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.
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.
