6.7 million profit

[Dirk Gently]

DG, I assume that should have read...

The key figure is that average wages in the Championship are only 29% of those in the PL

Corrected!

[Blue_Elm]

WHY! We're still getting parachute payments, we'll still get 18,000 people inside the stadium... firstly who are we going to sell? Man United may of been interested in Doyle, Matejovsky; Everton may of been interested in Shunt and Harper... but why are Everton and Man Utd going to go in for 4 players who have failed to get us promoted. We need at least 7 Million I feel to bring in new talent - Surman... a player in the Reading mould, Southampton arent going to take a chocolate teapot for him.

We wont go up next season as theres no ambition... if Madejski wanted to spend some dough, get us in the Premier League again - then great; at the moment, we look more likely to be spending an afternoon in Exeter, Southend and Milton Keynes in a seasons time.

At least Madejski will have his knighthood. JOKE!

[Dirk Gently]

See the multiple other threads about this, and the thread giving a detailed breakdown of finance in Club Polices.

[Harry Carry]

It does make sense to ship some out. Lots of dead wood at the club.

[Who Moved The Goalposts?]

The key figure is that average wages in the Championship are only 29% of those in the PL - 29% of the average current average PL wage bill of £59.8 M is £17.3 M. Scary numbers, and from that it's not hard to see that our wage bill might easily top £10M.

I suspect that the differential has increased - wasn't the ITV Digital fiasco right in the middle of those 2006 figures? That would have caused a rethink/retreat. Still, as you say, not hard to imagine a £10m wage bill.

And if anyone wants to be a professional footballer, make sure you're a forward!

[Snowball]

Agreed some changes, even if of best players may be needed


BUT


What concerns me some is that all the vibes are that not only
will we be trying to do things on the cheap, but actually
raking it in. There seems to be too many dropped hints
about "our wonderful youths" etc, then this "find 11M to balance the books"

If the vibes turn into reality then we might struggle

[Row Z Royal]

See the multiple other threads about this, and the thread giving a detailed breakdown of finance in Club Polices.

Most recently from this post onwards.

[W&E Royal]

:evil:

WHY! We're still getting parachute payments, we'll still get 18,000 people inside the stadium... firstly who are we going to sell? Man United may of been interested in Doyle, Matejovsky; Everton may of been interested in Shunt and Harper... but why are Everton and Man Utd going to go in for 4 players who have failed to get us promoted. We need at least 7 Million I feel to bring in new talent - Surman... a player in the Reading mould, Southampton arent going to take a chocolate teapot for him.

We wont go up next season as theres no ambition... if Madejski wanted to spend some dough, get us in the Premier League again - then great; at the moment, we look more likely to be spending an afternoon in Exeter, Southend and Milton Keynes in a seasons time.

At least Madejski will have his knighthood. JOKE!

Clearly a mental person!!

[Smoking Kills Dancing Doe]

Gotta service that debt.

Look at Leeds.....

[bobby m's syrup]

If a well run club and basically solvent club like ours needs to pursue a conservative policy re transfers, however much it restricts our options; just how badly has the financial crisis affected our competitors? Surely chairmen will learn from the obvious examples of Leeds and Southampton, (amongst others) and cut their cloth accordingly.

There seems to be far less activity than usual in the 'real world' transfer wise. As such, with most clubs watching the pennies, we could well be starting next season with our Irish contingent intact and little in the way of new blood.

[friday fan]

I posted the post stating Howe says the kids are ok - in that post I eluded to the reliance of the youth team - whilst I acknowledge others views I was slated. The news that we have to sell before we buy is not a surprise. I agree S Hunt needs to move on, we won't and can't not take a good offer for Doyler but it needs to be good. As for Bikey he is needed and is the best in the championship. Whatever we get for those departing needs to go back into the squad and not into JM's pockets for his "other" projects. I take a cyncical view of where the money has gone and am sick of posters stating that we are well run financially. If we don't buy and the performance slips so then does the gate numbers. I have a bad feeling that Rodgers will be another Bullivant and cannot help feeling Sir Steve got sick and tired of performing miracles with lower league players. We got S Hunt on a free and Doyler for about 80K so a good bit of business. I honestly can't see Tommy Smith as being better than Doyler, just an option to sell Doyler and for the management to say well he was replaced. I sincerely hope that I am wrong but instead of looking forward to looking at the top six next season I will be looking at the bottom hoping not to see us there. Hammond and JM will need to be ruthless and swallow their pride and get rid of Rodgers if things are looking pear shaped by Xmas - they also might spend more in the January transfer window to keep us up as there is less money and gates in league 1. I hope I am proven wrong.

[papereyes]

The key figure is that average wages in the Championship are only 29% of those in the PL - 29% of the average current average PL wage bill of £59.8 M is £17.3 M. Scary numbers, and from that it's not hard to see that our wage bill might easily top £10M.

When we went up, the following season we doubled our wage bill to about £30 million which would suggest that our wage bill in 05/06 was about £15 million.

(Actual numbers can be found: http://news.bbc.co.uk/1/hi/business/7424134.stm)

wasn't the ITV Digital fiasco right in the middle of those 2006 figures?

No.

[Millsy]

Same old story.

I I note that those who harp on about Coppell having had millions at his disposal are still quiet.

Had millions but didn't spend eh?

So how come all of a sudden we we came down we weren't allowed to invest but he had to sell?

And now we have a new manager again we're looking to the youth and looking to sell?

Same old Madejski, always a tight git. His fault we came down. He's raking it in. But then it's thanks to him we went up in the first place so I can't fault the guy.

[Seal]

Our parachute payment covers more than our entire wage bill.

Therefore unless we are paying off Sir John’s debt, I struggle to see how we would be in desperate need to ‘balance the books’.
Nevertheless it does of course illustrate the importance of promotion this coming season (i.e. this is our last parachute payment).

I’ve also seen some conflicting numbers in this thread. The latest Deloitte Report (published in June 09), says Reading’s 07/08 operating profit was £12.5m, and 5 year operating profit stands at £13.9m.

Couple of other interesting snippets from the report included:-

- We had one of the lowest Wage – Revenue ratios (57%) in the Prem / Champ in 07/08
- Interestingly the teams with the 3 lowest wage bills (us, Brum & Derby) were the 3 relegated. Make of that what you will

[Dirk Gently]

Same old story.

I I note that those who harp on about Coppell having had millions at his disposal are still quiet.

Had millions but didn't spend eh?

So how come all of a sudden we we came down we weren't allowed to invest but he had to sell?

And now we have a new manager again we're looking to the youth and looking to sell?

Same old Madejski, always a tight git. His fault we came down. He's raking it in. But then it's thanks to him we went up in the first place so I can't fault the guy.

Had millions but didn't spend, yes. A deal was done with Portsmouth to have Gary O'Neil, including personal terms agreed. Then at the last minute SC was worried about "disrupting the core squad" and O'Neil went to 'Boro instead.

The big difference is that now we have Championship level income, not PL income, plus £11M parachute payments for just one year. Tell me a player worth having who will come to a club on a one-year contract? Or should we commit to a 3-year contract even though we won't have parachute payments in years 2 and 3 (like leeds and Southampton were happy to do)? It's the wages spread over 3 or 4 years that cripple, not the one-off transfer fees, and the "buy before you sell" is more about freeing up wage money than it is about transfer fees.

The fact remains that JM has never, ever, declined a request for money for a transfer. Whether that means he's not been asked might be another question, but it's way, way too simplistic to blame him for relegation.

[Dirk Gently]

Our parachute payment covers more than our entire wage bill.

Therefore unless we are paying off Sir John’s debt, I struggle to see how we would be in desperate need to ‘balance the books’.
Nevertheless it does of course illustrate the importance of promotion this coming season (i.e. this is our last parachute payment).

Yes, but any worthwhile signing will insist on a 3 or 4-year contract. We need to know that we can pay their wages at the same rate even without the parachute money.

[brendywendy]

not another one of these threads.............

[Seal]

Hence my point. Promotion this season is vitally important.

The club needs to make a decision.

1) Calculated gamble – invest in the team to ensure the best chance of promotion, thereby securing a minimum of 3 years of significant increases in revenue (1 Prem season + 2 parachute payments)

2) Take the frugal option to ensure that we are not left short when parachute payments run out.

I fear that if we go for 2), we will miss out on promotion, our competitive advantage through the parachute payments will be gone, and we will be just the next in the long list of clubs who had a stint in the premier league, only to be long forgotten.

However, I would be utterly delighted to be proved wrong.

[Vision]

Our parachute payment covers more than our entire wage bill.

Therefore unless we are paying off Sir John’s debt, I struggle to see how we would be in desperate need to ‘balance the books’.
Nevertheless it does of course illustrate the importance of promotion this coming season (i.e. this is our last parachute payment).

Yes, but any worthwhile signing will insist on a 3 or 4-year contract. We need to know that we can pay their wages at the same rate even without the parachute money.

Same for contract renewals. Take as an example Doyle/Hunt and assume they earn 20k a week after recent contract renewal over a 3 year period thats over £6m just 2 players. Its surely not too difficult to understand why players like that would need to be sold in order to stabilise the finances.

People keep talking about parachute payments as if it proves we have a considerable advantage over the rest of the championship but its pretty much swallowed up by the fact that the wage bill of a relagated Premiership club is still considerably higher than the rest of the championship even with the reported 40% reductions.

[Who Moved The Goalposts?]

wasn't the ITV Digital fiasco right in the middle of those 2006 figures?

No.

Sorry - you're right. It was the League damages legal claim that was launched in 2006! I imagine that didn't get very far!