Sugar Daddy needed - again?

[The Only Way Is Up]

Originally Posted by krux

so he put loads of money in, got them promoted several (?) divisions and has left them debt free.

Why is this being sneered at?

An example of a sugar daddy bringing huge benefits to the football club. Imagine what could happen at a proper club like ours, instead of a tin pot outfit like Eastleigh.

One promotion only, from NL South. It isn't sneering, it's drawing attention to the fact that huge "investment" doesn't necessarily buy success. I think that if we had £10 million over 6 years, we'd show better results - but the most important bit relates to Easleigh's potential cash problem next season. How are they going to afford the wages of the "overpaid" (his words) players taken on board. Without similar "investment" next season, their £2.5 million loss from this season will either cause them to fold, or dump the players for cheap alternatives - with consequences.

[Junior Shabadoo]

Originally Posted by pagl

Its just like BTB being needed again though. another injection of additional finances to support the playing budget and bring better players in.

The difference is that we have the fan base doing it whereas some clubs have a sugar daddy.

BTB was never needed to support the playing budget though, there was just a group of fans who insisted that the club adopt it. Eastleigh's money has by contrast lifted them artificially; I've got no problem with that but it's quite different.

[The Only Way Is Up]

Originally Posted by Todd Sweeney

The difference with Eastleigh is that without another person willing to put in large amounts (e.g. £10m) they won't be able to honour their contracts or sustain football at this level, debts will quickly mount up and they will likely drop back down the leagues or cease to exist. Our model doesn't rely on a single individual so, in theory, is sustainable in perpetuity.

Exactly.

[krux]

Originally Posted by The Only Way Is Up

One promotion only, from NL South. It isn't sneering, it's drawing attention to the fact that huge "investment" doesn't necessarily buy success. I think that if we had £10 million over 6 years, we'd show better results - but the most important bit relates to Easleigh's potential cash problem next season. How are they going to afford the wages of the "overpaid" (his words) players taken on board. Without similar "investment" next season, their £2.5 million loss from this season will either cause them to fold, or dump the players for cheap alternatives - with consequences.

if you told me we would have investment which meant we could get into league two, but would then have to get cheaper players because the money to pay higher wages was withdrawn..........I'd snatch your hand off!!!!

[wrexhamandy]

Originally Posted by Omni

Taking Krux's point of view into account, that type of investment into a club like ours could see us improve exponentially and we'd still be in a decent position if they walked away as long as they didn't call the debt in.

That’s the kicker. Our last “sugar daddy”/“local successful businessman” didn’t do that and we lost our ground, training facilities and almost our existence. I’d be very very surprised if Eastleigh’s wrote it all off.

[The Only Way Is Up]

Originally Posted by krux

if you told me we would have investment which meant we could get into league two, but would then have to get cheaper players because the money to pay higher wages was withdrawn..........I'd snatch your hand off!!!!

You cannot be serious!!!

How the f... could we afford any players if we were haemorrhaging £2.5 million a year, let alone players with the ability to keep us up in L2? For the sake of 5 metaphoric minutes glory, would you really grab the chance of another relegation to non-league, followed by another 10 years in the wilderness?

I do hope you are in a minority of one.

[Bagger Vance]

Originally Posted by Omni

It isn't as all the money he's put in is in the form of shares.

Apparently he's not asking for any money for his shares either so the future of the club depends on the intentions of the new owner and how big his pockets are.

I suppose that's the difference between the likes of Eastleigh and us.

If a sugar daddy pulled out and left us with shareholder's funds of £2.5m, we could cut our cloth accordingly and manage just fine while someone with the fan base of Eastleigh could end up going bust in a couple of seasons if they didn't cut costs dramatically.

Big question is though is why do all the sugar daddies support tin pot clubs?

Its all about levels of wealth. If you were worth £20m then sticking £500k a year into a lower league club to indulge your love of the game is achievable and for a club at a certain level that could really kick them on, however get into the need to put £1m a year in and you realistically need to be in the £40-80 net worth bracket so your man with £20m wouldn't cut it.

You are spot on with the observation on the shares, people shouldn't get hung up on a loss of £2.5m, losses are only a historic view, not a forward projection. No one sticks in £2.5m of share capital injection without the intent to use it, if its used it needs to go on the balance sheet somewhere, in this instance as a loss to balance the injection.

Cash flow is king in football not necessarily P&L, losses aren't what historically drops smaller clubs into trouble cash flow does.

For example Wrexham's accounts last year might look better than the likely cash position as a transfer fee was placed onto the income field whereas some of the cash position looks to sitting in amounts due over 1 year probably due to being payed in installments.

I could do the same in my business, we could bank work in progress into the P&L yet our payment terms are on successful acceptance testing so I can stick profit into the P&L that I haven't been paid for, its the same with some losses. Cash is king in the small business.

[pagl]

Originally Posted by Junior Shabadoo

BTB was never needed to support the playing budget though, there was just a group of fans who insisted that the club adopt it. Eastleigh's money has by contrast lifted them artificially; I've got no problem with that but it's quite different.

Money is always needed to support the playing budget. Its one of the reasons we struggled after FAT final. Not going into that conversation again though.

The whole point of BTB was to give Keates a chance to sign better quality to avoid the drop. When he took over he didnt really have any budget to work with.

The fans raised a great start amount and asked the club to assist with collecting the monies so it was assistance not insistence the fans wanted.

[krux]

Originally Posted by The Only Way Is Up

You cannot be serious!!!

How the f... could we afford any players if we were haemorrhaging £2.5 million a year, let alone players with the ability to keep us up in L2? For the sake of 5 metaphoric minutes glory, would you really grab the chance of another relegation to non-league, followed by another 10 years in the wilderness?

I do hope you are in a minority of one.

Presumably we could offload said players, and reduce that loss? Cut our cloth? I don't mean carry on with a subsidised wage bill with no subsidy! Yes, this would mean poorer players for league 2, but we cam take our chance.

Also our loss wont be as big as we have more income.
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