Reduction In Wage Bill

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Roztitute said:
“Well, surely as Chairman you should be aware what these other operating costs are?â€￾ Bill: “No, absolutely not, and why should I? I can’t break down the accounts for you…â€￾
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kenwright.jpg
 

mikewex said:
Such as? What sort of large figure would either not need to be declared on its own, or be so mundane the report would ignore it?

Yes, that is true. As opposed to "It feels wrong, and everyone knows the board are crooks anyway" which is basically the argument. Its usually accompanied by some pointless comment about handlebars, or uncle cyril or spaces or some such garbage.

I don't know how much it cost to run a club the size of Everton. All I can do is compare it to whatever figures I have available for similar sized clubs and note that it seems pretty well in the ballpark, after that I have no real reason to turn it into some artificial scandal.

There are no scouting fees going to Kenwright either.
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Here's the thing about a lot of the clubs you mentioned. I haven't heard of any of them selling land to service debt(Bellefield). I haven't heard of any selling a newly acquired training ground to service debt (Finch Farm). I haven't heard of them undertaking a self-imposed three year transfer spend embargo while shedding around £30m worth of players without it making any type of dent in the debt (From the clubs own PR guy) and I haven't seen anything to suggest their business practice are at best questionable.

Like I said there is no way that our cost exclusive of wages stand anywhere near that amount. I haven't suggested criminality but shady business practice is almost a certainty when the club are being so evasive about the issue.
 
mikewex said:
Such as? What sort of large figure would either not need to be declared on its own, or be so mundane the report would ignore it?
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Well let's go at this another way: given that wages and player trading are the bulk of operating costs - which you're happy to subtract from total operating costs to arrive at 'other operating costs' - can you explain to me how Everton's other operating costs have dramatically risen in recent years when those two items have been a constant throughout the whole period as the bulk of operating costs? Service charges for DK aside, how do you account for the spike? Why weren't the basket of items Elstone alluded to arriving at similar totals in earlier accounts?

mikewex said:
Yes, that is true. As opposed to "It feels wrong, and everyone knows the board are crooks anyway" which is basically the argument. Its usually accompanied by some pointless comment about handlebars, or uncle cyril or spaces or some such garbage.

I don't know how much it cost to run a club the size of Everton. All I can do is compare it to whatever figures I have available for similar sized clubs and note that it seems pretty well in the ballpark, after that I have no real reason to turn it into some artificial scandal.

There are no scouting fees going to Kenwright either.
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All clubs will have different trajectories of development. Some clubs could have new stadia/sections of grounds/higher form of rent/cost differentiation with services given the number of games and success in competition etc etc to cover. It'll always vary. It's like asking how long is a typical piece of string.

Focus not on a comparison with other clubs, focus on explaining that first point about the enormous increase to our other operating costs. You've offered nothing so far to sustain your 'it's all bolloxolgy' charge.
 
mikewex said:
I don't know how much it cost to run a club the size of Everton. All I can do is compare it to whatever figures I have available for similar sized clubs and note that it seems pretty well in the ballpark, after that I have no real reason to turn it into some artificial scandal.
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The point is that expense, whatever it is, wasn't there six years ago. If it was a standard operating cost, why has it only just turned up?
 
steken1 said:
Here's the thing about a lot of the clubs you mentioned. I haven't heard of any of them selling land to service debt(Bellefield). I haven't heard of any selling a newly acquired training ground to service debt (Finch Farm). I haven't heard of them undertaking a self-imposed three year transfer spend embargo while shedding around £30m worth of players without it making any type of dent in the debt (From the clubs own PR guy) and I haven't seen anything to suggest their business practice are at best questionable.

Like I said there is no way that our cost exclusive of wages stand anywhere near that amount. I haven't suggested criminality but shady business practice is almost a certainty when the club are being so evasive about the issue.
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See, here is the thing. None of those facts you posted are actually quite how you describe them. I mean they sound all dodgy the way you phrase it, but you don't back them up. Take Bellefield, once Finch Farm was built what use was it? What else would you do with it other then sell it to service debt? The way you put Finch Farm makes it sound like it was build then they decided all of a puther that it needed to be sold. It was set up that way before it was even built. Its not an uncommon method. There was a three year transfer embargo? Really? When? And Tyrell just said the money wasn't used to pay down debt. But if by doing so they avoided borrowing forward on the Sky money? Something the denizens on here have been giving out about for a while.

Which then brings us to "and I haven't seen anything to suggest their business practice are at best questionable." That really doesn't surprise me to be honest looking at how you just summed up the details above.

"Like I said there is no way that our cost exclusive of wages stand anywhere near that amount."

Lets think about that one. At least on an overview they are akin to other clubs of the samish size. I assume you have nothing really to compare it with personally? I take it you aren't actually involved in the admin or management of a club the size of Everton? I assume that purely because you probably would have mentioned it by now. I am curious as to what your background is that you can be so definitive that all the stuff like maintenance, rates, policing, insurance, marketing, auditors, accountants, equipment, et al cannot build up to that sort of a figure.
 

davek said:
Well let's go at this another way: given that wages and player trading are the bulk of operating costs - which you're happy to subtract from total operating costs to arrive at 'other operating costs' - can you explain to me how Everton's other operating costs have dramatically risen in recent years when those two items have been a constant throughout the whole period as the bulk of operating costs? Service charges for DK aside, how do you account for the spike? Why weren't the basket of items Elstone alluded to arriving at similar totals in earlier accounts?
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Actually I'm more curious about why there was a drop in 2006, guessing it was something to do with winding down Bellefield. Its another one of those selective things. If you compare it to roughly where it was the year before you are talking an increase of say 5m. 1.5m of that is directly the cost of leasing Finch Farm. Thereafter you are talking about the maintenance of a vastly bigger setup (i believe 55 acres vs 8?), more modern, more high tech.

2004 12
2005 17.3
2006 16.4
2007 11
2008 21
2009 21
2010 23

Don't really see the controversy. Be nice to see a breakout, but its not exactly waving big red flags.

(btw, why "which you're happy to subtract from total operating costs to arrive at 'other operating costs'"? Its not that I'm "happy" to do it, it just is.

davek said:
All clubs will have different trajectories of development. Some clubs could have new stadia/sections of grounds/higher form of rent/cost differentiation with services given the number of games and success in competition etc etc to cover. It'll always vary. It's like asking how long is a typical piece of string.
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Yes, for example they could set up and a huge modern training centre for a start.

EDIT: actually I glossed over this a bit. Basically you are saying that teams have higher operating costs due to being more successful and different stadia requirements depending on the ground. This of course has an element of truth, however in some of the years that had spikes we had European commitments and we have a very old ground, with all the additional maintenance around that. The two clubs specified didn't have a lot of either. As an argument it actually makes the costs at Everton look better.

davek said:
Focus not on a comparison with other clubs, focus on explaining that first point about the enormous increase to our other operating costs. You've offered nothing so far to sustain your 'it's all bolloxolgy' charge.
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There you go, focused. However in the absence of fine detail, comparison with clubs of a similar size is all we have. And ALL substantiation so far, pack of an envelope so far as it is, is from my side. NOTHING other then gut feeling has been offered in defense of the accounts being dodgy. As always in these situations though the one doing the wild pronouncements is the one looking for evidence that he's wrong....

So until you can come with ANYTHING supporting your accusations, then yes, its bolloxology as far as I'm concerned.
 
mikewex said:
See, here is the thing. None of those facts you posted are actually quite how you describe them. I mean they sound all dodgy the way you phrase it, but you don't back them up. Take Bellefield, once Finch Farm was built what use was it? What else would you do with it other then sell it to service debt? The way you put Finch Farm makes it sound like it was build then they decided all of a puther that it needed to be sold. It was set up that way before it was even built. Its not an uncommon method. There was a three year transfer embargo? Really? When? And Tyrell just said the money wasn't used to pay down debt. But if by doing so they avoided borrowing forward on the Sky money? Something the denizens on here have been giving out about for a while.

Which then brings us to "and I haven't seen anything to suggest their business practice are at best questionable." That really doesn't surprise me to be honest looking at how you just summed up the details above.

"Like I said there is no way that our cost exclusive of wages stand anywhere near that amount."

Lets think about that one. At least on an overview they are akin to other clubs of the samish size. I assume you have nothing really to compare it with personally? I take it you aren't actually involved in the admin or management of a club the size of Everton? I assume that purely because you probably would have mentioned it by now. I am curious as to what your background is that you can be so definitive that all the stuff like maintenance, rates, policing, insurance, marketing, auditors, accountants, equipment, et al cannot build up to that sort of a figure.
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Ok, Bellefield was sold for a widely reported £8m. I seem to recall(but I'm not certain) the quoted costs for FF were £10-12m. Now which of these scenario's do you believe played out and was the choice of the owner.

A) sell both and lease one back at a cost of up to £80m over the life of the lease thus servicing debt and allowing you to maintain control of your business.
B) attempt to use capital gained from one sale to facilitate another purchase thus maintaining ownership of an asset
C) have no choice in the matter because a bank has determined you no longer have control over your finances and swallows up any monies incoming or forces you to effectively asset strip your business to stave off administration

My own profession means I'm involved with the management of of a large scale business, that has sizeable staffing, marketing and asset budgets. Admittedly there isn't the type of money involved that there is at Everton. But it's not too dissimiliar in terms of scale of employee's, sales activity and local standing.

We are also involved in high volume public events, work with local and national partners in our industry and I'm confident I could make an educated guess at a lot of the costs associated with all bar policing, and legal though I seem to remember Wigan's dispute with the police was reputed to be for around £200,000. So I doubt we're talking millions in that area.
 

steken1 said:
A) sell both and lease one back at a cost of up to £80m over the life of the lease thus servicing debt and allowing you to maintain control of your business.
B) attempt to use capital gained from one sale to facilitate another purchase thus maintaining ownership of an asset
C) have no choice in the matter because a bank has determined you no longer have control over your finances and swallows up any monies incoming or forces you to effectively asset strip your business to stave off administration
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See, we are back at "When did you stop beating your wife".

Lets look at them again:

steken1 said:
A) sell both and lease one back at a cost of up to £80m over the life of the lease to free short term cash flow
B) attempt to use capital gained from one sale to facilitate another purchase and take on a set level of additional medium term debt while retaining the asset
C) Not really relevant as it is a contributing factor to your two actual options
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And the answer is, as any good cost accountant knows, do a cost/benefit analysis using data that I do not have access to, so not going to attempt it.

However in my own business (since we are going down that route) we took the sell lease back option on a €10m build. Made more sense. Did it in this case? Don't know, but being as you are in management of large scale business you will know that these are sometimes the right answer.
 

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