Minority Report 2019-20 - Talking Finance (2)

I agree. I urge everyone to think, and not to look to assumption.

The fact is, facts are at an absolute premium, there is opacity and confusion where there shouldn't be. And a calm open minded request to have questions answered. To have points of note placed into the public domain for relevant analytical scrutiny.

Its the most open minded thing in the world to ask for clarification and information. Its the reverse if someone alleges transparency for the reason of opposite suppression.

The natural steps forward are in the hands of the trust and journalists, and I very much hope they pose them when our owners next appear.

Questions aren't a witch hunt. To understand and seek clarity are just that.

My standpoint is one of concern, not of accusation. Some may disagree but I merely want answers. The questions seem pretty straight forward.

 

I don't know which Barnsley fans you're speaking to, but I would think you will find that the complete opposite is the truth. We all care about the finance side of the club. That's why two years on we are wondering why billionaires are taking out a loan over the summer, if they will pay it back out of their own pocket not player sales and why they don't appear to have international contacts as they have done nothing on the commercial side to improve it, so we are less dependent on weakening our squad to cover shortfall.

 

Well If you are still listening, then I will tell you what I think, "we are not going to do anything crazy" actually meant.

The new owners were attracted to Barnsley FC because it did not have the levels of debt that other clubs in the Championship were carrying. Not doing anything crazy means that they are not going to take on debt simply to please fans who want success on the field to the exclusion of everything else, and If that means that the fans will not support them, well being the owner of a football club is seldom about popularity, is it? They are going to try to improve how the club is run, but those things are not easy. Patrick Cryne tried for years. He ran the club very well as compared to many others. They are looking for potentially successful innovations that make sense and that have not be tried before. If that was easy, then every club would be doing it.

They have two problems.

The first is that they have said some very foolish things and the fans are presently throwing the foolish things that the said back in their faces. What do they do about that? Well if it was me, I would keep my mouth shut in future, I would deny the fans any further ammunition.

The second is the fans. The fans are impatient. They want to see results, and they want to see them now. None of this two steps forward and one back for them. They have paid for their season ticket, and as far as they are concerned that is a guarantee of success. They have paid their £300 and the owners should reciprocate by spending £30 million of their own money on players. They are not being had for fools.

So, how much of their own money should they invest?

Let us assume the figure of £30m quoted above. It is not a large investment measured against the debt that is washing around the Championship. Let us assume it buys 6 players with experience at Championship level, that those players are aged 25+, that they are on 3 year contracts and that they increase the wage bill by £15m per year. It is currently about £7m for all players. The initial investment is written off over 3 years (£10m per year). Assuming the club broke even in the Championship before the investment, it now loses £25m per year and the owners do not just have to fund the initial £30m, they have to find another £15m per year for wages as well. At the end of 3 years the club owes the owners £75m, but the bigger problem is that they have broken FFP rules because they have lost £75m and the maximum under FFP rules is £39m. The EFL fines the club £20m and imposes a transfer ban on it. The players leave and they cannot be replaced. If, in spite of the investment, we are relegated, then our turnover falls to £8m and our total player pay cannot exceed 60% of that figure £4.8m. Clearly, the 6 players have to be sold and the price we can get for players sold under those conditions would be exceedingly low. WHAT A MESS. But this is just what is being advocated by a section of our fans. Fans who believe they have all the facts, but who do not care about Balance Sheets, FFP and SCMP.

 

The idea of spending £30m may be some fans wish but I think the majority want the club to be sustainable.

Bringing in experience may not be in the plan if the plan is based on player resale value. But equally, a combination of youth and experience may serve the team better on the pitch and be sustainable in terms of finances.

The options are not the youth only or go bust with experience which are suggested.

For every Kevin Long there’s an Emanuel Frimpong.

 

As I understand it, the suggestion is that we trawl through the players who could not get anyone to sign them before the transfer window closed, players who have therefor not played a competitive game of football since last May at the latest, pay them double what our young lads are earning, and hope that they can save our bacon.

It does not sound much of an idea when you express it thus, does it?

 

I'm always listening (not sure why you felt the need to start your dialogue in that manner).

Right from the start... you've made an assumption of owner motive that then frames all other analysis and view.

Tell me this. Because I sure can't get my head around this.

If you're a group of wealthy investors, either through personal wealth, or through attracted fund wealth... why would you buy a team like Barnsley? (Starting to consider the possibilities why and channelling thought there is an interesting exercise in itself) Whats in it for them? If you're making money through golf courses and holiday resorts in Vietnam, you've just generated approx. 80m euros from selling OGC Nice, you've generated investment funds of hundreds of millions of dollars in agreements for managing film rights in and around China. There are aspects of Real Estate, Media and many other things.

So why Barnsley? Returns in many of those aspects dwarf the potential that Barnsley has.

I've not seen anyone anywhere saying they should throw £30m plus associated costs into the pot. What I have seen is a number of people questioning their intent and after a very moderate amount of scrutiny identifying more questions that answers.

My suggestion has been about growing revenues and expanding international commercial reach (which they said they'd do, just trail back through their vids on ifollow), generating true value for players and a more balanced squad.

Consider some of their interviews, and one of the last ones was a suggestion they wanted to develop the academy "like they did at Nice"... well that alone highlights an issue I don't think any of us were aware of... that the Academy of Nice started well before their involvement with that club. So if they want to do what they did at Nice.... where is the money going to come from to allow such a development to occur? Especially if they say they aren't going to indebt the club (though they did that at Nice to get personal cash out). What land would be used, how would the council be involved, would they use their own money, load the company with debt, stymy recruiting, or would they look at an investment fund for land development?

The line "not do anything crazy" is rightly something they should have been embarrassed to say and should rightly use better language. Appointing Morais and sacking Daniel and their subsequent announcement of it (though incomplete) were certainly in the crazy realm.

Fans are impatient, of course. They are also wiser in part than many give them credit for. So if they owners wish to retrench because there are some uncomfortable questions put to them, should we be muzzled? Questions seek answers. If answers don't come forward or the person answering finds it inconvenient, that in itself gives insight to form opinion.

The owners can do whatever they choose. But if they stray from the values that Barnsley fans associate with and with a style that is unfair, petty or churlish, I think we have the right to tell them its not right.

I don't think anyone expects them to throw millions at this. I think everyone knows we are a means to a profitable ends.

 

A fine example of setting up a straw man, I fear. I have seen no-one arguing for that level of spending. What has annoyed people is that a successful and popular head coach has not been given the resources to achieve stability for the club in the Championship. Nothing more. I would argue that that would have required nothing like the level of input you are referring to in your post. I think one of the primary arguments coming through is that what we did have available to invest (i.e. a net increase in our turnover of £6M) ought to have been partially directed at strengthening the experience level of the squad, alongside the well-established (and largely successful) policy of developing young players. Not an unreasonable objective, I would suggest.

 

I've been buying multiple season tickets for many years (sons, grandkids, as well as my own). The idea that I've been doing so because success is guaranteed, makes little sense given the actual success we've experienced!! That's the problem with your Balance Sheet-centric analysis. It completely ignores the fact that when you take the romance and dreams out of football, and focus on reality, there's relatively little left.

 

I think you misunderstand. The position you describe is the one we are in because of the policy.

 

There are many things that don't sound good in the cold light of day.

Lets sign 10 new outfield players with an average age of 21 who have collectively little to zero competitive football at this level.

Lets sell one of our key centre forwards days before the transfer window and not replace him effectively.

Now, lets sack our head coach and not tell anyone anything, and actually express it to the fans in the most terse language of brevity ever used on our website.

The issue we have is we cant sign anyone until January. If we carried on at this rate, its fair to suggest we could be so far adrift as to have almost had a points deduction. If we're not looking at any free agents (and of course, there may be none that are suitable), sacking the coach seems even more crazy.

 

Right from day 1, I queried why Barnsley. Based on what they did in Nice, they obviously intended to buy at the bottom, improve the club as a business and sell it on. The problem for me is whilst I see that such a thing can be done at Nice, I do not see any way of doing that at Barnsley. They will give it a go, and 18 month is not long enough to thoroughly understand what the problems are, never mind solve them and have the club heading upwards. But frankly, finding a return on their investment is mainly their problem. I do not really see how solving that problem can affect my club adversely, provided they do not sink the club in debt, which they have shown no sign of doing so far.

You are right that Paul Conway has said some very foolish things, but other than that, he has done nothing to damage my club, and has certainly not put its future existence in doubt. Sadly, fans expectations are difficult to meet whilst not putting the clubs future existence in doubt.

 

I am patient. When the new owners came in, saw off a promotion winning coach due to their transfer policy, appointed a useless coach as a replacement, saw us relegated to league 1, there were no complaints from me. I was a happy clapper all the way. Give them time, they’ll get it right. They are now in their third season and making the same mistakes. How long are we meant to be patient for? When we are back in league 1 for the second time in 3 years under their ownership, which make no mistake we will be unless a coach with the managerial genius of Ferguson, Clough and Guardiola is appointed or a spine of experienced players are recruited

 

No it isn't. The position we are in is because we kept to SCMP rules last year and we have continued to stick to those rules even though we have gone up a league. We have done that because the gap between the leagues in now too large to bridge. We have done that because the most likely outcome at the end of this season was always that we would be relegated.

 

I think its fair to say that had they not sacked Daniel a week ago, they wouldn't be getting this level of blow back. Even if they'd put out a better statement. But seeing such actions bring questions and particularly about motive, and sometimes when you start tugging at a thread, things can unravel pretty swiftly.

I have a perception of what they are trying to do but I'll keep that to myself as I see how things actually transpire. Its very different to what I thought would happen at the outset.

My assessment before last Monday wasn't a good one. But like you said, the immediate issue didn't seem to be one of debt. So you could easily say, well, is it so much different to want went before aside from the younger more intensive less experienced recruitment?

But I do think Monday changed my view and I don't think i'm completely alone.

 

You call that patient. I have been watching the club for 54 years and I am still more patient than that.

 

Or they could have brought in 3 loans to bolster the squad with exprience at next to nothing cost and or utilise the free agent market.
Im lead to believe we were prepared to invest in a £1.2 million player in the summer plus his wages ...that would have been a sizable sum.
Instead (if we want to keep talking finances), we are prepared to lose £6 million by getting relegated, that on top of the money they have accrued from the potts and summer sales.
Ok no guarantee but its almost as if they have concentrated TOO much on the financial side and not listened to common sense. 3 loan players could have made all the difference.
This is a more than flexible attitude which i think the board are falling short of......to just dismiss the loan market to help our youngsters is shortsighted at best.
No one wants the club to fail with ffp, ignoring all their silly statements for one moment, other avenues should have been examined, for proffesional businessmen i find that.....unusual.
Im sure if someone offered them an income stream that was low risk and nicely diversified they would sit up and listen....this shows to me the only income stream they can guarantee an d understand is the selling of players and they are prepared to do that at the expense of anything else.

 

Well I would argue otherwise. Have you seen the value of most squads in the Championship as compared to the value of ours?

 

Your last statement is simply not correct. Please explain why the policy meant we could not, as part of our transfer policy sign anyone with any experience? That is not a matter of SCMP or FFP that is a factor of the policy.

 

When we are relegated, player wages also fall. I recon that the players combined wages in the Championship are £7m and that they fall by 30% on relegation. Therefore the net fall in profit is £3.9 m and conversely that is also the net increase when we are promoted.

 

It is a factor of wages cost.

Young players are happy to accept wages that are half what an older player would want. They are willing to do so because they are putting themselves in the shop window. Older players are just trying the maximise their remaining career earnings.