Net Spend

[mpickard2087]

With wages as well we have in recent years been spending what is considered the healthy amount in relation to turnover (55%). All of the clubs above us were virtually identical with their ratio.

 

[@Bobby__Lucky]

I think it's 5 years now where we have only spend what we have recouped, I think it just shows what good business we actually do.

I'm sure there is money to spend if necessary as every club has a transfer budget and this won't impact on profits or losses as such as we can stay within net spend parameters and make a loss or make spend in the transfer window and make profit.

Either way Levy is a great business man although it's clear to me he is a long term planner, who is building consistently for the future without jeopardising financial clarity. Sometimes I would like him to be a little more maverick but staying clear of macabre dealings

 

[cliff jones]

net spend as debated endlessly on here is simply the wrong metric to judge the owners.

the reason I'd like them to sell is that they

squeeze absolutely every bean out of the fans

lack judgement in the appointment and retention of managers (models and individuals)

don't invest any of their enormous gains in the value of their asset- in anything other than land/capital projects. (They didn't before FFP, the stadium, but now have (almost) perfect cover for being tight.)

The proof lies in their reaction to the CL season. Revenue spiralled, investment didn't. Our heroes left prematurely.

I've seen so many posts along the lines of IF we sign XYandZ this will be the most fantastic window ever. I love our new transfer window model. Honestly. What's the point exactly of low-balling Schalke for their best young talent? You or I could do that 20 times a window. We've landed no-one yet. I applaud when we do, not now. And when their judgement results in improved football, both in terms of performances and results, on the pitch.

Improvement on the Sugar years is also the wrong benchmark. Given our fanbase, history, location EL football is par no more for our great Club.

 

[Flynn]

I used to have to explain to my daughter that when she loses her school jumpers that money doesn't grow on trees and if she keeps losing them she'll just have to go cold.

She's nine years old now and she finally gets it.

Amazed how many football fans and socialists don't get it.

 

[Led's Zeppelin]

It's very probable that at least one eye has been kept on the financial covenants that the stadium funders will require.

Five years or so of no net spend whilst maintaining the league position and increasing revenue will go a long way to making the funding happen.

 

[The General]

Strange how this topic seems to provoke anger on both sides. Three things;

I) The net spend argument is sound. The clubs above us all have a large positive net spend. There is undoubtedly a correlation between positive net spend and success. Fact

II) living within your means doesn't necessarily require a neutral net spend. The club has many other sources of revenue (tv rights, gate receipts, etc) and other costs (wages). Many other clubs balance the books and still have a large positive net spend.

III) however none of the above means Levy is running the club badly. I'm a big fan of our current model as we'll never compete with the big spenders by trying to beat them at their own game. By going down the route of growing our own, increasing revenue with the new stadium and profiting from transfer activity so we can compete on wages we might just have a chance of glory.

COYS

 

[SNAFU_Clarke]

There is undoubtedly a correlation between positive net spend and success. Fact

This is not a fact.

 

[The General]

There is undoubtedly a correlation between positive net spend and success. Fact

This is not a fact.

It was meant with an element of humour, delivered Rafa Benitez style. However it is a fact and if you don't think it is, perhaps you don't understand what correlation means.

 

[SNAFU_Clarke]

There's a far stronger correlation between total wages for the playing squad than there is for transfer expenditure.

 

[mill]

It was meant with an element of humour, delivered Rafa Benitez style. However it is a fact and if you don't think it is, perhaps you don't understand what correlation means.

I think the correlation is wage bill to league position, most of the time, rather than money spent on transfer fees

 

[knowlespurs]

The issue I have with us not spending is that we normally end each window no better off squad wise, it seems we would rather make do
Most aren't asking for zillions spent, but when we constantly make a transfer profit but end the window with huge holes in the squad, that's when I get pissed off

 

[The General]

People are confusing causation and correlation. I never said having the largest net spend guarantees success. But it is a FACT that the two things are correlated. Re the correlation between wages and success, i agree with you. No doubt there is a correlation between wages and success. This is also FACT. But the reality is the clubs with the highest wage spend nearly always have the highest net spend so it's not possible to say which has the greater correlation. Either way, we can't be the biggest spender on transfers or wages so we'll have to try and do things differently and the stadium, academy and training centre route is ok with me.

 

[beats1]

Interesting that Trix is mentioning the Academy and training ground. I wouldn't say the academy has required a lot of funds and is actually working more of a culture change, other countries like teams in Croatia aren't producing players because they are throwing money at the problem meanwhile someone like Man City and even Barcelona are throwing money at the problem but not addressing it.(spent £200m on their complex). Also we haven't had the players who benefited from the new training ground come through the academy yet, as the academy moved after the first team did and the academy players we have now would of spent most of their time at chigwell anyway.

Also we can't compete with the big clubs in this aspect or in terms of the training ground. FFP allows clubs to freely spend on this without getting penalised or counting towards their profit or loss sheet.

So to compete whilst we say look at the training ground, the truth is we need to spend more to compete. Just to give you an idea here is the new city and chelsea training grounds:

Chelsea's new Indoor pitch and sport science building that they are going to build:

Chelsea's current First team players building built:

Chelsea current Academy building

Man City's Academy

Shit here is the QPR new proposed training ground

The Truth spurs lodge was a substandard training facility, which we moved in to at a time when we were broke. The new facilities are great but aren't the best in the country though they are great for a club who doesn't have the same budget as city(who spent £200m as opposed to our £45m) they aren't that far off bar the sixth form and stadium

net spend as debated endlessly on here is simply the wrong metric to judge the owners.

the reason I'd like them to sell is that they

squeeze absolutely every bean out of the fans

lack judgement in the appointment and retention of managers (models and individuals)

don't invest any of their enormous gains in the value of their asset- in anything other than land/capital projects. (They didn't before FFP, the stadium, but now have (almost) perfect cover for being tight.)

The proof lies in their reaction to the CL season. Revenue spiralled, investment didn't. Our heroes left prematurely.

I've seen so many posts along the lines of IF we sign XYandZ this will be the most fantastic window ever. I love our new transfer window model. Honestly. What's the point exactly of low-balling Schalke for their best young talent? You or I could do that 20 times a window. We've landed no-one yet. I applaud when we do, not now. And when their judgement results in improved football, both in terms of performances and results, on the pitch.

Improvement on the Sugar years is also the wrong benchmark. Given our fanbase, history, location EL football is par no more for our great Club.

You're overlooking the big £24m bump in wages

 

[nssmuckers]

For the life of me I don't know why more people don't look at wages. Wages reveal by a mile the most powerful correlation between finance and success on the pitch. Transfer fees are too much of a clusterfuck to put much stock in whether it's net or gross.

Net spend should never be talked about in the context of what actually happens on the pitch, ever. It's a good thing to look at for seeing what sort of value we get in the market, and it says a lot about how teams are approaching their business, but wages are king.

 

[Doomchicken]

Are we counting the £45m training ground and £400m stadium into our net spend?

 

[Timberwolf]

I wonder if we're more likely to have a positive net spend this season since we've cut our wage bill so much. We've cut a ton of deadwood, and I'd assume young players like Bentaleb, Trippier, Wimmer and Mason are on less than the likes of Paulinho, Capoue and Kaboul were. If we get rid of Ade, Soldado and Lennon that'd surely free-up around £200,000 worth of in wages that we could use to sign the likes of Berahino or whoever.

 

[cliff jones]

Interesting that Trix is mentioning the Academy and training ground. I wouldn't say the academy has required a lot of funds and is actually working more of a culture change, other countries like teams in Croatia aren't producing players because they are throwing money at the problem meanwhile someone like Man City and even Barcelona are throwing money at the problem but not addressing it.(spent £200m on their complex). Also we haven't had the players who benefited from the new training ground come through the academy yet, as the academy moved after the first team did and the academy players we have now would of spent most of their time at chigwell anyway.

Also we can't compete with the big clubs in this aspect or in terms of the training ground. FFP allows clubs to freely spend on this without getting penalised or counting towards their profit or loss sheet.

So to compete whilst we say look at the training ground, the truth is we need to spend more to compete. Just to give you an idea here is the new city and chelsea training grounds:

The Truth spurs lodge was a substandard training facility, which we moved in to at a time when we were broke. The new facilities are great but aren't the best in the country though they are great for a club who doesn't have the same budget as city(who spent £200m as opposed to our £45m) they aren't that far off bar the sixth form and stadium

You're overlooking the big £24m bump in wages

you're saying in the space of a season our wages went up £24m? I'd be very surprised by that? Over a few years, yeah, I could understand.

But again you're falling into the trap of talking about a single aspect. Every time someone mentions wages someone else could mention tv money inflation, commercial revenue etc.. I'm not overlooking any aspects.

I feel our heroes left prematurely because they didn't see any other world class talent coming in alongside them, and didn't think they could win stuff as a result.

 

[SNAFU_Clarke]

Yeah, this bit isn't true either.

There is a far stronger correlation between wages and league performance than there is with transfer expenditure. I'm going to cite Why England Lose by Kuper and Szymanski as my primary evidence for this view.

At April 2015 the wages table showed United, City and Chelsea with similar wage bills, followed by the goons, followed by Liverpool, then us, (we're some way behind Liverpool). After that there's a raft of clubs with very similar levels of spending on wages. You have a few outliers, (QPR, southamptioon), but largely wages and league performance correlate.

Do you have anything to back your claim that net transfer expenditure has a stronger link to league performance than this? I'd be keen to see it if you have. I'm kind of talking about numbers and things here.

But the reality is the clubs with the highest wage spend nearly always have the highest net spend so it's not possible to say which has the greater correlation.

 

[SNAFU_Clarke]

They left because they were offered more money elsewhere in the main. 'Our heroes'. Lol. They're footballers.

I feel our heroes left prematurely because they didn't see any other world class talent coming in alongside them, and didn't think they could win stuff as a result.

 

[spids]

It was meant with an element of humour, delivered Rafa Benitez style. However it is a fact and if you don't think it is, perhaps you don't understand what correlation means.

What was Chelsea's net spend last summer? They bought Costa and Fabregas but sold Ruiz, De Bruyn etc. I think they may even have made a small profit. And yet they led the league from start to finish. Compare their spending to Man C, Man U and Arsenal last summer and you'll realise your 'fact' is in fact not a fact.

Disclaimer - Yes I know Chelsea had a decade of buying titles preceding Mourinho's latest stint in charge.