Accounts, Wages and Other Stuff

The Club’s next set of annual accounts should be announced any time now. What with that, conjecture over player’s wages and Platini’s ’fair play’ scheme, I reflected on past year’s performance. Taking each year since we entered the Premiership (believe me you don’t want to delve any further back) this is how it looks, in summary:

Year Turnover Pre-tax profit Wages / Turnover ratio
£m £m

2010/11 77.100 6.440 64%
2009/10 60.900 1.700 69%
2008/09 52.031 -7.543 75.6%
2007/08 39.228 -15.204 89.7%
2006/07 37.111 -15.488 81.1%
2005/06 36.207 -12.303 91.5%
2004/05 39.082 0.508 77.5%
2003/04 33.641 -20.800 ?
2002/03 32.381 -33.596 94.9%

For the first 6 years, as you can see, we struggled for financial survival; even if we kept our head above water footballing wise. Season 2007/08 was when we finally grew up in economic terms. The Club’s Annual Report that year included this statement -

“Of the Company’s total revenue in the year to 30 June 2008, 65% came from sources controlled by the Premier League (2007:59%). In the event of relegation … the Company would have to take action to significantly reduce operating costs. Such action could prevent the maintenance of a playing squad capable of gaining promotion back.”

Not rocket science perhaps but this is when the reality of maximising revenue and controlling wages kicked in - the figures above tell their own story. While there’s no doubt people played their part (Hodgson/MacIntosh) it was the determined policy on wage structures that made the significant difference.

We can now be defined as a ‘stable’ premiership club - financially and in football terms. - so is it a time to re-assess? Moving on a number of senior players (BZ and AJ being the obvious ones) has freed up a substantial amount of the current revenue budget. With the new TV deal the club can anticipate upwards of an increase in revenue of 30%. and while it would be wrong to spend money not yet earned, should we be paying players more? Indeed there have been hints that this is already happening with Dembele rumoured to be being offered £50k pw (the current cap is thought to be £40k).

Over the last year in particular, the improved finances has led to significant investment it the Development and Academy teams. In my view this is the more pragmatic way forward - football is as fickle as politics.

NB 1 This comment is about revenue not capital debts.
NB 2 It’s Mr Platini’s birthday today - bless !

 

This year's revenue budget is now well into surplus - what with DM and Lew added to the BZ, AJ and Pog savings. Setting aside any compensation from the FA for Lew, that's an estimated extra £8m pa (£160k pw) available without affecting the income/wages ratio.

Let's say £100k pw of it goes on 3/4 new signings, surely the balance should be put towards securing key players with only 1 year left in their contracts. Apart from the double Ds, there is Hangeland.

The full list is -

Aaron Hughes – Summer 2013 (3.5 years)
Brede Hangeland - Summer 2013 (3.5 years)
Chris Baird - Summer 2013 (3 years)
Clint Dempsey - Summer 2013 (4 years)
Csaba Somogyi - Summer 2013 (1 year)
Damian Duff - Summer 2013 (1 year)
Lauri Dalla Valle - Summer 2013 (3 years)
Mahamadou Diarra - Summer 2013(1 year)
Marcel Gecov - Summer 2013 (2 years)
Marcello Trotta – Summer 2013 (3 years)
Marcus Bettinelli - June 30th 2013 (1 year extension)
Mark Schwarzer - Summer 2013 (1 year with option of another year)
Mousa Dembele - Summer 2013 (3 years)
Neil Etheridge - Summer 2013 (2 years)
Philippe Senderos - Summer 2013 (3 years)
Rafik Halliche - Summer 2013 - (3 years)
Richard Peniket - 30th June 2013 (3 years)
Ronnie Minkwitz - Summer 2013 (2.5 years)
Simon Davies - Summer 2013 (3 years)
Tom Donegan - Summer 2013 (2 years)

 

I think the figures looks positive for the future... Also looks positive that that we have some surplus to reinvest in players wages. I really hope CD and MD sign new deals and at them moment would happily take one of them staying.

On a slightly different note what a waste of money Halliche was. 1.5mil for a player who has played 20min in the FA cup and gave away a pen. I had no isea he was on a 3 year deal. His agent must me amazing.

 

Maybe we should sign his agent?

 

Ah yes, the agent, never to be forgotten. I'm sure we all remember the fraca between MAF and Tigana regarding fees in the Martlet transfer. More recently, one of the reasons we did not seriously pursue Pog were the demands his agent was asking in fees.

A not disimilar scenario may be behind the apparent impasse in movement for Rhodes (allied to the agent's alledged demands for the player of £35k pw).

 

Not only all these players but I think Martin Jol and the majority of his backroom staff only have 1 year left on their contracts. This needs to get sorted.

 

Agree FI, although Jol's contract was for 2 years with an option for 1 further year.

 

While there’s no doubt people played their part (Hodgson/MacIntosh) it was the determined policy on wage structures that made the significant difference.

I'd be inclined to give Hodgson some more credit. The type of players he identified for us came in relatively cheap, professional in attitude and performed well. I've not got the immediate resources to figure out his net spend (ala LFC fans in Kenny's time) but I would guess that it was well into the + side. The fact he got it right first time with most of the starters (Schwarzer, Zamora, Duff, Gera), and brought in some reasonable back-up, meant the board didn't have to make an emergency signing, like Hull attempted, which would force them to break the wage structure out of necessity.

Having said that credit is due to the people who appointed him, who may well have set a criteria which wouldn't allow for a Hughes type manager (then) who would try to fix it with a marquee signing, in doing so breaking the cap.

It's a tough call for a club like Fulham facing relegation in January- increase the wage structure to try prevent future losses or keep on, put faith in the manager, and prepare, financially, for the worst.