Varney put on Twitter today that currently the teams without parachute payments get 5m in some sort of Premier League support system. That’s set to double next season. Unless players decide to take a slice of the pie or more club’s gamble on promotion then then that 8m loss becomes 3.
But that's exactly what will happen. How do I know that? Because that's what always happens.
If a club gets more money it will generally just spunk it on transfer fees and players wages. It's the way it is at football clubs and we, the fans (collectively), demand it. You only have to look at the comments calling TS "tight" to see that, as the bloke chucks millions of his own dosh down the khazi. The whole football business model is deeply flawed and has been for years.
Even reaching the "promised land" of the Prem doesn't mean a club will make money. They will likely just spunk it on more expensive players and salaries. Unless they decide to do a Blackpool, of course.
Players salaries (and transfer fees) are THE biggest cost for football clubs (aside from those developing stadiums, eg Spurs). Any "normal" business spending more than 100% of it's revenue on salaries would be fucked, but somehow football clubs survive lurching from one owner to the next.
Increased central revenue is a neutral, at best, scenario for the bigger clubs in league 1.
If they trying to use the money to break even, while the clubs that currently break even increase their wage bills they will end up getting relegated, eventually.
The end result as you say is x+5 million loses on a turn over of y+5 million.
Accrington Stanley, and the like, that don't have the fixed over heads are the big winners.
The point about increased central revenue is that it will reduce the advantage of clubs with parachute payments. It may also inflate wages, but relatively those clubs not in receipt of parachute payments will be better off, ie the league should be more competitive.
I think there is a risk of more financial instability between the Championship and L1 though, unless that cliff edge is smoothed.
While I’m sure player trading is within Sandgaard’s meaning, the underlying health of the business is about recurring operations, and that’s miles off.
Ultimately, Man United has probably offset a decline in matchday revenue from league games, rather than being a big net gain.
my point - or well question? was - there is no way the club is losing 6 million this season based on my OP? I'm not making any other statement about what that means for us in terms of a take over
My guess would be that we will lose between 5 and 6 million quid this season, if we don't buy or sell anyone in the next two weeks.
so we lose 6 million a year regardless?
Doesn't matter if we play man U away in a QF, have a bonus 200K from the world cup - a 20% profit sell on fee on a ten million sale - it's just a strict 6 million loss like every other year?
We've also had sales in Sandgaard's previous two seasons. When he first come in we sold Phillips, Bonne and then Doughty. Last season we sold Burstow. So the Pope income isn't particularly significant. Attendances have reduced so the Utd money covers that. 200k for Williams and Gunter playing in the WC doesn't really help too much.
We also had pretty significant transfer spends in those seasons unlike this year.
Transfer fees that are probably spread out, so Sandgaard still see's it that he's paying out in fees.
“Break even” means regular running costs are covered by regular income. Player Transfer revenue and purchases are capital transactions and excluded from any break even analysis. No investor would look at player sales covering trading losses as evidence of the business breaking even.
Although this would normally be the case I don't think it's right in this case. Surely it's wrong to include all the costs of the academy but none of the income, whether it be transfer fees or loan fees. If you just followed that logic you could soon be convince yourself shutting the academy is a no brainer. Chelsea run their academy as a profit maker. If it regularly produces an income source you would be wrong to exclude it.
Break even means break even between costs to run the business and the revenue from turnover from customers etc, not profit on sale of assets.
Positive balances on player sales/purchases simply introduces a windfall cash receipt. We might see it as "profit" but from a business perspective it is a fortuitous windfall of temporary cash, not an increase in turnover.. You don't value a business on expectation of fortuitous windfalls. Speculating when buying a business is when you pay more than the profits from turnover of a business are worth. Buying CAFC is a speculative purchase as you are buying nothing of proven value.
Having just read ab article on the BBC sport site About the owner of Lincoln calling for the reinstatement of a player wage cap. This is because he had seen player wages rise by £1.1 million up to £ 6.2 million as of June 2022 Raising the losses for that year to £2.2 million. So I would estimate we are no where near reaching breaking even.
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If they trying to use the money to break even, while the clubs that currently break even increase their wage bills they will end up getting relegated, eventually.
The end result as you say is x+5 million loses on a turn over of y+5 million.
Accrington Stanley, and the like, that don't have the fixed over heads are the big winners.
I think there is a risk of more financial instability between the Championship and L1 though, unless that cliff edge is smoothed.
Positive balances on player sales/purchases simply introduces a windfall cash receipt. We might see it as "profit" but from a business perspective it is a fortuitous windfall of temporary cash, not an increase in turnover.. You don't value a business on expectation of fortuitous windfalls. Speculating when buying a business is when you pay more than the profits from turnover of a business are worth. Buying CAFC is a speculative purchase as you are buying nothing of proven value.
About the owner of Lincoln calling for the reinstatement of a player wage cap. This is because he had seen player wages rise by £1.1 million up to £ 6.2 million as of June 2022
Raising the losses for that year to £2.2 million.
So I would estimate we are no where near reaching breaking even.