Something that has been bugging me over the last few days

Yer gret, daft bugger!


I'm probably wrong, mate, but I thought it was during the 2010/11 season.

 

The first thing to understand is that the Profit and Loss Account and the Budget are two different things.

The Profit and Loss Account, along with the Balance Sheet and Movement of Funds statement tells the story of what happened in the previous financial year. With the sales of Jacob Butterfield, John Stones etc and the FA Cup run to the quarter finals, there is little doubt that the story that the accounts tell will be a profitable one. Certain accounting policies are incorporated into the Financial Statements, that are probably too subtle to be used in Budgets, for example, transfer fees and signing on bonuses are written off over the term of the player's contract, rather than being written off to profit in the year they are incurred.

The Budget describes the amount of money allowed to the manager for the following season to be spent on players wages and transfer fees. This does not, by definition, have to increase because a profit was made in the Financial Statements for the previous financial year. The board may take the view that the surplus earnings in the previous year would be better invested in providing a buffer in case of losses in the following financial year, enabling the budget to be kept at the same level over a number of future seasons, rather than being spent totally in the one season that follows the good year. The logic for this is that any player that is signed, for example, on a three year contract would incur a future commitment not only in the budget for the next season, but also for the two seasons that follow it. Therefore, spending the whole of the profits earned in one season on wages and transfer fees for the next season risks moving the clubs finances from boom to bust, and vice versa (see the Jason Shackell sale and reduced budget offered to Mark Robbins).

The previous paragraph is not meant as a justification or argument in favour of this situation. It is simply meant as an explanation. In my view, the club has, for the first time in many years, the chance to move forward to a more stable future, rather than simply aiming to finish 21st. It is the only way to re-engage with the missing fans. If it is to take advantage of this unexpected transfer windfall, it does need to invest sensibly in better players. Where I feel your argument falls down is in believing that Hassell and Steele are vital to that better future. Hassell in particular is likely to be merely a squad player next season, and his wages and contract term must reflect that status. I am more surprised that Steele has not been offered better terms, but I am prepared to support the manager's judgement on this. He is bound to have information to which we as supporters are not privy.

 

No idea what he's been offered pal.