Buying Empty Vases

Empty glass vases

A few weeks ago when I packed up to move, I bubble wrapped eight vases and gave one back to my mum that I’d borrowed.  That’s a total of nine vases for a one bedroom cottage.  Nine vases are especially excessive when I never buy flowers.

I bought them for different reasons, one because it was bigger than the others, one because it matched my living room wallpaper and one because it was cheap from Ikea.   The underlying reason was that I bought the vases because I had the spare cash to do so. So what is the point of buying them if I never use them?

When Dave Jones starts to pack up his belongings at Sheffield Wednesday I wonder if this is how he will view his purchases of Martin Taylor, Joe Mattock, Jacques Maghoma, Chris Maguire….

There is a short termism about shopping and transfers that brings a certain buzz to fans.  A shiny new player bought in the Sky Sports Sales, sorry the transfer window, is the equivalent of rifling through the racks at John Lewis and coming home with an espresso machine paid for on your credit card.

You get it home and enjoy a Columbian roast perhaps twice and then it gets shoved to the back of the cupboard with the waffle maker, the five speed hand blender and the half priced smoothie maker you bought in January for your detox month.  All these appliances are forgotten about until the credit card bill lands on the welcome mat.

Football has lived in this same debt ridden bubble since the creation of the Premier League.  Every club’s attempt to keep up the Joneses has seen them strive for something that they could never afford to pay back.  Low revenue and ever increasing wages do not make for a healthy bank balance.

This is the reason I feel like banging my head against a wall when I see the frenetic reaction of fans insisting that a manager must sign ‘insert footballer name here’ or that the Chairman should ‘stick his hand in his pocket’.   It’s just a bankruptcy waiting to happen.

The reason the chairman isn’t getting his cheque book out is because of the introduction of Financial Fair Play (FFP).  These regulations have been introduced to the football league this season in order to safeguard clubs from incurring huge debts and ultimately from going into administration.

By the end of this season Championship clubs must reduce their losses to no more than £8m and by the 2015/2016 season no more than £5m.  Some of this debt can be funded by the shareholders.  If clubs do not comply with the regulations then transfer embargoes will be issued until they can demonstrate that they meet the FFP criteria.  Some may argue this would stop Dave Jones from buying more square pegs for round holes.

Sheffield Wednesday’s losses for the 2012/2013 season were £5m, which are within the FFP regulations.  Some fans may not like it but Sheffield Wednesday are doing the right thing by ensuring that they are planning for the future and sticking to FFP regulations.

There has been grumblings about the concentration of time and funds on the development and academy squads and not on the first team.  From a club that had no scouting system in place at all until Milan Mandaric took over to a club with a Category 2 academy status, investment in this area makes Sheffield Wednesday a viable and potentially profitable club.  There’s no denying that receiving Category 2 status will cost us more in coaching staff to maintain this Elite Player Performance Plan status (EPPP) but it will also bring ‘substantial’ funding into the club.  From the chairman’s perspective it also makes sure he makes a profit when the time does comes to sell.

Those calling for Dave Jones’ head after yet another match on our winless streak, might want to consider that as a club we may not be able to afford to sack him especially if the projected financial forecast is nearing the FFP £8m debt ceiling.

There is a budget to stick to and the chairman has to decide whether investment for future return is the way to go or to continue on the buy now, pay later route.  Either way the club can never please all the fans.

There is still this genre of fans, let’s call them the expectation generation, who purchase things they can’t afford on the ‘never never’ and who demand things immediately.  Sometimes you just have to plan and save for what you want or for a rainy day.  The dark rain clouds of corporate manslaughter charges and potential ‘unlimited fines’ may mean buying an umbrella now.

The realisation has to sink in that Sheffield Wednesday are not a rich or a successful club anymore and haven’t been for a considerable amount of time.  Things may get worse before they get better but it doesn’t mean that with careful financial planning that can’t change over time.

Patience is the key because the days of buying frivolous empty vases are over for football clubs.

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2 thoughts on “Buying Empty Vases

  1. HI Laura.

    Just a quick the accounts for the 2012 / 2013 season haven’t been released yet for SWFC.

    We Lost £5 Million in our last League One campaign, which is for when the last set of accounts are available.

    Until the years accounts are are released around Christmas time this year we won’t have a clue what we have lost only what we “hear” in the media. As we all know you can believe everything you read in the papers right 🙂

  2. Thank you James for your comment. I do concede that the figure of -£5m was from the League One promotion season. I do feel that the point of the article is still valid in that there is a budget to stick to for Sheffield Wednesday and with the increased cost of the academy The Owls are still likely to be in debt this season even with Championship TV money and league position bonuses. FFP is going to impact on every aspect of the club’s finances.

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