Mills to Leicester 5 Million

[Ian Royal]

Why do so many people struggle to cope with the concept of a deficit in the club's budget. That is not a one off thing. We sold Gylfi and plugged that hole for one season. It doesn't magically stay plugged.

We let one player go, who may or may not have been on particularly high wages and we signed three others for that season at that time. The wage bill isn't going to be significantly lower than it was at the start of last season. It may even be higher (pre-Mills going anyway).

McDermott is also hardly likely to say "whoop, we've got £5m smackeroonies sitting in my wallet just waiting to be spent!! All you clubs out there we're looking to buy from, please whack another zero on your asking price, we're loaded and looking to splash the cash!!!! I'm mad me!!"

[Who Moved The Goalposts?]

We let one player go, who may or may not have been on particularly high wages and we signed three others for that season at that time. The wage bill isn't going to be significantly lower than it was at the start of last season. It may even be higher (pre-Mills going anyway).

McDermott is also hardly likely to say "whoop, we've got £5m smackeroonies sitting in my wallet just waiting to be spent!! All you clubs out there we're looking to buy from, please whack another zero on your asking price, we're loaded and looking to splash the cash!!!! I'm mad me!!"

Agree with the second bit, but I think the "hole" is around half of what it was. We have reuced the wage bill considerably and regardless of the football side of things, I bet we'll be better off wage wise even when Mills replacement is signed.

[andrew1957]

Why do so many people struggle to cope with the concept of a deficit in the club's budget. That is not a one off thing. We sold Gylfi and plugged that hole for one season. It doesn't magically stay plugged.

We let one player go, who may or may not have been on particularly high wages and we signed three others for that season at that time. The wage bill isn't going to be significantly lower than it was at the start of last season. It may even be higher (pre-Mills going anyway).

McDermott is also hardly likely to say "whoop, we've got £5m smackeroonies sitting in my wallet just waiting to be spent!! All you clubs out there we're looking to buy from, please whack another zero on your asking price, we're loaded and looking to splash the cash!!!! I'm mad me!!"

Agree in part but one annoying thing is that when we sold Siggy we were told that it was to fill the 2011-12 shortfall - not the 2010-11 shortfall that had already been budgeted for from previous sales.

So if this 5M is not reinvested are we filling the 2012-13 shortfall or already looking ahead to 2013-14.

Surely there comes a point when you do have to reinvest something.

[The Rouge]

I personally don't struggle to understand the deficit at RFC, but we have sold players for a lot of money in recent close seasons - this year, we may see £11-12 million if so for Mills and Long + the money that came from FA Cup run and playoffs not being in the budget. With this in mind, it is not unreasonable for possibly £5-6 million to be reinvested in transfer fees (or cheaper but higher wage players).


(Do donny get 20% of transfer fee or profit for Mills?)

[PEARCEY]

Why do so many people struggle to cope with the concept of a deficit in the club's budget. That is not a one off thing. We sold Gylfi and plugged that hole for one season. It doesn't magically stay plugged.

We let one player go, who may or may not have been on particularly high wages and we signed three others for that season at that time. The wage bill isn't going to be significantly lower than it was at the start of last season. It may even be higher (pre-Mills going anyway).

McDermott is also hardly likely to say "whoop, we've got £5m smackeroonies sitting in my wallet just waiting to be spent!! All you clubs out there we're looking to buy from, please whack another zero on your asking price, we're loaded and looking to splash the cash!!!! I'm mad me!!"

I don't agree at all. The sale of Siggy came at a time when last season's hole was around half-way to be being covered off. His sale not only filled in the rest of the hole but left a fair bit over. OK we then made some signings but I would reckon we would still have been in the black. Add on the FA Cup and play-off money and like I said previously I cannot work out why we are still £4 million down.

[No Fixed Abode]

So - you sell Mills to Leicester for £4.5 plus add ons. Surely McDonut should be given approx £1.5m to buy a defender or a few cheap players from Ireland.

[Svlad Cjelli]

Is everyone taking this statement at face value?

When you go into a negotation do you really want to say to the world "look at all this money I've got to spend....."?

[Ian Royal]

Why do so many people struggle to cope with the concept of a deficit in the club's budget. That is not a one off thing. We sold Gylfi and plugged that hole for one season. It doesn't magically stay plugged.

We let one player go, who may or may not have been on particularly high wages and we signed three others for that season at that time. The wage bill isn't going to be significantly lower than it was at the start of last season. It may even be higher (pre-Mills going anyway).

McDermott is also hardly likely to say "whoop, we've got £5m smackeroonies sitting in my wallet just waiting to be spent!! All you clubs out there we're looking to buy from, please whack another zero on your asking price, we're loaded and looking to splash the cash!!!! I'm mad me!!"

I don't agree at all. The sale of Siggy came at a time when last season's hole was around half-way to be being covered off. His sale not only filled in the rest of the hole but left a fair bit over. OK we then made some signings but I would reckon we would still have been in the black. Add on the FA Cup and play-off money and like I said previously I cannot work out why we are still £4 million down.

We're not STILL £4m down. Deficit is not debt, last season's deficit was covered and iirc we actually made a small profit, now there is this season's deficit to deal with. Everything you are talking about is one off income, not repeat income. Our expenditure has not significantly gone down, we're spending more than we bring in. Therefore this season will see us operating at a loss, so money from Mills will go to offsetting this.

[Royal Rother]

This is true and the club has done spectacularly well in buying cheap players that have progressed into quality players. However, in the long term the house always wins, you cannot defy gravity and you cannot keep selling players for millions and replacing them with players for thousands without it having a long term drag on performance.

I'd rather we sought to keep the players we've made into the finished article rather than buy the finished article elsewhere.

In an ideal world so would I, but this isn't an ideal world. The financial muscle of Reading FC is so slight that we can't keep the players we've improved - whilst the same is true of just about every club in the world, it seems to hurt us more because we're so good at finding and improving players.

I'd put this another way. The rank stupidity within our fan base just beggars belief and clearly stretches well into middle age and beyond.

If we had a financial hole in our accounts, it's now gone up in smoke and whilst their are clubs who are willing to engage vastly over rated managers like SGE, who must be one of the biggest money pits the game is has ever known, there's no reason why clubs like RFC can't continue to make millions out of buying and selling the likes Doyle, Kitson, Long and (amazingly) Matt Mills.

Furthermore, I would take issue regarding our financial clout. Where did Leicester finish last season? Where were they a few seasons ago? In division 1. I'm a Mills fan but if he's worth £5 million it's time to flog my old wellies on EBAY and take a month off Everytime this happens we get richer and they will probably end up the poorer.

We should all be doing cartwheels for the rest of today and our serial wrist slitters (rather than crying into their beer because we will, quite rightly, be spending fraction of the proceeds on a replacement) should ponder the fact that it appears we TURNED DOWN £3.75m for Mills before accepting a higher offer. How does this equate with the percieved money grapping qualities of our Chairman and how many financially weak clubs could contemplate such financial
brinkmanship? If anyone still thinks we're busting a gut to sell Long for anything other than the very best price Nick Hammond can squeeze out of potential suitors, it's time to give your self up to someone wearing a white coat.

From this day forward, Squeeky walks on water and Brian should have the very capable Ian Harte, along with those vital free kicks, pencilled in for central defence and I'd be amazed if our search for an accomplished left back hasn't been under way for weeks...............................the net result being that both our defence and current account should start the new campaign in better shape than they finished the last whilst there's more chance of hell freezing over than the same applying to Leicester.

QED

Excellent post.

[Wycombe Royal]

Is everyone taking this statement at face value?

When you go into a negotation do you really want to say to the world "look at all this money I've got to spend....."?

Leicester do......and look what happens.......

[Svlad Cjelli]

Is everyone taking this statement at face value?

When you go into a negotation do you really want to say to the world "look at all this money I've got to spend....."?

Leicester do......and look what happens.......

Quite! They get fleeced into paying through the nose.

[TheMaraudingDog]

Do pople actually belieive the accounts that RFC decide to show? Any club can release info hiding facts. Looks like JM is the master at this, not even the Glazers cover their tracks as well.

JM, milking RFC for millions while somehow keeping an army of divs happy.

[Extended-Phenotype]

^But we don’t seem to get richer.

Or promoted, for that matter.

[Ian Royal]

Do pople actually belieive the accounts that RFC decide to show? Any club can release info hiding facts. Looks like JM is the master at this, not even the Glazers cover their tracks as well.

JM, milking RFC for millions while somehow keeping an army of divs happy.

You should leave this sort of poor quality wumming to Kes. You're much better than this. And believe me, that's damning you with faint praise.

[Ian Royal]

^But we don’t seem to get richer.

Or promoted, for that matter.

We're £20m odd in debt. We get less poor.

[brendywendy]

I personally don't struggle to understand the deficit at RFC, but we have sold players for a lot of money in recent close seasons - this year, we may see £11-12 million if so for Mills and Long + the money that came from FA Cup run and playoffs not being in the budget. With this in mind, it is not unreasonable for possibly £5-6 million to be reinvested in transfer fees (or cheaper but higher wage players).


(Do donny get 20% of transfer fee or profit for Mills?)

^^^^^^^^this

although id say more likely to e 5-6 million reinvested in transfer fees and new players wages

[mr_number]

I do quite like Mills as a player, but £5m is bonkers money, and a good deal for the club.

Just having a quick look at our last published set of accounts (for the year up to 30th June 2010):
Revenue was £27,665,000 (compared to £51,575,000 for our last season in the Prem)
Wages (all wages, not just players) totalled £18.1m (compared to £31.1m for our last year in the Prem)
We've got long term loans of about £15m, and some other long term borrowing which isn't clear what it is of £12m. These have stayed roughly constant over the last 8 years.
There's an additional £8m of 'Director loans', due within a year, which were only taken out for the first time the year after we got relegated.
That year we made a profit of £1.8m. I think that would have included a parachute payment in revenue as well (someone can correct me if I'm wrong...)

In the Premiership years we made profits of about £6m p.a, but in the two years before that, we lost about the same amount of money.
Interesting to see we have to pay around £500k a year interest on borrowing.

I haven't gone through everything to see exactly what's happening, but it's clear that even with parachute payments, things weren't massively rosy. Will be interesting to see the accounts for the year just ended, and see the impact of selling Gylfi, and how much the wage bill has changed now.

[Ian Royal]

Can't count anything for someone we haven't sold yet.

Therefore £4.5m for Mills (rising to £5.5m), less (allegedly 20% of profit) £700k ([4.5m - 1m]/5=0.7m for Donny) = £3.8m - £2m annual deficit = £1.8m to spend at best, before you take into account any contingency funding, or extra payments towards reducing existing debt.

[TheMaraudingDog]

Do pople actually belieive the accounts that RFC decide to show? Any club can release info hiding facts. Looks like JM is the master at this, not even the Glazers cover their tracks as well.

JM, milking RFC for millions while somehow keeping an army of divs happy.

You should leave this sort of poor quality wumming to Kes. You're much better than this. And believe me, that's damning you with faint praise.

A I'd have thought you'd be too intelligent to see through the smoke screens.

For a club that has no debt, no rental expenditure, a very sensible wage structure and a decent commercial revenue there is no way adding in the TV money, the prem money, the parachute payments and the absolute millions made on transfers that RFC is not making a huge coin. No way at all.

[Ian Royal]

Do pople actually belieive the accounts that RFC decide to show? Any club can release info hiding facts. Looks like JM is the master at this, not even the Glazers cover their tracks as well.

JM, milking RFC for millions while somehow keeping an army of divs happy.

You should leave this sort of poor quality wumming to Kes. You're much better than this. And believe me, that's damning you with faint praise.

A I'd have thought you'd be too intelligent to see through the smoke screens.

For a club that has no debt, no rental expenditure, a very sensible wage structure and a decent commercial revenue there is no way adding in the TV money, the prem money, the parachute payments and the absolute millions made on transfers that RFC is not making a huge coin. No way at all.

You failed Maths GCSE didn't you.