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Sustainble not so sure

Can football really be sustainable ?

When you consider that as of January 2013 the football league alone was carrying over a billion pounds in debt.

Now I have never been a fan of GSE from their arrival I have always looked on a management company running a football club as an investment opportunity with considered suspicion and rightly so in my opinion. Also when you consider the money GSE chucked at Jewe, their turn to sustainability does smack a little of forced options.

That said I totally agree in the model of sustainable football even in the top flight when you consider the likes of West Brom and Stoke who manage to operate within very tight margins. The other end of the scale are the likes of Man City who in 2011-2012 had a record loss of 197 million eye watering pounds. Or their local rivals Man U who have by far the greatest revenue income of over 331 million yet have an owner struggling to support the debt the carry.

What if we manage to fluke promotion with a paper thin squad do folk really believe that GSE’s model would stand up or would we be even more humiliated than our last attempt.

Football finance can not carry on within the vein that it has and although we have not seen to many go to the wall this season is this just the calm before the storm or is football really learning its lessons.

The average premier league first season investment ranges from 10 to over 30 million could you see GSE raising this even if we did get promoted or would they just use the trip to pay back their investors.
Not sure myself whether I trust GSE and Mr Rush that much.

GSE OUT !!!!!

posted on 22/3/13

Peeder,

We all want sustainability and Premier teams have proved its possible but even those you mention paid their dues/insurance to gamble retaining prem status.

I can not see GSE making that gamble myself.

posted on 22/3/13

They won't Dru. GSE are relying on two things. An upturn in the economy and the blind faith of DCFC supporters. There are still a large majority who believe GSE will deliver. That number is dwindling season upon season. If nothing changes and I've no reason to believe anything will, there will come a point where attendances will be at such a low level the club's existence will be at stake. GSE's backers will not keep pumping in money to fill the deficit hole as it gets bigger and bigger. Something will have to give.

posted on 22/3/13

Something I have stated for some time Republic since the old 606 days that at some point the backers will lose faith of getting their money back then what.

Personally this rubbish about the economy we have been in tougher times and the fans still came.

There is no solution to this situation in my mind that benefits the club and its fans.

posted on 22/3/13

If GSE are waiting for the economy to pick up they will be waiting a long, long time. Apart from the fact that there are more billionaires, the economy is worse than it was in the thirties. There can be no sign whatsoever of any improvement for a decade or more. Every year is worse. The Chancellor has just added £11Bn to the taxes the next government will have to impose by his giveaway budget to second home buyers. One penny off a pint of beer will save me 10p a night but my liver will need to be replaced on the NHS. He thinks he can buy us off with such largesse to beer drinkers.

Meanwhile there will be less and less supporters as less and less folk can afford to spend on mere entertainment. I don't see GSE getting their money back any time soon.

posted on 22/3/13

Ramdini,

Again some who shares the same fears that I do. Facts are GSE DO NOT OWN DERBY COUNTY AN INVESTMENT GROUP DO!!!

So what happens when that said group lose patience.

I will tell you what we go bust as they will be our main creditor and on that basis can place us into administration.

Scary but true.

comment by CapnBob (U1696)

posted on 22/3/13

First of all, I think the recession/economy is a factor affecting attendances. I kind of agree with 666's first couple of paragraphs and fans are having to make choices. It isn't just about tickets, additional costs like travel also come into play. Fans are now being more selective about matches. Not everyone can make midweek games, or matches switched to late evening kick-offs, making it expensive to buy a season ticket when you probably miss half the games.

Recessions were challenging in the past, but when second tier clubs are asking the best part of £30 for a ticket, it is an expensive hobby.

As for GSE, I am no tubthumper for them, but unfortunately wages drive football now and until these are put in some form of check, running a football club is unsustainable unless you do have a benefactor and shortfalls usually have to be covered & losses made.

Secondly, I think GSE would sell up at the first decent offer which would enable them to leave without making a loss. Gadsby made an enquiry a couple of years back but probably offered them lower than they paid.

I also think we are 'unofficially' up for sale as we were namechecked as one of the clubs for sale in a Dispatches programme (Channel 4) a while back about the Far Eastern guy, friend of SAF, who acted as a broker for clubs seeking investment.

I actually believe GSE would be as glad to be shot of us as we would be of them. I'm no fan of theirs, yet they were the only ones to make an offer for us. They came to make a quick profit, but decent buyers weren't queueing up. Why you may ask? A decent club with good support, not a mass of debts (you'd assume). Sometimes I do wonder if the financial situation at Derby is more complicated and if this puts prospective buyers off.

Modern football is now an expensive loss making business unlike any other unless you develop a strategy (Swansea), & is a business which tends to make short-term decisions.


posted on 23/3/13

Bob,

But teams in the premier have proven that you can compete without selling your soul and actually have a sustainable business model.

I have always said GSE bought something very different from what they bought and this is our biggest issue.

I agree the first oppo that covers their losses (which is unlikely) they will sell but this is a long shot.

We are stuck as are GSE and little will change until breaking point which is my biggest fear for my beloved club

posted on 23/3/13

The key problem is the current PL clubs are pulling up the drawbridge behind them.

The combination of increased PL parachute payments and Financial Fair Play mean that in future there will ba a cadre of 24~26 clubs that have a chance of playing in the PL - albeit in any one season 4~6 of them are having a temporary spell in the championship.

I heard on TV recently that under the new arrangements a club relegated from the PL will get £23m a year for 4 years. A Championship club will get £2.3m. So a relegated club will be able to out-spend a Chamionship club by £20.7m - for 4 years!!

To even that up a 'sugar-daddy' owner would have to pump £82.8m in - just to get a level playing field.

Why would a prospective sugar-daddy do that when the same money could by one of the smaller clubs already in the PL club?

I think next season... or maybe 2014/15 at a push - will be the last time a club gets promoted to the PL that has not been in the PL within the preceding 4 years.

Then there will be a double-whammy on the rest of the Championship clubs... their revenue will fall as some fans decide they are not going to spend £600 a year watching, when the only issue at stake is avoiding relegation to L1.

The Chamionship over the last decade has been arguably much more interesting that the PL because its not been predictable. I

n the PL over the last 15~20 years most football fans will have been able to name the two clubs who will fill positions 1&2, the two clubs who will fill positions 3&4 and the three clubs fighting for positions 5&6 before a ball has been kicked.

The same predictability has not been true in the Championship - but I believe it will be in the future.

I think its all a big yawn.

The last two seasons I've been seriously thinking about not renewing, and then changed my mind. I can't see that continuing this season.

As previous posters have said, the BS spewing from the Pride Park boardroom during the 'renewal window' now has zero credibility.

I'm thinking about how many extra trips to the theatre or cinema I could get for £600, and what would the enjoyment differential be between that and 23 cold & wet 90 minutes spent watching nothing much more than honest effort (in the most part) at Pride Park.

I think in 2013/14 I'm going to put it to the test.

posted on 23/3/13

Apathy will be GSE's downfall

comment by CapnBob (U1696)

posted on 23/3/13

I'm thinking about how many extra trips to the theatre or cinema I could get for £600, and what would the enjoyment differential be between that and 23 cold & wet 90 minutes spent watching nothing much more than honest effort (in the most part) at Pride Park.
..............................................................................

I know what you mean Wideboy. Yes, the danger is of the Championship becoming an unofficial PL2. I heard the same on the radio, the differential between a parachute payment of £20m+ and £2m is staggering.

Football is now about high stakes and money, which has distorted the notion of competition.

My only caveat as seen by the debt owed by Bolton to a benefactor, and the mismanagement of Wolves & Blackburn, is that the PL is a league unlike any other and that parachute payments were brought in to insulate clubs from the financial fall-out which often followed relegation where a club might get promoted and then sign players on lucrative contracts and then be liable to honouring these despite a fall in revenues upon relegation. It is still happening as seen with Zigic at Birmingham.

Swansea are probably an exception, West Brom, too, and Wigan have now gone the same way, of sourcing talent at reasonable markets, exploiting the loan system, but a side only needs to make a couple of toxic signings, like we did under both Jewell & Davies, to see £20m lost.

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