As promised, H:
h again, on 18 December 2014 - 07:37 PM, said:
Interesting bit of financial explanation, and all of it factual of course. However, since I don't like to see a bloke go down without the opportunity to defend himself - and far too many are far too eager to play the blame game - I'll play Devil's Advocate.
1. We budgeted for 7000 gates, which, with that highly scientific thing called hindsight was too much. But the extra money we thus 'stole' from the accounts goes to pay for some players who bring the fans in. Gary Roberts, just for one, would be more than welcome at many clubs in the Championship, never mind L1, and he doesn't come cheap - but I didn't hear a chorus of disapproval when we signed him from the people who're now rushing to condemn those responsible. If we want quality players, and who doesn't, it seems we have to go over budget, and DA has to OK it. No point complaining when we're in the red - in fact most people seem to be in favour of the 'speculate to accumulate' camp, and begrudge DA taking a cut of transfer fees.
I'm not even going to try to defend pay rises, since I don't know how much they were. In times of austerity they should be very carefully watched, but we have to pay the going rate to attract the right people - we seemingly still don't if the registration business is anything to go by. The biggest item will be the extra non-playing but football-related staff - I remember cribbing about them months ago and being told that they were all essential to a modern football club. Well, if that's so, they have to be paid for, and no point grumbling when the bills come in. I just wonder if a non-footballing CEO would have been quite so generous.
I do have a problem in being over optimistic when budgeting. Personally I would always be cautious and then anything over & above that is a bonus. That said though, I acknowledge that you only get one opportunity to sign a player when he becomes available. As you say, we stole/pretended/over estimated things to land players, the problem with the model is that if you fail to hit your over ambitious targets you will run out of funds and sure enough, the Club did.
What I have a problem with is how things were managed or not, as the case may be. By the Plymouth match on the 14th December, our 11th home league game of the season, gates were recorded at 69,661 compared with a budgeted figure of 77,000, this period included games against Mansfield, Burton, York & Scunny. I think Phil T mentioned that the average net ticket price is about £14.50, therefore we were £106K down on where we needed to be in Mid December, alarm bells should have been ringing then. In fact, if you take the Mansfield gate out of the equation, CT could have predicted that if things didn't change, our gates would have been £300K+ down on where they needed to be for the season.
At this point, or before, the budget should have been revisited and control measures put in place, especially as we were £130K over budget on the playing side before a ball had even been kicked. It's obviously near on impossible to start touching fixed term contracts, but some of the cost cutting measures that have been put in place this season, players no longer stopping at Casa, redundancies, etc, should have been put in place 12 months ago. It just shows the volatility or lack of understanding, when we can go from awarding pay rises right across the business to making redundancies in less than 12 months.
Last season, staffing costs were equal to 63% of our turnover and it is certainly an area that needs looking at and reducing. If the Club are serious about cost-cutting, this is the area to focus on, not trying to shave 10p / 20p a unit off pies, programmes, meat, produce, alcohol, etc.
It's funny that you should mention the non-playing football related staff, there's one name that crops up in conversation, time and time again.
h again, on 18 December 2014 - 07:37 PM, said:
2. Difficult job even for the Devil to defend the bonus structure. It seems to have been more an Eldorado than a planned incentive scheme. Even if it started off as a bit of a shot in the dark it should have been very carefully monitored as the figures came in, but by that time it's written into contracts anyway and probably too late to change. And we have to remember that PC favours smallish wages, where possible, with big bonuses - so that's how we got there in the first place, to attract decent players. Sounds like a cuddly little animal that turned into a monster and gobbled up its creator, but these things should be foreseen.
What annoys me about the JPT bonuses is that I'm sure I recall the same thing happening 2 years earlier!
Assuming that these bonus clauses were written into the players' contracts at the start of the season/when they signed, how can the Club specify an actual amount (I'm sure PC said £20K a man at the AGM) payable upon reaching the final at Wembley without 1) knowing who the opposition would be, 2) what the attendance would be & 3) what the receipts would be?
I've no issues with awarding a nominal amount for reaching the JPT final, but anything over and above that should have been expressed as a % of profits on the day. Perhaps the Club need to research a good bonus system that's linked to a whole host of variables (turnover, net profit, bad debt, cash in bank, the list goes on).
Bumper pay days should always benefit the Club first and foremost.
h again, on 18 December 2014 - 07:37 PM, said:
3. The concerts are speculative ventures and run the risk of a loss, even with the best marketing. Somebody has to decide if the risk is worth it, but I doubt that would have been CT.
I think to a certain degree we did get the acts wrong. TJ, rumoured to be DA's choice was a poor option, the gate on the night must have been 2.5K - 3.5K down compared with the EJ gig. As for the Sunday, we got the pricing wrong at £35+ for a ticket. Not only that, many of the artists were appearing at similar events in the area so people had options.
We were slow to promote the concert weekend, we reacted at the last minute to poor sales by dumping tickets in desperation. I think it showed just how out of touch we were when we got the Peak FM breakfast lot to host it. I'm pretty confident in saying that the target market for the Sunday gig wouldn't have been listeners to Peak's breakfast show!
h again, on 18 December 2014 - 07:37 PM, said:
4. The Off on Holiday grumble. Irrelevant - still leaves plenty of time for Admin, and I certainly wouldn't begrudge any of the staff joining the fun. It promotes bonding - and who wants to miss a p**s-up?
Month end, year end and faced with a £1M loss.
Does the CEO really need a bonding trip?
h again, on 18 December 2014 - 07:37 PM, said:
5. Short of facts, as we all are. Presumably we could have afforded Higdon if he'd accept a lowish wage, with big bonuses and add-ons - see above. His agent didn't think so, obviously - it might have meant less for him - so after a lot of argy-bargy he took himself off to annoy somebody else. We were probably never really in the hunt in the first place, but PC must nearly have sold him the idea before money talked.
It was in the public domain at the beginning of June that we had spoken with Higdon, then on the 4th July, his club said that we had been unable to agree personal terms. At this time, I was also aware that there would be no further signings until a board meeting had taken place on the 17th. Only the following week did CT start to put some distance between us & the player in the media.
I think it suited us to be linked with the player and that's about it.
h again, on 18 December 2014 - 07:37 PM, said:
6. Not good. Cookie gave a hostage to fortune when he told DA at his interview he could manage on a shoestring, which was true, but there's no need for DA and CT to make him prove it every week. Still, he must have had an idea at least that there wasn't much in the kitty - he's canny enough to read the tea leaves.
Agreed
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