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Smiffy

OG Zoner
Joined
Oct 27, 2003
Messages
16,107
Location
The North Bank
I feel that I should be letting you have my thoughts and feelings about the season now it is effectively at an end but I promised that I would answer all the questions that are put to me and I am continuing to do so. However I will need to bring this to an end soon as it was only meant to span two or three weeks.

Anyway for now I will try and deal with another six or eight questions:


We have made a large number of loan signings this season. It has been rumoured that the reason for doing this is that the club cannot currently afford to sign players on permanent contracts due to the on-going stadium plans. Please could you clarify this matter?
Joe Fitzgerald

The reason we signed loan players is because we were unable to secure suitable targets. A couple of players we had looked at such as Mulgrew and Zakuani, went to Aberdeen and Peterborough respectively. In short time ran out during the transfer window and that is when we started to look to the loan market. There is no relationship between the stadium funding and the Football Club’s finances and therefore that impacted on these decisions.

However it should not be overlooked that the loan signings we have made have all come from higher divisions. Whilst this policy can be disruptive to the squad’s continuity they often bring a quality to the team that would otherwise not be available. This is simply because these players are unlikely to move to a lower division club when there is an existing contract with a Championship or Premiership club where they feel there may still be an opportunity of them progressing.

With loan signings it is a way of them playing first team football and generally a stop gap for the loaning club but which sometimes converts to a permanent signing once both player and club having got to know each other etc.


Can you confirm how we plan on getting into the Championship at the first available opportunity and once there how we can sustain that position?
Tim Sims

Obviously there are no guarantees in life and less, I suspect, in football. If you subscribe to the view that there is a direct relationship between success in football and financial investment then it probably follows that through the new stadium plans, which will provide more distributable funds for the Club, there are greater prospects in advancing through the League into the Championship.

Secondly once in the Championship and then having the increased benefit of still further funds (television income and larger attendances) this will be self perpetuating and a greater chance of sustaining a position in the higher league – everything else being equal.

Of course, all these issues have to be tempered against the Manager’s player purchase decisions whilst also accounting for unforeseen situations such as injuries which are often sent to frustrate the Manager. Nevertheless if a Club has the wherewithal, which will be derived from our relocation plans, then it is logical that we will be able to lessen the troughs and maintain an upward spiral.


The club reduced matchday ticket prices last season in line with the government announced VAT Cut from 17.5% to 15% and made a big thing about it on the website. This didn’t affect season ticket holders as we had already paid for our tickets, which I think is understandable. However we were told that renewal prices had been frozen at £380 for next season. Am I right in saying £380 this season includes 15% VAT and therefore the club is picking up the difference between the 17.5% of this season and the 15% of next season? In which case the “SEASON TICKETS PRICES FROZEN” statement is factually incorrect and the club have not been up front with supporters. If that is not the case then can Season Ticket Holders expect a refund of the difference (£8.09)?
Steven Hurren

The VAT rate changed in December 2008. HMRC decreed that change as the point of sale as opposed to when the game was played. Season card holders “lost”, when the VAT rate changed in December 2008 £56.59*3/5, which equates to £33.95.

However the Chancellor also stated in December 2008 that the rate would be restored to 17.5%. So those season card holders that renew this coming season and pay the same rate as last year will pay VAT at 15% on the cost of their seat and will not be charged the extra 2.5% when the rate reverts to 17.5% thus gaining £29.74. The net cost to the supporter being £4.21 assuming that both season tickets were purchased before the cut off date for an amount of £380. It should be noted that the total price paid for a season ticket did not change between the two years.


Can you give a breakdown of associated match day costs, possible break even crowd expectations and how these would impact on the club if we were not able to regain a place in the Championship once the new ground is completed?
Trevor Higgs

This question has so many facets that it is impossible for me to answer without sending everyone to sleep. However a lot of the information will be included in the Club’s audited accounts which are available to the public. That said we are never looking at just match day costs, it is the total costs of running the Club which is included within the annual budget.

Within that budget we also have our best expectations of the average league attendance, throughout the year, coupled with estimates of cup runs etc.

Where the greatest variation arises is in players’ salaries and in this respect I have never restricted Steve to, say, 22 players at a top limit for the wage roll. We have always been flexible and that is why we substantially exceeded budgets last year due to relegation out of the Championship and also this year, in an attempt to make the season competitive with a view to getting back into the Championship. Those shortfalls were made up from the parent company.

I can tell you that very few clubs budget to break even but tend to rely on the sale of players or cup runs to balance the books. Running a football club unfortunately is not like other businesses where one might have fixed costs and with the greatest fluctuation on the income front only.

In a football club the football squad cannot be considered, in my view, as fixed costs because there are so many variables which impact on the cost of players and their replacement or necessary additions throughout the entire season.


What is the anticipated level of debt that the club (including the club's directly related companies and any SPVs set up to facilitate the move) will be servicing once the stadium move is complete, net of any proceeds from the development of the Roots Hall site?
Matthew Walker

The important issue here is that it is not intended that the Club has any debt, moreover substantially greater income and capital from the stadium plans to provide the Club with real impetus and with an infrastructure to maintain, as I have said previously, the upward spiral both on the pitch and also off.

In short, Southend United Football Club will not be servicing any debt which reflects the position I have established for the benefit of the football club in recent years whilst at Roots Hall.


Are their plans to extend the contracts of Steve and Paul still further in the near future?
Matt Marsh

Whilst I understand your reasons for asking, it would be inappropriate to discuss the Management’s contracts in open forum without this matter having first being discussed by the Club’s Board and subsequently with the Manager. I am sure you will understand the position.


I am glad that you have secured Rank as a casino on the fossets farm site. Yes I gamble on the odd game of football and the odd horse race. My question is, is it ethical to state that the deal with Rank will fund the youth team accadamy. Why would you want to promote to children that gambling is a good thing?

I apologise if I have mis-understood your reasoning behind the link between a casino and a football acadamy.
Kathleen Tilbrook

The link here is not one of ethics, but moreover commercial. The two elements, the football academy and Rank’s unit, occupy the upper mezzanine level of the retail terrace. Rank produces an income that will accommodate the costs of creating the academy building (that does not produce a commercial income) to meet the construction costs thereof.

There is no need to apologise; I can understand how the link may have been misinterpreted in the Echo article. We would certainly not want to promote gambling as a good thing to children and do not think we have done so, certainly this would never have been intended. The Club’s entire ethos is built on family entertainment together with the very considerable and highly regarded work it carries out in the community and I do not believe the commercial linkage in this instance undermines that position.



Next week, as I say above, I hope to bring the Q&A to an end and at that time I will need to determine whether a weekly blog (remember it was for a trial period) is worth continuing and would appreciate fans’ feedback on that over the next fortnight.

Finally, Saturday against Cheltenham should be a carnival day and I hope that we can finish the season on a high and take the stability we have achieved since January into next season enhanced with a number of planned new signings.

Up the Blues!
 
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