The Cost of Relegation

[javeajag]

I see Ross County have said relegation means their budget will now  be reduced by 45%.....which in our terms means about £2m ..... that’s why relegation will be a disaster..... rumours about players leaving have already started....

the record of teams bouncing straight back up us very poor Dundee Utd just being the latest example 

so I for one don’t long for the halcyon days of winning in lower leagues.... we need to stay up ! 

[Paolo]

50 minutes ago, javeajag said:

I see Ross County have said relegation means their budget will now  be reduced by 45%.....which in our terms means about £2m ..... that’s why relegation will be a disaster..... rumours about players leaving have already started....

the record of teams bouncing straight back up us very poor Dundee Utd just being the latest example 

so I for one don’t long for the halcyon days of winning in lower leagues.... we need to stay up ! 

It would be disastrous for us, we cannot afford to go down, its as simple as that,  unfortunately we don't have Ann Budge type fans who are willing to invest heavily in the first team at the club.

[watties wallies]

more reason why would should have added to the squad at the last window

[lady-isobel-barnett]

I'd take anything Roy McGregor says with a pinch of salt. OK may start out at a 45% reduction but you know Uncle Roy and his annual dip into the January sales.

That so is an aside and there's no refuting we'd have to make a huge reduction in budget.  It's just because of the club in question I'd ignore the figure of 45% and any correlation to our reduced budget.

[allyo]

We're not down.

[javeajag]

And may we stay not down !!!

[Lenziejag]

Does anybody know what other clubs have experienced when they got relegated. A big clear out in playing staff, bringing others in at reduced wages ? Or keeping some/most of their players at reduced wages.?

We don’t make huge amounts of profit and have no overdraft, I don’t think being relegated will affect the overall financial position. It might hold back any developments planned to concentrate on the playing side, though.

That said - I want us to stay up

 

[laukat]

Last time we were relegated it wasn't fun. Despite having a decent parachute payment we had the wrong management team (Whyte and Britton). On paper they had put together a squad that looked too good for the league below but it quickly fell apart and we ended up with back to back relegations. 

Previous relegations form the premier league under Murdo McLeod and Peter Cormack has similar results. It took a long time to get back and you usually get quite a few years of dross and bottoming out before you start to recover

So lessons from that were don't assume that we will make a quick return or even be competitive. Relegation can mean years in the wilderness so trying to measure it in year 1 financial terms is never really a fair reflection of what lies ahead.

Roy McGregor might be able to bankroll a quick return for Ross County but I'm fairly sure Dundee United thought the same three years ago and they still look some distant from a return

[lady-isobel-barnett]

1 hour ago, Lenziejag said:

Does anybody know what other clubs have experienced when they got relegated. A big clear out in playing staff, bringing others in at reduced wages ? Or keeping some/most of their players at reduced wages.?

No idea but I think we should be looking at St Mirren as a model. Similar size and, relatively free of any damaging debt and operate within their means. Dundee Utd are a bit of a basket case and I've already expressed my opinion re County/McGregor so I wouldn't looked to either as an example. 

[potty trained]

Why is a 45% drop in budget a bad thing?

Surely it's all relative and you set your budget to reflect where you want to finish in the league. If county think they can win the league and cut the budget by 45% then surely that's a positive note?

Added to that, how many of this squad do you want to keep on the wage bill if we stay up or go down?

And... If we go down a lot more of the development squad will be able to see first team action, so straight away we will be able to reduce spend, right there.

[allyo]

Agree regarding the budget, but jeez this is a bleak subject for this week

[javeajag]

Interesting thoughts on budgeting.....

You set your budget on what you can afford ...reducing your budget by 45% isn’t a lifestyle choice...

it’s simply there is 45% less revenue coming into the club from the spfl , tv, tickets, sponsors  etc etc so we go from a annual revenue of just over £4m spending around £2m on the playing squad to around  an annual revenue of around £2m  and £1m on the squad .....that reduces the number of players we have and the relative quality and a reduction in admin staff etc 

 

this is the realityof nit getting the next two games right 

[potty trained]

3 minutes ago, javeajag said:

Interesting thoughts on budgeting.....

You set your budget on what you can afford ...reducing your budget by 45% isn’t a lifestyle choice...

it’s simply there is 45% less revenue coming into the club from the spfl , tv, tickets, sponsors  etc etc so we go from a annual revenue of just over £4m spending around £2m on the playing squad to around  an annual revenue of around £2m  and £1m on the squad .....that reduces the number of players we have and the relative quality and a reduction in admin staff etc 

 

this is the realityof nit getting the next two games right 

Not everyone sets their budget to what they can afford. some run at a loss.

Admittedly I've not read the article, but just because their playing budget has dropped 45% doesn't mean income has dropped 45%.  unless you have figures that show they maych?

It doesn't automatically reduce the number of players, Archie runs with a similar size squad regardless of what division we are in.

Quality is sujective, can anyone say the quality of football we have watched in the last 5 years has been better than the football we played winning the championship?

 

 

[javeajag]

57 minutes ago, potty trained said:

Not everyone sets their budget to what they can afford. some run at a loss.

Admittedly I've not read the article, but just because their playing budget has dropped 45% doesn't mean income has dropped 45%.  unless you have figures that show they maych?

It doesn't automatically reduce the number of players, Archie runs with a similar size squad regardless of what division we are in.

Quality is sujective, can anyone say the quality of football we have watched in the last 5 years has been better than the football we played winning the championship?

 

 

Yes there income will drop just as ours will that’s what he was talking about .....look at our total revenue over the last ten years and being in the premiership pretty much increases it by half 

I’m assuming  the banks won’t allow us to run at a loss or a rich sugar daddy will subside us so we simp,y have a lot less to invest in the club and the team

yes 

[potty trained]

I've not denied their income will drop. But you have repeatedly inferred that both their playing budget and income will drop 45%. All I asked for was proof of numbers because it seems unlikely that that would be the case. 

 

There seems to be a lot of assumptions in your posts on this thread. 

 

If you genuinely have watched better football than the quick passing free flowing football we played winning the second tier, in the last 5 years id love to know when. The first season up we tried to emulate it but the players we had couldn't do it against bigger stronger opposition. They tried don't get me wrong. Since that first season. Maybe into the second, It's been tough to watch. 

Edited May 15, 2018 by potty trained

[lady-isobel-barnett]

1 hour ago, potty trained said:

If you genuinely have watched better football than the quick passing free flowing football we played winning the second tier, in the last 5 years id love to know when. The first season up we tried to emulate it but the players we had couldn't do it against bigger stronger opposition. They tried don't get me wrong. Since that first season. Maybe into the second, It's been tough to watch. 

No question the football we played 4 or 5 seasons ago was more pleasing on the eye. That doesn't mean we don't play relatively attractive football, it's just that most of the teams in the top league hardly excel in serving up entertaining fare.  What can't be argued is that no matter how dire it is to watch some of these teams as a means to an end they've usually been successful. The repetitive monotony of fixtures probably has much to do with the lack of entertaining football on display.

Btw the best I've seen us play, certainly for entertainment value, was the first 30 or so minutes at Dens (Aug 14).  The 4-0 (same season) up at Inverness was rather good as well.   

[Paolo]

Its marvelous that we have investment in the youth academy,  but hopefully Colin could be become more involved, I've mentioned in an earlier post, what Ann Budge has done with Hearts FC,

[javeajag]

9 hours ago, potty trained said:

I've not denied their income will drop. But you have repeatedly inferred that both their playing budget and income will drop 45%. All I asked for was proof of numbers because it seems unlikely that that would be the case. 

 

There seems to be a lot of assumptions in your posts on this thread. 

 

If you genuinely have watched better football than the quick passing free flowing football we played winning the second tier, in the last 5 years id love to know when. The first season up we tried to emulate it but the players we had couldn't do it against bigger stronger opposition. They tried don't get me wrong. Since that first season. Maybe into the second, It's been tough to watch. 

I said look at our turnover from our accounts when we were in Div 1 and now.....one is higher  the other much lower ....fact

I showed you the sources of revenue difference ....little tv money, reduced gate receipts, reduced sponsorship money, no spfl payments  etc etc ....fact

of course on the other hand you reduce costs on players both their wages and numbers ....fact

Where do you think our revenue comes from ?!

the biggest predictor of football success is the amount you pay players go down a division your making life hard for yourself 

also there is no guarantee we will play free flowing football if we go down that was one season and may never happen again but let’s play in the juniors and win every week 

[javeajag]

I see article on BBC where Neil Patey from Ernst & Young says relegation will costs us £1m in revenue.....with the ending of the parachute payments that will rise to £2m plus which is consistent with Ross County’s 43% decline in income 

so after a couple of years in the championship finances will be tough 

[a f kincaid]

As I understand it the parachute payments are £250k year one and £150k year two (unless promoted).  Broadly speaking £250k is only 2 x JHS full of Celtic or Rangers supporters.  It sounds a lot but in context of having 5 home games against them this season, it isn't.  Tough times ahead.

[allyo]

But isn't it just a question of turnover? You earn less, you spend less, your standard is lower, your competitors' standard is lower, you still compete. And if you do well, you go back up again. 

(And obviously I'd you don't.... etc etc)

Edited May 22, 2018 by allyo

[javeajag]

2 hours ago, allyo said:

But isn't it just a question of turnover? You earn less, you spend less, your standard is lower, your competitors' standard is lower, you still compete. And if you do well, you go back up again. 

(And obviously I'd you don't.... etc etc)

Correct

we will have less income and therefore less to spend .... meaning fewer players paid less 

[potty trained]

29 minutes ago, javeajag said:

Correct

we will have less income and therefore less to spend .... meaning fewer players paid less 

Let's hope so. To continue to pay Premiership wages would be financial suicide.

[Auld Jag]

4 hours ago, potty trained said:

Let's hope so. To continue to pay Premiership wages would be financial suicide.

Archibald has said the players who still have contracts have a relegation clause to protect the club.I would imagine that would mean less wages or free to go.

[javeajag]

13 minutes ago, Auld Jag said:

Archibald has said the players who still have contracts have a relegation clause to protect the club.I would imagine that would mean less wages or free to go.

I think that means they can walk if we get relegated