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Paul Barber: Why the Albion lose £1m a month



Bozza

You can change this
Helpful Moderator
Jul 4, 2003
55,575
Back in Sussex
Yesterday, Paul Barber wrote a long-detailed note addressing some concerns that Albion fans had expressed on NSC about the running of the club and the state of the club's finances. Some fans thought he had skipped the question as to why the club was losing in the region of £1m a month, so he's had another go:


Most Championship clubs lose money. Unfortunately it has been this way for many years and, although FFP is partially controlling and ultimately capping the issue, losing money in the Championship will continue to be the case for most clubs for some time to come.

This is because the combined pot derived from club controlled revenues (made up of ticket and hospitality revenue, merchandise sales, catering, events and sponsorship sales etc) PLUS central revenues from the Football League (made up of TV and sponsorship revenues and what's known as solidarity payments from the Premier League) simply do NOT add up to enough to fund a promotion-chasing football budget - and this is after some very aggressive operational cost management and reduction across the entire club.

It is why supporters always hear me bleat on about the disparity created by parachute payments as those relegated PL clubs benefit from nearly all of the above revenues (they don't currently get the PL solidarity payments) - their own and the Central Football League derived monies AND they also have the benefit of (this year) £20million+ worth of parachute payments (in year 1 alone).

To compete with this extreme level of disparity we, as a club that has never benefitted from any parachute payments, must rely on Tony to supplement our revenues in order to generate a playing budget that enables us to build a competitive squad. The alternative is that we lower our ambitions, reduce our losses far quicker and reduce our football operations budgets. However, as I've said previously, this strategy does not match our club's ambitions nor that of our chairman nor, I believe, of the vast majority of our supporters.

At the same time, and to minimise the need to allocate the playing budget we do have against transfer fees, we have invested in a world class academy facility and the coaching and technical talent it needs in the hope and belief that we will develop great young players for the future, either for our own first team or to sell on to different clubs in a variety of different circumstances thereby topping up our revenue pot from a different stream. This doesn't make us a "selling club" - players may develop with us and move on for a variety of reasons - and neither does it make us a "non buying" club; there will always be talent we need to buy in and we will always budget for that.

FFP adds another dimension to the mix because it puts a finite limit on the amount Tony can contribute in the meantime. I know some supporters scoff at FFP but, whilst these rules may change - and I expect them to - they aren't going away any time soon so we must take them seriously and comply.

All of this is why I am so obsessive about generating as much of our own revenue as possible - why I do want supporters to eat and drink at the stadium, why I do want fans to buy our merchandise, and why we need supporters to direct as many non-match day events as possible our way - and why I'm equally obsessive about reducing our operational costs, cutting waste, getting better supplier deals, and making the club more efficient because it's the only way that we can maintain a competitive playing budget without breaking FFP regulations.
 


Westdene Seagull

aka Cap'n Carl Firecrotch
NSC Patreon
Oct 27, 2003
20,938
The arse end of Hangleton
I get, and agree with, what PB is saying BUT he has previously said we will conform to FFP this season - we can't do that it we're losing £1m a month. That makes a £12m loss this financial year - deduct the £5m TB is allowed to chip in and that leaves a £7m loss. This season we're only allowed to make a £5m loss under FFP. Or am I missing something ?

** this is not a swipe at PB or the club and is probably my maths being wrong **
 


Marty___Mcfly

I see your wicked plan - I’m a junglist.
Sep 14, 2011
2,251
Seem's like the club are stuck in a bit of a half way house- not breaking even (i.e. accept it's unlikely the club will gain promotion and cut spending accordingly), and not spending enough, or spending it wisely enough to have a decent shot at promotion. So they are left losing money, but not competing with the top sides in the league some of whom have the massive financial benefit of parachute payments.

So really, the owners are losing £1million a month and the only tangible achievement the team are likely to give in return is to avoid relegation. Club ownership just isn't as glitzy as I thought..
 


hans kraay fan club

The voice of reason.
Helpful Moderator
Mar 16, 2005
61,088
Chandlers Ford
I get, and agree with, what PB is saying BUT he has previously said we will conform to FFP this season - we can't do that it we're losing £1m a month. That makes a £12m loss this financial year - deduct the £5m TB is allowed to chip in and that leaves a £7m loss. This season we're only allowed to make a £5m loss under FFP. Or am I missing something ?

Yes. You're missing that not all losses count towards FFP (academy costs, etc)
 


Giraffe

VERY part time moderator
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Aug 8, 2005
26,454
Fair comment. I'm not sure it tells us anything new though.

Maybe it's too much to ask, but given the transfer fees received from selling players I wonder if we are on course to have dramatically reduced the loss.

The concern expressed by some was that we were making a loss of approx £1million per month through to the last year end. Given the player sales and the assumption that the operating profit before player sales is improving does that still mean we are losing £1million a month.

A secondary question is if we are still losing £1m after everything Paul Barber has done to try and reduce this and the player sales, how can this be sustainable.

Tony Bloom has already invested £200million plus, does he really want to invest a further £12million every single year? No one would blame him if he said no at some point.

So is there a plan to break even in the near future or is it hang on as best we can until we reach the premiership?
 




tinycowboy

Well-known member
Aug 9, 2008
4,002
Canterbury
I get, and agree with, what PB is saying BUT he has previously said we will conform to FFP this season - we can't do that it we're losing £1m a month. That makes a £12m loss this financial year - deduct the £5m TB is allowed to chip in and that leaves a £7m loss. This season we're only allowed to make a £5m loss under FFP. Or am I missing something ?

** this is not a swipe at PB or the club and is probably my maths being wrong **

We'll have gains from player sales (although this is clearly an irregular and unpredictable credit to our income statement).
 


Publius Ovidius

Well-known member
Jul 5, 2003
45,919
at home
Fair comment. I'm not sure it tells us anything new though.

Maybe it's too much to ask, but given the transfer fees received from selling players I wonder if we are on course to have dramatically reduced the loss.

The concern expressed by some was that we were making a loss of approx £1million per month through to the last year end. Given the player sales and the assumption that the operating profit before player sales is improving does that still mean we are losing £1million a month.

A secondary question is if we are still losing £1m after everything Paul Barber has done to try and reduce this and the player sales, how can this be sustainable.

Tony Bloom has already invested £200million plus, does he really want to invest a further £12million every single year? No one would blame him if he said no at some point.

So is there a plan to break even in the near future or is it hang on as best we can until we reach the premiership?

Which was my point about getting other investment rather than relying on the goodwill of bloom, in the same way that Chelsea rely on Abramovitch, although he may have other investors who dip in.

It may seem to some that I come across as ungrateful, far from it, but we hear from PB comments like " tony dipping into his pocket" ....well isn't that what the problem was at withdean, where dick kept going cap in hand to FBS etc to put funds into the club to get us better players? ...or even survive?

I feel that the messages coming out of the club seem to be preparing the fans for a period of trying to stay in this division and waiting. For all these players we have bought for the " development squad" to come through at some time in the future.
 






CheeseRolls

Well-known member
NSC Patreon
Jan 27, 2009
5,922
Shoreham Beach
Fair comment. I'm not sure it tells us anything new though.

Maybe it's too much to ask, but given the transfer fees received from selling players I wonder if we are on course to have dramatically reduced the loss.

The concern expressed by some was that we were making a loss of approx £1million per month through to the last year end. Given the player sales and the assumption that the operating profit before player sales is improving does that still mean we are losing £1million a month.

A secondary question is if we are still losing £1m after everything Paul Barber has done to try and reduce this and the player sales, how can this be sustainable.

Tony Bloom has already invested £200million plus, does he really want to invest a further £12million every single year? No one would blame him if he said no at some point.

So is there a plan to break even in the near future or is it hang on as best we can until we reach the premiership?

My assumption rightly or wrongly is that the 1 million a month loss, is not the FFP figure and likely includes the start up costs associated with the academy. The intention here must be to improve the standard of locally produced players, with the intention of reducing our ongoing costs for transfers and signing on fees. There are development centres for under 8s through to under 15s planned for both Kent and Surrey.

From a cost perspective promotion to the premiership, would transform the finances, especially if we have the player base in place to sustain this beyond the short term. We may not have a top class centre forward right now, but plenty of other things are going our way.
 


El Presidente

The ONLY Gay in Brighton
Helpful Moderator
Jul 5, 2003
39,689
Pattknull med Haksprut
I fully understand why PB wants us to eat, drink and spend at the Amex, at the same time he must accept that the club has to get it's pricing policy correct, so that fans don't feel they are being overcharged.

My own view is that I'm prepared to pay more money for a higher quality product, so don't have an issue about most of the prices (apart from £4.10 for a pie, why not make it a straight £4? We sold about 150,000 pies last season, so it's £15,000 gained by charging the extra 10p, less the amounts lost by people such as me who don't like rummaging around for, or carrying about a load change, or feel it's a wee bit too much).

The 7-8,000 empty seats each week at the Amex do suggest that the pricing isn't quite right. It's a tough balancing act the board have between upsetting STH who pay a lot up front, and would therefore be slighted if the club 'gave away' tickets simply to fill the stadium through special offers, and changing some of the pricing policies.

I was at the BBC Price Of Football debate on Thursday held at the Etihad, and was talking to some other administrators of clubs. They were universally full of praise of PB, thought him to be one of the hardest working men in football. Some of them also spoke of initiatives to get fans into the ground, including one club who for one match said to fans 'pay what you want'. I'm not convinced this would work at the Amex (as the club pay for travel costs and it is to a large extent a cash free ticket purchasing process) but if done once a season, perhaps on a child and adult basis, would generate interest, food, drink and shirt revenues, and perhaps ensnare some new fans.

Regardless of all the above I strongly suspect that if the team were winning none of this debate would be taking place. It's pretty depressing that I can't recall the last discussion about Sammi Hyppia on NSC.
 
Last edited:


El Presidente

The ONLY Gay in Brighton
Helpful Moderator
Jul 5, 2003
39,689
Pattknull med Haksprut
I feel that the messages coming out of the club seem to be preparing the fans for a period of trying to stay in this division and waiting. For all these players we have bought for the " development squad" to come through at some time in the future.

I don't think it's a case of trying to stay in the division and waiting, it's more of a case of saying that we are in with the pack, and realistically have about a 1 in 6 chance of making the playoffs each season. Some years are better than others, some girls are bigger than others, some girls mothers are bigger than other girls mothers.
 




KZNSeagull

Well-known member
Nov 26, 2007
19,691
Wolsingham, County Durham
Seem's like the club are stuck in a bit of a half way house- not breaking even (i.e. accept it's unlikely the club will gain promotion and cut spending accordingly), and not spending enough, or spending it wisely enough to have a decent shot at promotion. So they are left losing money, but not competing with the top sides in the league some of whom have the massive financial benefit of parachute payments.

So really, the owners are losing £1million a month and the only tangible achievement the team are likely to give in return is to avoid relegation. Club ownership just isn't as glitzy as I thought..

Your first paragraph sums it up. The last ignores that for the last 2 seasons we have been in the play-offs, so whilst getting promotion is extremely difficult, it is not unachievable. It is too early to say whether the current squad can get to the play-offs this season, or whether this is a consolidation season to push on next season.

The money disparity is huge between those with parachute payments and those without. They are not the be all and end all - Blackburn lost 30m+ last season for example and did not challenge. Same with Bolton who lost even more (if I recall correctly).

The club has to spend it's limited budget (in comparison with some other clubs) wisely and has to get the best out of what it has. Until the disparity reduces, whether under FFP or any other scheme, it will always be like that. It isn't fair, FFP isn't fair, but if FFP in it's current guise or whatever comes after, gives us a chance to get better players in on wages we can afford, then it can only help. Until then the club has to be extremely resourceful with what it has - the academy is a great long term vision, but we cannot expect results from that quickly.

Gus' ceiling comment was correct but then pretty much all clubs have a ceiling. He got the club to stick it's head and shoulders firmly through ours (although it had been raised somewhat now we have seen the accounts) and I see no reason why it cannot happen again.

It is a hugely difficult conundrum but I think we are generally on the right track. I have been reading Soccernomics and in there it is clear that wages, not transfer fees, are the key to success. At the moment, we cannot pay top wages, we can pay decent wages and until wages of the slightly above average player come crashing down to a level we can afford, or FFP rules are changed to permit a far higher investment on the playing side (assuming TB is willing to pump even more money in), then we will be in the same position for a while.
 




I fully understand why PB wants us to eat, drink and spend at the Amex, at the same time he must accept that the club has to get it's pricing policy correct, so that fans don't feel they are being overcharged.

My own view is that I'm prepared to pay more money for a higher quality product, so don't have an issue about most of the prices (apart from £4.10 for a pie, why not make it a straight £4? We sold about 150,000 pies last season, so it's £1,500 gained by charging the extra 10p, less the amounts lost by people such as me who don't like rummaging around for, or carrying about a load change, or feel it's a wee bit too much).

The 7-8,000 empty seats each week at the Amex do suggest that the pricing isn't quite right. It's a tough balancing act the board have between upsetting STH who pay a lot up front, and would therefore be slighted if the club 'gave away' tickets simply to fill the stadium through special offers, and changing some of the pricing policies.

I was at the BBC Price Of Football debate on Thursday held at the Etihad, and was talking to some other administrators of clubs. They were universally full of praise of PB, thought him to be one of the hardest working men in football. Some of them also spoke of initiatives to get fans into the ground, including one club who for one match said to fans 'pay what you want'. I'm not convinced this would work at the Amex (as the club pay for travel costs and it is to a large extent a cash free ticket purchasing process) but if done once a season, perhaps on a child and adult basis, would generate interest, food, drink and shirt revenues, and perhaps ensnare some new fans.

Regardless of all the above I strongly suspect that if the team were winning none of this debate would be taking place. It's pretty depressing that I can't recall the last discussion about Sammi Hyppia on NSC.

Gave up buying food or beverages long before giving up my season ticket,left before half time to get a cuppa with the wife and was still walking the concourse looking for milk after the restart,it could of got better i suppose and i do urge you all to spend as much as you can when you visit the amex:thumbsup:
 






WATFORD zero

Well-known member
NSC Patreon
Jul 10, 2003
25,656
I don't think it's a case of trying to stay in the division and waiting, it's more of a case of saying that we are in with the pack, and realistically have about a 1 in 6 chance of making the playoffs each season. Some years are better than others, some girls are bigger than others, some girls mothers are bigger than other girls mothers.

I think you got your post mixed up with one on another forum where you are obviously very active
 




El Presidente

The ONLY Gay in Brighton
Helpful Moderator
Jul 5, 2003
39,689
Pattknull med Haksprut
I have been reading Soccernomics and in there it is clear that wages, not transfer fees, are the key to success.

Finished it this morning. Agree with the vast majority of what they had to say, what did you think of the book?
 




Napier's Knee

New member
Mar 23, 2014
1,099
West Sussex
I feel that the messages coming out of the club seem to be preparing the fans for a period of trying to stay in this division and waiting. For all these players we have bought for the " development squad" to come through at some time in the future.

I think you might be right, and if this is the case it seems pretty sensible to me. I'd be happy with that as a strategy. Secure the future of the club, delivers exciting times in the championship and a planned - not rushed - move to the PL
 


El Presidente

The ONLY Gay in Brighton
Helpful Moderator
Jul 5, 2003
39,689
Pattknull med Haksprut
I think you got your post mixed up with one on another forum where you are obviously very active

Oops, think I had a cut and paste violation.

I bet they are wondering why 'LadeezMan' has just posted something about CMS being useless on the 'Mother and 21 year old daughter want to get friendly' thread on the BonkyWonky.com main forum
 



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