Potential net cost to Khan if we are relegated?

[davew]

I have touched on this subject before but am still no wiser as to what the real cost to our owner is should we be relegated. I read all sorts of numbers about how much promotion is worth to a Championship side and also monetary gains from being relegated back to the Championship. I think it has been widely circulated that over 100m was spent in the last window and our owner is receiving accolade about "his" investment or allowing the club to invest that amount, no need to remind everybody that most of the investment has been a waste of money, but how much do you think has come from his own funds and what will the likely loss (if any) be to him building in the factor of relegation this season. As an accountant I look forward to analysing the replies!

[Neutral Zone Ultra]

I don't know much about it, but what's obvious is that it won't be beneficial.
One thing's for sure the Riverside will not be redeveloped if it happens.

[Woolly Mammoth]

He will probably have to cancel his order on Amazon for a new Anchor for his Yacht.

[AnOldBrownie]

I'd like to know this as well.

Khan was ready to spend 600 million on a stadium...so how worried is he about relegation "cost"?   With the right team he'd be back up in a year or two anyway.

One of the reasons I wasn't that big on giving up on Slav was that I didn't think relegation would hurt the owners as much as everyone was saying.   Maybe I'm wrong.

[Statto]

With the right team he'd be back up in a year or two anyway.

Personally I think the Championship is like a black hole. FFP limits what you can spend, and even when you do spend, the league is so unpredictable and competitive, there's no guarantee you will do well. It took us 4 years last time, and I see no reason to think it would be quicker this time.

Then of course we could come up in the year 2024 and be in the same position we are now - spend £100m and still set to go straight back down.

No doubt about it IMO - you have to fight for your life to get to the PL, then fight for your life to stay there, and if you can do that for about 2-4 seasons, you might eventually build the relatively stability we had under MAF, which clubs like Bournemouth and Watford are now starting to enjoy.

[AnOldBrownie]

Were the last two years (the seasons they were in the playoffs) financially successful for the Khans?

[davew]

Were the last two years (the seasons they were in the playoffs) financially successful for the Khans?

Before I answer that maybe at a later date if I can get more facts, perhaps I will try and add a bit more info to what I am asking. The Championship play off final from memory was all over the media and TV as described as worth 170m to the winner and we won! That presumably means that the club will be that amount better off this season, of course cost of new signings and higher wages has to be deducted, so if Mr Khan has spent 100m to 105m he is already 65m to 70m better off less the increased cost of wages which is what 20m ish or maybe even 50m, but I doubt that, so he has made a profit from our promotion already?

[davew]

259 views and so far not many on here, think it is 6 at the last count, willing to take up my question about the topic, which I will try to reword (to get attention and opinions), has Khan really invested any money or not this season, it does seem a polite question! 

[MJG]

Were the last two years (the seasons they were in the playoffs) financially successful for the Khans?

Before I answer that maybe at a later date if I can get more facts, perhaps I will try and add a bit more info to what I am asking. The Championship play off final from memory was all over the media and TV as described as worth 170m to the winner and we won! That presumably means that the club will be that amount better off this season, of course cost of new signings and higher wages has to be deducted, so if Mr Khan has spent 100m to 105m he is already 65m to 70m better off less the increased cost of wages which is what 20m ish or maybe even 50m, but I doubt that, so he has made a profit from our promotion already?

the famous 170m is minimum a club expects to get in years to come even if relegated. It is not all this season of a team finishes 20th, that would be about 95m-105m

[davew]

Thank you Mike, so that amount would cover the Summer transfer window spending, obviously it doesn't cover the increase in wage costs, so by my reckoning if Khan sells all the players we bought say for 50% of what they cost, he/the Club would still make a financial gain this season even if we finish last, plus of course there are the balloon payments. Not sure why he would risk any further substantial investment in the January window?

[MJG]

Thank you Mike, so that amount would cover the Summer transfer window spending, obviously it doesn't cover the increase in wage costs, so by my reckoning if Khan sells all the players we bought say for 50% of what they cost, he/the Club would still make a financial gain this season even if we finish last, plus of course there are the balloon payments. Not sure why he would risk any further substantial investment in the January window?

Its not good at all if we go down. The £100M spent only works if we stay up. Ive siad before I was really surprised we spent so much and I think many of the staff at the club were as well.
60-70M was the logical figure to spend. I see many talking about getting the cheque book out again in January and early. To do that i think CR needs to pick up 8 or 9 points in next 4 games to give us a base to maybe spend another 20M max. If it looks like its a waste then we may have to just get on wioth what we have. If we can terminate TFM loan I would do that.

[toshes mate]

Thank you Mike, so that amount would cover the Summer transfer window spending, obviously it doesn't cover the increase in wage costs, so by my reckoning if Khan sells all the players we bought say for 50% of what they cost, he/the Club would still make a financial gain this season even if we finish last, plus of course there are the balloon payments. Not sure why he would risk any further substantial investment in the January window?

I do love your Xmas touch (balloons rather than parachutes) but the media money alone has paid for the transfers.  The problem I foresee is just how well is this outfit (unchanged) going to do in the Championship with Ranieri at the helm.  Not very well is my assessment.  That means the January window has to be tactical, strategic and successful which was what we could have been entitled to have anticipated for the summer window too.   Just too many mistakes heaped on top of other historic mistakes.   

[davew]

LOL, I meant parachute payments!!

[Statto]

This is something I posted a few months ago showing how this summer's transfers will be spread in the accounts. You can see this year, with £100m+ revenue and probably a c. £70m wage bill, we are fine. The problem is we have already committed to spending £20m-£30m on each of the next few seasons after this one.

Ignore the FFP thresholds at the bottom, they are just the PL levels for info. They change if we go down and also you have to take into account revenue and wages.

[Jonnoj]

I can only assume that if we go down Sess will be sold as well as both cairney and Mitrovic. Then the loans go back. I would imagine they would loan or sell Seri depending on his market value.
After that and with some clever recruitment you can probably balance the books and hope to mount a challenge next year but as we all know it's not easy, only West Brom of last years three are even in play offs.

[Milo]

Let's face it, we thought we would storm the Championship with the kids a few years ago and were nearly relegated again... we thought we would be mid table in the Prem this year with £100m spent and are likely to be relegated... so we need to tread cautiously with any preconceptions of our chances in the Championship next year. As Mince and Tatties said... "I believe we will struggle in the Championship".

The reality is that the leagues constantly develop and change. All I do know is that watching the Championship highlights on Quest each week.. it looks fun!!