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Notts County paying £40,000 a month in bonuses, and even they admit they can't afford it.
Fair do's to the bloke for his frankness and modesty. I see the truth in his words about how people can be motivated by financial incentives and think I am interpreting him correctly to be saying that he can afford the losses they are currently incurring as a result of the bonuses but would not be able to do so higher up the Leagues.
It is a strange thing, though, that clubs like this install a structure that is not sustainable except on the back of a wealthy benefactor. It's not like there's a realistic prospect for all but a small minority of ever getting a return on that investment, unlike in a young business where you might also spend money to invest in it.
I made the following comments on the 2017 Trust AGM thread yesterday:
"Back to the comments regarding new partnerships, shares and equity; I see that Alan Hardy the Notts' County owner has now said that their current success is costing £40K a month in bonuses. He also commented that he doubted he could take them much further than League 1 with his financial model. The reality of the vast cost of football as one rises up the ladder is a sobering thought for us all and Trust members in particular. I'm not sure if this makes me feel half full or empty in terms of my/our ambition and dreams for WWFC. My background was not in finance or business so I don't sit easily with large numbers and I'm sure @Steve_Peart and others will have a clearer view."
Agree, just mad to me.
@ValleyWanderer Wise words. Anything higher than promotion to League One football would be wonderful but also extremely dangerous. Football is a funny game.
I am sure Mr Hardy is a super guy with the hopes and ambition of only Notts County at heart. What worries me about scenarios such as these is how easily led even the smartest businessmen can be when it comes to wild and whacky world of football finance. If Nolan, a player who has tasted the Premiership for many years, is in his ear saying 'sign him and pay the money' with the promise of greatness it will end in tears. I hope Mr Hardy is properly in control and not being taken for a sap and that will involve tapering everyone's expectations.
I don't think bonuses alone are necessarily the problem if the basic pay is well wihin financial control.
If a team is doing well and in the top three crowds should significantly increase. Assuming the attendance goes up by 1500 a game (which is likely in a city as big as Nottingham) and you have on average two home games a month, that should hring in an extra £40k per month. On top of that you have other increased income via increased food, drink, sponsorship, liklehood of more tv income etc. If your club is doing well the players must be performing well and thus you have potential future transfer income.
Performance related pay in itself is a good motivational factor at our level.
@mooneyman a quick glance at the attendances and they peak on opening day at just over 7000 but are more regularly at 5500 with the most recent league game 6700 ish. So bonuses are not coming out of increased attendances. Notts County are a yo-yo club like so many in orbit and I fully expect their crash to come and at some point one of these crashes will be terminal if they overspend like this.
The thing I can't get my head round with Notts County, is that they were very recently burned by some half wit. If I remember correctly didn't they get Sven in as manager & Sol Campbell at centre back? All the while, even the milkman wasn't getting paid!
I believe this owner is properly heeled, but surely the fans should be highlighting the "sustainability" of such policies. I can see that Nolan will have a promotion on his CV, the owner running out of patience after mid table L1 peak, then both are off & leave the club "up sh1t creek, without the paddle"!
Similarly, I hve nothing but good wishes for County but am more happy that we are looking to establish a more long-term model of sustainability even if it means we have no immediate dreams of the Premier League.
Spot-on IMHO @HCblue
Interesting debate about bonuses. In a previous employment I had access to players salary details up and down the leagues and without exception, bonuses made up the vast majority of a players gross earnings commonly in the region of one third basic pay two thirds bonuses.
This was in the early Premier League era but I have no reason to think that this bonus led pay system is not in at probably every club up and down the leagues currently.
The bonuses you could ‘earn’ covered pretty much every scenario from your basic win, draw bonus goals and clean sheets bonuses through to league position bonuses and to being available for selection for the match day but not actually being picked!
I would be majorly surprised if Wycombe didn’t have such a bonus scheme in position obviously running a smaller squad means less players to pay bonuses too but don’t for one moment think that this situation is unique to Notts County.
I bet Luton’s bonus payout exceeds this particularly if diving Danny is on a penalties earns bonus!!
I expect you're probably right, @dickie. It's more likely the level of the bonuses that's the issue rather than the fact of them.
We must, or did have, fairly large bonuses or the Craiggate affair would not have had so much publicity.
This is one for insider @rmjlondon isn't it?
It certainly puts into perspective Stevie Craig's angst if two thirds of our squad's pay comes from bonuses - which weren't being paid. In fact, it makes me wince just thinking about it - exactly the opposite of what we should be seeing from a supporter-owned club.
This month's When Saturday Comes has an article about Ipswich Town which mentions that, since their current owner acquired them in 2007, their debt has gone from £32 million to £90 million. That's a loss of around £6 million a year. I have no reason to suspect that's exceptional - for example I've just checked what Bolton's debt was when Phil Gartside turned off the tap. In April 2015 it was £172.9 million.
These figures are just bonkers and it's difficult to think of any other industry where a business could have accumulated losses of this scale and with no business model in place to change things in the foreseeable future apart from getting to the Premier League - where most clubs seem to manage to make a loss in any case.
For years and years I've been expecting / hoping for sanity to kick in and for more clubs to start to operate with a sustainable business model. But then I've been expecting / hoping that the house price bubble would burst for about 20 years and it shows very little sign of doing so.
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