Madejski Announcement

[cmonurz]

My point was if, after fees, clauses, installments or whatever, if all we've seen of those transfers is a total £4m or so then I don't know why we didn't hold on to the players. Unless their sale was critical to the survival of the club.

Not sure why Baines is being so facetious towards RL.

[Royal Lady]

Because however much it was, it obviously wasn't enough to warrant spending some of it on new players.

[mr_number]

They would have achieved the best price they believed they possibly could.

This is a ridiculous thing to say. I think they would definitely have sold for significantly less than they could have, so that SJM could give an interview saying we didn't have money. Because he loves doing that, and having the chance to do that is the main motivation behind him running a football club.

[Bandini]

My point was if, after fees, clauses, installments or whatever, if all we've seen of those transfers is a total £4m or so then I don't know why we didn't hold on to the players. Unless their sale was critical to the survival of the club.

Not sure why Baines is being so facetious towards RL.

Because it's more than usually stupid to suggest that we should hold out for more than [an unknown sum of money].

[brendywendy]

Surprised we didn't hold out for more then.

More than what?

this

[TFF]

[Bandini]

Because however much it was, it obviously wasn't enough to warrant spending some of it on new players.

It's pretty clear that the club is run on the basis that transfer fees received don't automatically go into a separate pot to fund player purchases. Money received funds all of the club's expenditure. Every time a player is sold we don't automatically go and buy a replacement with whatever money is received. For players we anticipate going - such as Long - it may well be that we buy someone who might in time be a replacement beforehand (Manset). For other players, the club looks at what players it already has available and what players might be available for purchase or for loan and the cost of the latter.

[mr_number]

Surprised we didn't hold out for more then.

More than what?

this

But you know there's nothing more than this

[Royal Rother]

My point was if, after fees, clauses, installments or whatever, if all we've seen of those transfers is a total £4m or so then I don't know why we didn't hold on to the players. Unless their sale was critical to the survival of the club.

Not sure why Baines is being so facetious towards RL.

Guesswork here -

Total (conditional) fees £9m to £11m. (Lower end guaranteed, upper end conditional). Less agents fees etc. of circa £500k maybe.

Payments spread out over 2-3 years, so deficits covered for at least 2 years. Nice.

Alternative was to have held onto them and hope they help us achieve promotion. But whether we did or not they could still leave for nothing at the end of their contracts.

If they wern't going to sign new contracts (or face didn't fit) then it's safest to get best fee for them now and build again secure in the knowledge that the deficits are largely covered for a couple of years.

The agents fees are a total red herring - every selling club is in the same boat. SJM was merely making the point that if the fee was £6m on Long, we would not have received that much anyway, and secondly it would have been spread out over time.

[brendywendy]

i just dont get whats so hard to understand in our policy of only spending money we actually have in the bank, right now. rather than gambling on future payments we may or may not recieve like everyone else seems to do.

[Royal Rother]

They would have achieved the best price they believed they possibly could.

This is a ridiculous thing to say. I think they would definitely have sold for significantly less than they could have, so that SJM could give an interview saying we didn't have money. Because he loves doing that, and having the chance to do that is the main motivation behind him running a football club.

[cmonurz]

My point was if, after fees, clauses, installments or whatever, if all we've seen of those transfers is a total £4m or so then I don't know why we didn't hold on to the players. Unless their sale was critical to the survival of the club.

Not sure why Baines is being so facetious towards RL.

Guesswork here -

Total (conditional) fees £9m to £11m. (Lower end guaranteed, upper end conditional). Less agents fees etc. of circa £500k maybe.

Payments spread out over 2-3 years, so deficits covered for at least 2 years. Nice.

Alternative was to have held onto them and hope they help us achieve promotion. But whether we did or not they could still leave for nothing at the end of their contracts.

If they wern't going to sign new contracts (or face didn't fit) then it's safest to get best fee for them now and build again secure in the knowledge that the deficits are largely covered for a couple of years.

The agents fees are a total red herring - every selling club is in the same boat. SJM was merely making the point that if the fee was £6m on Long, we would not have received that much anyway, and secondly it would have been spread out over time.

Fine, a good post. And I note that we haven't heard from the club much about ambition for promotion in recent times, and I hope it stays that way, because no club run like this, sensible as it is, is realistically going after promotion. As you rightly state, if the PL was our goal, we'd have clung on to Mills and Long.

[Platypuss]

Not the point at all brendy - just gently querying the assertion that SJM takes "no money out of the club".

OK, so if SJM take anything out of the club, that is wrong. Is that the issue? Because if it is, then the likes of Z175 are wasting their time trying to write reasoned and informed posts.

Please feel free to show where I have said it is wrong.

The use of inverted commas was to denote I was quoting someone else. In this case it was Z175 himself.

[brendywendy]

My point was if, after fees, clauses, installments or whatever, if all we've seen of those transfers is a total £4m or so then I don't know why we didn't hold on to the players. Unless their sale was critical to the survival of the club.

Not sure why Baines is being so facetious towards RL.

Guesswork here -

Total (conditional) fees £9m to £11m. (Lower end guaranteed, upper end conditional). Less agents fees etc. of circa £500k maybe.

Payments spread out over 2-3 years, so deficits covered for at least 2 years. Nice.

Alternative was to have held onto them and hope they help us achieve promotion. But whether we did or not they could still leave for nothing at the end of their contracts.

If they wern't going to sign new contracts (or face didn't fit) then it's safest to get best fee for them now and build again secure in the knowledge that the deficits are largely covered for a couple of years.

The agents fees are a total red herring - every selling club is in the same boat. SJM was merely making the point that if the fee was £6m on Long, we would not have received that much anyway, and secondly it would have been spread out over time.

Fine, a good post. And I note that we haven't heard from the club much about ambition for promotion in recent times, and I hope it stays that way, because no club run like this, sensible as it is, is realistically going after promotion. As you rightly state, if the PL was our goal, we'd have clung on to Mills and Long.

only if you are only allowed to have one goal.which isnt the case.

where this does notapply, different goals compete with each other, and in this case our goal of financial independance is equally, if not more important than keeping our best players for promotion.
and also i dont think you or anyone else here really understands the words ambitions, and goals.

[Cypry]

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.

Probably the best post I have ever seen on this website and I've clocked up a good 12 years now.

The Finerain's of this World have a huge opportunity to get some credibility now by acknowledging this and backing the f*ck down.

Probably not gonna happen though.

^what he said...

[Cypry]

Fine, a good post. And I note that we haven't heard from the club much about ambition for promotion in recent times, and I hope it stays that way, because no club run like this, sensible as it is, is realistically going after promotion. As you rightly state, if the PL was our goal, we'd have clung on to Mills and Long.

But the club does have an ambition to achieve promotion again (why wouldn't it? - means that SJM has more chance of selling for his desired price, and why would the playing staff not want to play in the PL?), it's just that they're not prepared to undertake some kind of "do or die" effort, which is what it seems a proportion of the fan base would like....

The problem is that certain clubs, (Pompey for example) haven't suffered enough when failing in this kind of effort in the past, and therefore there's a proportion of fans who think that if they didn't go out of business, then neither will we....
So the question is, do we take the risk (the risk that Customs and Revenue might start to take a harder line and not settle cases with football clubs, the risk that the FL might be forced to scrap the football creditors rule, the risk that there might be a first club to go out of business - and it could be us), or do we try to go about running the club in a sustainable way, whilst trying to remain as competitive as we can within the financial restraints we have?

Personally I'm quite risk adverse, and I'd much prefer that my four year old lad, who has his first ST this year, is able to support Reading FC for the foreseeable future, so I know which I'd choose......

From the Directors Report in the latest accounts:

The Board has considered the risks and uncertainties the Football Club faces which are principally related to the costs and revenues involved in maintaining a playing squad and trading in players, and maintaining, if not improving, its league position. The Board acknowledges this and recognises that to remain competitive within this league and to achieve promotion to the Premiership, it needs to continue to invest in players, whilst managing the costs associated with this within the financial constraints the company faces"

There you go, a statement of ambition (albeit tempered with some common sense)......

[Royal Lady]

I thought kids were free until the age of about 5?

[Platypuss]

I thought kids were free until the age of about 5?

They are/were.

[TFF]

Only if you want them to share your seat

[Platypuss]

Only if you want them to share your seat

Indeed.