By David Fraser Queens Park Rangers are fighting tooth and nail for survival, but after a productive transfer window is it time to start looking at the staggering figures involved, and where all this money is coming from? My team, Queens Park Rangers, are desperate for survival. Not four weeks ago we were seemingly in freefall, heading down and out, couldn’t buy a goal, in urgent need of new players, yet apparently unable to attract them. But a month is a long time in Queens Park Rangers-olitics, as someone definitely didn’t ever say. Fast forward to today and we’ve sacked uncle Neil Warnock (who, by the way, is close to attaining sainthood status in W12 – and I mention this because if he’s never managed your club, you probably hate him. Yet, if you follow a football league team he is, without doubt, infinitely better than your current manager, whoever he is. If you ever get the chance to get Warnock, sell your granny in order to do so.)….ermm….oh yeah….back to the present… we then brought in Mark Hughes and signed – count em – five new players, all of high quality and reputation. Head of that list are Djibril Cisse (who scored 12 minutes into his debut – nice one son!) and Bobby Zamora, two players who come highly rated and are a certain upgrade on Jay Bothroyd, DJ Campbell and Rob Hulse. It would be fair to say I am delighted. So why I am worried? Because I can’t see where the money is coming from, that’s why. Allow me to explain with some quick mathematics: The PFAs own figures from 2010 put average Premier League Wages at £1.16 million per annum (1). Let’s forget inflation and assume they haven’t risen in the past two years. Now, after QPR’s recent spending spree, there are, depending on who you believe, between 40 and 45 professionals at the club. Let’s say 40. Let’s also ignore reports that Joey Barton is on £80k a week (£4.16m pa) and Zamora £90k (£4.68m pa). Let’s put them at the average of £1.16m. Stop laughing. Making those assumptions, QPR’s player wage bill stands at £46.4 million. That doesn’t pay for Mark Hughes and his team, Warnock’s severance, the reported £10m in transfer fees or the actual costs of running a business, like Doris in accounts or that computer server that keeps packing up every Thursday afternoon – that’s just the wages of the 40 professionals. I don’t know the ins and outs of QPR’s income, but a club of our size and where we are likely to finish should receive around £40-45 million from Sky and the Premier League at the end of this season (2). Let’s call it £45 million. What about other income? Well, there is that of course, although recall former Spurs chairman Lord Sugar’s remark that “shirt sales don’t add up to a row of beans” and you suspect that other income makes little impact on a club our size these days. With no major transfer income to speak of, let’s be generous and say that Rangers’ total income from TV, sponsorship, corporate and so on might be income might be an extra £5m. So that’s £50m. Do you know what? I’m feeling generous – I’ll throw in another £5m I may not have thought of, putting total annual income at £55m. So, even with my extremely generous income guestimates and a naive assumption that Premier League wages have not gone up in the past two years and that Joey Barton is on £20k a week, that’s still player wages running at somewhere around 84% of total income, shockingly high for any business to remain sustainable. Apparently, the Premier League average is 68% (3), a figure already too high and almost single-handedly responsible for the half a billion pounds of debt (4) the 20 clubs are collectively saddled with. OK – now you’re thinking “Yeah, but QPR, they are owned by two extremely rich guys”. That’s true, I suppose. Lakshmi Mittal (who is represented at the club by son-in-law Amit Bhatia) and Tony Fernandes are two fairly flush fellas and I’ve no reason to doubt them so far. But equally, I’ve no reason to assume they want to blindly donate £10 or £20 million a year to the cause without wanting it back. They didn’t get rich by giving it away, so we shouldn’t make any assumptions that is what they will do, good guys though they seem. I have no insight here – I don’t have any information about QPR or Premier League finances that isn’t in the public domain. But simply, what’s coming in doesn’t cover what’s going out and I think anyone with a calculator and a brain can see that. It’s probably time for the club owners, who have a good relationship with the support, to clarify and reassure. Which, to be fair, they likely will do. But in the meantime, that’s why I’m simultaneously cock-a-hoop at the new signings whilst also having a nasty, uneasy feeling in my stomach. QPR fans have seen some dark times, you see. We’ve seen debt, administration, freefall down two divisions and fans having to have a whip round to buy a player. We don’t want to go back there, thanks. So when I say were desperate for survival, I mean more than just finish 17th. David Fraser isn’t an economist, accountant, lawyer or any kind of football insider. However, he can count, add up and subtract. http://www.sabotagetimes.com/football-sport/queens-park-rangers-wheres-all-the-money-coming-from/? Good blog, touching upon a subject many on here have raised a concern about earlier.
I take issue with a couple of things he says. "QPR, they are owned by two extremely rich guys”. That’s true, I suppose. Lakshmi Mittal (who is represented at the club by son-in-law Amit Bhatia) and Tony Fernandes are two fairly flush fellas" Fernandes IS rich....but Mittal is one of the richest people in the whole, wide world...worth around 30 billion!!! Anything spent on the club is small change to him and I think there is a vision of the far east market really taking off for us, which could be huge!! "I’ve no reason to assume they want to blindly donate £10 or £20 million a year to the cause without wanting it back. They didn’t get rich by giving it away, so we shouldn’t make any assumptions that is what they will do" Answered his own question there. They will have a plan, but that plan must include Premier League football I would have thought....hence the investment in players now!
Why is it so hard to believe that mega rich are primarily the fun aspect of having a club?! Economists are often too absorbed by numbers that they are not very good at understanding the human factors involved. When Ambramovich chucked £50 million quid at Liverpool for Torres are there any economists that actually believe that he thought that would lead to him making a profit?! While Mittal may not spend as much as Sheikh Mansour and Abramovich they are all ultimately unconcerned with making a loss overall. It I a simple as being ‘a bit of fun’ and in Mittal’s case he and his son in law can bond over this shared venture. Fernandes I would say is also motivated by the fun aspect but has a long term payback through having a team established in the most watched league heavily associated with Malaysia Airlines/Air Asia. The ego boost that the fame he can court is also a factor for Fernandes but there is no harm in that. The early years will cost more but to get to a stage where it becomes relatively self-sufficient the early expenditure is necessary to fast track the process to being an established side.
Agree Col. His blog are lacking a bit of balance re where our future income will come from. And as you say, for us to make that future income survival is imperative. But his points are still valid if you only consider current expenditure and income. My point of view is still that neither Tony or Amit/Mittals have given us any reason to doubt them.
PD, I don't think anyone doubts that the likes of Tony Fernades and Ambramovich are predominately in football for fun and tbh how many of us wouldn't be straight in there ourselves if we had their money? But the point that the post is making and is the purpose of the FIFA fair play initiative is the increased Risk that comes with clubs living beyond their means. What happens if one of these investors stops having fun because of poor results or they become ill/die suddenly/ go to jail or lose all the money? The problem is that often the financial situation is complicated by measures designed to minimise tax/costs/risks to the investor such that its the club that ends up with the debt - look at the Glazers at MU borrowing money against the club to fund buying it or Risdale at Leeds. But at the end of the day there can't be a single QPR fan who would have turned Tony away. And anyway there's nothing we can do about it now so why worry! Trust in Tony, onwards and upwards!!
I think Mittal in bankrolling us until we get a new stadium, then they may let us go self sufficient or keep on putting money in. Either way most clubs run at a loss and we arent spending stupid money yet.
They have not brought in Phil Beard just so he can negotiate buying players, this man is very well connected and will come in to his own with the new stadium, def will be multi purpose and will generate vast sums of money. As said above the lure of owning a Premier League Football club is massive and TF and the Mittals will be taking advantage of any possible benefits that come with it.
It's not where the money is coming from or why it's available that may be the problem, it's the UEFA Fair Play rules, which essentially stop the mega rich having unprofitable toys. But these will come to nothing when it is realised that very few clubs, including those without rich owners, actually live within their means.
Good posts above. As a slight aside, given our owners are business people but want some fun (you can't take money with you when you finally go to meet your Maker) why choose us? As far as Tony is concerned, he was a West Ham supporter, so we were second choice. But think of Lakshmi Mittal. Indians are big on status - and royalty. How many football teams have a "royal" name. "Queen's Park Rangers" is a name with which he is happy to be associated. What if we'd been called Brentford? Would he have invested ? Was Abramovitch attracted by the chic of the Chelsea name? It's all part of branding.
There's always scrutiny over our finances, yet have a look at our west London neighbors chelski. They have double the gate receipts, probably 3 times revenue/turnover (because of champs league) and yet they spend what 4-5 times what we spend on wages and transfers?? RA has less money than our owners yet no mention of them being in the ****?! I know it's a simplistic view and the figures aren't accurate but relatively speaking, surely they aren't in much better shape? Same with spuds, who aren't even in the CL.
They're already beginning to backtrack on the Fairplay rule as Barcelona and Real Madrid would be banned if they continue as they have. Add Chelsea, Man City and Liverpool to that and the Champions League will begin to look rather sparse. The getout is that the big boys will simply stick two fingers up at FIFA and form their own Super League, it'll happen in the next ten years regardless so I don't think any of them will be losing sleep. We'll either fly with TF and the Mittals or crash and burn, staying up will be crucial so the money we're spending now will be petty cash if we do stay up...
The average is 1.16 million, most of our 40 wont get near that, he said it as if man city had a lower wage bill than us because they had less players in their squad
All good points, so I will add a few others; Sponsorship - That figure will probably be at least 5million on its own. Brands like AirAsia, Malaysia, Lotto etc.. will all pay a decent amount for a PL side - Lotto deal in the NPC could have been worth up to 20m when we got promoted if I remember rightly? Wages - that average is exactly that, and average. We will be one of the lower wage payers for the majority of the squad we have - That average includes Man U, Man C, Chelsea, Arsenal etc.. Who all pay huge wages. We will not be anywhere near 40m a year wage bill imo. But I do agree, the figures dont add up if you include Transfer Fees, NW severance pay, Bills etc.. At this moment in time we are relying on TF/LM to fund us. Their plan is to get us a new stadium and training ground - enabling us to get more from gate reciepts. Also dont forget, a new stadium provides extra non matchday funding if we have facilities such as restaurants, hotels, conference rooms etc.. A new stadium will enable us to become self sufficient, but until that time, we rely on TF and LM.
Not anymore they're not. Anyway all the 2007-08 signings were on £15-20k at least, why couldn't we get them moved on? (apart from them being useless)...
All great points. I did ask a few weeks ago where all the money was coming from. In relative terms we have spent peanuts. We did not spend much last summer as well, so our expenditure during one full football season is about right for a club our size in the prem. I am becoming more and more excited about our future. We have seriously rich people behind our club. If you look at our transfer policy in Jan it really looks like shrewd business. Loaning players with an option to buy. Classic business acumen. Minimum outlay, minimum risk. The really exciting thing about our future is not just that these people are seriously rich but they seem to have their feet firmly on the ground. The appointment of PB should not be overlooked. Look at his CV. This guy turns silver to gold. He will drag us into the 21st century and build from the bottom up. Another very reassuring point is that whatever about TF exuberance or knowledge of football, we all know where Amit's heart is. It's with our club. I have full confidence in him. As QPR fans we have been hurt badly in the past by false dawns and promises of better times. We have suffered badly at the hands of fools and playboys. I can fully understand that some of us are very very very slow to trust. And maybe rightly so. But this seems the real thing, it looks good, it feels good and i think we all just need to learn to "move on" from our dreadful recent past and give these guys a chance. Believe!!!!!!!!!
