Well-Made Posted January 17, 2009 Report Share Posted January 17, 2009 Sunday Herald Football is still about real money The Economics of football were rewritten this week when Manchester City offered a staggering £100 million for the Brazilian Kaka. I was asked my views on it in a radio interview and when I spoke the number I stopped mid-sentence; just articulating it sounded ridiculous as it crossed my lips. £100 million. Most clubs in the SPL work on a playing budget of less than £2m. The money we have to invest in our playing staff comes from ticket sales and place money that we receive according to our finishing position in the league. In addition, we have commercial departments that work tirelessly to help generate extra funds. Our running expenses include staff, the stadium, the youth department and the community department. At Motherwell, players' wages account for about 55% of income, which is a realistic figure for these times. Sometimes as supporters we are guilty of forgetting that this is real money. The same stuff that comes out of the cash machine and is hard-earned. Many football clubs rely on philanthropic support, usually in the form of a generous benefactor who loves his football club and has the means to contribute beyond that of the normal supporter. These people have helped make the game what it is. Go down a list of English and Scottish clubs and you will struggle to find many who at some point or another have not benefited from the generosity of one of these individuals. Yet, their financial support for their chosen club does not buy them a lifetime guarantee of immunity from criticism or a place in the hearts of the beneficiaries, the supporters, in perpetuity. Perhaps they understand this when they get involved but I suspect that they would sometimes expect to be cut a bit of slack. Football clubs are extraordinary institutions and the people that run them mostly understand that the supporters are the clubs and that they are only custodians with a responsibility to provide the best team and facilities possible. And to protect the integrity of the instutions in their care. Anyone who thinks that its not possible for any of our clubs to go bust only has to look at what has happened in other industries around the world. Banks, airlines and retailers have gone out of existence with a speed and finality that most of us would have thought impossible. Why should football clubs be any different? Like any other business we have to move with the times, and times are hard. At Motherwell, we are fortunate to have an individual who has invested huge amounts of his own money in trying to bring success and who manages the club with common sense and prudence. We don't have debt and we pay our bills. We don't take risks; we don't gamble the future of the club. This approach will frustrate supporters at times but they have to understand the harsh realities and most do. I get frustrated. I know where there are half a dozen players who, if added to my squad, would give us a chance of challenging the Old Firm, and I don't mean for Kaka money. We have tried to be innovative with our ticketing and our pricing structure but we have to find a balance. We have bills to pay, a football club to run.If Manchester City can afford £100m for one player, though, surely they could subsidise their gate prices? We do where we can. There will be a shortfall in our income this year unless we finish top four or win the Scottish Cup and that has ongoing implications. We would have to sell to balance the books. However, we cannot afford to give too much away if we want to remain competitive. Sometimes I wonder why people like John Boyle and Sir David Murray bother but then I think if I could I would do the same. From my home in the West End of Glasgow I can see Ibrox and when it's lit for an evening match it looks magnificent. On those occasions I can see why someone like Sir David would want to do it. Rangers are a great club but like the rest of us are not immune to the times. By being sensible now and making brave decisions they will come through this recession in good shape and ready for an exciting future. I believe there will be casualties. Some clubs may go bust, and others who continue to take risks will suddenly be forced to rationalise, which will result in some big names tumbling down the divisions. In Scotland, we must protect our futures by acting now where we have to. As supporters we should try to see the long-term strategy as well as demanding short term success. Murray has driven Scottish football for the last 20 years. He upped the ante and challenged Celtic to match his ambition, which, through a succession of owners ,they have done. His ambition for Rangers is as responsible for the present Parkhead as anything or anyone else. Scottish football supporters and Rangers supporters owe him a huge debt of gratitude. I only hope others will step up and stump up the day the likes of Boyle and Murray decide enough is enough. Quote Link to comment Share on other sites More sharing options...
SuperCC Posted January 17, 2009 Report Share Posted January 17, 2009 Interesting thoughts on the business side and I sometimes think many of us don't appreciate where the money comes from........... Quote Link to comment Share on other sites More sharing options...
stuwell Posted January 17, 2009 Report Share Posted January 17, 2009 Thought provoking stuff, "Many football clubs rely on philanthropic support, .........Yet, their financial support for their chosen club does not buy them a lifetime guarantee of immunity from criticism or a place in the hearts of the beneficiaries, the supporters, in perpetuity. Perhaps they understand this when they get involved but I suspect that they would sometimes expect to be cut a bit of slack." - got to agree with this statement, we would be in a worse state if we didn't have JB's backing. "There will be a shortfall in our income this year unless we finish top four or win the Scottish Cup and that has ongoing implications." - can't get my head round this part, we've spent nothing over the last 6 month's, so whats happened to the money we made for finishing 3rd last season? "In Scotland, we must protect our futures by acting now where we have to. As supporters we should try to see the long-term strategy as well as demanding short term success." - Who's been reading this site then? Ye better all watch what your saying Quote Link to comment Share on other sites More sharing options...
numpty Posted January 17, 2009 Report Share Posted January 17, 2009 we've spent nothing over the last 6 month's, so whats happened to the money we made for finishing 3rd last season? We've spent nothing on transfer fees, but it still costs a lot of money to run a football club. Quote Link to comment Share on other sites More sharing options...
Wellfan1984 Posted January 17, 2009 Report Share Posted January 17, 2009 Second part could come into the Stadium upkeep. Not to mention the extra money we have paid for the Balloon. Quote Link to comment Share on other sites More sharing options...
weeyin Posted January 17, 2009 Report Share Posted January 17, 2009 Not to mention the extra money we have paid for the Balloon.I don't think Malcolm's wages account for all of it. We spent extra money to protect the pitch too. Quote Link to comment Share on other sites More sharing options...
ML1 Posted January 17, 2009 Report Share Posted January 17, 2009 So in a season where we had the Uefa cup , both legs live on TV and our smallest first team squad in a while we need to win the cup or finish in the top 4 to break even ? Who's our financial advisor ? Nick Leeson ? Thank fuck John Boyle told him to stick his John Kennedy idea up his arse Taking £16 and £11 off of those Rangers tickets was a masterstroke , still no word if it will repeated against the Green scum. Neednt come crying to the support pleading poverty if they do . Quote Link to comment Share on other sites More sharing options...
Wellfan1984 Posted January 17, 2009 Report Share Posted January 17, 2009 So in a season where we had the Uefa cup , both legs live on TV and our smallest first team squad in a while we need to win the cup or finish in the top 4 to break even ? Who's our financial advisor ? Nick Leeson ? Thank fuck John Boyle told him to stick his John Kennedy idea up his arse Taking £16 and £11 off of those Rangers tickets was a masterstroke , still no word if it will repeated against the Green scum. Neednt come crying to the support pleading poverty if they do . Glad to know you're a financial expert. And actually our squad isn't that much smaller than previous seasons, and a lot of the players will be on more than they were a few seasons ago. Quote Link to comment Share on other sites More sharing options...
ML1 Posted January 17, 2009 Report Share Posted January 17, 2009 You dont have to be a genius to know Motherwell budgeting for 4th or a cup win is insanity. Obviously we have bigger wages Einstein and if we cant afford them we shouldnt be paying them , same goes for Jim 'the second coming' Obriens transfer fee. When you take £16 and £11 off of tickets and then get the same attendance as you got when the tickets were full price , your making a fair loss when multiplied by 5000. Its not rocket science , once they tell us they wont be pulling that stroke again i'll listen to them moaning about being skint Quote Link to comment Share on other sites More sharing options...
Wellfan1984 Posted January 17, 2009 Report Share Posted January 17, 2009 All McGhee says is the men in charge of clubs cannot continue to pile money into the team, if the other areas of income are not there to meet it. God knows how you can argue with that! Quote Link to comment Share on other sites More sharing options...
ML1 Posted January 18, 2009 Report Share Posted January 18, 2009 Im not arguing with that . We were one of the lucky ones to come out of administration thanks to John Boyle , in the current climate it might not be so easy for clubs in future to do that. Having reread it through the beer goggles he doesnt actually say we budgeted for 4th or a cup win , he does say it will mean a shortfall in our income leading to knock on effects and having to sell to balance the books. Id like to know if its the same thing , are we relying on finishing 4th or winning the cup for the 3rd time in our history or having someone worth selling if we dont to keep our heads above water ? Quote Link to comment Share on other sites More sharing options...
brisbaneMFC Posted January 18, 2009 Report Share Posted January 18, 2009 Not sure "stump up" wasn't a wee Freudian slip, but point taken. Thing is, the investment on the part of these guys has been influential, but returns must have been there -I don't mean that there isn't a love for club, but anyone with series business acumen would surely endeavour to make sure that their passion (the club) breaks even, at least. The difference now is that everyone is shoring in, thinking about their expendables. Football takes a back seat when you've got rent or mortgage, fuel or transport, food and the rest. Add kids and your priorities deepen. We probably aren't in as 'bad' a situation as the Ibrox mob, but then we've been mostly on pursestrings for a while. To be completely frank, I saw that a man could get £500,000 a week to kick a ball about and felt sick. Maybe that is bitter but sport is a diversion. Quote Link to comment Share on other sites More sharing options...
stuwell Posted January 18, 2009 Report Share Posted January 18, 2009 We've spent nothing on transfer fees, but it still costs a lot of money to run a football club. Yes it does cost a lot of money to run a club but my point is that last year we finished 3rd, which I assume is higher than we budgeted for. This would give us a surplus at the start of the season. Now add JP's transfer fee, the money from Everton selling on McFadden, what little we got for McCormack and the Euro money (TV and gate money minus the cost of the away trip)and budget to finish in the top six.This is what I would expect to be used to run the club this season without going into the red. That is unless the cost of running Fir Park is so high that it eats up all this cash - in which case the sooner we move the better as we ain't going to manage to finish 3rd or 4th or win a cup every year! Quote Link to comment Share on other sites More sharing options...
Kmcalpin Posted January 18, 2009 Report Share Posted January 18, 2009 This would give us a surplus at the start of the season. Now add JP's transfer fee, the money from Everton selling on McFadden, what little we got for McCormack and the Euro money (TV and gate money minus the cost of the away trip)and budget to finish in the top six. I honestly don't know the overall effect of all these transactions - we'll have to wait for the AGM in 2010 for that I'd guess. However, things aren't quite as simple as you might think. On the plus side we received a small fee for Alan Martin of course. On the debit side, we splashed out on Steve Hammell. Don't forget though we received NOTHING from Faddy's sell-on clause as it all went to creditors. Euro money - I don't know if the club would break even given the reduced gate prices. Stephen Hughes and Chris Porter will be on substantial salaries. Last but not least we've had some extremely expensive pitch repairs to undertake and these will have run into 5 if not 6 figures. Quote Link to comment Share on other sites More sharing options...
Ya Bezzer! Posted January 18, 2009 Report Share Posted January 18, 2009 I don't want to sound like someone's grandfather but a lot of younger people have never been through economic hard times and don't really understand what its all about. Already the signs are the one were are entering is going to be much, much worse than the recession in the early 1990's and possibly on the same scale as the one back in the late '70's to early '80's. I was brought up in that period and it was whole different world from the last 25 years or so, I can tell you. Lots of people are going to lose their jobs, people in jobs will have to take pay cuts or freezes and no one is going to be throwing cash around on 'luxury' items and that means football games. Next season I think you can expect to see a vast reduction in season ticket holders all across Scotland. Our priority now should be making sure the club gets through this. Our attendances have already dropped significantly in the last few months despite 'record' season ticket sales, they will continue to dwindle in 2009 and possibly for longer. This is going to effect every football club but I think its pretty obvious that if we get into debt again like we did before then Motherwell FC won't make it this time. Remember the last time we were in this economic climate we went from being a pretty strong side to a team that a few seasons in Division 1 with 2,000 or so fans turning up. It's going to be tough times ahead, so be ready for it and support your team because we are entering uncertain times where anything could happen, including the worst thing of all. Quote Link to comment Share on other sites More sharing options...
fatcalf Posted January 18, 2009 Report Share Posted January 18, 2009 A nice wee smokescreen, we were losing fans hand over fist thanks to Boyle before this recession arose, his policies were driving folk away, it can only get worse now with the financial climate worsening. Quote Link to comment Share on other sites More sharing options...
mfc123 Posted January 18, 2009 Report Share Posted January 18, 2009 A nice wee smokescreen, we were losing fans hand over fist thanks to Boyle before this recession arose, his policies were driving folk away, it can only get worse now with the financial climate worsening. A bit over-dramatic I think .... how were we losing fans ? What 'fans' have been driven away ? Quote Link to comment Share on other sites More sharing options...
Haggischomper Posted January 18, 2009 Report Share Posted January 18, 2009 Check out are ave attendances in Boyle's era and see the trend. Quote Link to comment Share on other sites More sharing options...
Stu92 Posted January 18, 2009 Report Share Posted January 18, 2009 I think if you checked the average attendances of other SPL clubs over the same period you'd see a similiar trend. Quote Link to comment Share on other sites More sharing options...
Malky79 Posted January 18, 2009 Report Share Posted January 18, 2009 Twas reported at time that only 50% off Faddy money was due to creditors, indeed saw it reported as low as now of it due to time lapsed. So some maybe or all of it might have been in one door and out the other but enough reports on it suggest that may not be the case. Quote Link to comment Share on other sites More sharing options...
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