Reading's wage bill in perspective

[Huntley & Palmer]

So those that are moaning about a lack of investment, might want to look through the document if they have access to it

Doesn't that just show that outside of the top four and the relegated clubs we didn't invest as much of our income as the rest of the league because we actually made a profit.

I prefer to look at it from the perspective of being a well run club which will stand the test of time financially. Sunderland look as though they would have to make huge cuts to their squad if they had failed this season, similarly Boro would be pretty screwed if they were to be relegated. It's all about treading a thin line, gamble the future financial health of your club by attracting players with big wage offers or try and do it the 'correct' way.

[Arch]

So those that are moaning about a lack of investment, might want to look through the document if they have access to it

Doesn't that just show that outside of the top four and the relegated clubs we didn't invest as much of our income as the rest of the league because we actually made a profit.

AKA not taking absolutely every liquid asset we have and gambling with it.

[Bacon Double Cheese]

We doubled our wage bill for the first season in the Premiership (up 109%) yet were still considered poor payers in comparison with the clubs near the bottom of the league and therefore couldn't attract players?

Or have I got that utterly, utterly wrong

[RoyalBlue]

So given wages in the chumpionship top out at around £19m max, we're at least £10m over that.

Bearing in mind Hunt would cost us about £2m max, thats a lot of cuts just to drop to the same as the huge spenders in tier 2.

The quoted 40% drop in wages takes us to £17m ish. Thats still very high. No wonder we need to get rid of a few players as well.

But of course, where has all the money gone. wah wah wah

Only as Southbank Old Boy pointed out, this is the total wage bill for Reading FC (Holdings) Plc so unless you know how many non-playing staff are included in that figure and how much they are paid you can't be sure you are comparing like with like and that our playing staff costs are so much higher.

I prefer to look at it from the perspective of being a well run club which will stand the test of time financially. Sunderland look as though they would have to make huge cuts to their squad if they had failed this season, similarly Boro would be pretty screwed if they were to be relegated. It's all about treading a thin line, gamble the future financial health of your club by attracting players with big wage offers or try and do it the 'correct' way.

Trouble is I think both the figures and time will tell that it just isn't possible to 'compete effectively' at this level in the 'correct' way.

[Southbank Old Boy]

So those that are moaning about a lack of investment, might want to look through the document if they have access to it

Doesn't that just show that outside of the top four and the relegated clubs we didn't invest as much of our income as the rest of the league because we actually made a profit.

AKA not taking absolutely every liquid asset we have and gambling with it.

To an extent yes.

But also we failed to speculate with the guaranteed income we had projected and didn't invest enough, IMHO, for the future. All businesses need to invest in their future success. The market place we are working in means that liquid assets and making a profit are luxuries.

I do agree with H&P, and you Arch I suppose, that there is a fine line between gambling the future of the club and being overly prudent. Personally, from what I can see, we didnt get close to the line let alone cross it.

[brendywendy]

We doubled our wage bill for the first season in the Premiership (up 109%) yet were still considered poor payers in comparison with the clubs near the bottom of the league and therefore couldn't attract players?

Or have I got that utterly, utterly wrong

nope

thats about the size of it

[brendywendy]

AKA not taking absolutely every liquid asset we have and gambling with it.

To an extent yes.

But also we failed to speculate with the guaranteed income we had projected and didn't invest enough, IMHO, for the future. All businesses need to invest in their future success. The market place we are working in means that liquid assets and making a profit are luxuries.

I do agree with H&P, and you Arch I suppose, that there is a fine line between gambling the future of the club and being overly prudent. Personally, from what I can see, we didnt get close to the line let alone cross it.

we didnt gamble with projected income, and still only made 6 million profit
what would be the point of gambling so much that we made a loss each year like we have and will do at championship level?

[ShrewsandRoyals]

Last season would have included a lot of win/draw bonus element. That could be a fairly high component of the overall amount.

It is possible that this year will be significantly lower due to lower bonus components. It's hard to really judge things accurately without the full information.

[Silver Fox]

Am I the only one tittering at the heading 'Wage Rank'?

Not any more

[Dirk Gently]

We doubled our wage bill for the first season in the Premiership (up 109%) yet were still considered poor payers in comparison with the clubs near the bottom of the league and therefore couldn't attract players?

Or have I got that utterly, utterly wrong

nope

thats about the size of it

And it just shows you the quite ludicrously unrealistic numbers involved here, and the massive gap between each tier.

For instance, last season the Chelsea back four were paid more in wages than all the players in all the 24 squads in League 2.

[Arch]

Doesn't that just show that outside of the top four and the relegated clubs we didn't invest as much of our income as the rest of the league because we actually made a profit.

AKA not taking absolutely every liquid asset we have and gambling with it.

To an extent yes.

But also we failed to speculate with the guaranteed income we had projected and didn't invest enough, IMHO, for the future. All businesses need to invest in their future success. The market place we are working in means that liquid assets and making a profit are luxuries.

I do agree with H&P, and you Arch I suppose, that there is a fine line between gambling the future of the club and being overly prudent. Personally, from what I can see, we didnt get close to the line let alone cross it.

The thing is, these figures suggest that we were on a par with the likes of Bolton and Wigan - teams who were touted as outspending us on wages. Those who say we underinvested on wages are now going to have to say that we should have been up among the Evertons and Villas. I don't know how you can justify that.

On the other hand, the problem may be (as pointed out by JM and Nigel Howe) that we've been spreading our wage commitment too thinly. Smaller squad higher wages may be the mantra next time we're in the Premiership - it would be compatible with "reasonable" financial commitment while still attracting better players.

[biscuitsrus]

Last season would have included a lot of win/draw bonus element. That could be a fairly high component of the overall amount.

It is possible that this year will be significantly lower due to lower bonus components. It's hard to really judge things accurately without the full information.

Good point, on that basis our wage bill will have dramatically shrunk like a naked mans gonads in the Artic.

[brendywendy]

Last season would have included a lot of win/draw bonus element. That could be a fairly high component of the overall amount.

It is possible that this year will be significantly lower due to lower bonus components. It's hard to really judge things accurately without the full information.

Good point, on that basis our wage bill will have dramatically shrunk like a naked mans gonads in the Artic.

lOL

but we also increased the wages significantly for some players so it will still go up

[Stranded]

Interesting article in the EP today, worth a read:

Nigel Howe has revealed that Reading have had to tighten their purse strings because of mounting bank repayments and the fact that chairman John Madejski no longer subsidises the club.

Madejski has spent around £40million on Royals since taking over the helm in December 1990.

While he is sure to recoup that and more when he sells up, the multi-millionaire boss is desperate for the club to be financially self-sufficient.

Reading netted an estimated £50million from their two years in the Premier League and will receive £11m in parachute payments for the next two seasons following relegation to the Championship.

Manager Steve Coppell spent only a fraction of his available budget on new signings, but has still been told he must sell before buying this summer.

However, Reading FC chief executive Howe revealed that the playing and coaching staff’s wage bill shot up from around £9million to £30million following promotion – and that went up again slightly last season.

Although salaries will now be slashed by around 40 per cent, Royals are still on a tight budget as they are repaying bank loans.

In an exclusive interview with the Evening Post, Howe revealed: “We have got players on enormous wages and even though wages have been cut we now only get £11m compared to £30m had we stayed up.

“There is also the cost of the training ground, refurbishment, overdrafts, loans and a new pitch cost £1m.

“In previous years we have made substantial losses and had huge overdrafts. We have to cover for those and that means we have large bank overdrafts.

“But the money certainly hasn’t been squandered. We have had to repay debts and pay capital expenditure for things like the training ground, refurbishment work and keeping things up-to-date.

“Banks always want their money back, especially from a club that gets relegated. When that happens they want it back very quickly.”

Madejski used to subsidise the club with loans, offering far better rates of interest than banks, but he stopped that several years ago with the aim of getting Reading to be financially stable on its own.

“John Madejski is not putting money in now – he hasn’t for a long time,” revealed Howe.

“He can’t go on putting money in every five minutes. He wants the club to stand on its own two feet and be self-sufficient and that’s not unreasonable.

“He has put a lot of money in over the years and he still has loans he’s owed by the club.

“He loaned the club money to build the hotel and money that has been invested in the club over a number of years, including when we moved from Elm Park and we have to balance things up.

“He is still owed money. In loans and shares he has made an investment of around £40million and that is enough for any bloke.

Restrictions

“He (Madejski) may make a profit if and when he sells, but no-one has shown any interest yet.”

Despite the tightening of the purse strings and Coppell’s restrictions in the transfer market, Howe insists Reading are in good shape to rebuild.

“We are financially stable – as much as we can be considering we have lost around 50-per-cent of our potential income,” said the chief executive.

“Despite coming down to the Championship, we are in reasonable shape to either maintain the squad or add to it.

“What we have said about selling players is right but ideally we are going to listen to the right offers and unless we get the right offer then no one is going anywhere.

“I would say we will more or less have the same squad next season.

“He won’t want to buy if no one goes – he will only want to do that if he sells players.

“If some did go that money would be re-invested into the squad. That’s what West Brom did.

“I think they sold £17million worth of players and brought in £10million players, but there is no panic to sell players and there is no pressure to sell.

“We might be able to pick up one or two players on loans and he has said the squad is too big anyway.”

[biscuitsrus]

Talking Heads...............Road to Nowhere. Loan deals!!!!!!!!!! FCUK

[Platypuss]

Last season would have included a lot of win/draw bonus element. That could be a fairly high component of the overall amount.

It is possible that this year will be significantly lower due to lower bonus components. It's hard to really judge things accurately without the full information.

Good point, on that basis our wage bill will have dramatically shrunk like a naked mans gonads in the Artic.

lOL

but we also increased the wages significantly for some players so it will still go up

The broadcasting deal was also substantially larger last season.

All just speculation.

[kevan]

Wouldnt the figures for the holding company include revenues and costs for the hotel and conference centre too - this would distort comparions

[brendywendy]

howe said wages did rise slightly for last season, so will probably be at or above 30million
which is about the level of the money we wont be getting this season
so its clear to see why they feel the need to sell a few players

[weybridgewanderer]

Trouble is I think both the figures and time will tell that it just isn't possible to 'compete effectively' at this level in the 'correct' way.

For the time being yes

But I really do believe that in a few years the money men will move on to the "next big thing". That will be around teh same time the far east has a new fad and they all have their favourite snooker/darts players

Then we will see major chanegs and some very big clubs "doing a leeds"

[East Stand Royal 500]

The thing is, these figures suggest that we were on a par with the likes of Bolton and Wigan - teams who were touted as outspending us on wages. Those who say we underinvested on wages are now going to have to say that we should have been up among the Evertons and Villas. I don't know how you can justify that.

On the other hand, the problem may be (as pointed out by JM and Nigel Howe) that we've been spreading our wage commitment too thinly. Smaller squad higher wages may be the mantra next time we're in the Premiership - it would be compatible with "reasonable" financial commitment while still attracting better players.

Spot on. But you'd need to get rid of a lot of squad players to pay for new "talented" players and would need to play the new boys as well as pay them. What gets me is paying players with potential just for sitting around while they get used to the demands of the English prem or try to break into the first team.