I like to think I'm pretty level-headed. For a living I analyse situations and to do that you have to remove emotion, look at the evidence and at times use common-sense to fill in any gaps.
Looking at this situation, it is possible to make the arguement that fbm makes. After all, every noise coming out of the Club says that we're doing ok financially. We're not in Administration, we're free to sign players and according to the Club the winding-up petition will be dismissed just as soon as a large cheque from Sainsburys turns up on our doorstep. Plus Betsy and Revell were just two squad players and to be honest I said in the Summer that we had too many strikers and should be looking to get rid of one.
The trouble with the 'everything is fine, just chill-out' picture painted above is that it just doesn't wash with me. There's too many gaps.
My summary of the way things are, based on my understanding of events to date, is that when we got promoted in 2005/2006 we entered into a World where our income increased massively. More TV money, a run to the last-eight of a major cup competition and ultimately the sale of the second most valuable player in our history led to greatly increased turnover compared to anything we'd seen previously. However due to necessary investment on the playing staff to boost a squad which had achieved back-to-back promotions but which was likely to be outclassed at the next level our outgoings increased equally and in the Summer of 2007 we were relegated and broke even on the Accounts.
The next season our average gates were down 2,000, mainly due to greatly diminished away attendances, we had no international striker to sell for a seven-figure sum and we didn't have a long cup run meaning that turnover reduced substantially. But at the same time the wage bill for contracts which were signed, or re-negotiated, in the Championship were still having to be paid at that level, and the Club continued to invest money on new signings (Bailey, Revell, Barnard & Walker costing well over half a million between them). With income down and expenditure constant we returned massive losses.
The next season income dropped still further, despite the boost of a cracking cup performance at Chelsea but still the likes of Foran & Clarke cashed in big pay-cheques every week. According to Ron Martin we were one of the top five wage payers in this division last season. Also according to him the accounts to August 2009 will show a slightly greater loss to the one reported the previous year (£2.1m IIRC).
The Accounts show that the losses we've incurred and the debts that we've run up are financed by loans from Directors and from associated companies (not least SEL). That's a good thing in the sense that it means that they are unlikely to be called in (I believe we don't run an overdraft so we don't have to worry about an outside organisation like a bank calling in our lending lines), but the first rule of business is that Cash is King. The losses that we've made have destroyed any liquidity in the business which is why we're allegedly more likely to be late in paying bills and allegedly more likely to be using cash earmarked for things like a tax bill or for a "contractual obligation" to pass on funds for a testimonial.
If I was looking at these accounts and they weren't for Southend United Football Club, I'd be worried as I'd be looking at a company with real cash-flow difficulties and who's entire possibility of continuing as a going concerns rests on the ongoing support of the Directors and on one of their creditors not trying to wind them up. The fact that I know these accounts are for Southend United would make me feel slightly better as I think there's little chance of the Chairman pulling the plug. If we can generate enough cash to pay off the winding up petition we'll be ok in the short term. If that means letting a few players go then that means letting a few players go.
So with that being the situation as I understand it, what personally annoys me (bringing emotion back into things for one moment) is when the Club either make promises that they can't keep (we will sign players) or sling mud at a player who is on the way out in order to detract attention from the real reason why we have to reduce the squad.
I don't think that the Club are totally at fault for where we are today. We all wanted the player investment. We wanted to be successful and we over-reached ourselves (and demonstrated entirely why we need a new ground and new income streams to compete in the Second Tier). We could have gone bust a decade ago and were saved by the people in charge now and those same people have moved the Club forward and have taken us closer to a new stadium and a new future than we've ever had before. Ron Martin and Geoff King aren't villains in all this and I'm fairly happy to trust our future to them. I just ask that they don't lie to us and don't insult our intelligence along the way.
