Latest Rumours Players and Managers serve 14 day notice on Southend United ?

[Berrichonne shrimper]

I feel sick to the pit of my stomach about all this. Ron Martin what have you done.....

Well i think he fell to his knees and woopsy daisy touched up the cleaner or something along those lines.

 

[Clinton Baptiste]

Even though that website is laughable and never ever accurate, this one COULD happen. Weve already seen 2 players have their contracts and 3 others turned down new contracts so its not beyond possibility. Tilly must be close to leaving, having lost his loyal left hand man Brushy, his skipper and his most senior midfielder. He may be Southend through and through but surely Ron has pushed it too far this time.

 

[toellandback]

On WACCOE there has been lots of talk about Hooper. Apparently he has told Scunny he only wants to come to us, thus meaning that Boros bid of £2.5 million is worthless. We are thought to be offering just over a million for him. The source also reckons he will stay and leave for a free if they reject our offer.

Obviously there is a big chance this could be rubbish but i thought i should mention it. It could make a huge difference to what you receive

 

[Jay_Shrimper]

On WACCOE there has been lots of talk about Hooper. Apparently he has told Scunny he only wants to come to us, thus meaning that Boros bid of £2.5 million is worthless. We are thought to be offering just over a million for him. The source also reckons he will stay and leave for a free if they reject our offer.

Obviously there is a big chance this could be rubbish but i thought i should mention it. It could make a huge difference to what you receive

Bol. Lox. :thumbdown:

 

[Beefy]

What I still cannot get my head round in all of this, is how exactly are we in such bad shape? RM has still yet to explain this, and to the naked eye, and perhaps the uneducated, it seems incomprehensible that we have got to this point.

We averaged nigh on 8,000 over the last 3 seasons, and the season before that, 10,000. The season before that, again, around 8,000. We have had 3 appearances at The Millenium Stadium. We have had a number of decent cup runs against top Premiership teams. We have received decent money for players such as Freddy Eastwood and Nicky Bailey, and have no doubt, received excellent revenue from the commercial aspect of the club.

Of course, I appreciate that wages in the Championship were higher, but we hardly pushed the boat out on majoy signings, and any we did, we pretty much countered by the sale of Eastwood and Bailey in the following 12 months.

I simply do not understand how it has come to this, and for me, none of this adds up, or makes sense. RM has offered the recession, and the banks unwillingness to lend money, as the contributing factor behind the delay in starting building work - fine, BUT, that should not have left us in this state, no way never.

This club could break even on gates around the 6,000 mark, according to RM himself, and given that we have averaged at least 2,000 over that over the last 5 seasons, why is that equation now not balancing? I'm sorry, but this is not adding up, and no explanation by anyone on here has yet convinced me that all is what it seems.

Ok, very simply put – our income is lower than our expenditure. This has led to us returning a desperately poor set of accounts for the past several years. For three years in a row we returned an operating loss in excess of £2m. Even in our Championship season, with all of those extra boosts to the bottom-line which you mentioned, we only barely broke even. Had Freddy Eastwood been sold two weeks later we’d have returned a seven-figure loss that year as well.

When a person spends more than they earn they dip into their savings. When a football club, like any other business, habitually makes a loss those savings dry up which is what happened with us a long time ago. When a business takes further losses with no savings to pay for them then the gap has to be plugged through borrowings. We don’t/can’t borrow from banks so we’ve been plugging the deficit with a series of loans from Directors and Group Companies. Those loans are detailed in the Accounts and are what have historically enabled us to operate a wagebill at a higher level than the business turnover justified. On the 1st of the month if we happened to have no cash in the bank then monies were moved from elsewhere to cover the wage bill. Back in the days when we actually paid our tax bill, funds again would have been transferred from one of the Directors or from somewhere else in the Corporate structure to pay the bill. This wasn’t done out of the goodness of the Chairman/Director’s hearts – they were ensuring that the Club was able to live at a level where income was maximized until the new ground was built and everyone made their millions.

Where we’ve run into trouble is the Worldwide economic recession. The collapse of the banking sector has meant that it’s become extremely difficult for the Parent Company to secure the funding which is needed to build the new ground. The collapse of the retail sector has meant that the idea of an out-of-town retail park (a major financial factor behind the development) is a lot less desirable. And most crucially the collapse of the property market has destroyed the ability of the Chairman and his other Companies, to subsidise a loss-making football club. Basically, Ron Martin is skint. His companies are skint and the well of loans which have propped us up despite our losses has dried up. But the contracts signed two or three years ago committing the Club to paying a certain amount per month in wages to players signed in goodfaith are still valid. Our financial obligations are still here it’s just that we don’t have the capability to fulfil them.

With the continual delays of the stadium project there has to be major doubts about whether or not it will ever happen (my money is on it not happening and has been for a long time) and until there is some movement on that front there’s no way that anyone would put money into the Club to prop it up because they might as well set the money on fire for all the chance of them ever seeing it again.

You have probably seen me refer to us as having a chronic cashflow shortage. That is our underlying problem, in my opinion. I’ll try and explain what I mean by that. You mention in your post about our “break even” level of attendance. “Break even” is a phrase that relates to the Profit & Loss. It describes the level of business which is required in order that at the end of your financial year your income matches your expenditure. You haven’t made money but you haven’t lost any money either. The Profit & Loss shows how your business has performed over a twelve month period but for a struggling business the only thing that matters is how you are performing day to day and week to week. That’s cashflow. We may earn a certain amount of money per year in season ticket sales, match tickets and one-off bonuses to break even or even make a profit (we don’t…) but if you don’t have any cash in your bank account then you can’t pay your bills. It’s like if you earn £30,000 and have £10,000 of debts which you need to pay back in that time and maybe £10,000 of bills as well then on paper you should be able to meet those obligations comfortably, but in reality if a few bills arrive at once or you get something unexpected then you may well not have the cash at that time to spend.

From Southend United’s perspective our cashflow problems are much worse than that. We have an average of 7,500 crowds, but half of those are season ticket holders. The season ticket money for the 09/10 season was collected early (a classic sign of a business with a major cashflow shortage) which meant that after March 2009 around 4,000 of our fans weren’t contributing a single penny to the Club’s finances. The money had long since been collected and spent so the only cash that the Club was getting in was a couple of thousand ticket sales a couple of times per month and if you work out how much cash that equates to then you quickly see how that can’t fund a football club where players of modest ability are on contracts worth upwards of £2,000 per week.

When a business has a cashflow shortage there are two things that they generally look to do:
- Get money in as quickly as possible
- Delay making payments out for as long as possible.

This is exactly what Southend United have been doing for the past 18 months. But these are short-term remedies. There’s only so long that you can stop meeting your obligations and there’s only so far in advance you can ask people to pay their season ticket money. Ultimately something has to change because the one thing that kills businesses is a lack of cash.

 

[ElstreeBlue]

All very well, Beefy, but:

1 It's more than just cash flow. Cash flow is one symptom of massive losses. The two are different but connected. The club has been making its biggest ever losses (£2.4m) when it has been receiving historically big revenues (£5m). Why? And why are we struggling more than clubs in the same division as us who have lower attendances and less income?

2 Why have our expenses been so high? And despite reading countless posts by the same few posters, I still don't see any firm evidence of what those expenses are. The accounts certainly don't go into that level of detail. They just have broad heads. And there has just been a lot of speculation about what has been covered within those broad heads of expense.

I don't think many posters know fully where the money has gone. Each "side" accuses the other side of conjecture. I think both sides are therefore right in their accusations of the other. Each side simply doesn't know. But as RC says, something doesn't feel right. How on earth has our football club that has got through over 100 years of ups and downs (both financially and on the pitch) got into such a desperate situation now that other clubs - no matter how badly football is being run financially - are not in? Selling the club's assets was supposed to have cleared the debts. Why are we worse off when we've had more in revenue than we used to have with the success on the pitch, higher attendances, cup runs, TV money and transfers? WHERE HAS THE MONEY GONE?! Our club should not be in the state that it's in now!

 

[TJC]

Ok, very simply put – our income is lower than our expenditure. This has led to us returning a desperately poor set of accounts for the past several years. For three years in a row we returned an operating loss in excess of £2m. Even in our Championship season, with all of those extra boosts to the bottom-line which you mentioned, we only barely broke even. Had Freddy Eastwood been sold two weeks later we’d have returned a seven-figure loss that year as well.

When a person spends more than they earn they dip into their savings. When a football club, like any other business, habitually makes a loss those savings dry up which is what happened with us a long time ago. When a business takes further losses with no savings to pay for them then the gap has to be plugged through borrowings. We don’t/can’t borrow from banks so we’ve been plugging the deficit with a series of loans from Directors and Group Companies. Those loans are detailed in the Accounts and are what have historically enabled us to operate a wagebill at a higher level than the business turnover justified. On the 1st of the month if we happened to have no cash in the bank then monies were moved from elsewhere to cover the wage bill. Back in the days when we actually paid our tax bill, funds again would have been transferred from one of the Directors or from somewhere else in the Corporate structure to pay the bill. This wasn’t done out of the goodness of the Chairman/Director’s hearts – they were ensuring that the Club was able to live at a level where income was maximized until the new ground was built and everyone made their millions.

Where we’ve run into trouble is the Worldwide economic recession. The collapse of the banking sector has meant that it’s become extremely difficult for the Parent Company to secure the funding which is needed to build the new ground. The collapse of the retail sector has meant that the idea of an out-of-town retail park (a major financial factor behind the development) is a lot less desirable. And most crucially the collapse of the property market has destroyed the ability of the Chairman and his other Companies, to subsidise a loss-making football club. Basically, Ron Martin is skint. His companies are skint and the well of loans which have propped us up despite our losses has dried up. But the contracts signed two or three years ago committing the Club to paying a certain amount per month in wages to players signed in goodfaith are still valid. Our financial obligations are still here it’s just that we don’t have the capability to fulfil them.

With the continual delays of the stadium project there has to be major doubts about whether or not it will ever happen (my money is on it not happening and has been for a long time) and until there is some movement on that front there’s no way that anyone would put money into the Club to prop it up because they might as well set the money on fire for all the chance of them ever seeing it again.

You have probably seen me refer to us as having a chronic cashflow shortage. That is our underlying problem, in my opinion. I’ll try and explain what I mean by that. You mention in your post about our “break even” level of attendance. “Break even” is a phrase that relates to the Profit & Loss. It describes the level of business which is required in order that at the end of your financial year your income matches your expenditure. You haven’t made money but you haven’t lost any money either. The Profit & Loss shows how your business has performed over a twelve month period but for a struggling business the only thing that matters is how you are performing day to day and week to week. That’s cashflow. We may earn a certain amount of money per year in season ticket sales, match tickets and one-off bonuses to break even or even make a profit (we don’t…) but if you don’t have any cash in your bank account then you can’t pay your bills. It’s like if you earn £30,000 and have £10,000 of debts which you need to pay back in that time and maybe £10,000 of bills as well then on paper you should be able to meet those obligations comfortably, but in reality if a few bills arrive at once or you get something unexpected then you may well not have the cash at that time to spend.

From Southend United’s perspective our cashflow problems are much worse than that. We have an average of 7,500 crowds, but half of those are season ticket holders. The season ticket money for the 09/10 season was collected early (a classic sign of a business with a major cashflow shortage) which meant that after March 2009 around 4,000 of our fans weren’t contributing a single penny to the Club’s finances. The money had long since been collected and spent so the only cash that the Club was getting in was a couple of thousand ticket sales a couple of times per month and if you work out how much cash that equates to then you quickly see how that can’t fund a football club where players of modest ability are on contracts worth upwards of £2,000 per week.

When a business has a cashflow shortage there are two things that they generally look to do:
- Get money in as quickly as possible
- Delay making payments out for as long as possible.

This is exactly what Southend United have been doing for the past 18 months. But these are short-term remedies. There’s only so long that you can stop meeting your obligations and there’s only so far in advance you can ask people to pay their season ticket money. Ultimately something has to change because the one thing that kills businesses is a lack of cash.

So in a nutshell, we've been caught with out pockets inside out and doing an elephant impression?

 

[palexander]

So in a nutshell, we've been caught with out pockets inside out and doing an elephant impression?

Nah, thats a completely separate alleged court-case!!!

 

[Fish]

Ok, very simply put – our income is lower than our expenditure. This has led to us returning a desperately poor set of accounts for the past several years. For three years in a row we returned an operating loss in excess of £2m. Even in our Championship season, with all of those extra boosts to the bottom-line which you mentioned, we only barely broke even. Had Freddy Eastwood been sold two weeks later we’d have returned a seven-figure loss that year as well.

When a person spends more than they earn they dip into their savings. When a football club, like any other business, habitually makes a loss those savings dry up which is what happened with us a long time ago. When a business takes further losses with no savings to pay for them then the gap has to be plugged through borrowings. We don’t/can’t borrow from banks so we’ve been plugging the deficit with a series of loans from Directors and Group Companies. Those loans are detailed in the Accounts and are what have historically enabled us to operate a wagebill at a higher level than the business turnover justified. On the 1st of the month if we happened to have no cash in the bank then monies were moved from elsewhere to cover the wage bill. Back in the days when we actually paid our tax bill, funds again would have been transferred from one of the Directors or from somewhere else in the Corporate structure to pay the bill. This wasn’t done out of the goodness of the Chairman/Director’s hearts – they were ensuring that the Club was able to live at a level where income was maximized until the new ground was built and everyone made their millions.

Where we’ve run into trouble is the Worldwide economic recession. The collapse of the banking sector has meant that it’s become extremely difficult for the Parent Company to secure the funding which is needed to build the new ground. The collapse of the retail sector has meant that the idea of an out-of-town retail park (a major financial factor behind the development) is a lot less desirable. And most crucially the collapse of the property market has destroyed the ability of the Chairman and his other Companies, to subsidise a loss-making football club. Basically, Ron Martin is skint. His companies are skint and the well of loans which have propped us up despite our losses has dried up. But the contracts signed two or three years ago committing the Club to paying a certain amount per month in wages to players signed in goodfaith are still valid. Our financial obligations are still here it’s just that we don’t have the capability to fulfil them.

With the continual delays of the stadium project there has to be major doubts about whether or not it will ever happen (my money is on it not happening and has been for a long time) and until there is some movement on that front there’s no way that anyone would put money into the Club to prop it up because they might as well set the money on fire for all the chance of them ever seeing it again.

You have probably seen me refer to us as having a chronic cashflow shortage. That is our underlying problem, in my opinion. I’ll try and explain what I mean by that. You mention in your post about our “break even” level of attendance. “Break even” is a phrase that relates to the Profit & Loss. It describes the level of business which is required in order that at the end of your financial year your income matches your expenditure. You haven’t made money but you haven’t lost any money either. The Profit & Loss shows how your business has performed over a twelve month period but for a struggling business the only thing that matters is how you are performing day to day and week to week. That’s cashflow. We may earn a certain amount of money per year in season ticket sales, match tickets and one-off bonuses to break even or even make a profit (we don’t…) but if you don’t have any cash in your bank account then you can’t pay your bills. It’s like if you earn £30,000 and have £10,000 of debts which you need to pay back in that time and maybe £10,000 of bills as well then on paper you should be able to meet those obligations comfortably, but in reality if a few bills arrive at once or you get something unexpected then you may well not have the cash at that time to spend.

From Southend United’s perspective our cashflow problems are much worse than that. We have an average of 7,500 crowds, but half of those are season ticket holders. The season ticket money for the 09/10 season was collected early (a classic sign of a business with a major cashflow shortage) which meant that after March 2009 around 4,000 of our fans weren’t contributing a single penny to the Club’s finances. The money had long since been collected and spent so the only cash that the Club was getting in was a couple of thousand ticket sales a couple of times per month and if you work out how much cash that equates to then you quickly see how that can’t fund a football club where players of modest ability are on contracts worth upwards of £2,000 per week.

When a business has a cashflow shortage there are two things that they generally look to do:
- Get money in as quickly as possible
- Delay making payments out for as long as possible.

This is exactly what Southend United have been doing for the past 18 months. But these are short-term remedies. There’s only so long that you can stop meeting your obligations and there’s only so far in advance you can ask people to pay their season ticket money. Ultimately something has to change because the one thing that kills businesses is a lack of cash.

Superb post. Wish I had been able to express it that succinctly.

One thing to add is that the financial crisis I think has also meant that the new ground development has taken much longer than Ron would have originally planned for. We've had to re-structure the finance package and renegotiate the terms within it to assuage lenders who are now much nervier about lending. That means having to agree to things like less money up front, retail units being built before the actual ground, higher intgerest rates, shorter lending horizons. All of which also put pressure on the annual P&L. In the end RM has simply been left with too many plates to spin.

 

[Clinton Baptiste]

On the echo website it says there will be a 4 page special on our financial situation and Sainsburys involvement in the club in Mondays edition.

 

[Crawliano]

I've been given a sneak peak.

It's a four page pullout. Below is the smaller version:

 

[wiggy]

I feel sick to the pit of my stomach about all this. Ron Martin what have you done.....

To be fair i have been calling him a second hand car dealer for about 2 years now and got so much abuse for my trouble!

 

[Beefy]

All very well, Beefy, but:

1 It's more than just cash flow. Cash flow is one symptom of massive losses. The two are different but connected. The club has been making its biggest ever losses (£2.4m) when it has been receiving historically big revenues (£5m). Why? And why are we struggling more than clubs in the same division as us who have lower attendances and less income?

2 Why have our expenses been so high? And despite reading countless posts by the same few posters, I still don't see any firm evidence of what those expenses are. The accounts certainly don't go into that level of detail. They just have broad heads. And there has just been a lot of speculation about what has been covered within those broad heads of expense.

I don't think many posters know fully where the money has gone. Each "side" accuses the other side of conjecture. I think both sides are therefore right in their accusations of the other. Each side simply doesn't know. But as RC says, something doesn't feel right. How on earth has our football club that has got through over 100 years of ups and downs (both financially and on the pitch) got into such a desperate situation now that other clubs - no matter how badly football is being run financially - are not in? Selling the club's assets was supposed to have cleared the debts. Why are we worse off when we've had more in revenue than we used to have with the success on the pitch, higher attendances, cup runs, TV money and transfers? WHERE HAS THE MONEY GONE?! Our club should not be in the state that it's in now!

You say "just cashflow" as if that isn't serious. Losses aren't a problem necessarily. Debt isn't a problem necessarily. Not having cash to pay your tax bill and your wage bill is a huge problem. The operating losses we suffered in previous financial years weren't problems by themselves because there was the financial support behind the scenes to absorb those losses and still move forward. That support isn't there anymore.

Increasing your income doesn't make you necessarily any better off if your outgoings increase by more. Hull City have had two year's of Premier League money and yet are on the brink of bankruptcy because they spent even more than they had in.

We're struggling more than other clubs for the reasons I've outlined. Almost all Clubs face the same cashflow issues that we have, hence the 50+ who have gone into Administration in the past 13 years. We're struggling more than others because where others may have savings or might be able to meet short term cash needs from borrowings from banks or from a benefactor behind the scenes, the guy running our Club is clearly skint.

As for the expenses, well as I always say to you they are broken down in the finance forum. By all means point out those which you feel are too high but as Firestorm has often pointed out they are pretty consistent over the past 15+ years. It costs a certain amount of money to run a football club and there's only so many efficiency savings that you can make.

 

[GBJ]

To be fair i have been calling him a second hand car dealer for about 2 years now and got so much abuse for my trouble!

Not from me you haven't. I've agreed with a lot of what you've said. I wonder if those people who did give you sterling abuse will admit that they were wrong?

 

[davewebbsbrain]

To be fair i have been calling him a second hand car dealer for about 2 years now and got so much abuse for my trouble!

Maybe you have been, but you are still a **** of the highest order because you go from one moan to another with nothing positive ever.

 

[hockleyshrimper]

Its quite amazing how we still aren't in administration. I take it sainsburys have got a lot to lose by us doing so?

 

[wiggy]

Maybe you have been, but you are still a **** of the highest order because you go from one moan to another with nothing positive ever.

...and you must be the second most abusive person on here behind True Blue, well done. Sod all to have bin positive about since Captain Martin of the Titanic decided to run it into the ground, happy now?

 

[THE SEVENTIES NORTH BANK]

All very well, Beefy, but:

1 It's more than just cash flow. Cash flow is one symptom of massive losses. The two are different but connected. The club has been making its biggest ever losses (£2.4m) when it has been receiving historically big revenues (£5m). Why? And why are we struggling more than clubs in the same division as us who have lower attendances and less income?

2 Why have our expenses been so high? And despite reading countless posts by the same few posters, I still don't see any firm evidence of what those expenses are. The accounts certainly don't go into that level of detail. They just have broad heads. And there has just been a lot of speculation about what has been covered within those broad heads of expense.

I don't think many posters know fully where the money has gone. Each "side" accuses the other side of conjecture. I think both sides are therefore right in their accusations of the other. Each side simply doesn't know. But as RC says, something doesn't feel right. How on earth has our football club that has got through over 100 years of ups and downs (both financially and on the pitch) got into such a desperate situation now that other clubs - no matter how badly football is being run financially - are not in? Selling the club's assets was supposed to have cleared the debts. Why are we worse off when we've had more in revenue than we used to have with the success on the pitch, higher attendances, cup runs, TV money and transfers? WHERE HAS THE MONEY GONE?! Our club should not be in the state that it's in now!

This is where the mystery lies. Why was there such a cover up of expenses. Lots of people on here can mention money that came in, but nobody can tell us where the money went, apart from the obvious expenses. It's those that they slipped in as broad heads that need full and open scrutiny.
You don't have to be Columbo to work out someone has been up to no good.

In my own view, our club has been sucked dry.

 

[McNasty]

This is where the mystery lies. Why was there such a cover up of expenses. Lots of people on here can mention money that came in, but nobody can tell us where the money went, apart from the obvious expenses. It's those that they slipped in as broad heads that need full and open scrutiny.
You don't have to be Columbo to work out someone has been up to no good.

In my own view, our club has been sucked dry.

How long before the Fraud Squad appear and take all the computers away ? That is, unless the regular burglars get there first.

Years ago if a business was in trouble there would always be a "mystery" fire.

 

[Hawkwell Blue]

...and you must be the second most abusive person on here behind True Blue, well done. Sod all to have bin positive about since Captain Martin of the Titanic decided to run it into the ground, happy now?

What about me?