Date: 22nd July 2011 at 10:16am
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‘Where’s the Money Gone?’ some of us are asking but Couch Potato from the Couch would like to know first how much actually came in?

‘Where’s the Money Gone?’ some of us are asking but Couch Potato from the Couch would like to know first how much actually came in?

We let him loose below


Yeah, I know, I’m supposed to be writing an opera about *oyley.

But every time I get started, this irritating tune gets in my head. From 70s poppers Middle of the Road, it’s called ‘Chirpy Chirpy Cheep Cheep’, with it’s oft-repeated line ‘where’s your mama gone’.

Only when I hear it now, it’s ‘where’s the money gone’. And when I hear it, it’s about Burnley Football Club’s thus far sole season on the gravy train of the Premier League… when we were going to make so much money life would never be the same again. Right?

Well, maybe. But there’s been more than a few comments on this site that we should be flashing it about a bit more than we are doing, on new players and higher salaries. And since we’re not, the folk who post those comments sometimes ask ‘where’s the money gone?’

I’m going to get to that. I’m even going to write a piece about whether or not we went down stronger. And one on the amazing story of Brendan Flood’s financial involvement with our club.

But today, I’m just going to try to work out how much money there was.

And while I am doing that, as in the rest of this mini-series of Views from the Couch, there are two things you have to keep in mind. First that I have not got all the facts. Second, that if you join in debate in the thread that follows, and share your insights and knowledge, then it’s possible we’ll all make each other a little bit wiser. Okay? Here we go…

In the Introduction to his typically readable latest book – Entertainment, Heroes and Villains – Dave Thomas writes about the May 2009 Wembley win engineered by *oyley that ‘he brought a £60million payday at a time the club could barely pay its bills and only more directors’ loans kept the ship afloat in the weeks leading up to Wembley. Another £48million was assured from parachute payments after that.’

Dave Thomas knows what he talking about, so these figues must be right. Right? I have the highest admiration for Dave, and all his books. But I think it’s possible he’s got it wrong here. And here’s why…

1. I had always understood that the £60 million was only ever a made-up number, cobbled together by some newspaper or other, and possibly by one that doesn’t even exist any more. I don’t know. But I do know that it wasn’t a fixed sum that all Wembley winners were guaranteed.

2. I had always understood that it included every piece of extra income you would get from one season in the PL: extra gate money, TV money, prize money… and the parachute payments if you were relegated at the first time of asking.

3. When Swansea won at Wembley in May 2011, this headline number had been increased to £90 million. Now why should that be? My thoughts are that it was partly because the SKY money has gone up (Is Rupert Murdoch so bad if he gives us all this money?), and partly because the parachute payments were increased at the last PL meeting that Bfc attended.

4. If I am right about that, the £60million we ‘won’ definitely did include the parachute payments. They were not, after all, on top of the £60million.

5. But we’d have got more than £60million because the parachute payments had gone up, right? I wish I could be so sure. But every time I have read news reports of the meeting when the payments were put up, the wording has been ambiguous as to whether they were going up for clubs relegated that season (us), or starting with those relegated the next season (not us).

6. Regardless, there are a few other things to remember. Like the fact that you don’t get all the parachute money straight away. It’s spread over 3 years. Or maybe 4. And the extra money that you get from extra b*ms on seats won’t be as much if you’ve only got room for an extra 6,000, as opposed to having room for an extra 10,000. Which could go against us as we tot up our winnings.

7. Anyway, here’s what I reckon is the clincher. If you’re of a nervous disposition, you might want to sit down… and dig out your copy of When the Ball Moves Issue 86 (What? You didn’t buy one? Shame on you.) and read the article on pages 50 and 51 by Steve Kelly. As Steve puts it about himself ‘my business involves running a management consultancy that gives financial advice to the NHS, so while I now *ugger all about football, I do know about money’.

8. And what Steve says in his neatly set out extracts from the accounts of Burnley Football Club, for the 2009/10 year, is that the club’s income that PL year was £46 million, and the income in the year we got promoted was £11million.

And that, dear reader, means that the extra income we got in our PL year was £35million, not £60million; and that therefore Dave Thomas’s Introduction in his book Entertainment, Heroes and Villains is wrong on this point.

Sorry Dave, but I have plugged your book twice, and I am getting a lot out of reading it, and I recommend that everyone else reads it too.

So. What does anyone think about this article? And what can you share to help us all be a little bit wiser about what money came in… before we turn our attention in a future article about where it’s gone?

Couch Potato


26 Replies to “£60 Million Plus?”

  • I think CP, Blackpool were also rumoured to stand to gain £90 million but I think all these figures include the parachute payments. In the case of £90 million that would include £48 million if relegated in parachutes if no promotion in four seasons (£16m season 1&2, £8m in season 3&4). That increased from previous seasons at the time Blackpool went up. That could explain the approximate short-fall,not sure aint got a calculator! If you take out the parachute that suggests you are left with £42 million/season from TV revenues etc but I don’t think too that would include increased gates and increased merchandising but again not totally sure.

  • I think also the bottom line is whatever the figure, a promotion to the Prem is supposed to give you financial security for a time especially if you stay up. I am told that if it wasn’t for the parachute payments we would be in dire financial straits so maybe the question we should be asking rather than ‘where has the money gone’ is more ‘why has it gone so wrong’ when we did not even go into debt?

  • Aww, tmp, my story doesn’t even get top billing when it goes up? And in the seond thread you’re already trying to change the subject? 🙂 Get yer WTBM Issues 86 out and read pages 50 and 51! Our total (repeat total) income in the PL year was £46million. One thought that has occurred to me since writing this piece is that that £46million would presumably have been a bit higher but for the refunds of season ticket purchases as a result of Barry Kilby’s Premiership Pledge. So when you do find your calculator, you’ll need to factor that in, unless it was recorded as both a income and cost. Anyone know? And by the way, did you mean to say ‘Couch Potato from the Couch’ in your intro? Thanks for letting me loose. Back to the studio…

  • Sorry,you got top billing now! (forgot to change my sticky thing-don’t even go there!!). One thing that puzzles me is where and when the Directors took their loans back. Is that out of the £46 million or whatever? You are right about the Chairman’s Pledge, think that was a loss of about £3 million was it not, co-incidenatlly the same amount it would cost to buy the Turf back?

  • Couch literary genius at its best ! I know when I watched the Cardiff v Blackpool game it was billed as a £90M winner takes all game so on this point I concur with TFM. You are absolutely right though this figure has to be key be for we start to have a discussion on who spent what and why. Can anyone out there help us with this figure? I will see what the PL says about this I am not actually sure what the clubs accounting period is but I will have a look at last years accounts and see when this years are due to be posted this should give us a better idea Any more factual help would be very much appreciated, I can assume Blackpool fans will start to ask the same question perhaps they may have an handle on what they received and when

  • Hollins – are you casting doubt on Steve Kelly’s article in WTBM 86, which states categorically, after a review of the accounts for the PL season, as released at the AGM in Dec 2010, that the total income for the PL season was £46million? I welcome the input of further research. But my money is firmly on Steve reporting this entirely accurately after his having read the relevant accounts. I’ve no idea whether he posts on here, but I have sent word out on the jungle drums that we’d like him to. I will also invite Dave Thomas to comment. In the meantime, I reassert my firm view that both the £60million and £90million figures are just media attention grabbers, not fixed income, and basically irrelevant to informed financial debate. The two bits of data I would like to know (a) are how much the PL Pledge cost the club, both in terms of refunds and in terms of admin cost (b) did we or did we not qualify for the increased parachute payments? I am nowadays leaning to us having got them; but all the wording I have read (PL, BBC) is ambiguous. Can someone Twitter DazB on this? (I don’t Twit. Well… I’m not the sort of person who likes to be limited to 140 characaters, am I? Bit to each their own.) Thanks for the front page upgrade, tmp. Much appreciated. Be intersting to see how far this debate runs. I’ll start work on the next article…

  • Couch – not casting doubt but clearly looking to clarify!. IF the income for the trading period April 09 to March 10 was as you suggest £35M, ( direct P L monies let’s exclude the trading activity number of £11M in order that we can identify the Prem Monies only) then two separate parachute drops would need to make up the final£25M to get us to the assumed £60M ( £35m initial drop+£25 split two seasons= £60M) so I guess we need to establish what was the Parachute payment last year and is it correct to suggest our final payment is £16M this year, if this figure is correct that means we would over 3 years have had PL income ABOVE the suggested £60M, because some would suggest there is a weighting issue and we would have received a larger parachute last year than the £16M for this our final year, also it would be improbable that it would reach £90M but probable than we would exceed the original £60M do you agree Couch? …

  • Good article CP and I look forward to reading more of them. I would also be fairly confident that Steves figure is correct – As you/he point out. Finance is his area. I will see if we can get him involved.

  • Also was I on holiday when this happened ? when I look at the companies register it shows John B terminated as a director in March 2011 is this correct ?

  • C D … tell him there’s a pie and a pint in it! that’s got to work for any clarets fan hasn’t it ?

  • Yeah, excellent article as usual Couch. My assumption has always been that the fabled £60 million included everything such as increased gates, Sky tv cash, parachute payments etc.etc. In other words it’s the amount that a promoted club would fully realise as a result of that promotion. And I agree with you that it’s a newspaper generated figure as opposed to an ‘official’ figure. But I look forward to the continuation of your article , to see if we can get any closer to the truth, especially if Steve and Dave get involved.

  • Thank you for promotion my WTBM article Couch. My views on the article are that we ended up with about £80m in extra revenue spread over 5 years (roughly £32m, £18m, £14m, £8, £8m if I had to speculate) – the key though ain’t how much we got in (and there is still about £32m to come due to the new parachute deal which I assume did benefit us), it’s where it went. Staff costs (wages to you and I) went up by about £10m. We do have to factor in that we were making a big loss before. Say £15m extra in wages over an old break even level. Then we have the improvements made to infrastructure. Paying off the Director’s Loans (their choice, not one I’d have made). Paying back the questionable Premier League Pledge. Recruiting Laws and all his new players. There ain’t much left. Basically we had to stay up because that would have been an extra £35m or so, which would have covered all those infrastructure and loan issues, meaning we could crack on. Coyle knew that, which is why I detest the man to this day, and probably always will.

  • Couple more points – 1) the accounts are there for all to see on the Companies House website. 2) Director Loans don’t show in the income and expenditure account, that’s why the balance sheet is also important. 3) Trading period is July – June for football clubs. There really isn’t any mystery in it, most of it goes on wages which is why Eddie needs to get the bill down. I’d love to know how much Coyle committed on wages for people each week who didn’t set foot on the pitch. I bet it’s 30% of that big wage bill. Each week I’d split the expenditure out if I was the clubs FD – money spent for players who played, money spent on players who didn’t. Hence the smaller squad debate. Not much time today but I’ll dip into this thread periodically to contribute. Steve K.

  • “I think we have to get up this season or next, or we will be mid table in the bookies list with no money to spend. Greedy Coyle stuffed his players, fans and the club itself.”. That’s what I wrote in the article – this season coming is “next”. I fear we have to do it now, or never. For me the big gap in the legacy is the academy – if we don’t have one, I fear we may never get back. Worth also saying I praised Barry in the article, I swing both ways (watch it!) on this but broadly speaking he has made a silk purse out of a sows ear. But now, maybe, we need someone willing and used to taking a few more risks? Perhaps a commodoties trader (whose initials are JB)?

  • I’m stressing out trying to keep up with (a) this (b) the Test Match (c) the Roses cricket (d) my job (e) a complex local political argument… anyone on here an expert as to what a powerful development trust constituted as a charity can do in a small community before it has crossed over the forbidden line into politics? Where was I? I suspect we may be edging towards a consensus on how much extra dosh we gained and on our underlying income potential. I haven’t yet read all the threads carefully: has anyone yet got into how much we’ve made from player (and manager! and back room staff!) sales during this period? We got a million for *oyley, I think. But last I head Noblot hadn’t coughed up the compo for the rest of the traitors. And we got some cash for Fletch, of course. Have we sold anyone else?Anyway, my point is (:-)) that if John B did terminate as a director in March 2011 he was doing a very good job of pretending to be one when I spoke with him at the Clarets Trust Real Ale Festival in May 2011. I have the T-sort to prove it, and will be wearing it at Torquay tomorrow.

  • CrossC, Everybody! – where the money went is the subject of the next article! Don’t confuse us while we’re trying to work out how much came in!!! Sticking to that topic… IF we got the bigger parachute, my recollection is that £16mill came last season; £16mill comes this season; £8mill comes next season; £8 mill comes in 2013/14. I agree that, if you look solely at our finances and no-one else’s, this year does seem to have a make or break element to it. But clubs have gone up in the past while competing against those with bigger incomes, in fact – hold on! – we did it!!! So don’t despair. Don’t ever despair, in fact. In the meantime, my conclusion is that, IF we got the bigger parachute, our Wembley win was worth 35+16+16+8+8million=83 million or thereabouts because the 35 might include the one-off traitor’s bloodmoney… but that 16 of that 83 comes in at some point this season, and 16 is still to come over the next 2 years. If on the other hand, we didn’t get the bigger para, I think the figure would have been more like 67 million or thereabouts. Either way, I reckon that Dave Thomas’s 60+48=108million overstated things. But I will still buy each of his new books and recommend them all to everyone else! So which article shall I write next as the focus of the next debate. Where the money went? The directors’ loans? Or an identikit of a new investor? But – team – please hold your shape and discipline until each new article appears, and just focus for now on continuing to clarify how much came in.

  • I am very greatful for both Couch and Steve K’s input here well done guys, honestly really well done… it’s sad the club couldn’t have helped it’s self out in such a short space of time by making public some of these figures…. so my assumption of getting more than sixty but less than £90 is aligned, and given the additional £11M trading profit OUTSIDE OF THIS PREM MONEY for season 2009/10 then it does now take us over £90M income, Steve K erhh sorry Cross C how confident are you on the five years parachute period?, I and many others assumed the parachute was over three years? either way the money can be borrowed against we know its coming! …. I dare not start to speak about expenditure or a shall be brought to book by Coutch, I guess we need to know how much we generated in revenue last season also be for we start on the expenses scandal er I mean expenses / outgoing of the club

  • HC – I can’t speak for CrossC, but the para payments come across either 4 seasons IF we got the bigger payment, or (I think) 3 (or 2?) if the smaller. Blackpool would definitely have got the bigger sum, but I still haven’t seen an absolutley conclusive statement that we are doing so. I think maybe I’ll do the directors’ loans article next. I can promise some ‘tough choices’ about which there’ll certainly be scope for disagreement. But I can’t see any evidence of what I’d call a scandal, in the sense of moral or legal wrongdoing. But, as I’ll keep on saying, I am not an expert, and it would be great if anyone can add any more info here, in the meantime, about income. Did we get the bigger para payments? Have Noblot paid the compo on the backroom traitors? Exactly how much did we get for Fletch? Do advance season ticket sales get put in the accounts as income in the year in which they are paid for, or in the year in which the seats are occupied?

  • I was sure that when the parachute was negotiated to 4 years from 2 years BFC, Pompey and Hull benefitted. That was from media reports but I am fairly certain. On the borrowing money bit Hollins, I would also resist this – we have to be competitive in those seasons too and can’t borrow ahead, besides, borrow from who? Banks wouldn’t touch us even with guarenteed income (we could still go into admin anyway). Last season I predicted in my article income of £28m and a profit of £6m before transfers, pay offs and capital. Advance sales – would be the year in which they are occupied I would expect. Fletch – that money will be spread over a few years and CASHFLOW is the most important rather than income – now that banks aren’t lending money. Finally scandal – I agree there isn’t one, just disappointment there wasn’t one more gamble on not getting paid back until we go back up again (and value of shares then multiplies). For your next article in case I am on holiday!!

  • I emailed an article on directors loans to tmp last night. It was written entirely from memory, and in a bit of a rush. So I once again stress it’s ready and waiting for updates and corrections once tmp puts it up, rather than something that should be taken as authoritative. But I hope that by giving some background and by putting various events into a single narrative it will ultimately help us understand things a bit better. It is though very much a matter on which opinion will likely remain divided, rather than something like income on which we can arrive at a reasonably accurate shared figure. Thank you and well done to all who have got us there! In particular I have tried to pull together the various events that would have been impacting on directors’ minds in the weeks before Judas offed. On more straightforward matters, I am inclined to agree with CrossC that income from advance ticket sales will be reported in the accounts of the season for which the games take place, rather than in the season in which they are bought. I am also in agreement with CC that borrowing against future parachutes is unlikely to be a sound option. At best it would be at punitive interest rates, not least given current anxieties over Murdoch, which some lenders would probably regard as a reason to up the interest rates even further. I suppose that one of the many negatives of the football creditors rule (which obliges clubs to settle football-related debts before any others in the event of administration) is extremely offputting for banks being asked to lend. Banks are more accustomed to being at the front of all other known queues. Right, time to up and off along the road to Torquay. Come on Burnley!

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