Cold Light of Day...

....the truth is, the economic situation in this country is far worse than the papers or the government of the day, will admit.

It all started with the banks and if anyone thinks that the taxpayer has given these fair weather friends all the money that they need, they are very much mistaken. They are so desparate for money they have been forced to pay 12-14% interest to any government that will lend to them or buy their shares. In my opinion they will soon have the begging bowls out again, as the ressession cripples their profit forecasts. In addition, there will be a mass sell off of any bank assets that can raise a bob or two, together with the withdrawal of credit from all but the most secure borrowers.

Southampton Leisure plc is to secure borrowers, what Michael Wilde is to secure investors. I would be prepared to bet that Barclays, that well known Arab bank, is already turning the screws on our club to get out of the overdraft, PDQ, via their "business support" team, in Birmingham. Assuming that this happening, there is only one thing on Lowe and Jone's mind at the moment. Raising cash to pay Barclays off. Once this is done, the threat of administration will recede. Meeting the expectations of Southampton fans at the same time will be impossible and most will have to readjust to the new economic environment and limit their hopes to the economic survival of the club. It is the only thing we should worry about. Luckily, the short term debt, ie that which has to be paid within 12 months, is fairly low in the case of Southampton Leisure plc. Portsmouth, to put it in perspective, have £66M in short term debts. Chelsea have £132M in short term and £603M in long term debts.

We'll find the £5M or so to keep Barclays happy and avoid going out of business. Others won't and we'll look around one day and be thankfull we didn't pour money into trying to maintain league status. At the moment, business survival in 2009 will be a real achievement, for anyone....

Puts Kaka's valuation into perspective....

It seems perverse that a UK Bank with Arabic backing can hold SLH to ransom over £5m yet people/organisations from the same generic wealth pool can splash out £100m + wages on one footballer.

Madness.

....the truth is, the economic situation in this country is far worse than the papers or the government of the day, will admit.

It all started with the banks and if anyone thinks that the taxpayer has given these fair weather friends all the money that they need, they are very much mistaken. They are so desparate for money they have been forced to pay 12-14% interest to any government that will lend to them or buy their shares. In my opinion they will soon have the begging bowls out again, as the ressession cripples their profit forecasts. In addition, there will be a mass sell off of any bank assets that can raise a bob or two, together with the withdrawal of credit from all but the most secure borrowers.

Southampton Leisure plc is to secure borrowers, what Michael Wilde is to secure investors. I would be prepared to bet that Barclays, that well known Arab bank, is already turning the screws on our club to get out of the overdraft, PDQ, via their "business support" team, in Birmingham. Assuming that this happening, there is only one thing on Lowe and Jone's mind at the moment. Raising cash to pay Barclays off. Once this is done, the threat of administration will recede. Meeting the expectations of Southampton fans at the same time will be impossible and most will have to readjust to the new economic environment and limit their hopes for the economic survival of the club. It is the only thing we should worry about. Luckily, the short term debt, ie that which has to be paid within 12 months, is fairly low in the case of Southampton Leisure plc. Portsmouth, to put it in perspective, have £66M in short term debts. Chelsea have £132M in short term and £603M in long term debts.

We'll find the £5M or so to keep Barclays happy and avoid going out of business. Others won't and we'll look around one day and be thankfull we didn't pour money into trying to maintain league status. At the moment, business survival in 2009 will be a real achievement, for anyone....

I imagine that, if this is the case, there willl be dozens of clubs disappearing in the short term then ??

....the truth is, the economic situation in this country is far worse than the papers or the government of the day, will admit.

It all started with the banks and if anyone thinks that the taxpayer has given these fair weather friends all the money that they need, they are very much mistaken. They are so desparate for money they have been forced to pay 12-14% interest to any government that will lend to them or buy their shares. In my opinion they will soon have the begging bowls out again, as the ressession cripples their profit forecasts. In addition, there will be a mass sell off of any bank assets that can raise a bob or two, together with the withdrawal of credit from all but the most secure borrowers.

Southampton Leisure plc is to secure borrowers, what Michael Wilde is to secure investors. I would be prepared to bet that Barclays, that well known Arab bank, is already turning the screws on our club to get out of the overdraft, PDQ, via their "business support" team, in Birmingham. Assuming that this happening, there is only one thing on Lowe and Jone's mind at the moment. Raising cash to pay Barclays off. Once this is done, the threat of administration will recede. Meeting the expectations of Southampton fans at the same time will be impossible and most will have to readjust to the new economic environment and limit their hopes for the economic survival of the club. It is the only thing we should worry about. Luckily, the short term debt, ie that which has to be paid within 12 months, is fairly low in the case of Southampton Leisure plc. Portsmouth, to put it in perspective, have £66M in short term debts. Chelsea have £132M in short term and £603M in long term debts.

We'll find the £5M or so to keep Barclays happy and avoid going out of business. Others won't and we'll look around one day and be thankfull we didn't pour money into trying to maintain league status. At the moment, business survival in 2009 will be a real achievement, for anyone....

I agreed with a previous post of yours that Barclays and Aviva, would not put us in administration and had previously said the same. From the well respected posters, that regulary have the inside track, the theme seemed to be administration would most likely come from ourselves in the shape of voluntary administration, which in part would make sense, if our cash flow dried up, season ticket renewal was slow (Which i think we are all expecting) or quite simply the club ceased to be a going concern ( I think, but not sure we then have a legal duty to call in the administrators - happy to be proved wrong). However the club are saying there will be no more player sales (To raise the money you have mentioned) and Jan today is talking about bringing in new faces. This doesnt seem to me to be the actions of a club, so desperate for the next penny to keep the wolf Barclays from the door.

I have no idea how much we have stopped the bleeding of money or indeed where we are financially, but I keep toing and froing as to whether i think administration will actually happen. I hope it doesn't.

Puts Kaka's valuation into perspective....

 

It seems perverse that a UK Bank with Arabic backing can hold SLH to ransom over £5m yet people/organisations from the same generic wealth pool can splash out £100m + wages on one footballer.

 

Madness.

I was thinking the same thing, but I have a feeling that before long, sanity will reign and UEFA will introduce a rule regarding the financial viability of the clubs entering European competitions. It doesn't seem fair that a group of Arabs/Russians can buy success when the club itself is not a viable business model.

I think the Bundesliga model is a good one, requiring a 51% ownership by club members.

Puts Kaka's valuation into perspective....

 

It seems perverse that a UK Bank with Arabic backing can hold SLH to ransom over £5m yet people/organisations from the same generic wealth pool can splash out £100m + wages on one footballer.

 

Madness.

100 million. One mis-timed tackle away from being worth zero.

PR & marketing is one thing, making sane business decisions is another...

100 mil for a defence would be a better investment for them

And good OP GM, what you say about us applies to just about every consumer or business anywhere in the world.

Even down here, consumers are having their Credit Card limits halved, (even IF they can't afford to repay them) bank loans have become impossible to obtain or are even being called in, total insanity to announce you want to spend that much money on a footballer

Surely a cap on wages as a percentage of turnover is a start?

 

Lowe said it should be around 60 didn't he? Can't remember, but we let ours creep above 80%. What must Man City's be now? 400%?

I would think that the percentages can change quite quickly, Jones gave a clue to that at the AGM, stating that the 81% was just a blip.

What would be interesting would be to see how our competitors in the CCC fare in the same manner - Charlton would probably be a good comparable perhaps.

Thought in the past it was mentioned that 40% was the desired amount.

Seems like it's a classic 'chicken and egg' scenario though. You can't improve the cash flow without attendances at a suitable level, and of course you can struggle to get the attendances if the on-field offering isn't what is required.

A very fine balancing act, choosing who to keep on board (players and staff) and who to let go without causing too much disruption and damage to the squad.

One thing I would like to see come the end of the season is a review of the playing staff to make sure our squad levels (regardless of the league we are in) are not too high.

If you consider that we have already used over 30 players this season - players like Pulis and Gasmi can't be kept hold of if there's no meaningful contribution.

As for the pompey situation...is it that bad? Because they'll still making large offers for players. Surely if that bad they'd need to retain the money they've brought in?

The only bright spot on the horizon for Pompey, is when that two headed baby is born and they are able to play him up front....

I would think that the percentages can change quite quickly' date=' Jones gave a clue to that at the AGM, stating that the 81% was just a blip.[/quote']

By my estimates, somewhere in the region of £5-6m has been trimmed from the wage bill since the end of the last financial year, which would bring the wages/turnover ratio down to about 50%.

 

Seems like it's a classic 'chicken and egg' scenario though. You can't improve the cash flow without attendances at a suitable level, and of course you can struggle to get the attendances if the on-field offering isn't what is required.

 

A very fine balancing act, choosing who to keep on board (players and staff) and who to let go without causing too much disruption and damage to the squad.

Yep, an unenviable task for whoever has that job, in all honesty, and one where that person is going to be taking criticism from various angles regardless of what decisions are made.

 

One thing I would like to see come the end of the season is a review of the playing staff to make sure our squad levels (regardless of the league we are in) are not too high.

 

If you consider that we have already used over 30 players this season - players like Pulis and Gasmi can't be kept hold of if there's no meaningful contribution.

Agreed. It would also be useful to establish which players' contracts expire in the summer. Players under the age of 24 will remain on a rolling contract as long as the club has offered them a new deal on at least the same terms until another club decides to sign them, but then we would be due a compensation payment from that club. Players who have been here longer will be worth more as far as the tribunal is concerned as they have cost more to bring them through the ranks, regardless of their "market" value.

 

Fortunately, Gasmi is only on loan, so if it's decided he's not what we're after, there's no commitment on our part to sign him, even though we do have the option to buy at the end of the season.

I agreed with a previous post of yours that Barclays and Aviva, would not put us in administration and had previously said the same. From the well respected posters, that regulary have the inside track, the theme seemed to be administration would most likely come from ourselves in the shape of voluntary administration, which in part would make sense, if our cash flow dried up, season ticket renewal was slow (Which i think we are all expecting) or quite simply the club ceased to be a going concern ( I think, but not sure we then have a legal duty to call in the administrators - happy to be proved wrong). However the club are saying there will be no more player sales (To raise the money you have mentioned) and Jan today is talking about bringing in new faces. This doesnt seem to me to be the actions of a club, so desperate for the next penny to keep the wolf Barclays from the door.

I have no idea how much we have stopped the bleeding of money or indeed where we are financially, but I keep toing and froing as to whether i think administration will actually happen. I hope it doesn't.

Ok. I hope it doesn't happen, but if we were to call in the administrators, who are the firms that we would default on?

We would lose confidence and reputation among traders and make it more difficult for firms to want to do business with whatever company emerges from SLH/SFC post admin.

(Incidentally, how much do we owe the Inland Revenue?)

I would think that the percentages can change quite quickly, Jones gave a clue to that at the AGM, stating that the 81% was just a blip.

 

Thought in the past it was mentioned that 40% was the desired amount.

This was one of my main concerns when Wilde wafted into the club, and one of my questions which the Saints Trust got the new board to answer - they replied that "as a "rule of thumb", the directors will endeavour to ensure that labour costs remain around 50% of turnover. Short–medium term variations (in the pay-turnover ratio) in the range 40 – 60% will be regarded as acceptable provided that corrective actions are planned to restore the ratio to the 50% norm."

By the following summer I was still concerned this wasn't being addressed and contacted the club directly, to which they then replied "64% is still slightly on the high side... We have made considerable wage savings since relegation... a major challenge the Board faces is to maintain a team capable of challenging for promotion whilst not over committing the Company in terms of player wages relative to the reduced turnover levels in the Championship."

I guess they didn't bother!

What would be interesting would be to see how our competitors in the CCC fare in the same manner - Charlton would probably be a good comparable perhaps.

I know a year or two ago the Deloitte report into wages cited CCC clubs running at nearly 90% of turnover compared to just under 60% in the Premiership. Clubs like Fulham run high at around 80% as they are independently bankrolled (over £120m to date) like other clubs are now too - and of course we have Jack Walker to thank for that particular "business model" - he bought Blackburn's title by running their wage bill at 125%.

I know around the time we were relegated Charlton were running their wage bill up around 70% of turnover, way too high - they made nearly £20m profit on player trading one year but still had no cash as their model was unsustainable.

When Norwich came up to the Prem they ran their wage bill at just £11m compared to Saints at £25m. That meant that when they went back down, they only had to adjust it down by £2m to stay under 60% of turnover. But no doubt their board was castigated for the lack of ambition right?

IMO wages are the root of all evil in football - Spurs nearly went bust in the 80s until Sugar capped their wages, Arsenal were done for tax avoidance over trying to pay their astronomical player wages and hit with a £12m tax bill, Leeds went bust due to the excessive wages, Bradford, etc etc.

There needs to be some sort of cap, but I don't know how it can be done in practical terms without the big clubs finding ways to circumvent it - eg. loaning players out to other clubs and paying part of the wages. I like the idea of UEFA imposing capital structure rules on clubs, but again the big clubs will never fit the bill and there's no way they will risk the Champions League money cow to force it through.

I know there is still 2 weeks+ left in this transfer window but things seem very quiet on Saints players moving on to lower costs. Recent statements from JP indicated that he was not expecting to lose players and he is now hoping to still bring in a couple.I dont read imminent Administration somehow.

Is the financial situation now improved or is something going on which we dont know about?

This was one of my main concerns when Wilde wafted into the club, and one of my questions which the Saints Trust got the new board to answer - they replied that "as a "rule of thumb", the directors will endeavour to ensure that labour costs remain around 50% of turnover. Short–medium term variations (in the pay-turnover ratio) in the range 40 – 60% will be regarded as acceptable provided that corrective actions are planned to restore the ratio to the 50% norm."

 

By the following summer I was still concerned this wasn't being addressed and contacted the club directly, to which they then replied "64% is still slightly on the high side... We have made considerable wage savings since relegation... a major challenge the Board faces is to maintain a team capable of challenging for promotion whilst not over committing the Company in terms of player wages relative to the reduced turnover levels in the Championship."

 

I guess they didn't bother!

 

 

 

I know a year or two ago the Deloitte report into wages cited CCC clubs running at nearly 90% of turnover compared to just under 60% in the Premiership. Clubs like Fulham run high at around 80% as they are independently bankrolled (over £120m to date) like other clubs are now too - and of course we have Jack Walker to thank for that particular "business model" - he bought Blackburn's title by running their wage bill at 125%.

 

I know around the time we were relegated Charlton were running their wage bill up around 70% of turnover, way too high - they made nearly £20m profit on player trading one year but still had no cash as their model was unsustainable.

 

When Norwich came up to the Prem they ran their wage bill at just £11m compared to Saints at £25m. That meant that when they went back down, they only had to adjust it down by £2m to stay under 60% of turnover. But no doubt their board was castigated for the lack of ambition right?

 

IMO wages are the root of all evil in football - Spurs nearly went bust in the 80s until Sugar capped their wages, Arsenal were done for tax avoidance over trying to pay their astronomical player wages and hit with a £12m tax bill, Leeds went bust due to the excessive wages, Bradford, etc etc.

 

There needs to be some sort of cap, but I don't know how it can be done in practical terms without the big clubs finding ways to circumvent it - eg. loaning players out to other clubs and paying part of the wages. I like the idea of UEFA imposing capital structure rules on clubs, but again the big clubs will never fit the bill and there's no way they will risk the Champions League money cow to force it through.

The post of the week.

I know there is still 2 weeks+ left in this transfer window but things seem very quiet on Saints players moving on to lower costs. Recent statements from JP indicated that he was not expecting to lose players and he is now hoping to still bring in a couple.I dont read imminent Administration somehow.

Is the financial situation now improved or is something going on which we dont know about?

I am concerned that our current wage bill may be higher than quoted. We have promoted several Academy players, presumably on low wages, which is a good gamble/investment imo. However we are paying for too many players who are under-used or surplus to requirements. I am thinking of Gasmi, Pulis, and possibly Bart in particular. Then there are the long term injured who don't have a realistic future here (Poke,Thomas, Killer and those who are expensive (Euell, Saga? BWP?). We already have a squad of 35 players. One or two players have to go before the end of January (and we are used to last minute shocks).

The question is, come February 3rd, will we have a more balanced and efficient team or not?

I'd rather get relegated and avoid administration than have us go bust.

 

You dont get it, do you ?

Why are the two mutally exclusive ?

You say yourself about fan expectation.

There needs to be some sort of cap, but I don't know how it can be done in practical terms without the big clubs finding ways to circumvent it - eg. loaning players out to other clubs and paying part of the wages. I like the idea of UEFA imposing capital structure rules on clubs, but again the big clubs will never fit the bill and there's no way they will risk the Champions League money cow to force it through.

Not only circumventing it, but possibly being able to mount legal challenges against it. The clubs would (arguably rightly) argue that it's up to them how they run their business and by imposing a cap on the amount they are allowed to spend on player wages is a restriction of trade.

The idea of salary capping is a fine one in principle (albeit about 20 years too late), but I don't see how it would work in practice. The aim of it is, presumably, to return the game to a bit more of a level playing field in terms of the competitions, but the big clubs are already so far ahead of the rest that it seems almost impossible to reel that in.

Would such a cap be based on percentage of turnover? If so, the likes of Arsenal, ManYoo, Chelsea, Liverpool and even Spurs, Newcastle and Villa are so far ahead of the rest that all that does is prevent the chasers from speculating every now and then (like Pompey have done, to reasonable short-term success but while potentially doing irreversible damage in the long-term), so the gap between the haves and the have nots would only increase exponentially.

Alternatively, a cap might be put in place for a fixed value. If that happens, what do the big clubs do with the countless millions they would invariably have left over? Spend it on transfer fees? All that would achieve is to move the problem to a different area of football finance. Also, while the capped value would be comfortable for the big clubs, for the small clubs it would still be putting their finances at risk, but because they're allowed to spend up to that amount, they will do their best to make sure they do spend it, in order to feel as though they're not being left behind. Ultimately, it's the smaller clubs that are going to have the biggest problems, but I fear that this would only make things worse.

While a lot of the financial problems can be traced back to the creation of the Premier League in 1992 (or the beginning of football as Sky would have you believe), arguably it goes back a lot further, back to the days when the big clubs basically forced the Football League into accepting a rule change whereby gate receipts were kept by the home club rather than the previous arrangement where they were shared. Greed in football is not a new occurrence, it's simply highlighted more these days because there's a couple of extra 0's on the end of every number.

This was one of my main concerns when Wilde wafted into the club, and one of my questions which the Saints Trust got the new board to answer - they replied that "as a "rule of thumb", the directors will endeavour to ensure that labour costs remain around 50% of turnover. Short–medium term variations (in the pay-turnover ratio) in the range 40 – 60% will be regarded as acceptable provided that corrective actions are planned to restore the ratio to the 50% norm."

 

By the following summer I was still concerned this wasn't being addressed and contacted the club directly, to which they then replied "64% is still slightly on the high side... We have made considerable wage savings since relegation... a major challenge the Board faces is to maintain a team capable of challenging for promotion whilst not over committing the Company in terms of player wages relative to the reduced turnover levels in the Championship."

 

I guess they didn't bother!

 

 

 

I know a year or two ago the Deloitte report into wages cited CCC clubs running at nearly 90% of turnover compared to just under 60% in the Premiership. Clubs like Fulham run high at around 80% as they are independently bankrolled (over £120m to date) like other clubs are now too - and of course we have Jack Walker to thank for that particular "business model" - he bought Blackburn's title by running their wage bill at 125%.

 

I know around the time we were relegated Charlton were running their wage bill up around 70% of turnover, way too high - they made nearly £20m profit on player trading one year but still had no cash as their model was unsustainable.

 

When Norwich came up to the Prem they ran their wage bill at just £11m compared to Saints at £25m. That meant that when they went back down, they only had to adjust it down by £2m to stay under 60% of turnover. But no doubt their board was castigated for the lack of ambition right?

 

IMO wages are the root of all evil in football - Spurs nearly went bust in the 80s until Sugar capped their wages, Arsenal were done for tax avoidance over trying to pay their astronomical player wages and hit with a £12m tax bill, Leeds went bust due to the excessive wages, Bradford, etc etc.

 

There needs to be some sort of cap, but I don't know how it can be done in practical terms without the big clubs finding ways to circumvent it - eg. loaning players out to other clubs and paying part of the wages. I like the idea of UEFA imposing capital structure rules on clubs, but again the big clubs will never fit the bill and there's no way they will risk the Champions League money cow to force it through.

Inventing a time machine and going back in time to shoot Jimmy Hill, Terminator/Sarah Connor-stylee is more feasable than a workable wage cap that the big clubs will adhere to.

I'd change things more radically though as I can't stand the Champion's League. One of the most painfully dull competitions to ever ruin football. Ok, some of the later games are good, but the groups are beyond tedious, just cash exercises for big clubs and fruitless fights for small ones. I would limit it to 2 teams from a country. Would help smaller leagues grow too. Only have 1 seed per group, ie. the actual champions. You'd still get the quality teams meeting later on, but no more of the Liverpools of this world undeservedly boring their way through after finish 4th in the their for the 10th year running. This system would also instantky revitalise the UEFA cup. Have 3 or 4 places for that, maybe even a playoff place in the league.

It'll never happen. Turkeys voting for Christmas springs to mind. Don't forget, the group formerly known as the G14 threatened creating a breakaway European tournament if UEFA scrapped the SECOND group stage from the Champions League. Fortunately (or unfortunately, depending on which way you look at it) it never came to that and it was resolved amicably, but there's not a cat in hell's chance that any of the top clubs in the big European leagues would agree to a reduction in a) the number of qualifying teams from each country, or b) the number of guaranteed games in the competition.

Beyond that, mandatory sell on fees so that small clubs keep getting money back for players they produce, even if they move several times.

Now that IS a good idea...

Perhaps even a "Tax" on top flight expenditure, so that teams spending a certain amount on transfers pay a small percentage to the premier league, then this total gets disbursed throughout the lower leagues.

This sort-of happens already, particularly to the Championship, with the bizarre "solidarity" payment that gets distributed each season. When we finished 6th, we got £1.3m (or something like that) as part of this.

Clearly there's bugger all that gets distributed below the Championship though. Even the Sky broadcasting deal is massively skewed (70% Championship, 18% League One, 12% League Two).

Something I posted on a different thread:

Just out of interest, if we do stay up, avoid administration and get our finances to a break even level before the start of next season, would you say Lowe has done OK ?

For me if the above happens I don't believe anyone can argue that it wouldn't be deemed a success.

If we get relegated without going into administration, but clear our debts, not a success but not a failure either.

If we go into administration then Lowe has failed.

P.S Guided,

I thought Pompey were £66m in debt before the sale of Defoe and Diarra(whatever his name is) This would leave them approx £30m in debt with saleable assets like Crouch, James and Johnson ect. Plus if they survive they have Premiership money coming in next season. If they get relegated then thats a different matter they would be in trouble, or if they fail to sell any of the above.

Also heard that Liverpool had an extension of only 6 months to repay short term debts of £280m.

P.S Guided,

I thought Pompey were £66m in debt before the sale of Defoe and Diarra(whatever his name is)

That £66m is as of the accounts from June 2007. I would strongly suspect that figure has increased since then.

This would leave them approx £30m in debt with saleable assets like Crouch, James and Johnson ect. Plus if they survive they have Premiership money coming in next season. If they get relegated then they are in trouble or fail to sell any of the above.

If they stay up, they might have a slim chance of avoiding financial oblivion - as you say, they've then got another year's worth of Premier League money. However, they're still going to possess a hell of a lot of players on astronomical wages, and even if they trimmed their squad so it was running at the bare minimum, they'd still be making an annual loss, IMO. Of course, they'd then have a squad without a hope in hell of keeping them up as well...

Ok. I hope it doesn't happen, but if we were to call in the administrators, who are the firms that we would default on?

 

We would lose confidence and reputation among traders and make it more difficult for firms to want to do business with whatever company emerges from SLH/SFC post admin.

 

(Incidentally, how much do we owe the Inland Revenue?)

From reading westons post from last week, he suggested that over and above Aviva and Barclays, there was one other major creditor, who was not the Inland Revenue and that if administration were to happen, it would most likely voluntary.

For what it's worth i agree with you about losing confidence and reputation amoungst local tradaers, but also for the directors.

From reading westons post from last week, he suggested that over and above Aviva and Barclays, there was one other major creditor, who was not the Inland Revenue and that if administration were to happen, it would most likely voluntary.

 

For what it's worth i agree with you about losing confidence and reputation amoungst local tradaers, but also for the directors.

Not the photocopiers, I hope :shock:

Ultimately, it's the smaller clubs that are going to have the biggest problems, but I fear that this would only make things worse.

Just to be clear, the reason I'd like a wages cap (plural, ie. the whole club not per-player) is to protect the smaller clubs who run themselves out of existence by gambling their futures - unfortunately it is the big clubs who would stop this, although perhaps the Football League would be able to adopt different rules to the Premier League. I won't give a toss if Chelski go bust when Abramovich gets bored, or Arsenal go bust when they fail to qualify for the CL (won't that be funny), but I'd be sad to see the smaller, lower league clubs going bust simply because they get run by greedy short-term gamblers.

The reason I think wages are more important to address than transfer fees is that they are future payments - OK, I know transfer fees are typically 12 month payments but wages are typically 3-5 years of financial commitment. That is what cripples clubs, whether through collapsed leverage like Leeds or through relegation like Saints which makes 5 year financial commitments impossible to guarantee. Transfer fees are simple - if they have the cash then they can spend £100m on Kaka if they want... how about an FA tax on transfer fees (implemeted as a registration tax) which gets evenly distributed between all league clubs? Say 20% - that means that if Kaka signs for Al-Manc FC for £100m then clubs like Rochdale and Northampton will get £200k each... what a difference that would make to ensuring the future of those clubs.

back to the days when the big clubs basically forced the Football League into accepting a rule change whereby gate receipts were kept by the home club rather than the previous arrangement where they were shared.

Good point, this was the initial point of de-stabilisation. Does anyone know how this works in the other major European leagues?

I agreed with a previous post of yours that Barclays and Aviva, would not put us in administration and had previously said the same. From the well respected posters, that regulary have the inside track, the theme seemed to be administration would most likely come from ourselves in the shape of voluntary administration, which in part would make sense, if our cash flow dried up, season ticket renewal was slow (Which i think we are all expecting) or quite simply the club ceased to be a going concern ( I think, but not sure we then have a legal duty to call in the administrators - happy to be proved wrong). However the club are saying there will be no more player sales (To raise the money you have mentioned) and Jan today is talking about bringing in new faces. This doesnt seem to me to be the actions of a club, so desperate for the next penny to keep the wolf Barclays from the door.

I have no idea how much we have stopped the bleeding of money or indeed where we are financially, but I keep toing and froing as to whether i think administration will actually happen. I hope it doesn't.

I do not agree with this position, although I will concede that it will be more likely that we place ourselves into administration, but that will be driven by of actions from NU or Barclays.

If the bank lose their faith in us, that is it, there and then, unless some other idiot is prepared to step in and fund the financial hole in this climate. And if you believe that NU will not be able to pull the plug, I can see some logic in that line. But equally if we default with the payments to NU, they can take possession of the stadium and make us pay those charges and more to enable us to play at St Mary’s. Those charges would then have to be met by the bank (or other source) to allow us to operate and that would be an additional burden I really doubt the bank would shoulder. I don’t know if the current interest on the stadium notes have changed, but I cannot see them being any less then previous years. To repay the interest (was 8.34%), capital reduction and oversee the stadium, I cannot see that as being any less than £50k per week. It then asks how much can we afford of that amount at the present and how that will change in the future if revenue drops even further. If we can keep sufficient numbers coming through the gates the worst that would happen would be similar to what we see at Leeds. If we cannot and the numbers continue to drop off alarmingly as we have started to see this season, we could easily be ground sharing with Eastleigh.

Transfer fees are simple - if they have the cash then they can spend £100m on Kaka if they want... how about an FA tax on transfer fees (implemeted as a registration tax) which gets evenly distributed between all league clubs? Say 20% - that means that if Kaka signs for Al-Manc FC for £100m then clubs like Rochdale and Northampton will get £200k each... what a difference that would make to ensuring the future of those clubs.

I think I read somewhere that the FA already takes a 5% cut of all transfer fees anyway, but of course bugger all of that filters down past Brian Barwick's jug of goose fat.

I think I read somewhere that the FA already takes a 5% cut of all transfer fees anyway, but of course bugger all of that filters down past Brian Barwick's jug of goose fat.

Is he spending the 5% on goose fat then?

I don't get what you're saying now no.

 

All I've said is that the foremost important thing to me is the future of the club and avoiding administration. I'd rather we stayed up too, but I'll understand if we don't, it's a ****ty situation we're in.

 

Yet you're now saying I'm expecting too much? I've never said we'll avoid admin if we go down, I said I'd rather do all we can to avoid it. Doesn't mean we will, I don't know that and neither do you. I have no expectations at all, just the hope we can scrape together some wins to stay up while the financial situation is improved enough to avoid administration. But those are just hopes, I have no idea what will happen and I certainly never said the two were mutually exclusive did I.

I was in hurry, so was unable to elaborate further.

Why do you think that underfunding the team with the aim of ensuring financial stability will really ensure the club does not go into administration, considering the quality of the football that will result, possibly even leading to relegation ?

Why is there a huge assumption on many sides that the fan will continue turning up and footing the bill for utter dross ?

I am adamant in my belief that relegation will lead to administration as sure as night follows day.

In effect, looking at our league position and the dwindling number of games left, I think the club has one foot in the grave already.

That £5 million could have been found in a few seconds if the current directors had agreed to make similar commitments to a major shareholder..............so we have been told

That £5 million could have been found in a few seconds if the current directors had agreed to make similar commitments to a major shareholder..............so we have been told

LOL. Game, set, match...

And apparently we have sage, enlightened mangement "doing the best for the club"

I think I read somewhere that the FA already takes a 5% cut of all transfer fees anyway, but of course bugger all of that filters down past Brian Barwick's jug of goose fat.

Duh yes, I posted about that last year (maybe on saintslist?) - I have a memory like a sieve!

We should have a sweepstake as to who will the next club be that goes into administration.

I'll start with West Ham.

That £66m is as of the accounts from June 2007. I would strongly suspect that figure has increased since then.

 

 

If they stay up, they might have a slim chance of avoiding financial oblivion - as you say, they've then got another year's worth of Premier League money....

Part of their problem is that this year's TV income has already been spent - on buying a chain of pizza restaurants in the States (thanks to Gaydamak senior).

The debt is now reckoned to be £92m, so even if they can hang on until next year's cheque arrives, it will only be used to plug this year's holes.

Part of their problem is that this year's TV income has already been spent - on buying a chain of pizza restaurants in the States (thanks to Gaydamak senior).

 

The debt is now reckoned to be £92m, so even if they can hang on until next year's cheque arrives, it will only be used to plug this year's holes.

At last some good news.

....the truth is, the economic situation in this country is far worse than the papers or the government of the day, will admit.

It all started with the banks and if anyone thinks that the taxpayer has given these fair weather friends all the money that they need, they are very much mistaken. They are so desparate for money they have been forced to pay 12-14% interest to any government that will lend to them or buy their shares. In my opinion they will soon have the begging bowls out again, as the ressession cripples their profit forecasts. In addition, there will be a mass sell off of any bank assets that can raise a bob or two, together with the withdrawal of credit from all but the most secure borrowers.

Southampton Leisure plc is to secure borrowers, what Michael Wilde is to secure investors. I would be prepared to bet that Barclays, that well known Arab bank, is already turning the screws on our club to get out of the overdraft, PDQ, via their "business support" team, in Birmingham. Assuming that this happening, there is only one thing on Lowe and Jone's mind at the moment. Raising cash to pay Barclays off. Once this is done, the threat of administration will recede. Meeting the expectations of Southampton fans at the same time will be impossible and most will have to readjust to the new economic environment and limit their hopes to the economic survival of the club. It is the only thing we should worry about. Luckily, the short term debt, ie that which has to be paid within 12 months, is fairly low in the case of Southampton Leisure plc. Portsmouth, to put it in perspective, have £66M in short term debts. Chelsea have £132M in short term and £603M in long term debts.

We'll find the £5M or so to keep Barclays happy and avoid going out of business. Others won't and we'll look around one day and be thankfull we didn't pour money into trying to maintain league status. At the moment, business survival in 2009 will be a real achievement, for anyone....

Told you so. When you see it from without it's far far worse than what you see from within. Been heading on a downward spiral for about 5 years. Everybody told you all in blighty that endless credit for anything and everything would be your come uppance. looks like they might haver been right. It was obvious to anyone w

Told you so. When you see it from without it's far far worse than what you see from within. Been heading on a downward spiral for about 5 years. Everybody told you all in blighty that endless credit for anything and everything would be your come uppance. looks like they might haver been right. It was obvious to anyone w

 

Is France doing ok then?

Is France doing ok then?

Lets say the average household is by far less exposed to the effects of lack of credit.Credit is far more harshly regulated in France. IN THEORY you can't borrow more than you can afford to repay.France will suffer from the global downturn to be sure but on the whole the average household won't suffer much in the short term.Neither will you run of the mill business.There'll be hard time but not too many house repossessions will occur. We have our idiots as well, it's possible to contourn the credit regulations by outright lying,veilling the truth and falsifying documents but it's not really widespread. I'd say immigration is a by far greater problem than the credit crunch just now.

Is he spending the 5% on goose fat then?

He's swimming the channel for charidee.

I think one of the main problems concerning football is that virtually every Premiership and CCC club in the UK has been ripped off in the recent past for

vastly overated European 'talent'. Be it on loan or on definitive transfer

we have imported tons of rubbish that was no better than our own home grown talent and vastly more expensive.That's fan power for you, always clamouring for new faces, better players....

I imagine that, if this is the case, there willl be dozens of clubs disappearing in the short term then ??

Well here's a thought. What if about half of the CCC clubs are in danger of administration: a cunning plan would be for all of them to agree to go into administration on the same day. Then they'll all be in the same boat (docked 10 points) and can form their own mini-league for survival (only 3 can go down!).

Told you so. When you see it from without it's far far worse than what you see from within. Been heading on a downward spiral for about 5 years. Everybody told you all in blighty that endless credit for anything and everything would be your come uppance. looks like they might haver been right. It was obvious to anyone who talked to some of the holiday oiks that we get here in France that they were living way way above their means funded by credit.Stupid people with IQs of about 0.5 driving BMW 4x4s obtained on credit but with mortgage arrears totting up.

I don't want to pi $$ on your bonfire, but I wouldn't crack open the champagne too soon. A few facts:

• Currently, France has a debt of 66.6% of their GDP.
  
• Gross debt could rise to around 72 percent of GDP in 2010 as the French economy contracts by 1.5%.
  
• Today France is using approximately 89% of the income tax or 140% of its corporation tax to pay on the interest alone for the national debt.
  
• UK National debt is about 43% of GDP
  

A debt of 43% of GDP isn't bad for a nation that refused to collaborate with the Nazis and were prepared to spend all of it's gold reserves helping to free the rest of Europe from tyranny. The rest of the money, we needed to spend on armaments to defend "Blighty" and liberate France and the rest of Europe, we borrowed from the US under the lend lease programme, a loan which we finished paying back on 29th December, 2006.

I don't want to pi $$ on your bonfire, but I wouldn't crack open the champagne too soon. A few facts:

• Currently, France has a debt of 66.6% of their GDP.
  
• Gross debt could rise to around 72 percent of GDP in 2010 as the French economy contracts by 1.5%.
  
• Today France is using approximately 89% of the income tax or 140% of its corporation tax to pay on the interest alone for the national debt.
  
• UK National debt is about 43% of GDP
  

A debt of 43% of GDP isn't bad for a nation that refused to collaborate with the Nazis and were prepared to spend all of it's gold reserves helping to free the rest of Europe from tyranny. The rest of the money, we needed to spend on armaments to defend "Blighty" and liberate France and the rest of Europe, we borrowed from the US under the lend lease programme, a loan which we finished paying back on 29th December, 2006.

These are just statistics,important ones no doubt but they do not affect the average househokld in any way shape or form. As for all of the rest I couldn't give a sh*t. I know from speaking to many many people how it is in "France profond" Simple people,living simply without all the trappings and attributes that so many of our countymen seem to need so badly.I work with 107 other people and not oner of them is in any way affected by the "global downturn".

looking at wages as a percentage of turnover on its own can give a distorted view of a clubs finances, the real percentage to look at is wages plus fixed stadium costs(ie rent, mortgage and council tax) as a percentage of turnover.

If you own your stadium you can afford to invest more in wages without crippling the finances

I know from speaking to many many people how it is in "France profond" Simple people,living simply without all the trappings and attributes that so many of our countymen seem to need so badly.I work with 107 other people and not oner of them is in any way affected by the "global downturn".

Out of touch, expat gone native, IMO. A quick read of the history of France will tell you it is bound to go t!ts up soon, with another corrupt government installed to try and sort out the mess, as Paris riots and burns and tractors block the roads, fisherman the ports.

Take a look a what's happening in Greece. It's more relevant to you than what is happening in "Blighty".

On second thoughts, have another bottle of wine and shrug. It's what the French do in a crisis.

On second thoughts, have another bottle of wine and shrug. It's what the French do in a crisis.

Whatever you say John, I'm glad to be where I am, been here nigh on 30

years now, same as ART I suppose, maybe a couple of years less. I'd just as soon be here as anywhere else. Anyway if we do started "feeling the pinch" Pastis sales will rocket so the downturn will be short lived.

Well here's a thought. What if about half of the CCC clubs are in danger of administration: B Then they'll all be in the same boat (docked 10 points) and can form their own mini-league for survival (only 3 can go down!).

Brill, we still have a chance of staying up then ! I just knew that something good would happen if I just kept the faith !!!!!!!!!!

Not only circumventing it, but possibly being able to mount legal challenges against it. The clubs would (arguably rightly) argue that it's up to them how they run their business and by imposing a cap on the amount they are allowed to spend on player wages is a restriction of trade.

 

The idea of salary capping is a fine one in principle (albeit about 20 years too late), but I don't see how it would work in practice.

There is a salary cap in place in League Two (Div 4 to us oldies).

It started in 2003/4 and is currently set at 60%. Not overly sure how it is enforced, but I also know that League 1 (Div 3) started with a cap at the same time, but dumped it a year later.

A few other points regarding this thread.

If you're suggesting more money should flow down into the lower leagues as a way of ensuring club's survival, then that is no sure way of ensuring clubs stay solvent, mainly because there is no way to stop the same stupid Chairman just going out and spending this new money on players and agents who are aware of this windfall in an attempt to win promotion from whatever league.

The problem has been that the more money clubs receive, the more they just go and spend on players regardless of whether it is sustainable or not.

Having spoken to many clubs who run themselves prudently and with one eye on the future, their biggest problem is wage inflation and wage demands caused by either, (a) other reckless clubs offering stupid sums and/or (b) clubs who are bankrolled by millionaire owners creating the same problems.

Lastly, Charlton are an interesting case, not least because their directors and major shareholders pumped in 14million last year.

The dear old boys at the EU have a lot to answer for with the whole Bosman ruling...

The concept was right, the cause was just, just nobody realised the effect on the whole wage structures.

It was unfair on the majority of players back then, it's unfair on the amjority of clubs these days

Too many things wrong with football and finance in general for them to ever get put right so you either go with the flow and hope or you find a sugar daddy.

One day somebody will break the mould (sic) but will be fun watching (the likes of) Liverpool trying to re finance the loans that H&G took out to buy them and them dump on their necks - $280 mil O/D anyone - ouch

lol at the GM & WC arguments about which is more fooked UK or France... chill guys you're both gonna muddle through....

Mind you down here - ouch

I mean things are SO bad and SO wrong here right now I just spent the last 30 minutes mopping up the floors downstairs after a FLASH FLOOD - FFS this is a DESERT and I'm fighting the FLODD waters!!?? If I wanted to do that I'd move to Tewkesbury/ Guys out in the street pushing a taxi that's stuck in the middle - lol!

lol at the GM & WC arguments about which is more fooked UK or France... chill guys you're both gonna muddle through....

 

Mind you down here - ouch

 

I mean things are SO bad and SO wrong here right now I just spent the last 30 minutes mopping up the floors downstairs after a FLASH FLOOD - FFS this is a DESERT and I'm fighting the FLODD waters!!?? If I wanted to do that I'd move to Tewkesbury/ Guys out in the street pushing a taxi that's stuck in the middle - lol!

Well we could do with some of that "Global Warming" around here in the frozen Forez. So if there's any to spare anywhere you know where to send it.

I see that some dogoodies are trying to ban Foie Gras, just let them come over here and try that, they'd wish they'd never been born.Would teach them a good old lesson in fact.

Well we could do with some of that "Global Warming" around here in the frozen Forez. So if there's any to spare anywhere you know where to send it.

 

I see that some dogoodies are trying to ban Foie Gras, just let them come over here and try that, they'd wish they'd never been born.Would teach them a good old lesson in fact.

Global WARMING - you're having a larf! For the first time in 15 years down here I had to switch my a/c setting to HEAT. I was frozen! been wearing a fleece (yep the Purple useless Xmas pressie one) in the late afternoons and what is REALLY bad I even have to wear LONG trousers to keep warm on the golf course at the moment. Do Gooders & Nimby's - yep IMHO they are worse than global warming, tyrekickers at SMS and DMG's goals to shots ratio, sad thing is the Nimby's have made it down here of late...

Meanwhile on topic this recession has a long way to go yet, get that cash out the bank and under the mattress or buy Gold, I have to say that the concept of only surviving this season may not be as stupid as it sounds as a lot of clubs will have a lot of problems in the next few months....

Unless you are Man City of course, even Man U have HOW MUCH debt??