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Fulham: a financial look at what went wrong

Started by MJG, March 30, 2015, 10:19:53 PM

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Berserker

Financially I think Khan will do things spot on. I suppose it's hoping he gets the right advisors footballing wise thats the big thing.
Twitter: @hollyberry6699

'Only in the darkness can you see the stars'

- Martin Luther King Jr.

Apprentice to the Maestro

Thank you for the detailed analysis.

A critical change in the figures for which I cannot quite work out the cause in the 17% rise in wage costs for 2010-2011.

Can anyone explain that for me please?

MJG

Quote from: Apprentice to the Maestro on March 31, 2015, 10:10:44 AM
Thank you for the detailed analysis.

A critical change in the figures for which I cannot quite work out the cause in the 17% rise in wage costs for 2010-2011.

Can anyone explain that for me please?
Hughes and his bus load of hangers on don't come cheap.
Also I suspect the players had incentive rises in their contracts that kicked in following the Europe final. Plus new players coming in would have been paid more to be at same level.


fulhaman

What about shirt sales and the like? do we make a lot of money from them? This is a good article. Do you reckon we will post a loss from the last season in the prem. I reckon we will be ok money wise this season, we got a lot of our wage bill.

MJG

Quote from: fulhaman on March 31, 2015, 11:11:41 AM
What about shirt sales and the like? do we make a lot of money from them? This is a good article. Do you reckon we will post a loss from the last season in the prem. I reckon we will be ok money wise this season, we got a lot of our wage bill.
Shirts sales etc would be counted in the commercial side of the accounts.

fulhaman

Would selling a player like mitro be enough this summer. I heard that we are wanting still 10 million for him, so maybe this will help with our transfer wages pile this summer.


mrmicawbers

Good read.Appreciate the time and effort put in.Hopefully after getting rid of all the deadwood and their salaries we will be in a position to make some decent acquisitions in the summer.With the parahachute payments and the Chairman allowed to put in extra funding we could have a decent transfer kitty.It will be interesting to see if he decides to put his hand in his pocket and until then i am going to give him the benefit of the doubt.Regarding the new stand i agree that we dont actually need it now but believe we should start its construction.My reasoning being it would show that Khan is in for the long haul.It also wouldn't effect FFP and lets face it he can afford it.When constructed we would benefit from extra revenue from commercial side(riverside cafe/restaurant/bar etc.)Plus when we get to premier league hopefully sooner rather the later it could be used to its full potential.

Apprentice to the Maestro

Quote from: MJG on March 31, 2015, 10:26:39 AM
Quote from: Apprentice to the Maestro on March 31, 2015, 10:10:44 AM
Thank you for the detailed analysis.

A critical change in the figures for which I cannot quite work out the cause in the 17% rise in wage costs for 2010-2011.

Can anyone explain that for me please?
Hughes and his bus load of hangers on don't come cheap.
Also I suspect the players had incentive rises in their contracts that kicked in following the Europe final. Plus new players coming in would have been paid more to be at same level.

It must be that but it was a significant jump followed by further rises in the following two years. The departures last summer need to have a counterbalancing effect and take the wage bill back down to levels near £50m or preferably below I suspect.

Burt

Well, dannyboi was after the post of the month, and I think this is it.

A superb article Mr MGJ, very clear. And very scary. Particularly the wage as a percentage of revenue stat...


HV71

An extremely interesting and well written piece. The analysis is so sound and has the correct balance of impartiality and yet concern for the club. Following on from the analysis your points about promotion ( next season ) and the need for any money to be spent - not on one player at £10 m, but on three or so for that figure are most insightful. Hopefully the appointment of Rigg will help deliver such thinking and action within the club. If not then that is just another additional wage bill for little or no return ( but Khan appears to be trying to not make any more howlers with such an appointment )

Great stuff MJG !

Justme

Good article.

The pattern of the finances fits with the changes in policy at the club and the initial comments from MAF about sustainability.

Clearly there was a change in direction with money spent on infrastructure (e.g. the upgrading of Motspur Park and subsequent spend on plans, etc. for the Riverside) rather than on the first team (such expenditure should be reflected on the Balance Sheet rather than in the Profit and Loss statement). At the same time player investment was mainly for the Academy.

As a strategy, moving from buying to developing players makes sense. Unfortunately the lead time to develop players from the Academy appears to have been longer than expected leading to on-going increases in players ages and wages.

Looking forward there are likely to be some real financial issues for Premier League clubs when the next TV rights are negotiated. At the last round Sky agreed to pay 80% more for the same coverage while BT paid 15% more for increased coverage. It is unlikely that Sky will do the same again unless some competition can be created. Therefore it is quite likely that Sky will reduce their bid at the next renewal. If that happens it is likely to be a major disaster for a lot of the Premier League clubs.

Overall, being relegated may just be what we needed to get our finances in order and avoid the problems that any significant reduction in TV money would bring.

epsomraver



haynesfan

Thanks for an excellent, well set out article. I'm much better informed as aresult. What worries me in particular is that it looks like we won't have any money to invest in new players. Patrick Roberts to Liverpool/ Arsenal perhaps?

FPT

This is excellent MJG, and is why you sit in my box of well respected Fulham supporters! Fascinating read.

jarv

The saddest part is, after the Euro success, it was not rocket science to turn Fulham into a solid mid table premier team for a long time to come. It surely is not difficult to develop that strategy. We will never become the Manchester of the south but we could have become like Everton. Always there, always hoping, never really succeeding but in the premier for decades.

The whole thing points to serious mismanagement. The closest to any northern team we have mirrored is Middlesborough. Mid table, Euro final, owner stops writing cheques followed by relegation.

Superb post by the way.


MJG

Quote from: Apprentice to the Maestro on March 31, 2015, 11:57:45 AM
Quote from: MJG on March 31, 2015, 10:26:39 AM
Quote from: Apprentice to the Maestro on March 31, 2015, 10:10:44 AMThank you for the detailed analysis.

A critical change in the figures for which I cannot quite work out the cause in the 17% rise in wage costs for 2010-2011.

Can anyone explain that for me please?
Hughes and his bus load of hangers on don't come cheap.
Also I suspect the players had incentive rises in their contracts that kicked in following the Europe final. Plus new players coming in would have been paid more to be at same level.

It must be that but it was a significant jump followed by further rises in the following two years. The departures last summer need to have a counterbalancing effect and take the wage bill back down to levels near £50m or preferably below I suspect.
Do you want to be shocked.... Derby's wages for 2013-14 when they got to the playoff final were £13.5m up from £10.5m in 12/13.
Our wages in 12/13 were 66.5m
Our wages in 13/14 are going to be 70-75m

So think about how much we had to cut to get our wages even down to what I think it needs to be and that's in the 20-30m region for this season.

Apprentice to the Maestro

Quote from: MJG on March 31, 2015, 03:40:30 PM
Quote from: Apprentice to the Maestro on March 31, 2015, 11:57:45 AM
Quote from: MJG on March 31, 2015, 10:26:39 AM
Quote from: Apprentice to the Maestro on March 31, 2015, 10:10:44 AM
Thank you for the detailed analysis.

A critical change in the figures for which I cannot quite work out the cause in the 17% rise in wage costs for 2010-2011.

Can anyone explain that for me please?
Hughes and his bus load of hangers on don't come cheap.
Also I suspect the players had incentive rises in their contracts that kicked in following the Europe final. Plus new players coming in would have been paid more to be at same level.

It must be that but it was a significant jump followed by further rises in the following two years. The departures last summer need to have a counterbalancing effect and take the wage bill back down to levels near £50m or preferably below I suspect.
Do you want to be shocked.... Derby's wages for 2013-14 when they got to the playoff final were £13.5m up from £10.5m in 12/13.
Our wages in 12/13 were 66.5m
Our wages in 13/14 are going to be 70-75m

So think about how much we had to cut to get our wages even down to what I think it needs to be and that's in the 20-30m region for this season.

Someone said they could see the changes in policy and sustainability. Well it may be happening in terms of youth recruitment but, as you indicate, it certainly isn't showing much impact on the accounts.

Not only do we have a high wage bill due to those on PL salaries but we also have a large squad with still several players surplus to requirements.

FurMan

It would be interesting to couple this excellent analysis of the financial side of the accounts with that of transfer strategy.

This would likely be a lot of work - and difficult to do given that we could only see it on a macro level - but tying the wage and transfer financials to some analysis on our incoming and outgoing transfers such as average age of purchases vs sales and standard deviation of these ages could be quite enlightening.

I would theorize that the average age of our incoming transfers has actually been relatively steady over the past 8 years or so and that the big change has been in the standard deviation i.e. previously we were buying more 23-28 year olds but over the past 3 years our spending has been primarily focused on 30+ year old players and teenagers for the academy (to try and become "sustainable"). This would result in a pretty similar average incoming transfer age, but the types of players coming in would be vastly different and based on recent evidence yield significantly poorer results.


Steven Ageroad

A very informative read.

Hope it opens a few peoples eyes as to the whys and wherefores of running a football club and stop certain supporters just saying "Khan get your cheque book out"

PS. I'd still like to know who wanted/sanctioned the Mitroglou deal.

dont stand me down

Excellent article, seems we walked into it, and we'll almost certainly pay a heavy price for the mis management of our club. I fear we'll be down here a long time