Quote: "... the fact that, over a period, the average ......." So QPR were not an exception to the rule, their average wage bill over the previous decade or so was nowhere near the figure for last season! And of course the rule does not imply that if you suddenly pay mediocre players top wages you will transform your performances! It assumes that your wage bill reflects the real quality of your players (and staff).
What's the average first-teamer on these days, 20k a week? Assuming they are, that's a million quid a season x 25 = £25m for the first team squad before bonuses and all that. No doubt bonuses will equal another few million, add in the non-first teamers and youth team squads and that must be pushing somewhere in the region of £40m I'd have thought. Does that figure quoted also take into account National Insurance contributions etc? That will obviously push it up a bit further so I wouldn't be surprised if the £46.3m costs only covers the playing staff and excluded all the others.
right i've unravelled it. 49% is the right ratio, but for the 2011/12 season, and that is backed up in the latest deloitte football finance report dated June 2013 which looked at that season. And it includes all wages for all staff, you are right supers. my numbers above missed out social security costs (as Munky has pointed out) 12/13 - £50.8M costs / revenue £75m = 68% 11/12 - £36.8m costs / revenue £74.6m = 49% I'll bore off now
ok, so 68%, assuming you are correct! hmm, more than i was thinking when told it was 'more than 60%'... quite a lot more!!
yes, but we broke even, and the extra TV money this year means we can pay more wages to wolfy and co without going much higher
I am perhaps being a little slow here unintentionally, but my thinking is that QPR paid higher wages last year when they got relegated than their first year back in the Prem and in both of those years their bill would have been higher than their average over the previous 5 years say. What am I missing Robbie? Higher wage bills did not 'buy' the anticpated success.
Here's the link to the Guardian figures I referred to. NB the debt figure is net debt, not money owed (which as we know only came down to £0 this year). Also I don't know how the Guardian allows for different club accounting periods if any. Oops, sorry, didn't realise I had already actually posted this!
Higher wage bill averaged over e.g. a decade. Paying mega wages for two years would lift the average over the ten year period, but QPR's average for the period would be well below the Premier League average for the same period. However, even if your average wage bill over the period is above average for the league, it doesn't mean you can't be relegated. It only means that relegation is extremely unlikely. In theory even one of the top six COULD be relegated.
If you're going to use averages, I wouldn't use the "mean" for the actual figure given that this is skewed so dramatically by the top seven or so. I think the median, in this case, gives a better view of what our aim should be. Based on the Guardian article, the median wage bill is £62m-63m (Fulham/Everton) and the median percentage of turnover is 72-75%(Wigan and West Brom), which accords with Robbie's mean average above. Incidentally, both Fulham and Everton are just slightly above this on 78%. I would say that the best policy, in terms of costs, would therefore to be to aim to have costs (all staff) of around 70%. That leaves room for player purchases too, though not on the scale we have seen this year. The latest accounts (12-13, not this year as has been pointed out): Turnover - £78.7m Player wages - £45.9m (c.58%) Player investments - £19.7m (this is a clear demonstration that RvW's purchase was put into last year's accounts, by the way - check transfermarkt) Other costs - £12.6m (not clear what these fall under, but notice that the combined figure with the wages is the same as the accounts' "football expenditure", which Bowkett points out has increased by 46%, which means this figure was £11.2m the year before - presumably matches the increase in other staff) Sources: http://www.footballeconomy.com/content/norwich-wipe-out-debt http://www.theguardian.com/football/2013/oct/10/norwich-city-wipe-out-debt-profit http://www.canaries.co.uk/news/article/annual-accounts-june-13-101013-1106875.aspx However, as already stated, this reflects last year's accounts, it does not tell us about now, but it at least gives us an educated guess as to what, financially, the future has in store. We know that we are getting increased revenue from the sky tv contract. Estimates vary, but the most conservative estimate is about £13m (see the football economy article). We have also entered various new sponsorship contracts and have increased our revenue by £4m. Taking into account a lower league finish of, say, 16th (which we have been told is how NCFC budget forecast), we can still conservatively estimate that our total revenues will increase by c.£15m. So currently, for this year, we have: Turnover: £94m+ Player wages: [more than £45.9m] Player investments: c.£18m (so far, and I have deducted RvW on the basis of above) Other costs: [more than £12.6m] It's pure guesswork, but that tells us that, with a conservative estimate, merely to maintain our player wage bill percentage to turnover ratio, we would have to increase it to £54.5m! We added 7 new players (not counting Garrido, who presumably is on roughly the same wages), one of whom will not be on massive sums (Carlo Nash). Of players released, we must have freed up (conservatively) more than £3m (Holt alone was on about £1.5m/year), so we could be paying each of the main newbies £35kpw and still be below that percentage. That gives you an idea of just how much more money we have and the room we probably have for January. Of course, we should always bear in mind that all clubs benefit from this... If we assume that "other costs" will have jumped quite a bit, with various additions to scouting and coaching, we could say that may well be nearer £15m. So if we are aiming for a similar wage bill percentage next year, we will have approximately £6m to spend in January. Pure guesswork, but it all adds up with what we've been told (i.e. money to spend in January) and the wage bill proportions match. It would be interesting to look back on this. As an aside - interesting to note that Hughton getting us to 11th as opposed to matching Lambert's 12th of the year before, was the difference between us running at a loss or profit this year. Apologies for the length of post Rob
@Canary Rob Thanks a lot Rob! Even I should be able to get my head round it now! And Munky will have a second poster to grumble at for being too expansive .....
Rob, player transfer fees are spread over the life of the contracts, so it'll be less than 18 mil you quote Obviously the cash goes out of the door up front
Is that right? That doesn't quite make sense to me based on 11-12 reported transfer fees v accounts, but if that's what we've been told. I heard that spreading cost over the life of the contract is how they value players on their balance sheet, but I'm pretty sure that it's a requirement in the accounts for any payments to be reflected at the time of expenditure for tax reasons (clubs could falsify their profit/loss for subsequent years), but I'm no accountant or tax expert, I should reiterate, I'm fairly positive that this is a conservative estimate. We could feasibly have £10m or more for January, and I imagine, little by little, our ultimate wage cap will be c. £65m by the end of 2014, assuming another year of PL football
Yes it's in the accounts, transfer fees are Capitalised on the balance sheet You can see the related cost as amortisation of intangibles In 'operating expenses' To be honest, unless you are on a massive growth patern, it's prob not that different to what we spend in cash terms, and you guys certainly should not get bogged down in it
I imagine if that is the case, it's more to do with whether we're paying in instalments for players, or all up front. If it's £1m a year for 4 years, then it's whether you put £1m a year as the transfer fee expenditure, or put £4m up front and call that money spent. That would then have ramifications when it comes to interest, etc.
How do they deal with the tax problem then? And how does that equate to £19m in 2011-12, because there's no way we spent that in the Championship. Unless they're actually paying in instalments, that sounds like fraud to me!
Youre getting confused between cash flow and profit DH Regardless of when we pay the transfer fee, the club will spread it over the length of the players contract as an expense. Eg if it's 4mil up front fee and the player signs a 4 yr contract, well spend 4mil cash in yr one but only recognise 1mil per yr as an expense for 4 years in a row I hope that makes sense
