Just for clarity, it was 32Red who were paying for Rooney. Bet365 just subsidise the entire Stoke team
Exactly that, the club employees 145 people involved in footballing activities. This will cover players, coaches, analysts, physios etc. There are a further 19 employed on the commercial side and 15 in administration. All figures from 2020/21 accounts. Regardless of the activity all these employees have a salary that needs to be met by the turnover from the club. Last time in league one turnover fell to £7.8m and the wage bill was £8.1m. That represented a cut in wages of £2.5m from the prior year in the Championship. That season, before any player sales the club lost £4.8m. The club needs to raise around £7m from player sales and cut salaries by around £6m pa. That would result in the club making an operational loss of circa £5m next season. To fund that and the repayment of the EFL loan the £7m from player sales just about gets the club there. Neerav was quite clear that the club needs to make sales in the summer, it’s not going to be great watching some of our better players leave but it will enable a financial reset and put the club on a firmer financial footing.
When they leave isn't something that's in our hands. They can only go when someone makes an acceptable offer for them.
I'm glad you posted this as some of the inference from some quarters is to merge wages and income transfer fees and perceive getting £7m between them gets us where we need to be. I get that not everyone has accounting qualifications and that the difference between revenue and cash isn't obvious to all. The £1m injection is helpful, but it doesn't go too far and even though there is suggestion more may be put in, Id rather we didn't. It doesn't reduce our losses, it just provides cash to subsidise them in the short term, and means the owners ultimately want a better pay day when the time comes for them to exit. Obviously we don't know what the 2021/22 accounts are going to show but I'd be extremely surprised if it wasn't a very decent loss. So not only are we having to cut our revenue budget (wages) by the amount our turnover is going to drop (around £7m) but also by the level of loss that we accrue in the 21-22 season (which won't be filed til Q1 next year), so probably around £8-9m of cost has to come out of the club. We might see some profit on sales hitting the p&l, but thats just a single year subsidy and doesn't reduce operating costs to be break even after this accounting year... unless we do that over and over, something we've failed to do for the last 4-5 years. So in Woodrows case, we've generated (say) £500k to £750k of cash... likely to be paid in instalments over the term of his Luton contract... unless (and this may be why the fee is pretty nominal for a proven championship player, and notwithstanding any fees owed to Fulham) we've agreed it all to be front loaded to aid our perilous position. That should show as all being in profit given any fee paid has already been written off from his initial contract. But we don't get that profit again the following year, so in essence we're only reducing our wage bill by the £400k-£500k a year we've been paying him. Against the backdrop of needing to find savings, it's welcome, but it's just a drop in the ocean and has to be the first of several.
Officially, none of us know, and some of the posts around it over the last year or two have been quite conflicting. I did say in my post, notwithstanding any fees owed to Fulham.
My completely unqualified understanding was that there was a predicted 7m shortfall, 1m of which is being plugged by the owners, with the other 6 needing to be accounted for by cost cutting, incoming transfer fees, or the unlikely event of increased revenue. I imagine that between them, Woodrow, Schmidt, Halme, Adeboyejo, Palmer and Miller would amount to taking a million off the wage bill. Then if we sell Styles and Helik for a combined 5m, that covers the operating losses for a year, before any other outgoings are factored in (returning loan players, new players)? Am I understaning that right? I can't see how we can realistically reduce the wage bill by 6m in one transfer window, as that would require offloading about 14 players, without bringing anybody in.
The shortfall is a revenue shortfall. So one of costs vs income. Our wage bill is in excess of our costs even before relegation. So we have to find the circa £7m shortfall of revenue, plus the levels of losses we incurred in 2021-22 which we won't know til 2022-23. But lets be optimistic and say we only lost £1m last year. That's £8m of costs we need to save. Let's say we sell Collins for £1m (easy maths) and lets say he's on £5k a week (easy maths). He came on a free so we'd make a profit. That £1m would show as a profit on player sales in the P&L. Our wages would reduce by around £250k. So the deficit is only coming down to £7.75m. The £1m subsidises our losses, just like a capital injection would too, but we're still incurring losses by having costs that exceed our income. The last few years we've tried this experiment to essentially try and generate a regular revenue stream of profit on player sales which would hopefully offset our increased wages, in part due to carrying too large a squad. That's why we're in the mess we're in.