Finances

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I contacted Deliotte Touche last week to see whether they could point in the right direction for how clubs interact with their fans. Gave me some contacts to follow up, but alos sent me a couple of their publications (£175 to buy, for people like me, free !!).

Bucket loads of analysis which is forms the basis of all those reports you ever see. On the first reading one of the most interesting things was their attempt to correlate team performance with various factors, under the heading of 'can you buy success?'

First attempt was plotting average annual net transfer expenditure against average league position. The link had an R factor of 0.45 where this R is a measure between 0 and 1 on how likely trasfers links to performance. They then did the same with Seria A and found it was 0.20, or miles less. Lot sof this came form Inter spending megabucks and winning nothing. They then did it with average annual salaries against average position. This had a correlation of 0.72 or quite a high link. (I know you can do anything with stats but still interesting).

The best place to be is paying wages and transfer fees below average and have finishing position higher. For wages the this was Arsenal, who still had high salaries but lower than us and Chelsea dn Liverpool who had performed worse than them.

On transfer fees best was again Arsenal, but I'd guess this was hugely skewed by the £20m profit on Anelka.

I'm a bit frustrated by the reports as the majority of the data covers a 5 year period, showing all club details over the time period. The comparitive figures for us and Sunderland aren't really clear as they have had seasons out of the Premiership and their accounts ending last July cover a 14 month period rather then 12 so are difficult to compare.

If you want to get some sort of daft headline then what about .... "Sunderland wages bill spirals out of control, up 500% in 5 years !!"

-- Anonymous, June 18, 2001

Answers

I've read this elsewhere, but one interesting stat is around % of club turnover taken up by wages. The Premiership average is 63% and we are 64%. This is a double edged one. Leeds are at 49% but part of that is that they hace hugely increased their turnover from paying out big transfer fees and playing in Europe. Deloitte reckon 70% is just about the maximum you can run at, which puts 9 clubs in trouble and these are generally the strugglers (Wimbledon, Boro, Southampton, Derby, Sheff Wed, Everton, Coventry and Leicester, but also Liverpool who will presumably have sorted this out by winning cups and getting into the CL).

The average wage of a Premiership player is £400k per year, get your kids out kicking footballs now !!

An interesting disucssion on how they see transfers going with the new rules (Have our board read this I wonder ??)

There are 3 categories of players .... stars, first team players and squad players. Stars covers the top 50 players, these will still attract high transfer fees, and their pay packets will continue to increase. First team players will see their transfer fees reduce dramatically medium term due to pre-contract agreements, Bosman and realism. Fees will only really be seen in special circumstances. These players are probably overpaid now, there will be an outbrteak of realism with past propensity for huge pay increases being traded for future security of contract. Squad players will see transfer fees disappear in the medium term, as is starting to happen now. The pay for these will stabilise, Shorter contracts and (in the future) more of a buyers market.

Again interesting.

The bit that will be interesting will be the definition of 'stars'. Is Jeffers a star becaus ehe has cost a lot of money, or what makes a club view a player as a star ? Is Gary Speed a star, or a first team player or a squad player. When he comes and requests a longer contract should he be offered star wages, lower wages but for a longer period, or just told to run along and find another club willing to pay him his money ?

-- Anonymous, June 18, 2001


For the season before last Man u, Arsenal and Chelsea got around 25% of their revenue from European games.

In 1999/2000 the Premier League spent £255m on transfer fees, £53m to other teams in the Premiership, £52m to the Football League and £150m abroad.

In 1995/96 for every £1 spent on players, 51p was transfer fee and 49p wages, that is now 70p for wages. I found this amazing. More than twice as much on wages as on fees. I feel this can only come from having youth players coming through and paying them a fortune. So for example Scholes, Beckham, Giggs have no transfer fee but mega wages. Any one else a suggestion ?

I'll post more when I have some stamina.

-- Anonymous, June 18, 2001


I've a feeling that they're wrong about transfer rates dropping...There aren't enough quality players to go around and I reckon you're always gonna be able to find some clubs who'll be willing to pay to get a player rather than wait until their contract is up and offer them mega bucks (of course the player will still get mega bucks!)....

-- Anonymous, June 18, 2001

Intriguing stuff. I guess DT didn't give those top 50 Star players then? I reckon Shearer and Dyer are ours.

-- Anonymous, June 18, 2001

The wages hike will also have been helped by Bosmans (more to the player but less than if you had to pay a transfer fee as well) and by clubs retaining players on improved contracts to avoid buying replacements. Not many stars in our squad (whatever the Chronicle think) but plenty of them have signed improved contracts in the last 3 years.

-- Anonymous, June 18, 2001


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