Finance question

As i've said before I don't understand football finances .Can someone explain.Are we in massive debt or are we just adjusting not receiving Championship money.?

 

We’ll be playing weekday games during the day to save on floodlight costs

 

My basic understanding is that the only debt we have is the EFL loan, that clubs receieved during lockdown. But the main issue is that our costs are outweighing our revenue to the tune of 7m over the season. And the only ways to address that is to sell players, reduce costs or increase revenue. Given TV money is the main source of revenue, the latter isn't going to happen.

At a bare minimum, we'll need to bring in enough in fees to get us to January, and hope to sell again if needed. Or the owners need to plug gaps. If neither happen, then we start defaulting on payments and we're on a slippery slope.

There'll be far more qualified people than me to comment, but that's what I think is happening.

 

No debt. Just trying to keep a stable budget and cut losses

 

Are the excess outgoings wages do we think? Because if they aren't I see bigger problems as we need to adjust to the fact we are in league one and likely staying put.

 

Under John Dennis we relied on bank overdrafts and under Patrick Cryne we relied on loans.What is the difference now.
I'm aware of the "covid" loan from the EFL but I would hope for all the clubs below Championship level this can be repaid in instalments.

 

The bank overdrafts would've been manageable, until the ITV digital collapse and ultimately administration, and Cryne would loan money without wanting it back. Am guessing that none of the current owners are willing to do the same.

 

They do when we have millionaire and billionaire owners that could bail the club out rather than let it die on it's arse.

 

Or not selecting players because we don't want to activate appearance and goal clauses.

 

Because it's an investment for them (which has been very clear from the start). The more money you pump into it the more money you then have to make in order to get a return on that investment. I'm guessing they have an idea of how much they want to make and have a ceiling on the amount they're willing to spend on it. This means we have to operate as close as possible to break even point - which then brings us back to the current situation where we need to sell players and reduce the wage bill to plug the gap in income.

Patrick Cryne was a supporter of the team so was willing to lose money trying to make us successful. These owners might be good business people but don't really give a s**t about the club - other than the money they hope to get out if it by the time their investment ends.

 

That makes it o.k. Glad that's cleared up.

 

Don't get me wrong, I hate the idea of it - it's just reality. We can keep banging on about how they should pump money into the club but I doubt very much it'd happen and, if it did, they would be in loans so it'd stack the club with debt.

I wasn't happy when the takeover happened and I'm still not now. At the time of the takeover I couldn't work out how they planned to get a financial return from a club like ours. Realistically, the only possible way of them making money was an unlikely promotion to the premier league (which to be fair we got close to - but now looks a million miles away), money from player sales (which hasn't really worked out) or by taking ownership of the stadium and redeveloping parts of it (which looks dead in the water because of the legal issues).

We're now so far away from any of those scenarios that they'll probably think there's no benefit in chucking more cash at it. If they can get the club financial stable and remain debt free that might make it easier for them to sell in the future.....

 

Absolutely spot on sadly

 

It's bleak being a Barnsley fan right now. It's never been a bed of roses but it's particularly dark now. It's like being in admin without the legal team running our affairs.

 

The club started the season with zero cash and £3.6m of debt.

The last time the club was in league one operating losses were around £5m. That was based on turnover of £7.8m and costs of £12.8m (salary costs £8m).

The last filed accounts for the club show a salary cost of over £14m. So to just lose £5m the club needs to cut salary costs by £6m and somehow find £7m to meet loan repayments and operating costs.

That’s the size of the hole the club is in.

 

I

My main frustration is that we find ourselves in this position in the first place. Utter mismanagement. Borderline criminal.

 

Well it makes it easy when you ask the question: if they can't be bothered to invest in the club, why should we?

 

Broken record mate

 

I know.