Tranche 2 & the Preservation of Power

[Woodstock Jag]

39 minutes ago, javeajag said:

Your point being ….l

His point is an obvious one.

The vast majority of Partick Thistle's wages are spent on football players and coaching staff.

So if you are arguing that significant cuts need to be made to wages, on the scale that would need to be made, in order to meet a 60% wages to turnover ratio, at least some of that, and in practice probably most of it, is likely to fall on the playing budget.

That is likely to have a negative impact on expected prize-money and gate receipts. Suppressing turnover by potentially very large six figure sums.

Requiring you to make more cuts to wages to meet your 60% wages to turnover ratio.

It is therefore unclear how simply "making cuts" and "spending less on wages" makes the Club more sustainable. It could in fact just lead to the Club losing the same amount of money, or more, and with worse footballing outcomes.

[javeajag]

7 hours ago, Woodstock Jag said:

No. I'm asking you to explain how the turnover figure - for the purposes of preparing the season 2024-25 budget (or indeed any future budget) - which is premised on volatile future revenues - should, in your view, be calculated for the purposes of deciding to spend only 60% of revenue on wages.

In 2018-19 Partick Thistle had a turnover of £3.04 million.

In 2019-20 Partick Thistle had a turnover of £2.66 million.

In 2020-21 Partick Thistle had a turnover of £1.48 million.

In 2021-22 Partick Thistle had a turnover of £2.47 million.

In 2022-23 Partick Thistle had a turnover of £2.82 million.

In 2023-24 Partick Thistle had a turnover of over £3.1 million.

What turnover figure should Partick Thistle use for the purposes of the 2024-25 budget? Give me a number and a margin of error. I'll allow you, for the sake of argument, ±£150k. Tell us what it should be based on.

Without that number, we cannot meaningfully say what "60%" looks like for the purposes of deciding what the Club has available to spend on hiring people.

60% of the lowest of these figures is less than £900k. For the Club's entire staff. A figure broadly equivalent to Greenock Morton's playing budget.

60% of the highest of these figures is almost £1.9 million. More than double. And within £100k of what the Club's staffing budget was in season 2022-23.

What turnover figure should we be using, and why?

Jim likes calling TJF The West Wing of Partick Thistle.

Well in the words of Jed Bartlett: show me [turnover] numbers, Mrs Landingham!

 

I assume the club for each financial year ahead prepares a budget and like all businesses that is based on assumptions, projections and past actuals. Some of our revenue is relatively predictable , some not ….how unusual !
We have generally excluded cup runs from our projections for example.
The club will know how accurate the budget v actuals have been in the past so that should be getting more accurate and the variables more understood.

so the wage % will be based on the budgeted revenue line and should be on a conservative basis and should certainly exclude optimistic revenue projections. Been there, done that git the redundancy letters.

apparently revenue goes up and down in football which never happens to other businesses ?!!

the real question is …..if we spend money we don’t have and make losses who underwrites them ? You, TJF, Dave Cormack ?

 

[javeajag]

7 hours ago, Woodstock Jag said:

His point is an obvious one.

The vast majority of Partick Thistle's wages are spent on football players and coaching staff.

So if you are arguing that significant cuts need to be made to wages, on the scale that would need to be made, in order to meet a 60% wages to turnover ratio, at least some of that, and in practice probably most of it, is likely to fall on the playing budget.

That is likely to have a negative impact on expected prize-money and gate receipts. Suppressing turnover by potentially very large six figure sums.

Requiring you to make more cuts to wages to meet your 60% wages to turnover ratio.

It is therefore unclear how simply "making cuts" and "spending less on wages" makes the Club more sustainable. It could in fact just lead to the Club losing the same amount of money, or more, and with worse footballing outcomes.

Basically you are asking us to spend money we don’t have , to achieve revenue  we might not get for a promotion we might not make and if we don’t well it was ‘speculative’ and a bit of a ‘punt ‘ and hey Santa will turn up and give us some cash.

you don’t run a business that way.

[Jaggernaut]

16 minutes ago, javeajag said:

Basically you are asking us to spend money we don’t have , to achieve revenue  we might not get for a promotion we might not make and if we don’t well it was ‘speculative’ and a bit of a ‘punt ‘ and hey Santa will turn up and give us some cash.

you don’t run a business that way.

Do you notice how some manufacturers sell products (I'm thinking of food here) at the same price or even more, while reducing the amount (e.g., by weight and or number of items in the packet)? At some point many customers (I'm one, and I know others) simply decide to stop buying that product, as it is no longer worth paying that amount for. Now think of a football team, and you offer the customers (the supporters) an inferior product because you need to quickly slash the footballing budget to make savings. The inferior product will soon show on the field and in results. Well, people are much more likely to soon get fed up with paying the same amount or more for what is clearly less (quality) than they want and/or are used to. They will do without, or shop elsewhere or for an alternative. For the football club, that means further reductions in budget due to loss of several sources of income (tickets, hospitality, advertising and sponsors.....). Meanwhile, employment costs, maintenance costs, electricity costs etc continue to increase. 

What was that about how you should run a business?

[Tom Hosie]

Playing devil's advocate to a degree but would cutting expenditure and hoping that it doesn't lead to a worsening financial position due to reduced prize money, reduced gate receipts/season ticket sales for the preceeding season, reduced sponsorship income etc. not also count as 'speculative' and  a 'punt'. 

There's a clear risk with any strategy. 

I'm certainly not in a speculate to accumulate camp but equally I'm not keen on slavish austerity cuts at Firhill either. 

[Jordanhill Jag]

14 minutes ago, Tom Hosie said:

Playing devil's advocate to a degree but would cutting expenditure and hoping that it doesn't lead to a worsening financial position due to reduced prize money, reduced gate receipts/season ticket sales for the preceeding season, reduced sponsorship income etc. not also count as 'speculative' and  a 'punt'. 

There's a clear risk with any strategy. 

I'm certainly not in a speculate to accumulate camp but equally I'm not keen on slavish austerity cuts at Firhill either. 

Its been clearly stated by the Board that by the end of Season we will struggle to pay our debtors ie we will have ran out of money 

You therefore have two options STJ 2 or reduce spending 

So there is actually not a Risk ref Cutting costs - we dont have an option or we go bust 

The secret of Management is to cut costs on non core activities and minimise the impact on the Core Product 

There are plenty of successful Companies who do exactly that 

[Mr Scruff]

1 hour ago, javeajag said:

Basically you are asking us to spend money we don’t have , to achieve revenue  we might not get for a promotion we might not make and if we don’t well it was ‘speculative’ and a bit of a ‘punt ‘ and hey Santa will turn up and give us some cash.

you don’t run a business that way.

At the start of a financial year you have to make decisions based on your projections.  These are assumptions.  They may be right, they may not and will be affected in an iterative manner by those decisions.  This is especially the case (it seems to me) in football finances.  Rocket science is easier.

In that sense it's all "money we don't have".

You do run a business based on projections.

[Woodstock Jag]

1 hour ago, javeajag said:

I assume the club for each financial year ahead prepares a budget and like all businesses that is based on assumptions, projections and past actuals. Some of our revenue is relatively predictable , some not ….how unusual !

We have generally excluded cup runs from our projections for example.

The club will know how accurate the budget v actuals have been in the past so that should be getting more accurate and the variables more understood.

As I've just shown you, the actuals for revenue have, in the last three seasons, varied by £700k. In this division.

1 hour ago, javeajag said:

so the wage % will be based on the budgeted revenue line and should be on a conservative basis and should certainly exclude optimistic revenue projections. Been there, done that git the redundancy letters.

Agreed. That's why we instructed the Club to assume more pessimistic footballing outcomes than the budget they originally prepared.

1 hour ago, javeajag said:

apparently revenue goes up and down in football which never happens to other businesses ?!!

That's not the argument. The point is that it is more difficult, in football than in many other businesses, to make significant in-year downward changes to wages if budgeted revenue does not materialise, and there is high volatility in the primary revenue sources. You are (broadly speaking) committing to a figure in July/August, which you then have very limited capacity to alter except briefly in January, for the full financial year.

In other businesses it is much easier to adjust downwards wage-spend in response to other developments, at any time of year.

So if you're going to adopt a more "conservative" set of assumptions about turnover when setting a wage budget to hit 60%, that's going to restrict, quite drastically, your ability to hire people. That will have consequences for footballing performance (thus prize money, the single largest component of a successful football team's revenue in Championship football), and off-field revenue generation. It's a vicious cycle.

 

[javeajag]

51 minutes ago, Jaggernaut said:

Do you notice how some manufacturers sell products (I'm thinking of food here) at the same price or even more, while reducing the amount (e.g., by weight and or number of items in the packet)? At some point many customers (I'm one, and I know others) simply decide to stop buying that product, as it is no longer worth paying that amount for. Now think of a football team, and you offer the customers (the supporters) an inferior product because you need to quickly slash the footballing budget to make savings. The inferior product will soon show on the field and in results. Well, people are much more likely to soon get fed up with paying the same amount or more for what is clearly less (quality) than they want and/or are used to. They will do without, or shop elsewhere or for an alternative. For the football club, that means further reductions in budget due to loss of several sources of income (tickets, hospitality, advertising and sponsors.....). Meanwhile, employment costs, maintenance costs, electricity costs etc continue to increase. 

What was that about how you should run a business?

If you can point out where I said we should ‘quickly slash costs’ then you might have a point. We are getting tranche 2 so we have time to sort ourselves out.

you will also have noticed that we are currently losing money which is in chapter 1 of how not to run a business and that despite over spending we are not yet being over successful on the park. 

[javeajag]

50 minutes ago, Tom Hosie said:

Playing devil's advocate to a degree but would cutting expenditure and hoping that it doesn't lead to a worsening financial position due to reduced prize money, reduced gate receipts/season ticket sales for the preceeding season, reduced sponsorship income etc. not also count as 'speculative' and  a 'punt'. 

There's a clear risk with any strategy. 

I'm certainly not in a speculate to accumulate camp but equally I'm not keen on slavish austerity cuts at Firhill either. 

Who has advocated slavish austerity ? Just don’t spend money you don’t have since no one is going bankroll us. 

[javeajag]

8 minutes ago, Woodstock Jag said:

As I've just shown you, the actuals for revenue have, in the last three seasons, varied by £700k. In this division.

Agreed. That's why we instructed the Club to assume more pessimistic footballing outcomes than the budget they originally prepared.

That's not the argument. The point is that it is more difficult, in football than in many other businesses, to make significant in-year downward changes to wages if budgeted revenue does not materialise, and there is high volatility in the primary revenue sources. You are (broadly speaking) committing to a figure in July/August, which you then have very limited capacity to alter except briefly in January, for the full financial year.

In other businesses it is much easier to adjust downwards wage-spend in response to other developments, at any time of year.

So if you're going to adopt a more "conservative" set of assumptions about turnover when setting a wage budget to hit 60%, that's going to restrict, quite drastically, your ability to hire people. That will have consequences for footballing performance (thus prize money, the single largest component of a successful football team's revenue in Championship football), and off-field revenue generation. It's a vicious cycle.

 

Have you noticed that under your current strategy we are losing money and are having to be bailed out again ? 

[Jordanhill Jag]

6 hours ago, Mr Scruff said:

At the start of a financial year you have to make decisions based on your projections.  These are assumptions.  They may be right, they may not and will be affected in an iterative manner by those decisions.  This is especially the case (it seems to me) in football finances.  Rocket science is easier.

In that sense it's all "money we don't have".

You do run a business based on projections.

When those “ Projection” show you will run out of cash and not be able to pay your Creditors you make changes 

instead the Board and TJF decided to spend money we did not have - putting our Finances and by extension the Club in jeopardy 

Now this is a massive issue - we have two Accountants on our Board who agreed this budget - TJF Board who are there to carry out Financial Due Diligence actually boast how the agreed this budget 

BUT and this is key - the Board excluded the Forecast losses from the Club Financial Statement - TJF Board Rep went along with it - TJF Board allowed it  

None of this is acceptable - if the Board are going to deliberately exclude key info from there Financial Statements - what else is missing 

If TJF Rep and TJF Board are allowing this to happen - what is the point in them being here 

They came to Power on the back of the Financial BlackHole created by the Old Board 

Yet here we are struggling to pay our Creditors  at the end of the Season ? 

Edited November 25 by Jordanhill Jag

[Albert's Ghost]

16 minutes ago, Jordanhill Jag said:

Yet here we are struggling to pay our debtors at the end of the Season ? 

We pay our creditors.  Our debtors pay us.

and it's "their" FFS.

[Woodstock Jag]

If we're struggling to pay our debtors we really are in trouble.

[Jordanhill Jag]

9 minutes ago, Woodstock Jag said:

If we're struggling to pay our debtors we really are in trouble.

Its ok -  no matter who we are struggling to pay the Board backed by TJF will make sure its not shown in any Financial Statements #meetthenewboss 

[Jordanhill Jag]

1 hour ago, Woodstock Jag said:

As I've just shown you, the actuals for revenue have, in the last three seasons, varied by £700k. In this division.

Agreed. That's why we instructed the Club to assume more pessimistic footballing outcomes than the budget they originally prepared.

That's not the argument. The point is that it is more difficult, in football than in many other businesses, to make significant in-year downward changes to wages if budgeted revenue does not materialise, and there is high volatility in the primary revenue sources. You are (broadly speaking) committing to a figure in July/August, which you then have very limited capacity to alter except briefly in January, for the full financial year.

In other businesses it is much easier to adjust downwards wage-spend in response to other developments, at any time of year.

So if you're going to adopt a more "conservative" set of assumptions about turnover when setting a wage budget to hit 60%, that's going to restrict, quite drastically, your ability to hire people. That will have consequences for footballing performance (thus prize money, the single largest component of a successful football team's revenue in Championship football), and off-field revenue generation. It's a vicious cycle.

 

Complete rubbish - all businesses face the same challenges in adjusting costs and variances in income at different parts of the Year - its how there managed is the important bit  

[Albert's Ghost]

Just now, Jordanhill Jag said:

its how there managed is the important bit  

It's "they're" FFS

[lady-isobel-barnett]

2 hours ago, Tom Hosie said:

Playing devil's advocate to a degree but would cutting expenditure and hoping that it doesn't lead to a worsening financial position due to reduced prize money, reduced gate receipts/season ticket sales for the preceeding season, reduced sponsorship income etc. not also count as 'speculative' and  a 'punt'. 

There's a clear risk with any strategy. 

I'm certainly not in a speculate to accumulate camp but equally I'm not keen on slavish austerity cuts at Firhill either. 

Agree entirely. 

It's only in an ideal (Scottish Football) world where every other club in the division agreed to reduce their wages to turnover percentage to same would the risk element be nullified. At the other end of the scale I'm fairly sure in recent years Killie and the Dundee clubs have to varying degrees spent their way out of our league. That in turn most likely forced the hand of other clubs to pay more in wages transfers etc.

Having larger leagues would I think help. There'll still be clubs speculating to accumulate to gain immediate promotion but the fear of by not following suit and being dragged into the relegation zone would be somewhat diminished.   

[Jordanhill Jag]

2 hours ago, Albert's Ghost said:

It's "they're" FFS

If your arithmetic was as precious as your obsession with Grammar you might be able to work out if you keep spend more money than your bringing in - you will go bust

this argument that we need to keep spending money in case we miss out on the Playoffs doesn't stack up - we have done that for Two Seasons - we are still wracking up major losses and at best making the play offs 

[Albert's Ghost]

5 minutes ago, Jordanhill Jag said:

we are still wracking up major losses 

open goal there

[Lenziejag]

2 hours ago, lady-isobel-barnett said:

Agree entirely. 

It's only in an ideal (Scottish Football) world where every other club in the division agreed to reduce their wages to turnover percentage to same would the risk element be nullified. At the other end of the scale I'm fairly sure in recent years Killie and the Dundee clubs have to varying degrees spent their way out of our league. That in turn most likely forced the hand of other clubs to pay more in wages transfers etc.

Having larger leagues would I think help. There'll still be clubs speculating to accumulate to gain immediate promotion but the fear of by not following suit and being dragged into the relegation zone would be somewhat diminished.   

Almost every club, in recent seasons, has spent their way out of the Championship - Dundee over £2M, Kilmarnock nearly £2M, most other clubs high hundreds of thousands and I shudder to think what Dundee Utd spent.

[partickthedog]

38 minutes ago, Albert's Ghost said:

open goal there

Reminds me of Go Your Own Way by Fleetwood Mac

Wracking up is all you want to do.

[Jordanhill Jag]

1 hour ago, Lenziejag said:

Almost every club, in recent seasons, has spent their way out of the Championship - Dundee over £2M, Kilmarnock nearly £2M, most other clubs high hundreds of thousands and I shudder to think what Dundee Utd spent.

Are Falkirk Spending their way out of the Championship ? 

We blamed the Jlo Board for the losses in 22/23 Season - yet blew a 3 Goal with advantage with 18 minutes to go to get promoted - so we didn't spend our way out of the Championship that Season ? ( we threw away promotion ) 

 

 

[Jordanhill Jag]

15 hours ago, Woodstock Jag said:

No. I'm asking you to explain how the turnover figure - for the purposes of preparing the season 2024-25 budget (or indeed any future budget) - which is premised on volatile future revenues - should, in your view, be calculated for the purposes of deciding to spend only 60% of revenue on wages.

In 2018-19 Partick Thistle had a turnover of £3.04 million.

In 2019-20 Partick Thistle had a turnover of £2.66 million.

In 2020-21 Partick Thistle had a turnover of £1.48 million.

In 2021-22 Partick Thistle had a turnover of £2.47 million.

In 2022-23 Partick Thistle had a turnover of £2.82 million.

In 2023-24 Partick Thistle had a turnover of over £3.1 million.

What turnover figure should Partick Thistle use for the purposes of the 2024-25 budget? Give me a number and a margin of error. I'll allow you, for the sake of argument, ±£150k. Tell us what it should be based on.

Without that number, we cannot meaningfully say what "60%" looks like for the purposes of deciding what the Club has available to spend on hiring people.

60% of the lowest of these figures is less than £900k. For the Club's entire staff. A figure broadly equivalent to Greenock Morton's playing budget.

60% of the highest of these figures is almost £1.9 million. More than double. And within £100k of what the Club's staffing budget was in season 2022-23.

What turnover figure should we be using, and why?

Jim likes calling TJF The West Wing of Partick Thistle.

Well in the words of Jed Bartlett: show me [turnover] numbers, Mrs Landingham!

 

Our problem is - that we are presented with the selective financial info that suits whatever the agenda the Board are arguing - its a moving target 

there are “ vague” references justifying budget overspend - there is no allowance made in Accounts for CAPEX long term expenditure -then the requirement suddenly appears justifying overspend or Tranche 2

key financial data is omitted from Club Financial Statements 

Now TJF are allowing this to happen - so the assumption has to be made that they are ok with moving target on finances

its grossly unfair for TJF to allow budgets that spend all our Cash Reserves - whilst not challenging the Board  on the inconsistencies on financial data - to demand posters give detailed replies on Finances

TJF allow the Board to put out whatever numbers they please 

  

[javeajag]

1 hour ago, Lenziejag said:

Almost every club, in recent seasons, has spent their way out of the Championship - Dundee over £2M, Kilmarnock nearly £2M, most other clubs high hundreds of thousands and I shudder to think what Dundee Utd spent.

Fine……where do our losses go ? Who funds it ? Where’s the magic money tree ?