A Question for the Board of Directors

[AustrianAndyGull]

Due credit there then. Colin Lee was really not a good thing for us. He signed a LB called Mo Camara for some obscene sum of money (most of which he pocketed himself as a finder's fee). Camara played about 20 minutes in total and, suffice to say he made Nico look like Bobby Moore.

Matt.

I know, i think i was there! At the Don Valley v Rotherham, a freezing Friday neet and a 1-1 draw courtesy of a late Bennerz leveller. If memory serves?

[AustrianAndyGull]

When i say i think i was there, well i WAS definitely at that game and if it's the one he made his sub appearance in then i was there!!!!

[ferrarilover]

That was it, Andy, Bennerz in the 85th minute. Camara was so bad he got hauled off at half-time and replaced with LRT.

Matt.

[stefano]

I know, i think i was there! At the Don Valley v Rotherham, a freezing Friday neet and a 1-1 draw courtesy of a late Bennerz leveller. If memory serves?

He made his debut the week before along with loan signing Ashley Barnes at home to Port Vale. A 2-1 defeat. Big Mo only lasted until half time in that one too. Still he nearly inspired me to dust my boots off!

[ferrarilover]

Stef, your memory has shamed us all once again. I've just realised that means we failed to win two consecutive matches. I wonder if anyone wanted the manager sacked?

Matt.

[stefano]

Stef, your memory has shamed us all once again. I've just realised that means we failed to win two consecutive matches. I wonder if anyone wanted the manager sacked?

Matt.

I can see the angle you are coming from Ferrari and appreciate it was probably a rhetorical question, but the actual answer is sadly yes. After we lost at home to Port Vale we were in deep trouble and looking likely to return to the Conference at the first attempt! The club supporters forums were full of posts from the usual suspects calling for the managers head. What we didn't know at that time was that the 1-1 draw away to Rotherham the following week was probably the turning point as we only lost 2 of our last 16 games, were undefeated in our last 8, and didn't concede a goal in our last 7, finishing 17th and comfortably 13 points clear of relegation.

However even though it was comfortable in the end on the morning we hosted top of the table Rochdale which was our 6th game from the end the forums were still full of impending gloom, and indeed it did still look precarious as whilst we were picking up points so were the other relegation candidates. A 5-0 stuffing of Rochdale finally gave some belief, then two successive away wins 2-0 at Aldershot and crucially 3-0 at Grimsby Town who went down in 23rd position, made us safe and allowed us to enjoy the last 3 games. Now that is an opportunity that does not occur very often!

[ferrarilover]

I remember that Rochdale result. I was playing Lacrosse, so hadn't been able to get updates throughout the game. I got back to the dressing room (having beaten UEA in the Cup) and saw about a dozen notifications on my phone. Expecting the worst, I flicked through them in order, only to see that we'd scored a hat full of goals and won the match.

How the hell do you remember all this stuff?

Matt.

[stefano]

How the hell do you remember all this stuff?

Matt.

OCD!

[portugull]

Going back to the real issue the reality is that TUFC have lost on average £350,000 per year for the last 4 seasons.

Professional football is too expensive because of the greed of the top players.

50 years ago players were underpaid. Now the top players are grossly overpaid.

At the lower levels all across Europe clubs are struggling to survive. In the next 5/10 years I can see TUFC going part time. I am not joking!

[ferrarilover]

Oh dear, oh dear oh dear oh dear.

I accept it's harder for you, Portu, being that you don't see the place every week, but where do you think that money has gone?

We've got a three million pound stand, a gym, a press room, a computer suite, two new dressing rooms, a new treatment room, various other amenities, a new training ground, a new pitch, remodelled family stand, remodelled toilets and made huge changes behind the scenes.

All that for the princely sum of less than Oxford lose every year, despite playing in a three sided ground.

We'll be just fine.

Matt.

[portugull]

Matt you have made the classic error of confusing Capital Expenditure with Revenue Expenditure.

The cost of the New Stand is Cap Ex which is reflected as an Asset in the Balance Sheet.

All the items you mention are Capital Expenditure.

The revenue position is that our expenditure has exceeded our income over the past 4 years by approx £1,400,000.

It has nothing to do with the improvements made to Plainmoor.

I fully understand the Board wish to try and ensure the Club lives within its means. My original question was whether the Board were confident that the playing budget was adequate within the overall budget.

[AustrianAndyGull]

I wish I understood all this.

[FavGull]

What you say is correct Portugull, but to attempt to reconcile this to where Matt may be coming from, whether expenditure on a long-term asset or on day to day expenses, cash still has been spent.

Fixed assets should be funded out of long-term investment, long-term financing (loan) or surplus cash/profit generated from core activities (I imagine it's fair to rule out this option). Recent calls for investment may question the viability of continued capital investment, or perhaps even the decision to invest in the first place, although I hope this is not the case.

Any decision to use working capital (ie cash needed for core activities), particularly by a loss making business, is questionable, see comments on credit cards on whinge and moan thread (although technically a credit card would not class as long-term funding, the principal is the same).

None of this investment affects profit. But, all other things being equal, if a company loses £x a year, spends £y on a long-term asset, then the cash loss is £x+y (ignoring depreciation in x). So the likelihood is that the position for the club is more difficult than the annual loss suggests.

I haven't looked at the most recent accounts, hence no attempt to quantify anything.

[ferrarilover]

We've been over this loads and, if I'm honest, I still don't get it. So far as I see it, without all the accountancy rubbish is that we've got loads of shit for not much money, which must be better than being, say, Oxford, who still only have a three sided ground and seem to lose millions every year with bugger all to show for it.

Matt.

[portugull]

Matt it is very simple. If the club spends £2 million on a new stand that stand is an asset and will be used for the next 100 years!

I imagine it was financed with grants, loans and some cash.

Revenue expenditure e g Salaries is money spent every month financed from gate receipts and other income.

Interestingly enough Premiership Clubs only get 23% of their income from gate receipts ( because of huge T V income) whereas League 1 and 2 clubs get 50% of their income from gate receipts.

Between 2007/8 and 2011/12 8 Football League Clubs moved to New Stadia and only 2 were Championship Clubs.

Despite the recession, and shortage of money, clubs have been improving their facilities, as we have, and no less than 12 League 2 clubs ,including Argyle, are considering new Stadiums. Very surprising.