Problems with Gartside

[thebish]

Devon's short of football teams!

[LeverEnd]

Very interesting interview. Frank in some respects but a lot of defensive excuses.
I don't get the bit about fans wanting ED out? I've never seen that from anyone. If he's picking up on some Twitter muppet and tarring the whole fanbase with it he can feck off.
I'm quite willing to accept the good things he's been involved with, I just don't like him and get the impression he's gone into Megson mode and doesn't like us either.

[bobo the clown]

Very interesting interview. Frank in some respects but a lot of defensive excuses.
I don't get the bit about fans wanting ED out? I've never seen that from anyone. If he's picking up on some Twitter muppet and tarring the whole fanbase with it he can feck off.
I'm quite willing to accept the good things he's been involved with, I just don't like him and get the impression he's gone into Megson mode and doesn't like us either.

It's coming quite a bit from the more trollish sites (naming no names) and if you follow the article responses on the BEN.

Not by any means everyone but enough. A bit like the level of anti-Gartsiders maybe 12 months ago.

[LeverEnd]

Ah. I don't bother with them. Problem just a few dickheads repeating themselves. I've seen comments on other BN articles, usually descending into racism and general stupidity.

[Worthy4England]

Aye - it's the "where's all the money going" brigade - clearly being out of pocket by £160+M, means you've trousered the cash from the Fibrelec sponsorship deal, to pay for your next Lear jet..

[Athers]

Aye - it's the "where's all the money going" brigade -

Probably the same lot who used to stop by the players' car park for a look at Diouf's alloys.

[H. Pedersen]

I appreciate the candid interview, but this bit made me shake my head.

Very few players transfer from this level to Premier League – they [Premier League clubs] would much rather, as a rule, buy a foreign player rather than recognise a player that has dropped down.

There are exceptions, but it’s not a regular thing. The value of our squad was significantly discounted from day one. The players we thought would be sellable and valuable are all of a sudden not. And you have Premier League wages hanging around them too.

So Premier League clubs are to blame because they aren't interested in players who, for the most part, have shown they are not capable of competing at Premier League level. Right.

[Worthy4England]

I appreciate the candid interview, but this bit made me shake my head.

Very few players transfer from this level to Premier League – they [Premier League clubs] would much rather, as a rule, buy a foreign player rather than recognise a player that has dropped down.

There are exceptions, but it’s not a regular thing. The value of our squad was significantly discounted from day one. The players we thought would be sellable and valuable are all of a sudden not. And you have Premier League wages hanging around them too.

So Premier League clubs are to blame because they aren't interested in players who, for the most part, have shown they are not capable of competing at Premier League level. Right.

I'm not sure he says anyone is to blame - it looks like he's pointing out what happens?

[Mar]

I would imagine he doesn't want people looking into whose to blame especially after signing players like Elmander, N'Gog, Sordell and Shittu.

We overpaid for all of those and gave them contracts that were easy to escape from by leaving on a free (Elmander in particular). Shittu was a very questionable signing and never got given much game time, why we paid for him when we could've signed a free player baffles me. Elmander's 3 year deal at the age of 28 meant we weren't going to get much return on investment if he was successful because by the time the second season rolls round its clear he's got to head off or sign a new deal.

Sordell and N'Gog are arguably decent signings when you look at it on paper. Young goalscorers hoping to make the grade. Sign then sell on. But again we paid for them when we shouldn't. Imagine using that £4m that we paid for Sordell on a player that would've contributed to our team (loan signing for example) and maybe just maybe it would've made a difference in whether or not we stayed in the Prem.

[LeverEnd]

I appreciate the candid interview, but this bit made me shake my head.

Very few players transfer from this level to Premier League – they [Premier League clubs] would much rather, as a rule, buy a foreign player rather than recognise a player that has dropped down.

There are exceptions, but it’s not a regular thing. The value of our squad was significantly discounted from day one. The players we thought would be sellable and valuable are all of a sudden not. And you have Premier League wages hanging around them too.

So Premier League clubs are to blame because they aren't interested in players who, for the most part, have shown they are not capable of competing at Premier League level. Right.

I'm not sure he says anyone is to blame - it looks like he's pointing out what happens?

That's how I read it. Wolves had similar problems.
My biggest problem with it all is player contracts. They were clearly too long, too fat and not sufficiently well-structured to cope with relegation. Long contracts are fine for valuable assets who you can get good money for, but we haven't managed that for years. All they've done is drag us down.
We were never a club immune from the threat of relegation, especially not without Big Sam. That looks like piss-poor planning to me.

[H. Pedersen]

I appreciate the candid interview, but this bit made me shake my head.

Very few players transfer from this level to Premier League – they [Premier League clubs] would much rather, as a rule, buy a foreign player rather than recognise a player that has dropped down.

There are exceptions, but it’s not a regular thing. The value of our squad was significantly discounted from day one. The players we thought would be sellable and valuable are all of a sudden not. And you have Premier League wages hanging around them too.

So Premier League clubs are to blame because they aren't interested in players who, for the most part, have shown they are not capable of competing at Premier League level. Right.

I'm not sure he says anyone is to blame - it looks like he's pointing out what happens?

But he says they had players they "thought would be sellable and valuable." So I guess they didn't budget for the fact that relegated players are not desirable (with the notable and completely baffling exceptions of Quashie and Hreidarsson).

[Worthy4England]

He does, and whilst admitting that with hindsight we signed some tough Contracts, that made it difficult (which is why I think we had quite a few refusing transfers/loans), he seems to be pointing to FFP playing a part in Clubs not buying lower division players. I've not worked out that link yet.

[H. Pedersen]

Maybe he means that with stricter financial controls, teams are less likely to take a punt on an overpriced player like David Ngog.

[Worthy4England]

Maybe he means that with stricter financial controls, teams are less likely to take a punt on an overpriced player like David Ngog.

Maybe, but we were struggling to give 'em away for nowt, just to get their salaries off the books. N'gog we actually managed to shunt to Swansea. I think the Prem broke it's record for transfer fees paid in the Summer so I'm stll confuzzled.

[Beefheart]

Yep. But I understand he stopped taking interest as of July this year. (Al Fayed, btw, never took interest on his investment at Fulham).

We did - I went and had another look at the Accounts and did an edit.

I think 'taking interest' is a bit misleading. I assume that the interest was just tacked onto the principal rather than him receiving any cash. It would be a bit silly if he was. The 'debt' comes from him pumping in cash to cover the shortfall, so given the size of the losses being made if he were to take interest out he'd just be taking back money that he's already loaned the club....but then he'd only be giving that back to the club the next time they need bills paying.

[Worthy4England]

Yep. But I understand he stopped taking interest as of July this year. (Al Fayed, btw, never took interest on his investment at Fulham).

We did - I went and had another look at the Accounts and did an edit.

I think 'taking interest' is a bit misleading. I assume that the interest was just tacked onto the principal rather than him receiving any cash. It would be a bit silly if he was. The 'debt' comes from him pumping in cash to cover the shortfall, so given the size of the losses being made if he were to take interest out he'd just be taking back money that he's already loaned the club....but then he'd only be giving that back to the club the next time they need bills paying.

Quite, I think I can recall Gartside saying it was a wooden dollars transaction previously...

[EverSoYouri]

Yep. But I understand he stopped taking interest as of July this year. (Al Fayed, btw, never took interest on his investment at Fulham).

We did - I went and had another look at the Accounts and did an edit.

I think 'taking interest' is a bit misleading. I assume that the interest was just tacked onto the principal rather than him receiving any cash. It would be a bit silly if he was. The 'debt' comes from him pumping in cash to cover the shortfall, so given the size of the losses being made if he were to take interest out he'd just be taking back money that he's already loaned the club....but then he'd only be giving that back to the club the next time they need bills paying.

Quite, I think I can recall Gartside saying it was a wooden dollars transaction previously...

I bow to those who understand the arcane mysteries of business accounting on this matter. What doesn't sit comfortably in my mind is the two-fold mantra of:

We don't really have much debt.
We're still up sh*t creek on FFP.

Anybody explain?

[Worthy4England]

Yep. But I understand he stopped taking interest as of July this year. (Al Fayed, btw, never took interest on his investment at Fulham).

We did - I went and had another look at the Accounts and did an edit.

I think 'taking interest' is a bit misleading. I assume that the interest was just tacked onto the principal rather than him receiving any cash. It would be a bit silly if he was. The 'debt' comes from him pumping in cash to cover the shortfall, so given the size of the losses being made if he were to take interest out he'd just be taking back money that he's already loaned the club....but then he'd only be giving that back to the club the next time they need bills paying.

Quite, I think I can recall Gartside saying it was a wooden dollars transaction previously...

I bow to those who understand the arcane mysteries of business accounting on this matter. What doesn't sit comfortably in my mind is the two-fold mantra of:

We don't really have much debt.
We're still up sh*t creek on FFP.

Anybody explain?

I'll have a crack (albeit Gartside says in the interview we're on target to hit FFP criteria)

FFP looks at the Accounts in terms of how much we earn (Revenue) Vs how much it costs (Costs) - we can't be more than £8m above our Revenue with our Costs, without incurring penalty.

Debt (or Equity as Garty prefers) - is a big chunk of money, but for Accounting purposes (so yearly costs) we only show how much we pay in interest...so up until the last accounts, from our £160m Debt, only the interest payments contributed to our Operational cost (so £7.5m last Accounts, zero, this set of Accounts).

I haven't yet worked out if Clubs can increase their "lump sum" at zero interest without falling foul of some FFP quirk, theoretically that could be a loophole, but no one seems to be talking about it as such, so I think there must be some wording to cover that eventuality - I think it's buried in "Related Party Transactions"...

If our Revenue increases - so we build a 120,000 seat stadium and fill it we can spend more. If our Revenue goes down - which ours is doing as most of it's parachute payments, then we have to cut out costs to match.

We can spend £8m more than we earn without incurring penalty (which seems to be where Gartside and others are suggesting we're going to land this year...

[Dave Sutton's barnet]

We don't really have much debt.
We're still up sh*t creek on FFP.

Anybody explain?

Others will be far better at it than me, but as I understand it:

* FFP basically means your outgoings can't vastly exceed your incomings (we're looking at you, PSG and Man City etc)
* Ours still do, because Championship income is vastly less than Premiership income, especially as parachute payments shrink
* The debt, which is large but structured very manageably (all to Eddie not banks), is a small outgoing compared to wages (IIRC?)

Basically, any club who signed long-term contracts without relegation-reduction clauses is still paying Premier wages on Champo income. In my opinion Gartside's BN interview was far from being a loaded gun pointed at his own head, but for me the worst part in it was the implication that relegation caused us this contractual problem - that we had (I surmise) been extending contracts without these relegation-reduction clauses. Considering FFP was not a surprise when it arrived, this strikes me as foolish.

More details (generally) on FFP here: http://www.financialfairplay.co.uk/fina ... lained.php" onclick="window.open(this.href);return false;


EDIT Thanks Worthy. Is it possible/easy, for explanation, to list the last few seasons' Income vs Costs?

[EverSoYouri]

We did - I went and had another look at the Accounts and did an edit.

I think 'taking interest' is a bit misleading. I assume that the interest was just tacked onto the principal rather than him receiving any cash. It would be a bit silly if he was. The 'debt' comes from him pumping in cash to cover the shortfall, so given the size of the losses being made if he were to take interest out he'd just be taking back money that he's already loaned the club....but then he'd only be giving that back to the club the next time they need bills paying.

Quite, I think I can recall Gartside saying it was a wooden dollars transaction previously...[[/quote]

I bow to those who understand the arcane mysteries of business accounting on this matter. What doesn't sit comfortably in my mind is the two-fold mantra of:

We don't really have much debt.
We're still up sh*t creek on FFP.

Anybody explain?[/quote]

I'll have a crack (albeit Gartside says in the interview we're on target to hit FFP criteria)

FFP looks at the Accounts in terms of how much we earn (Revenue) Vs how much it costs (Costs) - we can't be more than £8m above our Revenue with our Costs, without incurring penalty.

Debt (or Equity as Garty prefers) - is a big chunk of money, but for Accounting purposes (so yearly costs) we only show how much we pay in interest...so up until the last accounts, from our £160m Debt, only the interest payments contributed to our Operational cost (so £7.5m last Accounts, zero, this set of Accounts).

I haven't yet worked out if Clubs can increase their "lump sum" at zero interest without falling foul of some FFP quirk, theoretically that could be a loophole, but no one seems to be talking about it as such, so I think there must be some wording to cover that eventuality - I think it's buried in "Related Party Transactions"...

If our Revenue increases - so we build a 120,000 seat stadium and fill it we can spend more. If our Revenue goes down - which ours is doing as most of it's parachute payments, then we have to cut out costs to match.

We can spend £8m more than we earn without incurring penalty (which seems to be where Gartside and others are suggesting we're going to land this year...[/quote]

Much obliged, Worthy. That's a damned sight clearer than mud!

But...it does suggest that ED taking interest (or whatever Garty wants to call it) would have been a contribution to our falling foul of FFP. Am I right?