Minority Report 2019-20 - Talking Finance

Given that most clubs in The football league do not operate on a model where they sell and buy a new team every year and until very recently neither have we it’s just not right to say that is the only available model. I suspect Charlton and Luton aren’t structured to lose millions but both can afford players who might have kicked a ball at the required level before.

 

As someone who has spent most of my life running businesses, or helping to run them, I have to say that your analysis of our ownership structure and the financial arrangements/constraints involved, are unarguable. The problem is that supporting a football club seems to me to be the polar opposite of objectivity. In what other sphere of life would you actively spend large sums of money and time observing failure, in the (usually vain) hope that success is just around the corner? I've already fallen out of love with professional football in general, due mainly to the influence of Sky, the Premier League, and the fact that its soul has been sold to the highest bidder. Supporting Barnsley is therefore the last bastion for me, but I have to say that I am immensely disappointed by our current situation. Exactly what the motives of our new owners are is impossible to know, but if objectivity is the sole factor involved, then their actions to date would suggest that any return on investment they eventually achieve will be limited (at least in terms of their reputed personal financial positions).

 

Red Rain thanks for the brief summary of the operations of a football club and indeed any plc or limited company.

A couple of small points I would make are that the wealth of our owners is totally immaterial if they do not wish to invest any of their capital in the business. For all the fanfare of the new ownership we have a current model that is based on Patrick Cryne's approach but without any shareholder loans or donations but purely focussed on resale value of the players. This approach could be replicated by any owner capable of stumping up the capital to buy the club given that there is no financial dependency on the owners.

Given that there is a difference of broadly £6m in distribution to clubs in the championship and league one the 'resale' approach then becomes even more stark. Failure in the league, as it did in Patrick's Cryne's tenure, has financial consequences. The last stay in the championship saw the club with turnover of £14m, this will fall by roughly £6m give or take for the year in league one. To put this in context match day receipts for the year were around £3.6m.

The pursuit of a 're-sale' approach may be the blue-print, but if that means losing out on £6m (at least for one year - promotion is not guaranteed), pressure, not necessarily from the fans, but the financial implications may result in a different approach if the position looks bleak by the January window.

 

Just a couple of points

The last time we were relegated, we were told that player contracts included a relegation clause. This will not make good on the £6 we lose, by any means. We will not know the figures for last season, our promotion season until the end of February 2020, but I expect us to have lost money in spite of the player sale. Owning a football club does not seem much fun any more.... does it.

I have pondered many times whether the fans are important any longer. The club has to build the stands around the ground, it has to maintain it, it has to police it on match days etc etc etc. For its efforts, it pulls in an income of just £3.6m, less than half of what it makes from selling the same product to SKY. And yet, if you log on to the BBS any day of the week, you can read about fans threatening to stop going or complaining about prices. Frankly, the threats of not going any more mean nothing as compared to the potential loss of £6m. Of course the board does not want to see us relegated. They simply need to find a formula that allows us to compete without attracting huge debts. I say simply, but it isn't simple is it. The problem with fans is the minute thing go wrong, they need a scapegoat, and my opening post alluded to that. Whether you are a fan or an owner, we all want the same thing. There is no point in simply lashing of blindly.

 

Sky pay for a performance the premier league acknowledges the importance of this by limiting the cost of away tickets. If attendances at Oakwell halve it will have a massive impact on us.

 

Some good posts here from all concerned & thanks to @Red Rain again for all the detail.

I think few expect a gung-ho approach, but the short / medium term aim of the new owners was to make us an established second tier club. That aim does not currently appear to be being achieved. Overall recruitment seems decent, in that in a season or two I can see many of these players making the grade & moving on for more money. If we drop back to league 1, I feel our ability to command bigger fees for our better players will again diminish & players like Pinnock will be sold for less than we could have got for them. You only have to look at the money Brentford made in player sales in the summer for illustration of this. For that reason, a couple of experienced players, maybe on 10k a week, with a view to them possibly moving into coaching positions, if they get their badges could benefit the club's long term aims, if we manage to retain our Championship status as a result.

 

This makes sense from both a financial and footballing point of view.

 

The irony of watching the game back on TV was the slogan of our shirt sponsor emblazoned on the East Stand - ‘investing for tomorrow’.

As we fell to a 3-1 home defeat it certainly felt like we hadn’t invested for today.