McDermott via TalkSport

[Rev Algenon Stickleback H]

If its so obvious, why do these threads spawn like satan's own love juice?

because "where does the money go?" is not the same question as "how can we be losing money?", which implies people haven't grasped the concept of losses occurring when you spend more than you get in.


I really would like to know the breakdown of total playing salaries and turnover, as well as the costs on the non-playing side of the business.


Our first team squad might be number 1-40, but it still only has 31 players in it, not 40. A quarter of those are really just youth/reserve players, and I'd find it frightening if we are paying those £5000 a week or so.


To be honest it's the costs outside the first team squad that I find interesting, because by the sounds of the numbers, we could release the bulk our our first XI as still not break even, even if crowd remained the same. I don't for a moment think anything "dodgy" is going on, but if clubs really can't reduce their non-playing expenses then you have to wonder how this division can survive.

[FiNeRaIn]

If its so obvious, why do these threads spawn like satan's own love juice?

because "where does the money go?" is not the same question as "how can we be losing money?", which implies people haven't grasped the concept of losses occurring when you spend more than you get in.


I really would like to know the breakdown of total playing salaries and turnover, as well as the costs on the non-playing side of the business.


Our first team squad might be number 1-40, but it still only has 31 players in it, not 40. A quarter of those are really just youth/reserve players, and I'd find it frightening if we are paying those £5000 a week or so.


To be honest it's the costs outside the first team squad that I find interesting, because by the sounds of the numbers, we could release the bulk our our first XI as still not break even, even if crowd remained the same. I don't for a moment think anything "dodgy" is going on, but if clubs really can't reduce their non-playing expenses then you have to wonder how this division can survive.

Fantastic post, sums my feelings up entirely.

I would love to see how much individuals are on to put to bed all these threads.

[Rev Algenon Stickleback H]

I would love to see how much individuals are on to put to bed all these threads.

I've been to baseball games in the USA and they list the exact salaries of all players on both teams in the programme.

That's not so much my point though. I would like to know exactly where the money does go, then it'd be clear how we can sell players for £x million, reducing the wage bill by several hundred thousand, and still be on target to lose at least as much as the previous year (if that is the case).

If all clubs were forced to publish such information then maybe measures could be taken to redress a system which sees clubs budgetting to run up 20-25% losses year on year, just to tread water.

[FiNeRaIn]

Completely agree, only problem is I could see courts getting involved due to players kicking off about it. That would create a big old mess, football should have a wage cap its thoroughly disgusting it doesn't. People can say what they want about American sports, the fact they get 100,000 fans for a college team ( michigan) amongst a bunch of other ridiculous attendances for college games where money is NOTHING to do with it speaks volumes. That's a proper sport. Not turning out to see players on 250k a week hopping ship with no loyalty at the chance to raise that to 300k. Football is a world wide embarrassment.

[Wycombe Royal]

football should have a wage cap its thoroughly disgusting it doesn't.

It is against EU law to cap what an individual can earn. You can cap the total wage bill at a club, but you cannot cap the earnings of an individual.

[Wycombe Royal]

If its so obvious, why do these threads spawn like satan's own love juice?

because "where does the money go?" is not the same question as "how can we be losing money?", which implies people haven't grasped the concept of losses occurring when you spend more than you get in.


I really would like to know the breakdown of total playing salaries and turnover, as well as the costs on the non-playing side of the business.


Our first team squad might be number 1-40, but it still only has 31 players in it, not 40. A quarter of those are really just youth/reserve players, and I'd find it frightening if we are paying those £5000 a week or so.


To be honest it's the costs outside the first team squad that I find interesting, because by the sounds of the numbers, we could release the bulk our our first XI as still not break even, even if crowd remained the same. I don't for a moment think anything "dodgy" is going on, but if clubs really can't reduce their non-playing expenses then you have to wonder how this division can survive.

I don't think you are grasping how many costs there are in running a football club. Yes wages are the main bulk of it (total wages not just the players) and I would guess it takes around 70% to 75% of our turnover. But then you have all the other costs (utilities, the dome, the training ground, maintenance of the stadium, various supplies, hotels and transportation for away trips, etc, etc). All these things add up and we don't exactly do them all the cheapest possible way.

I spend my day analysing the expenses for the company I work for and you will be amazed at how the expenses soon add up and none of that gets reported in the published accounts except in summary. So unless you are going to work for RFC in their finance department you are never going to get the information you want.

[under the tin]

Please don't insult everyone's intelligence by going on about what the catering staff cost.
You can get a pint of generic eurofizz, similar to that sold at the Madstad for £1.99 at a Wetherspoons pub. Madstad price £3.70.
The concourse outlets are not run as a public service. It's a very lucrative revenue stream.
FWIW, I was under the impression that these were run by outside catering operations, who pay the club a fee for the rights to operate them.

In any event, it just goes to highlight the sums of money generated.
What does a programme cost these days?
I haven't bought one since God was a boy. I don't need to know that the last CD bought by tricky winger Jimmy Beke was "Underground explosion" by The Soggy Tortillas, or that last week's Golden gamble was won by Wilf Armpit from Cleckheaton, complete with his photo.
Does anyone actually believe that these glossy publications, full of paying advertisers, don't generate significant income?
The replica shirts are manufactured far away, cheaply, yet retail at what, £40?
We pay 5/6/7 times as much as we used to to watch a game nowadays, with attendances also having increased by about the same factor.
Yet the club still struggles to break even, because footballer wages are out of control, as are the perks.

I understand the club rent Hogwood from JM. Does having a chef there, preparing free lunches for those who earn ten or twenty times what the fans do, really have that much impact on player performance? Would Noel Hunt be a lesser player if he had to get up 15 minutes earlier, and make some Ham sandwiches, and put them in a tupperware box alongside an apple, and a KitKat?
If Reading draw a minnow in the FA Cup, our players will be facing opposition players that do exactly that. Reading would probably win, based purely on technical ability, but I am sure that the opposition would "give us a game".
Pro football used to be a sport. Now it's a circus, where the clown's jokes are on the audience, not on themselves.

[Wycombe Royal]

It is irrelevant how much something sells for when talking about the cost base - they are still costs. Yes they generate revenue but that revenue is to cover lots of different costs including a contribution to the overall running of the business. You seem to suggest that a cup of coke should only be sold so that the cost of producing supplying that drink is covered with a small profit. Wrong.

And why the rant about the programme? If you don't like it, don't buy it. Simple. I don't and haven't done for years.

I really do wonder about the business sense of some people.

Now I just need to dismount this very high horse.........

[Svlad Cjelli]

All the catering is provided by Compass - they pay a commission to RFC under the terms of their contract.

So there's a whole lot less of a commercial link to RFC's coffers from catering expense and income than most people seem to think.

[Rev Algenon Stickleback H]

football should have a wage cap its thoroughly disgusting it doesn't.

It is against EU law to cap what an individual can earn. You can cap the total wage bill at a club, but you cannot cap the earnings of an individual.

Wage caps don't cap what an individual can earn, just the overall salaries each club pays.

Going by the numbers though, if we had a cap based on turnover so we should break even, I don't see how we could do it without releasing most of the first team. Even if they are on £10,000 a week, we'd still need to ship out 8 of them to get rid of that £4 million hole.

[brendywendy]

The only thing I'd question is if the £4 million deficit is a yearly thing, then why?

That's what deficits are, aren't they?

deficit - annual loss
debt - total accumulated loss

if we're running at a deficit of several million, then every year we need to find an additional several million to break even.

Thank you captain obvious. You've saved the world yet again.

What I mean is that our wage bill in the premier wasn't meant to be much over £20 million.
After shipping out virtually all of our big earners, it seems rather odd that our wage bill is still at at least half of our premier league levels.

5 years ago the average salary in this division was supposed to be £4000 a week. Could it really have doubled or more since then?


If, on the other hand, the average wage bill is really is £15 milllion or so, that just seems mental. It makes you wonder what other clubs lose every year.

roughly 32 in the first year, and 35 in the second wasnt it?

[Svlad Cjelli]

football should have a wage cap its thoroughly disgusting it doesn't.

It is against EU law to cap what an individual can earn. You can cap the total wage bill at a club, but you cannot cap the earnings of an individual.

Wage caps don't cap what an individual can earn, just the overall salaries each club pays.

It's perfectly permissable for individual competition rules/organisers to limit the sums that each club can spend on player salaries - either as an absolute figure or as a percenatge of income.

[brendywendy]

now you want us to reduce the wages we pay?
will that not result in lower class players coming here, and our best players leaving for other clubs who pay better?
would that not result in much hand wringing and complaints about how our club is run?

[Rev Algenon Stickleback H]

roughly 32 in the first year, and 35 in the second wasnt it?

sort of - just found this
http://news.bbc.co.uk/1/hi/business/7424134.stm

£29.8 million in 2006/7, and £33.8M in the second.

It was £14.5M in 2005/6.

[Rev Algenon Stickleback H]

now you want us to reduce the wages we pay?

..the wages everyone pays.

If an average club getting average crowds and paying average salaries will always be on course to post 20-25% losses ever year, something is seriously wrong.

[Wycombe Royal]

football should have a wage cap its thoroughly disgusting it doesn't.

It is against EU law to cap what an individual can earn. You can cap the total wage bill at a club, but you cannot cap the earnings of an individual.

Wage caps don't cap what an individual can earn, just the overall salaries each club pays.

Going by the numbers though, if we had a cap based on turnover so we should break even, I don't see how we could do it without releasing most of the first team. Even if they are on £10,000 a week, we'd still need to ship out 8 of them to get rid of that £4 million hole.

Some people don't think like that and think of it is as capping what an individual can earn, hence my comment. It wasn't that difficult to understand what I wrote.

As for having a cap, it is more likely that it would be based on what PERCENTAGE of turnover can be spent on player wages. This is what is in place in the lower leagues at a level of aorund 65% (I can't remember exactly) but we aren't too far from that now.

[Cypry]

All the catering is provided by Compass - they pay a commission to RFC under the terms of their contract.

So there's a whole lot less of a commercial link to RFC's coffers from catering expense and income than most people seem to think.

Point taken - I wasn't aware of that...

Waste of time getting involved with this discussion (again) - I just don't get why people have to get their tin foil hats out and protest that the club must be hiding something....

The wage bill is the wage bill and that makes up the bulk of our outgoings - yes, football players get paid FAR too much these days, but I can't believe that Reading pay any more than they have to to secure the services of a given player, at the end of the day it's a cost benefit exercise, McD and Hammond need to make a case for what any individual player will add to the squad, and why they are worth a given salary same as any purchase by any business - and that's exactly why Madejski is campaigning to introduce measures that could help to limit, or even reduce these stupid salaries. Has anyone who likes to slate him thought that the reason he's so passionate about reducing the salaries players are paid is everything to do with the fact that we wouldn't then have to sell players to keep our heads above water? Of course not - in some peoples eyes SJM is a bumbling old idiot who has no idea about business - it's laughable, most of those who have this attitude wouldn't last 5 minutes in business....

[melonhead]

now you want us to reduce the wages we pay?

..the wages everyone pays.

If an average club getting average crowds and paying average salaries will always be on course to post 20-25% losses ever year, something is seriously wrong.

erm yes. have you not been listening to dikers/svalders for the last 5 years


but good luck with sorting that little mess out

[Royal Lady]

Compass must make so little out of us that they don't even include us in their "sporting venues".

http://www.compass-group.co.uk/sport-venues.htm

Back to the other part of the discussion, I'm pretty sure Kebe will be gone in January - and we might get £2-3million for him if we're very lucky, Gorkss could be gone at the end of the season, imo, if we have a "meh" season and if he continues to be the standout player at RFC.

[melonhead]

are you this negative about everything in life, or just Reading FC?




heres a little negativity of my own:
i would imagine getting 3 million for kebe to be hugely optimistic.
and thats speaking as one who would gladly have his babies.
4 months left on contract, wants to go back to france.
unless a french club comes in for him(or a prem club-hugely unlikely since hes hardly pulled up trees on a regular basis in tehcvhampionship) hell wait till the end of the season, go for free and get more money, and cost the french club less.