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

[Machiavelli]

There is no other industry on earth that behaves like football.

That's a good post Mo, but ever heard of banking, finance, etc?
The big difference between them is that football attracts a lot of fans who are incredibly dedicated, banking and finance nobody wants to even try to understand.

 

[AZ Gull]

If my post isn't clear read some of the other posters alluding to a similar point about there being little evidence of parachute payments ultimately benefitting clubs.and it's not a case of spending the money wisely. In fact it's more the opposite ie lumbered with servicing huge legacy contracts for players who are not that great.

Let's imagine it is August 2012. Let's say Albion are interested in signing Jordan Rhodes; but so are newly-relegated Blackburn Rovers, with their £16million parachute payment. Who do you think is likely to win his signature?

Or that it is June 2013, and Albion wish to sign free-agent Wayne Bridge after a very successful loan; but newly-relegated Reading and QPR (with their £23million parachute payments) are also interested. Hmmmm - I wonder who will win Bridge's signature?

Or that it is July 2014, and Albion, needing a striker, are interested in signing Ross McCormack; but so are newly-relegated Fulham, with their £23million parachute payment. Fulham, or Brighton; Brighton, or Fulham?

If you don't think that Albion are at a massive competitive disadvantage when compared to the 10 teams this season who have parachute payments, then I think you are bonkers. Of course, having parachute payments guarantees nothing; it doesn't even guarantee you won't be relegated. And Palace and Burnley have shown in recent seasons that promotion CAN be achieved on a relatively small budget. But if Albion are in the market for a player, and so are a club with parachute payments, you better hope with all your might that the player wants to come to the club for non-financial reasons, otherwise we don't stand a cat-in-hell's chance.

 

[beorhthelm]

on cost of Harveys - yes it is much more than elsewhere. but have we considered the alternative, no ale or the likes of John Smiths for the same price? i'd rather pay 4.10 for the Harveys than the Kronenblurh or other beers likely offered.

 

[Quinney]

on cost of Harveys - yes it is much more than elsewhere. but have we considered the alternative, no ale or the likes of John Smiths for the same price? i'd rather pay 4.10 for the Harveys than the Kronenblurh or other beers likely offered.

Not sure it's that's much more expensive. If you get to ground early and get the discount it works out similar price to pubs, and certainly favourable price when compared to other grounds.

 

[pottert]

I presume that we are second guessing barbers comments & we don't know the full extent of our next yearly accounts.Also am I right in thinking that the next yearly accounts are for 2012/13 & not 2013/14.

If I am correct & that is the case then the next years accounts will be far more significant.

We averaged 27000 fans per home game (3000 more than this season) & sold 15m worth of players & only re-invested
About 5m of that into the team.

If the financial results for last season are bad then we are in trouble because attendances are down & we don't have any players to sell.

 

[AZ Gull]

I presume that we are second guessing barbers comments & we don't know the full extent of our next yearly accounts.Also am I right in thinking that the next yearly accounts are for 2012/13 & not 2013/14.

If I am correct & that is the case then the next years accounts will be far more significant.

We averaged 27000 fans per home game (3000 more than this season) & sold 15m worth of players & only re-invested
About 5m of that into the team.

If the financial results for last season are bad then we are in trouble because attendances are down & we don't have any players to sell.

The 2012-13 accounts were released earlier this year. The club has to submit the accounts for 2013-14 to the Football League by December 1st (I don't know when they will release them for public consumption; it might not be until next year sometime).

At any rate, during the period covered by the accounts 2013-14 (which is July 1 2013 to June 30 2014) we sold Dobbie, Barnes, Bridcutt and El-Abd for about 5million. During the same period we bought Stephens, Chicksen and Monakana (but also don't forget that for accounting purposes, these accounts will also show the pro-rated costs of players bought in previous years on longer contracts, such as CMS and Ulloa).

The sales of Ulloa and Buckley will fall into the accounts for 2014-15.

 

[pottert]

The 2012-13 accounts were released earlier this year. The club has to submit the accounts for 2013-14 to the Football League by December 1st (I don't know when they will release them for public consumption; it might not be until next year sometime).

At any rate, during the period covered by the accounts 2013-14 (which is July 1 2013 to June 30 2014) we sold Dobbie, Barnes, Bridcutt and El-Abd for about 5million. During the same period we bought Stephens, Chicksen and Monakana (but also don't forget that for accounting purposes, these accounts will also show the pro-rated costs of players bought in previous years on longer contracts, such as CMS and Ulloa).

The sales of Ulloa and Buckley will fall into the accounts for 2014-15.

Thanks for clearing that up

Im sure that the payment terms of all players joining or leaving the club are very complex & well organised.

As fans we can only generalise especially as most deals these days are undisclosed.

All I do know is that the team I have supported all my life has sold all of its prizes assets has lost
3000 fans through the turnstiles & is sitting in 19th place in the league.

 

[Bry Nylon]

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

On your first attempt at this calculation you understated the additional profit by a factor of 10. On this second attempt the profit is inflated by 20% as you haven't accounted for VAT...

Are you really an economist / accountant

 

[El Presidente]

On your first attempt at this calculation you understated the additional profit by a factor of 10. On this second attempt the profit is inflated by 20% as you haven't accounted for VAT...

Are you really an economist / accountant

Guilty as charged, serves me right for rushing out an answer...... my head is duly bowed

 

[El Presidente]

All I do know is that the team I have supported all my life has sold all of its prizes assets

Not ALL it's prize assets, you are forgetting we still have CASPER

 

[El Presidente]

So spot on, this can be extended to the pundits who pass comments and talk absolute nonsense!! The whole football circus is becoming ever rapidly disinteresting.

I'm not disagreeing with you, but attendances broadly are holding up, and the TV companies are paying 70% more every 3/4 years, so someone is interested.

 

[Bozza]

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).

For a lot of people it's just one electronic number (and often it's £3.69 or £3.49) being subtracted from another electronic number on their e-cash cards.

 

[spanish flair]

Thanks for clearing that up

Im sure that the payment terms of all players joining or leaving the club are very complex & well organised.

As fans we can only generalise especially as most deals these days are undisclosed.

All I do know is that the team I have supported all my life has sold all of its prizes assets has lost
3000 fans through the turnstiles & is sitting in 19th place in the league.

Spot on and if I were part of the clubs management team I would be more worried about losing the 3k STH (Aprrox £1.25 mill) than the fall in the number of pies and pints sold. Surely 3k fans bring in more than the profit on pies and pints?

 

[El Presidente]

For a lot of people it's just one electronic number (and often it's £3.69 or £3.49) being subtracted from another electronic number on their e-cash cards.

Agreed, in retrospect I have been a bit of a wally about the pie price

 

[eaglejez]

Agreed, in retrospect I have been a bit of a wally about the pie price

Like Palace, Brighton are extremely lucky to have owners that are real fans and treat the club like a member of the family ! Its interesting to see these threads that mirror a lot of what happens at our place and the BBS ie Brighton and Palace are almost unique in that the owners/chairman have direct communication with the fans and yet there are still moaners !! Look at some of the BBS posts from people moaning that they weren't personally informed about tickets going on sale or their seat being broken ! Can't quite imagine Roman or the Glaziers getting involved !!

As most people who look at football finance in detail know football is screwed financially. We were spending zilch but still relying on the owners underwriting us to the tune of 5m pa. Obviously things are ok at the moment but although we are being prudent compared to most clubs the inevitable relegation will mean we'll start making losses again (hopefully not for many years but inevitably one day)

Football is screwed when attendances are almost an irrelevance in the scheme of things and most Championship clubs are totally reliant on the Premier League payout !

In your case I think Barber should be highly commended for his transparency but someone really needs to ask him 'what makes up the Administration and Operational Costs' item in the Accounts and more importantly how fixed are these and what latitude have the Club to reduce these over the next few years. This item is why you are/were losing 1m per month (see attached summary from your accounts)

 

[Brighton Mod]

I'm not disagreeing with you, but attendances broadly are holding up, and the TV companies are paying 70% more every 3/4 years, so someone is interested.

Yes they are, but not me, I just can't abide the sycophantic comments and fear of criticising poor performance. In the main live games on television are boring, so its the Amex that remains the centre of my attention.

 

[Brighton Mod]

Like Palace, Brighton are extremely lucky to have owners that are real fans and treat the club like a member of the family ! Its interesting to see these threads that mirror a lot of what happens at our place and the BBS ie Brighton and Palace are almost unique in that the owners/chairman have direct communication with the fans and yet there are still moaners !! Look at some of the BBS posts from people moaning that they weren't personally informed about tickets going on sale or their seat being broken ! Can't quite imagine Roman or the Glaziers getting involved !!

As most people who look at football finance in detail know football is screwed financially. We were spending zilch but still relying on the owners underwriting us to the tune of 5m pa. Obviously things are ok at the moment but although we are being prudent compared to most clubs the inevitable relegation will mean we'll start making losses again (hopefully not for many years but inevitably one day)

Football is screwed when attendances are almost an irrelevance in the scheme of things and most Championship clubs are totally reliant on the Premier League payout !

In your case I think Barber should be highly commended for his transparency but someone really needs to ask him 'what makes up the Administration and Operational Costs' item in the Accounts and more importantly how fixed are these and what latitude have the Club to reduce these over the next few years. This item is why you are/were losing 1m per month (see attached summary from your accounts)

Thanks for the insight, I am amazed that the accounts can be presented in such a way as to just write down the admin and operational costs as a summary figure, savings can be made its clearly here. With regard to our chairman I am continually surprised at where the money is coming from, is the Amex in someway leveraged to pay for its own costs and can the chairman continue to shed £5-7m a year in losses with the team not actually challenging for promotion. It has perplexed me as £200m is a lot of money, would make a massive hole on the balance sheet if it came from a company or even worse if it was personal money. I'm sure we have seen some readjustment with the sales and the incomings this year, but what really generates money is success and I can't see that coming anytime soon. I feel that our chairman took a punt during the second season at the Amex and unfortunately the Poyet project failed, leaving us on a slow decline.