so we're expecting a 11% increase in the wage to turnover ratio this season - i would have expected that, and it's an inevitable consequence of trying to move up the ladder a bit. Given the accounts released last week showed we broke even last year, i wonder does this mean we have to save some costs elsewhere, or will we make a small loss in 13/14? the interest on the external debt would have gone for 13/14, but that's probably £2-3m - 11% of our turnover is £8m - so that leaves a £5m shortfall. at least it's small-ish numbers.
Presumably no -- because revenue has been boosted by far more this year (mainly due to the TV money).
actually you are probably correct - maths refresher lesson required for max - but it will depend on how much revenue is e.g 12/13 was 49% of £73m = £36m wages 13/14 expected 60% of say £90m revenue (just picking that out of the air) = £54m wages so revenue goes by £17m between the years in this hypothetical example, but wages go up by £18m, so overall profit goes down by £1m. Looks like it will be roughly break even then.
it will depend on what mark the club intend to use in terms of wages-to-turnover. maybe they wanted to set it around the 60% all along but the debt repayments meant it had been kept much lower before? roughly 60% is not exactly breaking the bank and would be one of the lowest in the division if not the lowest (2nd lowest last year was swansea at 53% but they, like us, have strengthened substantially) - we have clauses in all playing staff's contracts if we are relegated and i assume that would then take wages down to a more manageable figure that can comfortably be paid using parachute payments over four years. as long as everything is planned for, for good or bad, then i'm comfortable with the figure sitting a bit higher than i for one had hoped, but i don't want it creeping up towards 70% - that would be a mistake in my opinion. it should be set and capped. wages will still rise if turnover rises and we should still be able to compete but probably not in the top half until we get our bloody capacity bigger! it really is going to be a major problem if we continue to stay in this league.
As I understand it, under the old TV deal, clubs were guaranteed a minimum of £38.5M (plus any extras for league place or additional broadcast matches). Under the current deal it is said the minimum a club will receive goes up by approximately 50% to £57.7M. That's an increase of £19.2M (plus any extras as before). So your figures are probably about right but if anything err on the low side when it comes to the £1M end of year profit.
yes supers, i'd have thought a 60% ceiling is our limit to remain 'organic' shall we say and without a stadium capacity increase or big increase in other income streams like commercial or shirt sales. the debt repayments would have affected cash flow (rather than profit) hopefully some of our youngsters coming through will marginally help that ratio in a couple of years time
i wanted it to remain under 50% - i was very proud that we'd managed to do that in the premier league and survive - but thinking about it now, it was a bit daft to expect the club to be able to keep it that low. i hope it never goes above 65% but obviously, 65% goes a lot further with a 35k stadium rather than a 27k stadium, so it may have to.
Kind of but don't get to caught up in revenues, it means very little. Turnover is vanity, profit is sanity and cash is reality! The first rule in business. I have known people in my line of business to sell things worth £70k and only make a £4K in profit and forget to take into account logistics, labour and accounts involved in processing the order and they have been thrilled because they landed a £70k order! Crazy! A football club is a little different because the labour costs are crazy, but you cant just concentrate on the money in. See Bernard Matthews for a good example. Sales of £470 +million last year generating a profit of around £1m. Shareholders were thrilled! Not!
don't worry kemp, I work in finance for my sins. wages as a percentage of revenue is the important kpi, and cash is king!
In the context of the current debate, the fact that, over a period, the average wage bill is a good predictor of league position and, in particular, that a club whose average wage bill is above the average for its league is very unlikely to be involved at any point in a relegation battle, a club aiming to stay in the PL should, if possible, raise its average wage bill to no less than the league average. Such a club will almost certainly survive comfortably, being likely to finish somewhere between 6th and 13th. Furthermore, although average wage bill is a good predictor of league position, the correlation is not 100%, so other factors do of course contribute to a team's performance (doing better than predicted by average wage bill, or worse as the case may be). Most studies weight the two (average wage bill / other factors) at around 85% / 15%. Put another way, a club which on average wage bill alone is predicted to survive comfortably in the PL with at least a 13th place finish has the potential, with good off-field and on-field management, to perform better, even much better, than the average for clubs with wage bills above the average for the league. That means that even a fan's wildest dreams, though unlikely, could be achieved, just as a third place finish was achieved in 1992-93. Because of that 15% contribution of "other factors", even a club whose average wage bill is below the average for the league can out-perform the odds. But for the moment what we need to know is where we currently stand in relation to the PL average wage bill, and whether it is realistic to envisage our average wage bill rising to exceed the league average.
and following on from that robbie, any ideas what the average wage bill is for the premier league then? I'd be interested to know is it in actual £'ms or as a percentage of revenue, both measures would surely have their pros and cons.
The figures for season 2011-12, compiled by the Guardian (and quickly averaged by myself !!!!) were: Average wage bill: £81.3M (NCFC £37M) As a percentage of turnover: 72.32% (NCFC 49%) So we were well below average that season. Season 2012-13 our turnover increased by around £3.7M to £78.7M, but according to Superman (above) our wage bill as a percentage increased by 11% (to 60%). That implies a wage bill of £47.2M, still way below the 2011-12 average (2012-13 average unknown, but given the new TV deal only started this season, 2013-14, probably not much different from the previous year). That's the best I can do, and beware, I'm no accountant!
robbie, i think the 60% is the budget for the season we are currently in, I assume he (Supers) has heard that from a contact at the club. (EDIT - he has confirmed as much now) 49% was for last season. However, i've just check the clubs accounts and i am confused, as for Player wage costs as as % of turnover, it was 39% for last season and 34% for 11/12. The 49% must include some non-playing football staff as well, and that isn't quoted directly in the accounts - it's probably a definition that is caculated for the guardian article. i'm lost in numbers and i am an accountant! either way it's (a) still low but (b) going up!
are you sure? as that's as follows from the accounts: 12/13 - £46.3M costs / revenue £75m = 62% 11/12 - £32.5m costs / revenue £74.6m = 44% i think it excludes non-football related staff
There are exceptions to every rule Robbie and may I mention QPR as the obvious one in this case. Average wage bill rocketed and they got relegated. And that was funny!
