toffeejack
Player Valuation: £100m
cant we just get a sexy seceratary to sleep with the bank managers to pay off the loans, works in all the blody films for gods sake
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Wikipedia didnt tell him that mate
njligernj
Player Valuation: £15m
First off this isn't an issue of "not liking it." However just because there is a lot of money floating about doesn't make it a business. The Premier League is a business. No doubt. The clubs themselves however do not behave like businesses -- if the primary aim isn't to turn a profit then in my book it's not a business in the traditional sense. Everton for example seem to consider it a "success" if we break even. Would your business consider the last 10 years of Everton's accounts an acceptable return? If we were a business we wouldn't sell to buy; we'd sell for profit. Before we get dragged into another "well our board is the worst" I will remind you it's not just us ...
In 09-10 we saw 16 of the 20 Prem clubs finish at a loss for the year: http://www.guardian.co.uk/football/2011/may/19/premier-league-finances-black-hole So most clubs don't make a profit year-to-year which brings us to the next great myth:
Soon the worldwide brands of Stoke and Sunderland will be sold for a massive profit? I doubt even City or Chelsea could be sold for a profit right now -- although I'll admit I'm not intimately familiar with their accounts so you never know ... doesn't seem like it would be possible.
The only person I can think of who made money from a football club lately is the bloke at Blackpool and their fans lost their minds that he made so much money off their relegation. That's an odd way to react to someone just making a profit from their business. Matter of fact, if I were tasked with making money off a football club that is precisely what I would do -- get relegated and slash wages, then get promoted, then spend nothing extra in the Prem and just take the money from the revenue sharing (another great aspect of traditional business) and get relegated again (or maybe fluke staying up for one extra year). That's the easiest path to profit in football. Blackpool could have spent that 11m on wages to try to stay up and then broken even -- instead they just took the profit like a business. They are however the exception (although oddly Malcolm Clarke, the chairman of the Football Supporters' Federation, said: 'Football clubs are community assets and it's inappropriate for anyone to use them as a vehicle for payouts"). Inappropriate that a business makes a profit for its shareholders?
The ironies in the "business" of American sports like the NFL are even more intense than the Prem -- record profits thanks to the most socialist system in the United States. I should adopt some of their ideas. Tomorrow I'm going to call up my competitors and suggest we collude to control wages, create a system where all potential employees are legally drafted into service with no alternative, then just divide the profits from our respective businesses equally ... oh and also create a monopoly where new "competition" has to be approved by everyone, and they are obligated to participate in the revenue sharing and salary cap systems. Also there will be no legal ramifications for any of this. BUSINESS!
Don't get me wrong ... I'm not against it. I think the NFL especially is fantastic ... but the way they do things is hardly "business" as usual.
Depends which club you're talking about. Man U? They do okay. Us? Problem.
The state sponsored charity sponsorship deals they are making aren't really a realistic model for most clubs (or most businesses). That's another example of something which is not typical of business in the traditional sense (aside from perhaps tax dodging when you distribute profits from one company among your others). Regardless ... does it really "balance itself out" when they are essentially paying themselves? If it's allowed it may technically help balance the books but if the argument is they are genuinely attempting to turn a profit with this "investment" then I'd book that as more of an expense than income.
I hate it when people ask me to think like a businessman.
Everton is badly run, I say. Well what would you do to make it work better, they reply? How the feck would I know, I'm an electrician. If someone like me is capable of running a massive football club then why the hell to we pay top wages to CEOs with fancy business degrees?
Everton is badly run, I say. Well what would you do to make it work better, they reply? How the feck would I know, I'm an electrician. If someone like me is capable of running a massive football club then why the hell to we pay top wages to CEOs with fancy business degrees?
pfim
Player Valuation: £50m
They're not businesses because they lose money? I'm not sure I follow.
Everton wouldn't sell players for profit (unless they had to) because these are the primary assets that create cash flows. If you owned a chocolate factory, would you sell all the machinery inside for a profit if you planned to continue operating? Of course not, what would you sell after the machines were gone?
I think you have a very narrow definition of what a business is, how cash flows are derived, and how companies build worth. 16 of 20 PL teams lost money that year, net, but as I've already said that's one of the worst metrics to judge football clubs due to the high depreciation numbers brought on by player purchases. These are non-cash charges and basically a giant tax deduction.
What is troubling about the numbers in the original post of this thread is that Everton's free cash flow (how it's defined) is negative here. That's even after depreciation is added back in. The board should be happy they're breaking even because the club is not generating enough cash.
"Football clubs are community assets and it's inappropriate for anyone to use them as a vehicle for payouts"
If this were ever true, it ended when the premier league was established. Hell, you had clubs floated on the stock exchange!
Everton wouldn't sell players for profit (unless they had to) because these are the primary assets that create cash flows. If you owned a chocolate factory, would you sell all the machinery inside for a profit if you planned to continue operating? Of course not, what would you sell after the machines were gone?
I think you have a very narrow definition of what a business is, how cash flows are derived, and how companies build worth. 16 of 20 PL teams lost money that year, net, but as I've already said that's one of the worst metrics to judge football clubs due to the high depreciation numbers brought on by player purchases. These are non-cash charges and basically a giant tax deduction.
What is troubling about the numbers in the original post of this thread is that Everton's free cash flow (how it's defined) is negative here. That's even after depreciation is added back in. The board should be happy they're breaking even because the club is not generating enough cash.
"Football clubs are community assets and it's inappropriate for anyone to use them as a vehicle for payouts"
If this were ever true, it ended when the premier league was established. Hell, you had clubs floated on the stock exchange!
pfim
Player Valuation: £50m
We're probably boring/frustrating everyone, I try not to talk about this stuff but I can't turn my brain off.
I think the argument is they're not buisnesses because they can lose money without it being seen as a problem. Football Clubs don't define their success through how much money they make.
You don't judge a chocolate factory on the quality of their chocolates but on their profit, which is why their exists a formula for success in making bad but cheap choloates. Their isn't a scucessful formula for making bad but cheap football teams.
Football Clubs may be a business but they're very much a non standard one.
kenada_blue
Welcome to Barcelonaton FC
kenada_blue
Welcome to Barcelonaton FC
Of course its a problem for us because the people at the helm arent doing a very good job. I'd like to know how much they, personally, make out of the club. The club/s as a brand my have a set debt/loss/gain every year...but the people running the club/s may make a lot of money out of it. There lies the difference as to why on the outside running a football club looks daft...but inside is where you make the money. Why would those fellers over at Libberpool FC buy out or take on £200million worth of debt in the first place if there wasnt an avenue to line their pockets?
As for Citeh...now that the rage-fest if over with them smashing into the system, they've had a plan all along and its paying off - or will pay off. And hats off to em. Their goal was to make them a global brand and its working. They've now implement the new academy which will be one of the worlds best in terms of facilities and start spending millions on youth to dodge the financial fair play stuff...and they'll be flying. They'll be a well oiled machine IMO turning in mega-bucks.
Where does that leave us? To me its more down to how narrow minded the owners are than anything else. All their deals etc seem small time to me as if they're the only choices we've got, that our market is too small, and we do just fine as we are.
That maybe true. I just dont believe it is with the avenues Moyes has created over the years.
I_Dan_Talisman
Player Valuation: £950k
Im not laughin, I dislike the status quo in a lot of walks of life, this one just hurts a bit more because occasionally im stupid enough to get my hopes up.
steken1
Player Valuation: £70m
I don't see any situation as hopeless ever. Ours has massive potential IMO.
Skeleton Crew
Player Valuation: £8m
Hell, I am a VP at a bank and I have no idea how to run this team financially. (not true but i refuse to put my ideas on here to be torn to shreds)
njligernj
Player Valuation: £15m
If you owned a chocolate factory which had not turned a profit for decades and had no immediate realistic prospects of turning a profit it would be a relatively logical decision to liquidate the assets. Vulture-capitalists buy and liquidate businesses for a profit all the time ... haven't you seen Wall Street?
My point is, why would a business "plan to continue operating" when they had no realistic potential to ever make a profit? BK is allegedly (and I am no fan of him) keeping the ship afloat in order to sell it to someone else. Would you keep a chocolate factory running at break-even for decades for the 1% chance a billionaire chocolate aficionado might come along and buy it and turn it into a success? A lot of this is semantics about how you define "business" I suppose but interesting to me (and probably only me).
Seamus Colemole
Previously deathbyropeandglass
If you owned a chocolate factory which had not turned a profit for decades and had no immediate realistic prospects of turning a profit it would be a relatively logical decision to liquidate the assets. Vulture-capitalists buy and liquidate businesses for a profit all the time ... haven't you seen Wall Street?
A lot of this is semantics about how you define "business" I suppose but interesting to me (and probably only me).
This might of been mentioned already but the difference between a chocolate factory and a football club is that the football club gains succe3ss not from profit but from honours, plus it has a loyal fanbase who have an emotional attachemnt to it and see themselves as fans not customers whereas as chocolate factory doesn't.
You're not wrong in your examples its just that football clubs while businesses yes do not operate in the same universe as any other business so the same scenarios don't apply to them.
Sign some new players without selling old ones to make the team better. My expectations won't be met.
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