Would a spell in League One actually be a good thing?

[NottsRam77]

1 hour ago, Ghost of Clough said:

I don't see it myself. The wage bill will drop severely for the 3rd successive year. A number of in contract players will definitely be moved on for cash (Marshall, Byrne, Shinnie, Lawrence, Jozwiak). At the very least, I'd expect us to make a cash profit next season.

Time to actually go back to building a team around the academy graduates, rather than use them to fill gaps around the past it experienced players.

If that is the case .. and I think your right then as fans we need to exercise a great deal of patience.

league one is a physical and tough league it will take our youngsters time ... possibly a lot of it to get up to speed to deal with the physical demands 

anyone expecting an immediate return to the champ may want to re align their expectations 

[Topram]

We’re going to find out

[Ghost of Clough]

15 minutes ago, falconram said:

Keogh not paid off, Cocu not paid off, attendance down, TV revenue down, if we don't go into admin I would be amazed.

MM cannot carry on funding this anymore

The Keogh tribunal payout you refer to is capped at about £25k. The papers suggested £4m for Cocu. An estimated maximum of £7m in ST refunds too (no idea how many people opted for refunds and how many are still to be repaid).

However, Mel's other company will still undoubtedly owe the club money for the stadium.

Income in L1 will be down, but so too will other costs.

Revenue
TV Money = £5m decrease
Match Receipts = £2m decrease
Sponsorship = £1m decrease
Total = £20 (was £29m in 17/18, let's just round that down to £20m to be on the safe side)

Expenditure
Wage Bill = Less than £10m (once the players I listed are sold)
Academy = £6m (assuming no cut backs)
First Team Coaching Costs = £2m (assuming we replace Rooney)
Staff Costs = £3m
Stadium Rent = £1.1m
Transfer Fees Due = c£3.5
Total = £25.6m (I'd say that's a very conservative estimate)

So in a very extreme worst case scenario, that's £20m coming in, £36.6 going out (£16.6m Mel needs to find down the back of the sofa)
Then factor in sales (Marshall, Byrne, Shinnie, Jozwiak, Lawrence, Kazim) and those losses will be halved.
The reality is, ST refunds will be less than I stated due to some having already been refunded, others chose not to have refunds. An agreement would have been reached with Cocu to pay him in instalments, and the wage bill will be much less than I've stated given there will only be Roos, Forsyth, Bielik and Marriott on 'senior wages'. 
As also mentioned, that's not even taking into account the money Mel's other company should be paying the club for the stadium.

[jimtastic56]

The only “silver lining “ to going into div 1 , is that we wouldn’t need the “championship expert” Rosenior. There must be a tie 3 expert pundit  we can waste our season ticket money on?

[IslandExile]

1 hour ago, NottsRam77 said:

league one is a physical and tough league it will take our youngsters time ... possibly a lot of it to get up to speed to deal with the physical demands

It's there, or lower, that they would be sent on loan if we had a stronger squad in the championship.

[IslandExile]

I really hope we do not go down. However, if we do, then how we approach it is critical.

To me, having a Tiger's fan as a friend, I would hold Hull City up as a good example.

They were comfortably mid-table in the Championship in the season they went down, even looking to get into the play-offs. January transfer window, they sold Bowen to West Ham and Grosicki to West Brom.

They dropped like a stone in the second half of the season and were relegated.

The supporters generally dislike the owners - the Allam family. No longer invest since their attempt to change the name from "Hull City" to "Tigers" failed. They have been trying to sell the club but cannot find a buyer.

However, what they did do right was hire a bright young manager, who had achieved some success at Doncaster, Gavin McCann. They wheeled and dealed in the transfer market and found some decent players. They knitted together a decent team and are now one or two points away from instant promotion.

The key for me is recruitment: manager and players.

[NottsRam77]

40 minutes ago, IslandExile said:

It's there, or lower, that they would be sent on loan if we had a stronger squad in the championship.

Yes ... but they would be there to supplement a squad 

the way things are looking they may end up being the main body of our squad for next season

theres absolutely nothing wrong in having the likes of bird, sibley, knight and Buchanan as part of a squad to push for promotion ... but to build a hopefully promotion challenging side around ... I’d be concerned 

[NottsRam77]

35 minutes ago, IslandExile said:

I really hope we do not go down. However, if we do, then how we approach it is critical.

To me, having a Tiger's fan as a friend, I would hold Hull City up as a good example.

They were comfortably mid-table in the Championship in the season they went down, even looking to get into the play-offs. January transfer window, they sold Bowen to West Ham and Grosicki to West Brom.

They dropped like a stone in the second half of the season and were relegated.

The supporters generally dislike the owners - the Allam family. No longer invest since their attempt to change the name from "Hull City" to "Tigers" failed. They have been trying to sell the club but cannot find a buyer.

However, what they did do right was hire a bright young manager, who had achieved some success at Doncaster, Gavin McCann. They wheeled and dealed in the transfer market and found some decent players. They knitted together a decent team and are now one or two points away from instant promotion.

The key for me is recruitment: manager and players.

We’re ducked then lol

[Ken Tram]

What would happen in League 1?

People have mentioned players leaving, and staff being made redundant.

I think Sunderland, in League 1, has an academy, so I guess that they have surfed to keep that running.

Would crowd numbers dip that much?

Is it TV money and sponsorship that would be the biggest difference?

 

[Ghost of Clough]

1 hour ago, Ken Tram said:

What would happen in League 1?

People have mentioned players leaving, and staff being made redundant.

I think Sunderland, in League 1, has an academy, so I guess that they have surfed to keep that running.

Would crowd numbers dip that much?

Is it TV money and sponsorship that would be the biggest difference?

 

£5m TV money, £2m tickets, £0-2m sponsorship, maybe a little bit elsewhere too.

[Brammie Steve]

Dunna marrer wot I fink....

Finish in the bottom three and we'll find out!

[Ken Tram]

40 minutes ago, Ghost of Clough said:

£5m TV money, £2m tickets, £0-2m sponsorship, maybe a little bit elsewhere too.

I guess it's obvious, but presumably it means having a team with £7-9m lower wages bill, if we are to cut our cloth accordingly?

According to salarysport.com, our wages are £15.5m per year, so if we were to break even, we could cut the current squad in half, or halve the average cost of each player, or a mixture of the two.

Or, keep the cheapest half of the squad, and replace the most expensive half of the squad with players one-quarter of their current value.

So, I guess, unless someone wants to bankroll a chance to bounce back up to the Championship, we will have to have a much weaker squad (or, at least, a much cheaper squad)?

[Ghost of Clough]

14 minutes ago, Ken Tram said:

I guess it's obvious, but presumably it means having a team with £7-9m lower wages bill, if we are to cut our cloth accordingly?

According to salarysport.com, our wages are £15.5m per year, so if we were to break even, we could cut the current squad in half, or halve the average cost of each player, or a mixture of the two.

Or, keep the cheapest half of the squad, and replace the most expensive half of the squad with players one-quarter of their current value.

So, I guess, unless someone wants to bankroll a chance to bounce back up to the Championship, we will have to have a much weaker squad (or, at least, a much cheaper squad)?

See my post from earlier today. 

13 hours ago, Ghost of Clough said:

The Keogh tribunal payout you refer to is capped at about £25k. The papers suggested £4m for Cocu. An estimated maximum of £7m in ST refunds too (no idea how many people opted for refunds and how many are still to be repaid).

However, Mel's other company will still undoubtedly owe the club money for the stadium.

Income in L1 will be down, but so too will other costs.

Revenue
TV Money = £5m decrease
Match Receipts = £2m decrease
Sponsorship = £1m decrease
Total = £20 (was £29m in 17/18, let's just round that down to £20m to be on the safe side)

Expenditure
Player Wage Bill = Less than £10m (once the players I listed are sold)
Academy = £6m (assuming no cut backs)
First Team Coaching Wages = £2m (assuming we replace Rooney)
Staff Wages = £3m
Stadium Rent = £1.1m
Transfer Fees Due = c£3.5
Total = £25.6m (I'd say that's a very conservative estimate)

So in a very extreme worst case scenario, that's £20m coming in, £36.6 going out (£16.6m Mel needs to find down the back of the sofa)
Then factor in sales (Marshall, Byrne, Shinnie, Jozwiak, Lawrence, Kazim) and those losses will be halved.
The reality is, ST refunds will be less than I stated due to some having already been refunded, others chose not to have refunds. An agreement would have been reached with Cocu to pay him in instalments, and the wage bill will be much less than I've stated given there will only be Roos, Forsyth, Bielik and Marriott on 'senior wages'. 
As also mentioned, that's not even taking into account the money Mel's other company should be paying the club for the stadium.

 

[Ken Tram]

2 hours ago, Ghost of Clough said:

Revenue
TV Money = £5m decrease
Match Receipts = £2m decrease
Sponsorship = £1m decrease

From your figures, we would not be able to sustain being in the championship either.

Why do managers (or players) get pay-offs after being sacked for poor performance? Whydon't contracts specify result clauses?

I guess that if Mel does not wish to find £17m, then we could go bust? And, then, I guess the debts to former managers, highly paid players, and season ticket holders would be written off?

[Ken Tram]

If the ownership of a championship club is simply a gamble purely based upon achieving promotion to the premier League - based upon the figures above being unsustainable in both the Championship and League 1 ...

... and if we were relegated to League 1 ...

... would any owners not want to double-down on the gamble on the hopes of immediate promotion back up from League 1 to the Championship?

[Ken Tram]

If the figures are as you say, should we double ticket prices to help pay the players' wages, and help balance the books?

[Ghost of Clough]

7 hours ago, Ken Tram said:

From your figures, we would not be able to sustain being in the championship either.

Preston did it for a number of years before 'making a push for top 6'. Their revenue is around the £12.5m mark.
Brentford had been doing it for a couple of years with  a £15m revenue, based on increasing the value of players and selling them on (£10m loss last season despite making a £25m profit on players).

If they can do it, then we should be able to with more than double the revenue.

7 hours ago, Ken Tram said:

Why do managers (or players) get pay-offs after being sacked for poor performance? Whydon't contracts specify result clauses?

I'm sure some do have those clauses. Clubs would probably find it harder to entice top managers in though. 'Risk vs reward'?

7 hours ago, Ken Tram said:

I guess that if Mel does not wish to find £17m, then we could go bust? And, then, I guess the debts to former managers, highly paid players, and season ticket holders would be written off?

I'd expect individual player sales until we reach a figure Mel is happy with.
As I mentioned, once you factor in sales (such as Marshall, Byrne, Shinnie, Jozwiak, Lawrence and Kazim) and a more realistic estimation ST refund due, that £17m figure would be closer to the £5m mark. If that's still too much, then it likely means only one of Buchanan, Bird, Knight and Sibley being sold

7 hours ago, Ken Tram said:

If the ownership of a championship club is simply a gamble purely based upon achieving promotion to the premier League - based upon the figures above being unsustainable in both the Championship and League 1 ...

... and if we were relegated to League 1 ...

... would any owners not want to double-down on the gamble on the hopes of immediate promotion back up from League 1 to the Championship?

Peterborough are regulars at the top end of L1 and they only have a £6m wage budget (players and coaches). They made a £3.5m loss off a £7.5m revenue. If they can compete on that budget, then we should be able to to on a £20m budget.

As evidenced by Brentford, the only sustainable policy in the Championship is with making profits off player sales.

You also have to remember P&S. It's not an issue as such in L1 (an owner can inject as much cash in as he wants), but it is on the return to the Championship. Those losses in L1 (with a max of £13m of owner injection counting) could mean having to make cut backs once promoted.

7 hours ago, Ken Tram said:

If the figures are as you say, should we double ticket prices to help pay the players' wages, and help balance the books?

The sensible thing would be for all clubs to reduce their expenditure (the majority of which is usually the players' wages).
I'm sure the club would be open to donations if you want to put more in ?

[Ken Tram]

8 hours ago, Ghost of Clough said:

Preston did it for a number of years before 'making a push for top 6'. Their revenue is around the £12.5m mark.
Brentford had been doing it for a couple of years with  a £15m revenue, based on increasing the value of players and selling them on (£10m loss last season despite making a £25m profit on players).

If they can do it, then we should be able to with more than double the revenue.

I'm sure some do have those clauses. Clubs would probably find it harder to entice top managers in though. 'Risk vs reward'?

I'd expect individual player sales until we reach a figure Mel is happy with.
As I mentioned, once you factor in sales (such as Marshall, Byrne, Shinnie, Jozwiak, Lawrence and Kazim) and a more realistic estimation ST refund due, that £17m figure would be closer to the £5m mark. If that's still too much, then it likely means only one of Buchanan, Bird, Knight and Sibley being sold

Peterborough are regulars at the top end of L1 and they only have a £6m wage budget (players and coaches). They made a £3.5m loss off a £7.5m revenue. If they can compete on that budget, then we should be able to to on a £20m budget.

As evidenced by Brentford, the only sustainable policy in the Championship is with making profits off player sales.

You also have to remember P&S. It's not an issue as such in L1 (an owner can inject as much cash in as he wants), but it is on the return to the Championship. Those losses in L1 (with a max of £13m of owner injection counting) could mean having to make cut backs once promoted.

The sensible thing would be for all clubs to reduce their expenditure (the majority of which is usually the players' wages).
I'm sure the club would be open to donations if you want to put more in ?

That is such a helpful analysis. You've made such a complicated issue much easier to understand.

Thanks for taking the time to explain it so clearly.

I think that you're implying that a manager's ability to increase the value of players is very important. (Moreso than I had realised.)

The fan revenue is obviously important, and probably why Derby has maintained a relatively high position in the league pyramid throughout its history.

Do academies tend to make a significant contribution to income from increasing the value of players or is it relatively insignificant compared with increasing the value of first team players?

[Ghost of Clough]

12 minutes ago, Ken Tram said:

That is such a helpful analysis. You've made such a complicated issue much easier to understand.

Thanks for taking the time to explain it so clearly.

I think that you're implying that a manager's ability to increase the value of players is very important. (Moreso than I had realised.)

The fan revenue is obviously important, and probably why Derby has maintained a relatively high position in the league pyramid throughout its history.

Do academies tend to make a significant contribution to income from increasing the value of players or is it relatively insignificant compared with increasing the value of first team players?

Cheers.

To add more clarity on the importance of match receipts, we received £9.1m in 17/18, only 6 clubs below the Championship have total revenue exceeding this figure.

Regarding academies, it depends on the club I suppose. For us, we need to develop £6m worth of players each season to breakeven. Cat 2 clubs such as Bristol, Sheff Weds will be looking at the £2m figure.
P&S is also a factor for academies as the academy spend doesn't count against the P&S limit. Every penny gain through selling an academy player is another penny the club can spend whilst staying within the limit. Thankfully, we've been able to sell c£30m worth of academy players over the past 5 or so years, which has helped offset the money wasted on Butterfield, Blackman, Anya, and co. From memory, we've only made a profit from Vydra and Ince out of the players we've bought in

[Ken Tram]

6 hours ago, Ghost of Clough said:

LFor us, we need to develop £6m worth of players each season to breakeven.

P&S is also a factor for academies as the academy spend doesn't count against the P&S limit. Every penny gain through selling an academy player is another penny the club can spend whilst staying within the limit. Thankfully, we've been able to sell c£30m worth of academy players over the past 5 or so years

I wonder if League 1's Sunderland have found it easier for Academy players to make a transition into the first team, compared with the transition to a Championship squad, which few people seem to think has gone well for us this season.

You've really enlightened me a lot with the figures and explanations.

The only downside is that it sounds a bit like what I presume the Football Manager game was like (which somehow I never played) - in that a key goal for our managers must be ensuring that players at all levels are increasing in value!

7 hours ago, Ghost of Clough said:

which has helped offset the money wasted on Butterfield, Blackman, Anya, and co. From memory, we've only made a profit from Vydra and Ince out of the players we've bought in

Do you know what the trends have been in relation to player value?

Have we just played the market very very badly, or is it generally difficult to increase the value of a squad? By

Presumably, if clubs survive with lower ticket revenues than us, then they must be better at increasing player value.

16 hours ago, Ghost of Clough said:

As I mentioned, once you factor in sales (such as Marshall, Byrne, Shinnie, Jozwiak, Lawrence and Kazim)

Is it sensible to have a few players in a squad who are significantly better than the above-average players in a given league? And would not some of these players above provide that if we were in League 1?

And didn't you, or someone, say that players on an existing contract are counted towards spending limits as if they were on a capped level of wages.

So, shouldn't we try to keep as many of the more expensive (and talented) players as possible; and make savings (or increase revenue) elsewhere?

Maybe?