Budget constraints (3 Viewers)

[Gazolba]

I think the term 'building a team round' is just a reference to thinking someone may be good enough to 'build a team around' don't worry we won't be getting anyone soon to even remotely think about doing that

One thing I do know - you build your defence around a good goal-keeper. And we definitely don't have one of those.

 

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[Grendel]

I thought we didn't offer much to the academy players like Haynes, Thomas etc anyway?

The windfall from Wembley at £600K is enough for 11-12 players on £1,000 PW for a year.

Plus, isn't the rule for young players offer a contract equal or greater than what they're on? If GT is on £500 p/w (purely hypothetical) we could offer £501 p/w surely?

More importantly, Robins and the Wembley win and potential promotion next season may sway a few players rather than a few more £'s.

£600,000 won't cover overheads for 3 months with no cash flow coming in.

 

[ccfc92]

£600,000 won't cover overheads for 3 months with no cash flow coming in.

Could you expand on that please?

Which expenses? I'm assuming the 3 months is end of/pre season?

 

[Terry Gibson's perm]

£600,000 won't cover overheads for 3 months with no cash flow coming in.

It shouldn't need to as they should budget to spread the cash, also if we hadn't got the 600k would the club have folded or would they have asked the owners for some money short term?

Surely every team in every league has the same issues just on different levels.

 

[Astute]

£600,000 won't cover overheads for 3 months with no cash flow coming in.

Fisher will have to make his mind up. We are either making a profit or a loss.

 

[Generally Midfield]

The problem with discussions like this is sisu make the finances impossible to understand - isn't that one of the key skills of hedgefunds with offshore bases and so on? It means everyone can chuck around figures but it's all guesswork. Only thing for certain is sisu only care about their own financial position and don't care what league we're in or whether we end up with a squad good enough for promotion or not.

 

[better days]

I'm not as pessimistic as some contributors for next year
From what I've seen so far I'd trust Robins to make best use of whatever resources he has
Most relegated clubs are not in our position.
They just have poor players who aren't good enough or guys who are past their best
We have a group of talented kids but we had too many in the team at once with not enough experience around them
Perhaps 2 or 3 kids will be sold to raise extra funds.
The others will stay to form the basis of next years team.
The money from the sale of those sold should be used to bring in 4 or 5 aspirational guys in the 25 to 28 age range who are among the best players in the division in other teams at League 2 level and want to be part of a team pushing for promotion
It's been a difficult season but the fans turnout and the reaction to the Checkatrade win will be a big selling point when Robins is talking to potential signings
Whatever budget we have should be used sensibly to make sure we pay what we need to attract the 4 or 5 aspirational 'men' we need to give the team the backbone it needs
Especially in wages for those particular players
There are also parachute payments for teams relegated from League 1
League increases parachute payments to relegated clubs

 

[Grendel]

Fisher will have to make his mind up. We are either making a profit or a loss.

Why? Companies can go bankrupt with healthy balance sheets if they have no cash flow.

 

[Grendel]

Could you expand on that please?

Which expenses? I'm assuming the 3 months is end of/pre season?

The problem the club has is that it's self funding and seemingly has no ability to fund periods of negative cashflow.

Once the season ends the club will need to still pay contracted players (the whole squad until the end of June) and all other overheads. Management, other staff, rent, bills from the training ground with zero funds coming in.

Remember the only reason the club survived the period last season was player sales and the funds raised from that.

The club is operating at a loss and needs cash flow neutrality. Then it has to try and sign players. This will require some agent and signing on fees

The cup final money will e swallowed up. Last season on a £1.7 million wage bill and turnover significantly higher than next season will be still had to raise what - £2 million in transfer revenues? Otherwise we'd have been unable to self fund.

It's nothing to do with profit loss or break even. It's cash flow. Bills needed paying and there is no other cash to pay it.

 

[Astute]

Why? Companies can go bankrupt with healthy balance sheets if they have no cash flow.

Eh?

Are you now after an argument about companies going bankrupt because they are doing at least OK to get away from Fisher saying that we are making a profit?

Or are you saying that our club is going bankrupt because of a lack of cashflow?


You tell us that no money goes to SISU. They have our ticket money. They will get the cup run money if they haven't already received it. So where would the cashflow problem come from?

 

[Adge]

The fact that many seem to want to retain the majority of this failed squad I find incredulous. Regardless of that though can anyone explain how it's at all realistic.

The wage bill will be completely slashed. I would guess a £500k reduction on a bill of £1.7m so how will out of contract players be offered new deals?

We need many new players to address a losing mentality.

I can't see us retaining hardly any of the out of contract players and big earners (Reid) must be transferred out.

I'd think we will lose the vast majority of the squad

Not that I'll be shedding any tears.

This!

 

[Astute]

The club is operating at a loss

So if you are able to call Fisher a liar are you going to leave those that also call him a liar alone?

 

[Grendel]

Eh?

Are you now after an argument about companies going bankrupt because they are doing at least OK to get away from Fisher saying that we are making a profit?

Or are you saying that our club is going bankrupt because of a lack of cashflow?


You tell us that no money goes to SISU. They have our ticket money. They will get the cup run money if they haven't already received it. So where would the cashflow problem come from?

Give me strength.

Cash flow is an ability to pay bills and to balance revenues coming in and outgoings.

Over a financial year a company may have a healthy balance sheet - however if it runs out of cash it goes bust - unless it can sell assets.

We are operating at a loss and funding through asset sales.

OSB agreed they this revenue will probably not be enough to fund the club without additional player sales in the summer

Perhaps he isn't qualified as you are in this area - or indeed this guy.

Even profitable businesses go bust - Dun and Bradstreet Small Business

 

[Grendel]

So if you are able to call Fisher a liar are you going to leave those that also call him a liar alone?

FFS it's an operating loss

 

[ccfc92]

The problem the club has is that it's self funding and seemingly has no ability to fund periods of negative cashflow.

Once the season ends the club will need to still pay contracted players (the whole squad until the end of June) and all other overheads. Management, other staff, rent, bills from the training ground with zero funds coming in.

Remember the only reason the club survived the period last season was player sales and the funds raised from that.

The club is operating at a loss and needs cash flow neutrality. Then it has to try and sign players. This will require some agent and signing on fees

The cup final money will e swallowed up. Last season on a £1.7 million wage bill and turnover significantly higher than next season will be still had to raise what - £2 million in transfer revenues? Otherwise we'd have been unable to self fund.

It's nothing to do with profit loss or break even. It's cash flow. Bills needed paying and there is no other cash to pay it.

Ah, but you forget. The honest Timmy said we are £1,000,000 in profit!

That's before the Wembley financial windfall.

So surely that nice bank balance counters cash flow issues?

 

[Grendel]

Ah, but you forget. The honest Timmy said we are £1,000,000 in profit!

That's before the Wembley financial windfall.

So surely that nice bank balance counters cash flow issues?

No we are not - it's not available cash.

It's why I believe we have not sold players in January

Discussed here;

The mammoth sum Coventry City owners Sisu would need to walk away without loss

 

[Astute]

Ah, but you forget. The honest Timmy said we are £1,000,000 in profit!

That's before the Wembley financial windfall.

So surely that nice bank balance counters cash flow issues?

Which is why I said Fisher will have to make his mind up :banghead:

Poor Grendel. Either he is a liar or Fisher is a liar. And he won't allow anyone to call Fisher a liar :smuggrin:

 

[Grendel]

Also when is this £600,000 arriving?

Is it now, next month or the month after? Will show as credit on a balance sheet but won't pay the ground staff, the players, the manager, the assistant manager, the rent, utilities, rates will it if it's not there?

 

[Grendel]

Which is why I said Fisher will have to make his mind up :banghead:

Poor Grendel. Either he is a liar or Fisher is a liar. And he won't allow anyone to call Fisher a liar :smuggrin:

So even OSB is full of shit now. Wow.

 

[Astute]

No we are not - it's not available cash.

It's why I believe we have not sold players in January

Discussed here;

The mammoth sum Coventry City owners Sisu would need to walk away without loss

So why isn't it available cash? SISU don't take any. Fisher doesn't lie. He said we made a profit. Fisher works for free.

What is your take on it Grendel?

 

[Astute]

So even OSB is full of shit now. Wow.

Read above and answer for once.

 

[ccfc92]

No we are not - it's not available cash.

It's why I believe we have not sold players in January

Discussed here;

The mammoth sum Coventry City owners Sisu would need to walk away without loss

But, But, But.... "We're debt free"

I'm using £600,000 to quote your very good self.

I'm not saying we will have +£1,600,000 in the bank to pay players over the summer, but surely the club account for the summer period and leave cash free?

If not, that's highly irresponsible wouldn't you say?

That's like a tenant saying can't pay you rent over December as I don't work that month, sorry. You leave cash/allowances for these lower income times.

 

[Astute]

But, But, But.... "We're debt free"

I'm using £600,000 to quote your very good self.

I'm not saying we will have +£1,600,000 in the bank to pay players over the summer, but surely the club account for the summer period and leave cash free?

If not, that's highly irresponsible wouldn't you say?

That's like a tenant saying can't pay you rent over December as I don't work that month, sorry. You leave cash/allowances for these lower income times.

The same 600k we didn't know was going to our club at the time.

 

[stevefloyd]

Omfg.. some people don't get it...during the season ccfc or sisu get revenue during the close season they don't.. . It's not rocket science

 

[ccfc92]

I'm not being funny, but even over 3 months (which I doubt there will be zero income) that's a loss of £425,000 in wages.

It will all be proportionate to yearly income etc. TF says we are running neutral, then that is calculated over 12 months surely? Not just the 9 months that people pay their ticket money?

If not, why set a budget? Might as well say we have £100,000 for a year, or £10,000,000 for the year if you don't allow for lulls in revenues.

 

[Astute]

Omfg.. some people don't get it...during the season ccfc or sisu get revenue during the close season they don't.. . It's not rocket science

We have a budget. It is a 12 month budget not 9 months.

And do we only sell season tickets once the season starts?

 

[ccfc92]

Omfg.. some people don't get it...during the season ccfc or sisu get revenue during the close season they don't.. . It's not rocket science

But you budget for that.

If you worked 9 months of the year, at 5K income per month, you still only earn 45K a year.

You don't spend 5K per month, then "bum" the other 3 months living for free do you?

You budget at 45K per year, divided by months, minus your outgoings plus other expenses.

It's not rocket science.

 

[Cavan O'Doherty]

You've already said you'd like to keep Reid, Haynes, Bigi, Thomas, stokes, Beavon to name but a few.

Kwame Thomas, Turnbull and jones are on long term deals. You keep Reid and Beavon that's at least 30% of the wage bill - so then resign out of contract players as well - how does that work?

Bigi really? Has one good game in 10. The amount of times he gives the ball away is ridiculous

 

[skybluetony176]

Also when is this £600,000 arriving?

Is it now, next month or the month after? Will show as credit on a balance sheet but won't pay the ground staff, the players, the manager, the assistant manager, the rent, utilities, rates will it if it's not there?

Don't worry about that. Tim also said that MR will be provided with the tools he needs. Maybe he doesn't need a budget.

 

[skybluetony176]

So even OSB is full of shit now. Wow.

Why? Is OSB an advisor to Fisher?

 

[Astute]

Why? Is OSB an advisor to Fisher?

He had to try and deflect considering all the contradictions he has come out with.

 

[skybluetony176]

Omfg.. some people don't get it...during the season ccfc or sisu get revenue during the close season they don't.. . It's not rocket science

I think the point people are making is that between the"£1M profit" Tim was bragging about and the trophy windfall it's not unreasonable to say we should have a contingency fund available to cover the leaner times during the summer.

 

[ccfc92]

I think the point people are making is that between the"£1M profit" Tim was bragging about and the trophy windfall it's not unreasonable to say we should have a contingency fund available to cover the leaner times during the summer.

Clearly, it is unreasonable

 

[skybluetony176]

Clearly, it is unreasonable

Maybe these lean times during the summer are news to SISU and they didn't realise that they have to budget for them? Maybe that's the point Grendull is making?

 

[Grendel]

He had to try and deflect considering all the contradictions he has come out with.

I've explained.

I've shown links as to why companies can be shown as profitable but can then go bankrupt

I've shown an accountants view on this forum as to why the cash position would be potentially perilous

It's not my fault you cannot understand the difference between profitability, cash flow and break even statements.

I've not come out with any contradictions and have tried to explain as simply as I can the issues.

I can't be held responsible for the fact that you pretend to understand things but actually fail even in the basics.

I can't be blamed they having presented you with a dot to dot of 3 dots you can't even make it from 1 to 2 - I give up