The people have spoken: Hull, Burnley and Bournemouth to leave the union

John McCormick:
John McCormick. Impartial, as always

Would you believe that some people, somewhere, think Man Utd  will be relegated? And that others say the axe will fall on Spurs, Chelsea, or Man City. Some even say Arsenal will go down.

That’s democracy for you, so please, please, no histrionics, vitriol or gratuitous insults. There have been enough of them these past few weeks and it’s time for civilised behaviour between gentlefolk, like we always get when discussing football.

Read moreThe people have spoken: Hull, Burnley and Bournemouth to leave the union

Not quite Real Madrid, not quite Barcelona. But better than Swansea and Stoke

John McCormick:
John McCormick. we’ve come a long way, some way yet to go.

It’s been a few years since I’ve done a timely review of Deloitte’s “Money League”, which usually comes out in January or February (it was January this year).

But when there’s a battle to be fought there’s not much room, time or inclination to give some thought to a little piece of meaningless self-publicity, which is what the Deloitte Money League is, entertaining though it may be.

Read moreNot quite Real Madrid, not quite Barcelona. But better than Swansea and Stoke

Relegation poll: Middlesbrough, Hull or Sunderland? Arsenal and Manchester Utd? Vote now

John McCormick:
John McCormick. reading the past, looking to the future

I’m getting a bit tired of the title (and Monsieur Salut should apologise to any reader lured here by thoughts it was a poll on religion; the word inexplicably replaced relegation in the headline when published and still appeared some time later at the newsnow.co.uk site) .

But just because we have some decent players, led by one of the Premier League’s most experienced managers and backed by a tremendous crowd, we can’t assume we’re safe.

Our record is not good. We’ve been one of the survivors for too many seasons and we can’t take anything for granted. Even now there will be some fans somewhere rubbing their hands as they look at the fixtures and thinking ‘Sunderland, that’s an easy three points’.

Read moreRelegation poll: Middlesbrough, Hull or Sunderland? Arsenal and Manchester Utd? Vote now

SA’s Essay: Really pleased for everybody, and the fans deserve it

 

Jake's take on Big Sam
Jake’s take on Big Sam

 

John McCormick writes: I could get used to this. Sitting at home with the bairn laughing, me laughing, and looking forward to match of the day. It’s aal reet,  it’s better than aal reet.

I might even have a beer or two between now and then. First, though, I’m intercepting Colin’s post to bring you the letter that Sam has written to him, and perhaps to one or two others

Read moreSA’s Essay: Really pleased for everybody, and the fans deserve it

Sixer’s Sevens: One hard-fought win. Three well-earned points v Man Utd

ManUtdH(FT)

John McCormick writes: Ed posted that his lift to the game had been delayed because of the snow. I hope he got there in time for the start.

Sam’s transfer dealings appear to be paying off  and we might, just might, be in with a chance.

What does Pete Sixsmith think? We’ll have to wait for his more considered opinion but now, while we’re still exulting over our first home win against Man Utd since Micky Gray,  here’s his instant seven-word verdict:

Read moreSixer’s Sevens: One hard-fought win. Three well-earned points v Man Utd

Sunderland’s Desert Island Discs – Wrinkly Pete’s playlist

Peter Lynn: a musical theme for every moment
Peter Lynn: a musical theme for every moment

John McCormick asks: Do you remember, at least three managers back, so it must be years and years (or perhaps 18 months) ago, when I did an end of season piece about the songs that made the season. Now Peter Lynn, aka Wrinkly Pete, has picked up the theme with his own version of Desert Island discs. In keeping with the programme he has picked eight songs that  have special meaning for him, and maybe for other supporters.

Were you there? Did you sing? Or do you have other songs that bring back memories? In his e-mail to the boss Pete suggested others might give us their favourites. Why not give it a go?

Now, over to Pete:

Read moreSunderland’s Desert Island Discs – Wrinkly Pete’s playlist

Are we in the mix for the Money Football League?

For the last couple of years I’ve reported on our progress towards the Deloitte Money Football League. I had just about started an update in February when other things took priority – we had a double to celebrate, then a cup final, and then we started digging what we thought was a grave, only it turned out to be a tunnel. I finished my piece around the start of the World Cup, when there was a lot going on and then went off on holiday. Now here we are, in the transfer window with friendlies underway and next season’s fixtures around the corner, and I’m hoping our esteemed editor can find space between Pete’s reports and Borini’s never-ending saga.

Read moreAre we in the mix for the Money Football League?

Bally’s Backchat: everything in terms of effort vs Manchester United

John McCormick writes:

I was expecting the weekend off but M Salut has sent an e-mail asking if I can put up Bally’s backchat. As ever, I’m happy to oblige but I have to say I’m struggling with a dodgy network and an iffy computer, so graphics might not make it. Here’s the text, straight from the gaffer at the SOL. Pictures will be added as and when I can and, like the team and their manager, I won’t rest until it’s working properly:

Dear Colin,

Commentary

In terms of effort I thought everything was there for us

The players worked hard; they deserved their lead in the first half and created several other chances.

At the start of the second half we expected United to come out as they did.

From my point of view – and the players feel the same – we all felt that the [first] goal could have been prevented and that something could have been done about it, and the same could have been said for the second goal.

Plucky losers once more, thinks Jake
Plucky losers once more, thinks Jake

It’s minor details that if we get them sorted it will stop these sorts of goals going in. That’s something we’ll be working on.

In terms of effort I thought everything was there for us.

It’s fine margins against the top teams and the higher you go, those margins get smaller and smaller.

There were parts of the game the players will be really happy with and parts they will be disappointed with.

I thought the fans backed us really well throughout and it would have been nice to get something at the end.

The fans got right behind us and we really appreciate that.

 

 

All the best,
Kevin Ball

McCormick’s Craic: will financial restrictions level the Premier League playing field?

John McCormick: looking at the figures
John McCormick: looking at the figures

There was a time, when Sunderland was known as “The Team of All Talents” and upset the footballing authorities by flouting the financial restrictions in force at the time. Later they were “The Bank of England Team” and you can bet that the fact the players were subjected to a maximum wage didn’t stop them from getting a few extras. From a fan’s point of view the ultimate aim of running a football club is easy. We want to see our team winning trophies, playing attractive football and signing the players to achieve that end. Every transfer window, and the times in between, sees amateur pundits with their wish lists, advising the club that such and such a player will strengthen the squad and perhaps berating the manager or owner for not signing some star name or another. But it’s not that simple. Clubs like Sunderland can’t always go out and pick a player with the ease that they could find a frozen lasagne at Tesco, although judging by some of the carthorses we have signed in the past you might not think so. There are many reasons why it isn’t so simple, fees and wage just being part of the package. What is clear is that over the past decade or two it has become harder for clubs to break into the elite band which may just challenge for the title. John McCormick has been looking at the implications of financial restrictions about to come into force and whether or not it will succeed in making the Premier League more competitive.

 

Earlier this month the Premier League reached agreement on spending controls and financial restrictions for all member clubs. Apparently Ellis Short started the ball rolling with a proposal on wages which the majority of the Premier League’s chairmen received favourably.

One school of thought is these measures were brought in to provide a more level playing field and keep the Premier League relatively balanced. If the gap between top and bottom gets too wide the League will become more predictable and therefore unattractive. Comparisons were drawn with American sport, where various leagues take steps to ensure no club or clubs are allowed to permanently dominate.

Given this and our Chairman’s leading role you might expect Sunderland to benefit but I’m not so sure. I don’t think it will make any difference to ourselves or to the so-called “big clubs”, which will carry on as if nothing has happened.

The restrictions comprise a “Long-term Sustainability Regulation” and a “Short Term Cost Control Measure”. From next season until 2015/16 Premier League clubs will not be able to make an aggregated loss in excess of £105million and clubs with a player wage bill in excess of £52million will not be allowed to use more than an additional £4million from PL Central Funds ( TV rights money) to increase player wages. The wage bill limits and allowable increases will each rise by £4 million per season until 2015/16.

Let’s look at a few clubs to get the picture before we move on to Sunderland.

Man Utd have an annual player wage bill in excess of £52 million. Depending on the website you visit you’ll find it starts at about £80 million and goes beyond £100 million. This is one club that will find it can’t use much more of the PL central funds to pay increased wages. However, Man Utd is a massive cash generator in its own right so PL restrictions are irrelevant. A club with annual match day revenues of about £100 million will be able to buy players or increase their wages without falling foul of the Premier League, and matchdays aren’t United’s only source of cash. They also do well out of international marketing, sponsorship and participation in the Champions League. Usually this is enough for them to show an annual profit but in 2011-12 they posted a small loss after a poor season. A 3-year loss of £105 million seems unlikely, so there’s no worry about breaching the “sustainability regulation” either.

At the other end of the Premier League “PL central funds” make up about 88% of Wigan’s revenue. Wigan spend about 75% of this on players’ wages but, at about £40m, wages don’t reach the £52 million ceiling. Wigan are therefore going to be unaffected by the cost control measure. The long term sustainability regulation also appears to be irrelevant. Wigan posted a profit of £4.3m for May 2011-May 2012 after a small loss (£7.2million) the previous year and larger but decreasing losses before then. They also won’t run up £105 million of debt in the next three years and therefore won’t be subject to any of the sanctions the league can impose.

QPR might offer a different picture of life at the bottom. They had wages of £29.7 million, turnover of £16 million and an operating loss of £25.7 million in their promotion season. That’s a wages to turnover ratio of 183 per cent. Finances will have been aided by promotion but they finished below Wigan and have a small ground so income, although likely to be higher than Wigan’s because of higher prices, will be still be low by Premier League standards. Yet they signed 31 players in 18 months, some allegedly on high wages, and even with ten on loan they have too many players for a PL squad. Continuing a policy of trying to buy survival could lead QPR to accumulate such big losses or pay so much in wages they fall foul of the new regulations, assuming they do stay in the premiership.

safc crest 1890

Sunderland are somewhere between these extremes. I don’t have recent figures but last March “The Journal” reported that Sunderland was on track to meet EUFA’s Financial Fair Play regulations. The club had posted a loss of £7.8 million, a 72% reduction from the previous year’s losses (£28 million). Margaret Byrne was quoted as saying there were plans to reduce the wage bill through more creative contracts and incentives, with a target of reducing the wage to turnover ratio from about 76 per cent (it was 82% a year earlier) to a much healthier 60 per cent.

Overall, therefore, it looks as if the club has not been doing too badly in controlling losses and wages and is heading in the right direction. This can only be for the good. But while it looks as if SAFC are likely to stay under the £105 million of allowable losses what about the £52 million salary cap? The Journal article estimated players’ salaries were in the region of £60million, significantly above the £52 million ceiling. Since then, of course, we have lost some expensive players and we haven’t signed many to replace them. If the wages to turnover ratio has decreased to 65% (revenue has increased, as you’ll see in a future post, but we’ll ignore it for now) the player wage bill will be £51.6 million, just under the limit. Even if the club breached this limit I don’t think there’d be serious cause for concern. We generate about £15 million from match day income and at least another £15 million from sponsorship and commercial activity. Not in Man Utd’s League but it will help with the wages.

It appears that the Premier League has come up with regulations which will not impede those clubs taking steps to control spending but which will target clubs living beyond their means. This does not mean, however, that careful clubs will benefit; regulations and sanctions are not the same thing. Consider a scenario where a club as well run as Wigan goes down while one with QPR levels of spending stays up. Would the Premier League reverse this decision? I think not, and nor could I find provision for points deductions for clubs breaching the regulations. Careful middle-sized clubs are still not protected from clubs which use money they haven’t earned to buy Premiership survival. Nor are they helped to compete against rich clubs which use their financial power to maintain their status.

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And that’s without considering debt. Borrowing and repaying is part of everyday commercial enterprise. It isn’t necessarily unhealthy. However, it can be argued that clubs which go into debt to buy players or pay wages without the income to service their loans are gaining an unfair advantage. The new financial regulations may apply to losses or overspends created by such situations but they do nothing about debt itself. This is no surprise. Man Utd might expect an operating profit but they are some £350million in debt, even after a rights issue. Wigan might be a well-run club but they had debts of £73 million in 2010. Most of this has been converted into equity and is no longer a liability. Ellis short did something similar at Sunderland. When it comes to debt there are a lot of owners living in glass houses, with no right to throw stones at other clubs.

In 2008 John Samuels, an Emeritus Professor of Finance, wrote “The beautiful game is over”. His premise was that football has become subject to international free market forces.  This has brought in a flood of new money but it has not been equally distributed, so some clubs have withered while others have become all-powerful.  Samuels argued that there is a deep reluctance to see the market regulated in favour of greater equality and thus more genuine competition. The Premier League may have started to overcome this reluctance but there’s still some way to go.



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Predictions: Sunderland, Man Utd/ City, Newcastle, Stoke, Everton – How will they fare?

A very productive week for all concerned in the Salut! Predictions League, a fact which must frustrate Bill and Robert no ends as in other weeks they could, and would, have moved up the table swiftly – so crap are our usual collective predictions. This week, however, no fewer than five of us gained 4 (four) points. We have our friends Newcastle largely to thank for that one

Jake ponders Poznangate.

 

Malcolm and Sixer are doing their best to allow the rest to catch up by picking up solitary points, while John Mac and Colin slide down the table despite gaining a point. The first week everybody has scored at least a point, in fact.

We really are rubbish at this.

Stoke v Everton is an interesting one this week – so I’m going with that alongside the North East’s big two fixtures against Manchester’s big two. Well, against Salford’s big one and Manchester’s big one, perhaps. You know what I mean. Easy three points for the lads, I suspect – this despite Wayne Rooney bouncing about in his stripey pyjamas tonight like a kid at Christmas. He’s foaming at the mouth and all excited for revenge, strangely. I must misunderstand the concept of revenge. All sorts of threats coming our way from the Old Trafford faithful (and not so faithful) due to the youthful element in one corner of our ground mocking them with the Poznan at the summit of last season. They seem mad…..

OH NO……….

maybe they’ll beat us………

AGAIN!

Here’s the predictions:

Man Utd v Sunderland

Robert: Wayne Rooney is convinced Sunderland need to be taught a lesson after some fans celebrated City winning the title after United defeated us on the last day of last season. My hope, that Rooney gets all wound up, kicks someone, and gets sent off. Unfortunately I don’t see that happening, and United will stroll to a 2-0 win.

Jeremy: It’s difficult to envisage anything for our fans to “Poznan” over in this one. Man Utd to probably run us ragged and stick a few past the increasingly brilliant Simon Mignolet. Man Utd 3 Sunderland 0

Colin: Can’t see anything better, much as I naturally Iong to be proved utterly wrong. Pete Sixmsith summed it up by asking whether the win against Reading was papering over the cracks. Well, there are still cracks. If this is unwarranted pessimism, over to MoN and the Lads to make me eat my words. 4-1.

The rest: John Mac 5-6. Bill 2-2. Sixer 1-2. Goldy 1-0. Jake 3-0. Malcolm 3-0.

Newcastle v Man City

John Mac: Man City look to have too much against a lacklustre team whose manager has peaked (only 7 years 8 months of him to go, boys!) 0-2.

Jake: Hopefully the Skunks slump will continue. I really can’t see anything other than a City win.

Goldy: Now then. I’m gonna be honest here, I obviously fancy a City win but I’m going tactical with my prediction. I was umming and aghhing regarding the score – but my mind has now been made up by the other predictions. I’d kick myself if they all come in and mine didn’t. Observe the first four predictions proceeding mine and you’ll see what I mean. 1-3.

The rest: Robert 1-3. Jeremy 1-3. Bill 1-3. Colin 1-3. Sixer 0-2. Malcolm 1-2.

Stoke v Everton

Bill: With only three points separating Potters and Toffees, this might look like an obvious draw. Stoke are the great stonewallers – unbeaten at home since the Cats’ victory last February and with only two goals against them at the Britannia ground this season. But that can’t last and I think Everton just might have the edge. 0-1.

Sixer: No rugby score here. Both sides thrive in adversity, unlike some I could name. 0-1.

Malcolm: I always feel that Everton should be better than teams like Stoke, with more flair and technical ability at their disposal but as we know the Potters never make it easy for visiting teams. A one all draw is my feeling. 1-1.

The rest: Robert 1-1. Jeremy 1-1. Jon Mac 2-1. Colin 0-1. Goldy 1-1. Jake 0-1.

Something’s gotta give if 0-1 or 1-1 comes in at The Brittania then.

Here’s the table:

Correct Results Correct Scores Points
Malcolm Dawson 20 5 30
Sixer 17 5 27
Jeremy Robson 17 4 25
Jake 20 2 24
Colin Randall 16 3 22
Goldy 18 2 22
John McCormick 15 3 21
Robert Simmonds 12 4 21
Bill Taylor 13 3 19