Tranche 2 & the Preservation of Power

[javeajag]

25 minutes ago, Woodstock Jag said:

The Trustees signed-off on the 2024-25 budget, which projected a £280k loss.

We have made clear that this year was exceptional and that we expect subsequent budgets to be prepared for future seasons on the basis of aiming to break-even over each three-year cycle.

So with regard to this season specifically, "yes". With regards to future seasons "no".

So what is the plan to achieve break even ? Have you seen one ?

[Woodstock Jag]

11 minutes ago, Jordanhill Jag said:

Actually the interesting thing is that its stated by the Board  if you have Shares to the Value of £350K your entitled to a place on the Board - she owns 10% of the Shares ( not sure of the Value )

No.

If you are the holder of the majority of the Class C shares, or at least 1,250,000 of them, you have the right to appoint a director or observer.

All of Jacqui Low's shares are Class A and B shares. These do not carry those rights at all.

She has no legal entitlement to sit on the Club Board.

 

[Woodstock Jag]

Just now, javeajag said:

So what is the plan to achieve break even ? Have you seen one ?

The Club is in the process of preparing its proposals for the 2025-26 budget (obviously those proposals are partly contingent on what league we're in next season). However, several areas have been identified as where (a) revenue is expected to increase and (b) where cuts to expenditure would fall.

On the former, there are several multi-year commercial contracts, which the Club has previously identified as not realising their full potential value, some of which expire in the summer of 2025 and others which expire in the summer of 2026 (in most cases, negotiated pre-2023). This would realise quite substantial improvements on the income side.

On the latter, the main expectation is that cuts would fall on the playing budget, with other areas identified as ones where cost controls need to be more rigorous.

Clearly the latter is a balancing act, as setting the playing budget too low risks poorer footballing performance and therefore poorer (a) prize money (b) gate receipts (c) hospitality revenue especially. So cutting the playing budget by (say) £200k might not actually save you anything like £200k in profitability terms because (say) the difference between finishing 3rd and 5th impacts (a) prize money by almost that figure and (b) denies you the revenue from a play-off fixture.

[Albert's Ghost]

17 minutes ago, javeajag said:

We have lost money every year for five years at least …..if it’s not a cycle it’s a habit

A habit common to most football clubs

[javeajag]

5 minutes ago, Albert's Ghost said:

A habit common to most football clubs

Well that’s alright then …..so I guess your going to cover our losses 

[javeajag]

15 minutes ago, Woodstock Jag said:

The Club is in the process of preparing its proposals for the 2025-26 budget (obviously those proposals are partly contingent on what league we're in next season). However, several areas have been identified as where (a) revenue is expected to increase and (b) where cuts to expenditure would fall.

On the former, there are several multi-year commercial contracts, which the Club has previously identified as not realising their full potential value, some of which expire in the summer of 2025 and others which expire in the summer of 2026 (in most cases, negotiated pre-2023). This would realise quite substantial improvements on the income side.

On the latter, the main expectation is that cuts would fall on the playing budget, with other areas identified as ones where cost controls need to be more rigorous.

Clearly the latter is a balancing act, as setting the playing budget too low risks poorer footballing performance and therefore poorer (a) prize money (b) gate receipts (c) hospitality revenue especially. So cutting the playing budget by (say) £200k might not actually save you anything like £200k in profitability terms because (say) the difference between finishing 3rd and 5th impacts (a) prize money by almost that figure and (b) denies you the revenue from a play-off fixture.

I think this would helpful for this to be circulated to members - not necessarily in detail - but what the objectives are , how these are planned to be met, how they will be monitored and what happens if they are not met. What success looks like and the risks of bad things happening.

we need to start living within our means.

[Woodstock Jag]

4 minutes ago, javeajag said:

I think this would helpful for this to be circulated to members - not necessarily in detail - but what the objectives are , how these are planned to be met, how they will be monitored and what happens if they are not met. What success looks like and the risks of bad things happening.

we need to start living within our means.

We have tried to give a flavour of this in the detailed document we circulated to beneficiaries this morning (and which is on the website). Chapters 2, 3 and 5 in particular have tried to contextualise the financial situation as best we can. Chapter 5 explains some of the underlying budgeting assumptions from this year, and alludes to some of the challenges and opportunities for next year.

But it's not for the Trustees to come up with the break-even budget. That's for the Club Board to do, and they are very clearly seized of the fact that that is the expectation for next season. The role for the Trustees is, I hope most would agree rightly, to scrutinise and stress-test the assumptions presented to them, and to make a judgment about whether the Club Board has struck a reasonable balance between deficit reduction/elimination and remaining a viable and competitive Championship club.

I accept there probably is more that the Club Board should do to contextualise and publicly quantify the sorts of decision that would be involved in cost-cutting, but they have trailed this before. For example, in August's finance update they said:

"Without the second tranche of investment, we would make it through to the summer. But then we would have to seriously consider how the club proceeds. Without investment from somewhere, we would need to consider a significant reduction in costs – the easiest and most effective way of delivering savings being in the playing budget – which will ultimately risk setting the club on a cycle we have seen many teams unable to escape from in recent years. Lower investment creates a weaker squad earning less prize money, resulting in even lower investment and a diminishing return year-on-year."

I'd encourage you, if you can, to get along to the open meeting on Friday 29th November, and to ask these questions of the Club Board directly. There was (in my view at least) considerable candour as to what the trade-offs are on sustainability at the last Q&A meeting, and I'd expect the same again just under three weeks from now.

[Jordanhill Jag]

22 minutes ago, Woodstock Jag said:

The Club is in the process of preparing its proposals for the 2025-26 budget (obviously those proposals are partly contingent on what league we're in next season). However, several areas have been identified as where (a) revenue is expected to increase and (b) where cuts to expenditure would fall.

On the former, there are several multi-year commercial contracts, which the Club has previously identified as not realising their full potential value, some of which expire in the summer of 2025 and others which expire in the summer of 2026 (in most cases, negotiated pre-2023). This would realise quite substantial improvements on the income side.

On the latter, the main expectation is that cuts would fall on the playing budget, with other areas identified as ones where cost controls need to be more rigorous.

Clearly the latter is a balancing act, as setting the playing budget too low risks poorer footballing performance and therefore poorer (a) prize money (b) gate receipts (c) hospitality revenue especially. So cutting the playing budget by (say) £200k might not actually save you anything like £200k in profitability terms because (say) the difference between finishing 3rd and 5th impacts (a) prize money by almost that figure and (b) denies you the revenue from a play-off fixture.

So in short - the Board have no idea on any level how to stop the losses 

we will start with the “ increased revenue” why on any level do the Board believe they will get better deals ? The Scottish Economy is hardly growing - there are cuts across all Public Sector Budgets / so it impacts on Business - those we are negotiating with know we are on our arse financially - so why would they pay more money ? This is simply Pie in the Sky - its not real 

So your left with Cuts to Expenditure - and here as with the Club its the threat on the Playing Squad - what your suggesting is that there are no other parts of the PTFC overhead that can be cut outwith the Playing Squad ?
 

So bottom line - there is no plan

apart from - buy some time with Plan 2 - hope one of the New USA Investors has a mate with cash when we run out

meantime carry on as before

as per my original post Tranche 2 is nothing more than the preservation of power for the Board and TJF

as soon as it was stated we will struggle to pay our debts at the end of the Season TJF are duty bound to make changes on the Board - as thats unacceptable 

 

 

 

[javeajag]

11 minutes ago, Woodstock Jag said:

We have tried to give a flavour of this in the detailed document we circulated to beneficiaries this morning (and which is on the website). Chapters 2, 3 and 5 in particular have tried to contextualise the financial situation as best we can. Chapter 5 explains some of the underlying budgeting assumptions from this year, and alludes to some of the challenges and opportunities for next year.

But it's not for the Trustees to come up with the break-even budget. That's for the Club Board to do, and they are very clearly seized of the fact that that is the expectation for next season. The role for the Trustees is, I hope most would agree rightly, to scrutinise and stress-test the assumptions presented to them, and to make a judgment about whether the Club Board has struck a reasonable balance between deficit reduction/elimination and remaining a viable and competitive Championship club.

I accept there probably is more that the Club Board should do to contextualise and publicly quantify the sorts of decision that would be involved in cost-cutting, but they have trailed this before. For example, in August's finance update they said:

"Without the second tranche of investment, we would make it through to the summer. But then we would have to seriously consider how the club proceeds. Without investment from somewhere, we would need to consider a significant reduction in costs – the easiest and most effective way of delivering savings being in the playing budget – which will ultimately risk setting the club on a cycle we have seen many teams unable to escape from in recent years. Lower investment creates a weaker squad earning less prize money, resulting in even lower investment and a diminishing return year-on-year."

I'd encourage you, if you can, to get along to the open meeting on Friday 29th November, and to ask these questions of the Club Board directly. There was (in my view at least) considerable candour as to what the trade-offs are on sustainability at the last Q&A meeting, and I'd expect the same again just under three weeks from now.

I assume it’s up to the trustees to be happy that the budget set by the Board  is in line with the parameters set and is on a break even basis or what is the point.

we can’t continue losing money each year that should be a simple directive to the Board.

i can’t help thinking we are making this all too complicated.

[Woodstock Jag]

1 minute ago, javeajag said:

I assume it’s up to the trustees to be happy that the budget set by the Board  is in line with the parameters set and is on a break even basis or what is the point.

Yes of course it is. That's what I said! That's the expectation for future seasons.

But we don't literally write the budget for them. That's not our job.

1 minute ago, javeajag said:

we can’t continue losing money each year that should be a simple directive to the Board.

Agreed. which is why the Club Board has been tasked with developing a break-even budget for 2025-26.

[Fawlty Towers]

1 minute ago, Woodstock Jag said:

Yes of course it is. That's what I said! That's the expectation for future seasons.

But we don't literally write the budget for them. That's not our job.

Agreed. which is why the Club Board has been tasked with developing a break-even budget for 2025-26.

With regards to this season's budget we have gone for a 4th place league position, are you able to say what we budgeted for in terms of the League Cup (not getting out of the group, making the first set of knock out matches, etc) and what we put in for the Scottish Cup?

Looking ahead it is vital that we have realistic plans and strategies to deliver them which will see us actually achieve break even and if we can't do that then that is when serious questions will need to be asked of the directors and changes made if necessary.

[ChiThistle]

Maybe we need to be more explicit about what Board success and failure would look like, and what criteria would lead the Trustees to remove Board members.

There’s a case to be made against having a revolving door, and there’s a case to be made against giving them a dozen chances to get things right.

[Jordanhill Jag]

43 minutes ago, Woodstock Jag said:

Yes of course it is. That's what I said! That's the expectation for future seasons.

But we don't literally write the budget for them. That's not our job.

Agreed. which is why the Club Board has been tasked with developing a break-even budget for 2025-26.

No you dont write the Budget 

But you agreed a £280K loss for this Season with only £75K in Cash reserves 

Funny enough the Board confirm that we will struggle to pay our debts at the end of this Season 

So when TJF & the Board having a Budget where the losses were greater than the Cash Reserves - did they look to save overhead ? No - we actually increased it by employing more staff 

And these are the people that are deciding on the future finances of PTFC ? 

As previously stated - if TJF are putting limits on minimum Cash that the Board are allowed to operate to - your already stating you have No Faith in there ability to manage the Club Finances 

So why are you not making changes

- what unique skill sets do the current Board have that cannot be replaced - the changes to the Trust Agreement on Cash Reserves already confirm that TJF have to oversee the Board - so why are you continuing with them ? 

 

 

[erty13]

2 hours ago, Woodstock Jag said:

The Trustees signed-off on the 2024-25 budget, which projected a £280k loss.

We have made clear that this year was exceptional and that we expect subsequent budgets to be prepared for future seasons on the basis of aiming to break-even over each three-year cycle.

So with regard to this season specifically, "yes". With regards to future seasons "no".

To retain credibility that the second share sale is in the long term interest of the club the fans should also be provided with the business plan for the next few years.

If this can not be provided, then the board need to consider their positions.

[Lenziejag]

7 hours ago, Jordanhill Jag said:

Really ? 
 

Or how about you get a Board that can run the Club within Budget ? 
 

Our Finances are shocking - if this had been a Jlo Board then there would be War & Peace from TJF Condemning it and protests on the Canal Bank 

as I said in my original posts - large debts and no cash reserves are ok as long as the “ right people” are in Control 

What your suggesting is that we are to be in a loop of continuing debt funded by Fans ? With No Plan to stop the Cycle ? 

 

Have you looked at the accounts of any of the Championship clubs ? Almost all reported losses in 22/23 and almost all have large carried forward losses. PTFC aren’t unusual when it comes to Championship football clubs.

[Lambies Lost Doo]

28 minutes ago, erty13 said:

 

If this can not be provided, then the board need to consider their positions.

If the board leaves who replaces them?  Suggestions would be good before this idea.

[javeajag]

8 minutes ago, Lambies Lost Doo said:

If the board leaves who replaces them?  Suggestions would be good before this idea.

Filling board positions  never been an issue…..ever.

[javeajag]

22 minutes ago, Lenziejag said:

Have you looked at the accounts of any of the Championship clubs ? Almost all reported losses in 22/23 and almost all have large carried forward losses. PTFC aren’t unusual when it comes to Championship football clubs.

Accounts as of May 2023 : Raith had over £300k in cash in the Bank, Ayr increased theirs to over £200k……how much did we have ? Oh yes it goes negative this year.

[Woodstock Jag]

2 hours ago, Fawlty Towers said:

With regards to this season's budget we have gone for a 4th place league position, are you able to say what we budgeted for in terms of the League Cup (not getting out of the group, making the first set of knock out matches, etc) and what we put in for the Scottish Cup?

From memory I believe the budget was premised on failure to progress past the group stage for the League Cup, and on a 4th Round Scottish Cup exit.

[Fawlty Towers]

52 minutes ago, Woodstock Jag said:

From memory I believe the budget was premised on failure to progress past the group stage for the League Cup, and on a 4th Round Scottish Cup exit.

Sensible in terms of the League Cup but not keen on budgeting beyond anything more than 1 game in the Scottish Cup. If we lose to Queens Park (which is perfectly possible) it means the budgeted loss increases so lets hope we win that one.

Edited November 12 by Fawlty Towers

[Woodstock Jag]

15 minutes ago, Fawlty Towers said:

Sensible in terms of the League Cup but not keen on budgeting beyond anything more than 1 game in the Scottish Cup. If we lose to Queens Park (which is perfectly possible) it means the budgeted loss increases so lets hope we win that one.

Last season the exit fee difference was (IIRC) about £10k between rounds 3 and 4, FWIW. So you're right that there would be a difference, but it's not a big one (and without going into the granular detail, it will broadly "wash" when you take into account the player bonus structure, VAT etc.) The impact of taking part of the gate for two games instead of one will have a bigger impact on the numbers than the prize money for that stage of the competition.

Scottish Cup only begins to make a "big difference" to prize-money and our bottom line between rounds 4 and 5 and/or if you get a TV game in round 4 onwards.

We benefited from a TV game against Motherwell in the League Cup, of course, which slightly boosted income there.

Edited November 12 by Woodstock Jag

[dl1971]

My view on this on reading some of the above is that in common with the vast majority of football clubs, there is no silver bullet to becoming profitable or even break even over many years. I've supported thistle for 51 years now and rarely have we been in the black. Some posters seem to think a different group of people would deliver financially better results, while presumably pushing the budget to remain competitive. I suspect that's not easy, otherwise all clubs would be doing it. They are not and we know that is not how football works. How about this. It has been stated that the fans share option will not be diluted any further. For me that is the line in the sand for now. Some have forgotten the impact of the pandemic and our relegation. That takes time to recover if we are pragmatic. I'm happy for now that we graciously acceot the money and that things will improve. If there was a further proposal to reduce the fans share of the club, alarm bells should ring. Nb this might all go away if we get promoted....

 

Edited November 12 by dl1971
Typo

[Jordanhill Jag]

1 hour ago, Lambies Lost Doo said:

If the board leaves who replaces them?  Suggestions would be good before this idea.

Or maybe we should be asking what unique Skillset our current Board brings that cannot be replaced 

suggesting replacements wasn't an issue when pressure was being applied to remove the Jlo Board 

for the avoidance of doubt - the current board could be replaced in a heartbeat from our Fan Base 

[dl1971]

2 minutes ago, Jordanhill Jag said:

Or maybe we should be asking what unique Skillset our current Board brings that cannot be replaced 

suggesting replacements wasn't an issue when pressure was being applied to remove the Jlo Board 

for the avoidance of doubt - the current board could be replaced in a heartbeat from our Fan Base 

OK. They could be replaced. As others have asked by whom and how can we be guaranteed they would do a better job? 

[dl1971]

5 minutes ago, Jordanhill Jag said:

Or maybe we should be asking what unique Skillset our current Board brings that cannot be replaced 

suggesting replacements wasn't an issue when pressure was being applied to remove the Jlo Board 

for the avoidance of doubt - the current board could be replaced in a heartbeat from our Fan Base 

Nb the fanbase are pretty firmly behind TFJ. Trustees maybe not. I'm not sensing a groundswell of fans against either. Notwithstanding yourself and Mr Houston. But seriously, questions should be asked.