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'If It's Football, It's Vital'

So where has the money gone?



Couch Potato leans back, stretches out, and reacts to the Chairman's Official Statement in the third of his mini-series of articles regarding the club's finances.

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It's an interesting feeling to have taken on the role of doing a mini-series of articles on here about Burnley FC's finances, only to have the Chairman join in, albeit on the official site!

Well, at least I can put my feet up now, and do what a Couch Potato does best... make sure my ClaretsPlayer sub is paid up, do a dummy run to see if I can remember my password, and lie back ready for Phil Bird and his pals 20 minutes before kick off. Unless we've sold Phil along with all the rest of them? I've not got enough fingers...

But I started this mini-series, so I'll finish. Anyone who can remember as far back as the first article will recall that I don't pretend to know all the answers, but am just trying to see what information we can gather together in one place, if we have VitalBurnley articles dedicated to specific financal topics, rather than just make passing comments on issues as they arise in debates about the latest link, the new loan, and now even a signing!

Thus far we've established what the income has been year-by-year since we started the road to Wembley with - what was it? - a 4-2 loss to Brian Laws and a parachutist stuck on the Cricket Field Stand Roof.

We've also looked at various questions around directors' loans... On this Barry Kilby has now stated that the club had 'wiped the slate clean' coming into the relegation year. Which was intersting to me, because someone with a Burnley shirt on Torquay station after the 3-1 in the south coast sunshine claimed that BFC still owed Barry a million. Which just goes to show that if you want to know what's going on, it's probably not worth whatever it is for a return train ticket from wherever you are to ask TorquayStationClaret.

What else did ChairmanClaret tell us that was new? Well, it depends on where you're starting from. But if you've read CrosspoolClaret's (aka whatever he's called in real life) article in WTBM from about January this year, you'll have learned that, after the £11million loss in the promo year, and the £14million profit in the PL, which we already knew about, we're now expecting a £4million loss from our sadly failed attempt to bounce back first time.

You'll also have learned that in our player trading over those three years we've lost £6-7million. (Would the noisy cynic at the back please shut up about us knowing exactly how much if we hadn't lost it!) And no, I don't know whether that includes the alleged £1million we got for *oyley (and the gang) who was of course still registered as a player, and might still be for all we care. Nor do we know whether the alleged £1million we had to pay Brian to leave early is included in the reckoning.

ChairmanClaret has of course reminded us that we can read all about it in the accounts. Those for the promotion and relegation years are available from Companies House (and possibly also the club?). Those from last year will be available after the AGM, which is usually in December. Of course, official accounts don't go into all that much detail, but they will show one thing very, very clearly...

The lion's share of 'the money' went on players. First there was buying players to get us promoted. The payroll that year was more than we could afford, and would have been the major reason for the £11million loss, together with having to pay promotion bonuses. Then there was buying players after we got promoted. And buying players in what must have been our toughest transfer window ever. And paying them PL wages. And buying players since then and paying them the sort of wages you can afford when you're dangling by a parachute before they cut the strings... at a rate that put us in the top quarter of the payroll league table in the Championship last year.

ChairmanClaret's statement has confirmed that our players won't be keeping the club in that part of the payroll league table any longer. But they will still be costing us at least 60% of our income, even though it is still inflated by the two remaining £8million parachutes this year and next.

QUIZ: Can you list on here all the players bought by Coyle, Laws and Howe? And all the players sold by them before the start of this year? Can you add numbers to that? Remember, the answer is minus £6million (or minus £7million)!

While you're busy on that, I'll try to make a list here of everything else we've spent money on, beyond just keeping the ship afloat, since wonderful Wembley...

1. We had to do stuff to the ground to keep SKY happy, like make sure that all journalists had their own screens to watch instant replays in case they missed the action first time. (I hasten to add that this courtesy was not extended to Vital Burnley's team! Why was that turfman?)

2. We did some other stuff to the premises, like giving the Turf a nice going over in claret and blue, and replacing the communal bath!

3. We spent a million on improving the playing surface. Lovely jubbly!

4. We've improved things down at Gawthorpe, like put in showers, which I know some people may think means we've gone soft, but this is the 21st Century!

5. Then there was the cost of ChairmanClaret's PL Pledge, not only giving back the money to season ticket holders from the previous year who wanted it back, but all of the admin in contacting both them and the ones who kindly said keep the cash and send me shares. (I applaud them, without feeling grumpy about the ones who took the windfall, and sadly live too far away to make a season ticket a sensible option for me at the moment.)

6. Yes, some money went back to directors, all of which was covered in the previous article.

7. Does anyone know, when you buy a player for '£1million' whether that includes VAT (if applicable), and agents' fees, and lawyers' fees? Or are they extra? When was it VAT went up from 17.5% to 20%? When did NI contributions go up? All since that 4-2 loss to Laws.

8. Meantime, we've 'tripled' our scouting network, Chairman Claret has advised this week, which together with the improved faciltiies at Gawthorpe will hopefully mean more young players coming through, on top of those who had a more than useful run out against Sunderland, especially now we're not limited to only being able to sign on those who don't mind not being able to take a shower... though Chairman Claret has reminded us that, while our plan is youth, it isn't cheap, because many are signed on, but only the lucky few go on to do a job after graduating. (Just like Britain under the Coalition? Please fogive my deviation into politics.)

9. What other costs have I forgotten?

While I am trying to remember when was the last time our club captain had come through the ranks (which I have forgotten), please fill in my probably glaring gaps and correct my appalling errorrs by posting comments in the box below and pressing submit. Here we go!

And do please let me know what you think of this article, if you're still bothered now the football's started!

THE END (but not yet closure)

Couch Potato
The Journalist

Writer: turfmanphil Mail feedback, articles or suggestions

Date:Monday August 8 2011

Time: 8:32AM

Your Comments

Great read CP A down to earth reality of the challenge of keeping this football club we love alive for our Children and childrens children, to follow and be be proud of.
grimsby claret
I have be considering what has been written and said over the last few weeks, it is interesting that the chairman choose to become so public with his answers to many of the questions we have been raising on this forum, it leaves me wondering if VB perhaps does get read by influential personnel at turf moor and if so it demonstrates hat constructive debate is always a good thing ! or whether the statement from the chairman was purely coincidental, either way it was desperately needed. Two points on this, one the communications team should have picked up on such frustration and moved sooner to correct some of the speculations, but two thank god we have some answers! I will be posting over the coming days on this because for me many answers raise further questions, Whilst I now appreciate its not been so easy with the parachute monies, I still feel some of our business planning is based on a poor strategy, for example why have a wages cap? that's like communist Russia where every one good a spud and two eggs a week, they all got the same so no one moaned .... well folks they did....... in a free capitalist society why can the manager not just have an annual budget and reward his players on ability, Turf Man makes a great point on one of the posts yesterday about this ! also Couch the directors loans WERE NOT completely wiped clean if they were Burnley Football Club would own it's own ground and as you may recall Mr Kilby gave an interview earlier this year confirming that this was one of the most important jobs of the board to return the ground ownership BACK to the club, further in the chairman's interview his maths simply don't add up, I will pick up on this point later this week. However, what I would say is that I was impressed by Mr Kilby and his heart is in the right place, as are all the board members, the question for us as clarets fans is .... is this enough, are they capable of developing a strategy that will see us promoted before the monies runs dry I hope so, I cant help but like BK and BF I just think they need to grow a pair and start to take some of the risks needed to resource this team properly for EH
hollinsclaret
Hollins. It's great to read your thoughts on constructive debate. I hope that more and more Clarets will in time come looking for more of that here on VB, knowing that we argue robustly but are all, I think, quite happy to share a beer and a laugh. (I have TMP's ticket for the Palace in my wallet. We'll be in a pub somewhere near Thornton Heath railway station beforehand, London rioters and the world economy willing.) I look forward to your further, more detailed, thoughts. On a technical accounting point, would an arrangement concerning investment in the club based on ownership of the ground be classified as a directors' loan? My suggestion would be that it would not. So EH and BK may both be right! Maybe ChairmanClaret can clear up this point? I am just repeating what he said.
Couch Potato
There are rumours of disorder on the streets of Twickenham tonight....Waitrose has run out of pate ! I jest of course - I feel desperately sorry for the ordinary, hard-working folk of Tottenham, Enfield, Hackney et al who have lost their homes and businesses and above all the freedom to walk round their own communities in safety. The brave toytown gangsters causing havoc should get a taste of life on the front-line in Afghanistan or Iraq. Anyway, back to CP and I think this was his best effort yet. Some interesting questions and a healthy dose of tongue-in-cheek humour but also the latent realisation that, as fans, all we want is to see the team win games. Many of us, me included, want to see admission prices reduced but also want to see better players signed on higher wages. We can't have both. I know my way round a balance sheet but have no knowledge of BFC's finances. I do know though that on gates of around 14000 it is going to be tough to survive.
RickersTwickers
Thank you for the kind words, RT, and Grimsby earlier. I'm hoping the riots won't have spilled over into Selhurst by Saturday, RT. A friend of mine who was on page 2 of The Guardian the day we played Sunderland predicting a London summer of knife crime as a result of government cutbacks in youth work lives not far away from Palace, so perhaps I'll ask for his latest prediction tomorrow? The last home-grown club captain, by the way, was Chris Brass, Daz Bentley informs me after consulting club historian Ray Simpson. Next question... who was the last player to achieve the feat before Chris? I haven't got a clue! But while you're worrying about that, I am busy turning up some surprising (to me anyway) conclusions in my next article, about whether or not we 'went down stronger'. Then I'll do something about the pros and cons of new directors... and that will bring this mini-series to an end.
Couch Potato
Yeah, another excellent read Couch. It's been interesting to 'discover' that most of the cash has gone on players, but then again most of us probably knew, or at least suspected that. Most of us have also been wondering for quite some time now, when football will return to some kind of normality in financial terms and although moves are afoot at the moment, the massive financial gap between the premiership and the championship remains a stubborn and formidable obstruction to any solution. It's the fans who ultimately pay of course, not only with their hard earned cash for tickets (and travelling !), but also with regard to who they end up supporting and the demographic circumstances of that town. We end up ‘paying’ or suffering because of the limited gate income as has been pointed out above , and what the solution to that problem is I don’t know. What does seem pretty certain though is that we have no choice but to trust in Eddie and his judgement on 'cheaper' players, and if Treacy's performance along with Mee and Trippier on Saturday are anything to go by , then there's always a chance. And the chance has got to be taken , because if we don't get another transfusion of premiership money soon then we all know we'll be in Dire Straits again. Just love the way he plays that guitar.
WelshClaret
Some interesting comments from Crosspool about our losses on player trades (and the wages linked to those trades) in the thread on Pato's latest injury problem, put up the day after this thread. I have joined in that debate with him there. Thus far, I think we have agreed that we've made some poor trades in the post-Cotts era. It would be interesting to do a tally of the separate records of Coyle, Laws and Howe thus far. My instinct is that Coyle would come out looking a very, very poor businessman. Laws would come out looking okay apart from the Cort disaster, made under almost impossible circumstances, but when he also brought in Cork and Fox. Howe would come out looking shrewd thus far. Maybe this should be the topic of a separate article? As I said earlier in this thread, the new article I am writing about whether or not we came down stronger is making me re-evaluate a number of my opinions when I look at the detail.
Couch Potato
 

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