Some points for the record. Anyone who wants to can request accounts from companies house -
http://www.companieshouse.gov.uk Firstly- RFC Holdings includes both the hotel and the results of the football club. Reading Football Club is just the club. The hotel was initially loss making and seperately loaned money from SJM. It has now profitable and has paid this back and could now potentially subsidise the club.
Secondly, SJM takes no salary, no dividends and no money out of the club other than interest on his loans of £20m. This is at a rate BELOW base rate, so is currently NIL. If anybody feels like abusing the man please ensure you would be prepared to work without any pay or reward whilst being abused in the same fashion.
Thirdly, over the last 6 years, almost every penny of our TV income from the premierleague, parachute payments and ticket revenue has been spent on players. RFC earnt approximately £60m from tv, £32m from parachutes and £40m from ticket revenues over this period and spent £130m on playing staff wages alone. Therefore all running costs of the club, stadium, training facilities and of course incoming transfer obligations are currently being met by player sales.
Fourthly transfer income is obviously paid over a number of years and dependant on numerous clauses. Therefore I think SJM makes it clear that its not as simple as spending £11m on new players, or indeed £4m. We probably can rely on an extra £2.5m a year over the next 4 or 5 years and so it is this figure that will be built into our new budgets. As we have probably budgeted to a £3m or so loss then this will result only in break even for 2011-2012, so to actually pay lots of cash for any new players right now would lead to borrowing.
Fifthly, of course this is different from most clubs, who spent either next years season ticket money (leeds, cardiff), dead peoples money that is in dispute (Soton), money borrowed against a new stadium (Brighton), Imaginary money gained by fraud (leicester) etc etc. Reading could gently pledge future cash to fund a new team but the currently strategy has given us more success than the above clubs so why change?
Sixthly, we pay our players high wages so that we attract top players and they no doubt get bonuses for all our recent success, cup runs etc, but most importantly they get high wages so they tie themselves down and can be sold for lots. An alternative would be paying lesser wages, having worse players, not need to sell them and playing in league 1. The wagebill is still big as Long and Mills will still be on it, much as Harper was the year before and Hunt and Doyle before that. Comments above the £20m is ridiculous are wide of the mark as
a) rough calculations based on football manager £xK a week do not include the 12.8% extra employees NI on all wages and the fact that bonuses are likely to have the tax paid by the company (not exactly normal but very common) which leads to a 66.67% tax rate, all of which is included in salary costs.
and b) the average championship wagebill is over £20m.
Seventhly and finally, people have asked where would we be without all these sales and surely no other champ club has brought in so much income.... well the best example is Sheffield Utd. They got a reported £25m from west ham but are now an estimated £56m in debt and of course, are in league 1. Other clubs rack up more debt each year. I did an analysis of the league in Coppell's final year and found that of the top half, only Swansea and Burnley were profitable. "wheres the money from?" would be a more appropriate chant.
