must have access to the current Management Accounts, because without them they have no starting point. They must have access to current cash flows, along with details of major short term receipts and payments (for example transfer fee installments due). They must have access to the current detailed business plan. They must have access to the decision-makers at the club in order to establish the recent history of decision-making measured against the plan, and where the current management believe the plan needs to change. The accountant can then take away the information that he has collected, and this process can take weeks. Back at his office, the accountant will construct a detailed forecast based upon the information he has collected. He will produce a forecast Profit and Loss statement, a detailed forecast Balance Sheet and a Detailed forecast Cash Flow. In fact there would be more than one forecast. There would be at least 2 (one for the continuation of the current plan and one incorporating changes that existing management would introduce). The accountant then takes the information back to the club and discusses it with the decision-makers. That information might well form the evidence that points to a need for a change, or it might not. Only if it does point towards a need for change, does the next part of the process begin. That process involves the need for a new business plan, but it would be wrong to produce a new business plan without the establishment of new criteria. The new criteria would involve a statement from the owners about the amount of money they are prepared to increase their investment by. It will be necessary to look at the other clubs in the Championship and compare their numbers with those of Barnsley FC. A detailed analysis of Clubs accounts at Companies House would follow. The important number as far as I am concerned is annual pay costs. For example, in 2020, total pay cost at Barnsley were £11.1m. At Preston, the figure was £20.4m. The question that I would ask our owners is this. Is it reasonable to expect our players and support staffs to be of the same quality as the Preston players and support staff when they are paid so much less. The question for the owners then becomes, are you prepared to match the costs of the other clubs in the Championship in order to attract equal quality. Any change to the business plan must address this basic question, because it would involve the Owners subsidising the club to a much greater degree than they currently do so. It would involve the owners loaning the club money, and lots of it. In support of this, I would point out that Preston lost £7.7m in 2020 compared to our £0.3m. There is of course the argument that we could be better at what we do, and in that in such a case there would be no need for further investment. The problem as I see it is that as fans, we all think that we could do the job of any named official better than he does it. And yet he is getting paid a large amount of money for his knowledge, expertise and contacts, he is aware of all of the challenges and problems and he knows exactly why things were done in the way they were done. All plans are good plans for just as long as it takes to put them under the toughest test, the real test of a plan is operating effectively in real life. Accountants are no better than anyone else unless they are given loads of time and lots of money. Until then, like everyone else, they are working in the dark and their plans are largely hot air.
Thanks for the response Red Rain (sorry...don't know how to do the @ thing). I am aware of Accountant / Finance Director responsibilities in big organisations. I've recruited many and worked closely with them at a senior level. The best Bean Counters are not those who sit in their financial ivory towers but those who understand the wider business and have high emotional intellugence and inter-personal skills in their armoury in addition to their financial knowledge. They are few and far between. I know Sheriff and he meets the above criteria. I don't know Archerfield but judging by his/her posts he fits the bill also. Rather than jumping on the "Sack the Board Without Providing Alternative Options" bandwagon I wanted to get some constructive thought on how our Owners might be tempted to move on. VCs do tend to use Finance guys in the same way a Mafia boss would use a Consigliere!
My problem with getting rid of this lot (and their plan) is that the next lot (and their plan) could be infinitely worse. No-one has a properly thought through plan, and that includes all the accountants. All we have at best, is some airy/fairy belief that the current plan just needs tweaking a bit. None of it has been thought through and as far as I can see, there is no knight in shining armour waiting around the corner with saddle bags stuffed with cash and a cunning plan to save us. The current owners have made mistakes, but most of those mistakes have been revealed through hindsight. I never make mistakes if I know the outcome of my decisions. When I do not know the outcome, I make lots of mistakes. I made one yesterday which means that today I have to attend Northern General for stitches in a hand wound. Mistakes happen and policies / business plans are there to ensure that the board does not panic or over-react when things go wrong. The points that I wanted to make when I first replied to you is that the fans are the last people in the world that you want to be involved in decision-making in a crisis. They panic, they over-react, they over-estimate their own abilities, they do not have the knowledge or experience and they take their decisions without proper consideration of the financial consequences. I am a fan, and I include myself in all of that.
