The Plan!

Below is a piece I've done on football club finances. Derby are compared with our near rivals, Nottingham Forest as I originally wrote it for their Garibaldi Gazette Website. Keep an eye on that site as a full article looking at several clubs is currently being written for it.

The blog below is a few weeks old, so excuse the quick edit to include the appointment of Billy Davies as Forest's new manager.

As a fan of Derby for over 43 years, it often riles me that younger fans are complaining that we aren't paying out high fees for players.

Twice we have stared at a real possibility of going out of business due to massive debts! The last time was during the tenure of the trio of Jeremy Keith, Murdo Mackay and Andrew Mackenzie. This trio referred to as 'The Three Amigos' by the fans, bought the club for a pound each.

They were described on their appointment as 'Business Doctors'. Well Doctors are supposed to make things better. This trio accumulated debt after debt! George Burley the then manager worked miracles with no money getting the team into the play-offs. This down to him having a scouting network that came up with free transfers such as Grzegorz Rasiak and Inigo Idiakez.

A season later Burley had, had enough. He left to be replaced by an inexperienced Phil Brown. With no money he struggled. Before he was fired, the squad was reduced to one striker in the shape of veteran Paul Peschisolido. Rasiak had been sold at a giveaway fee during the transfer window.

It was inevitable that the club would either have to be rescued or would once again face oblivion.

The Three Amigos in their wisdom then decided to try and get the now infamous SISU on board in order to retain control of the club. Thankfully former director Peter Gadsby came to the rescue and with a consortium of local business people, applied the kiss of life. Debts were renegotiated and the clubs fans looked forward to a new dawn.

Gadsby and his colleagues appointed Billy Davies as manager and expected to reach the premier league within a few seasons. They did it in one and the rest is history. With little money to spend they were quite frankly a disaster in the top tier.

Billy Davies constantly complained about the lack of funding. He did however manage to waste the cash he was given. £6m for the pair Robert Earnshaw and Claude Davis. Spending I suspect was still over budget as the club still had outstanding debts and the hope of being able to meet the most of these by Premier League prize money from a second season in the top flight had in reality evaporated by Christmas.

Adam Pearson had by then joined the board and sacked Billy Davies before that period. No doubt his outburst on Radio Derby after the Chelsea fixture had put the final nail in his coffin. Davies claimed that he hadn't seen Pearson for six weeks. This was in fact untrue.

Adam Pearson immediately went in search of new investment. Roy Disney a member of one of the worlds most famous film making companies was a name mentioned as a prospective buyer. In the end it was General Sports and Leisure who came up with £50m to buy the club and clear any debts.

After Paul Jewell dabbled in the January transfer window with a few panic buys with a last ditch attempt at survival, the club were relegated.

Jewell squandered a lot of cash and eventually resigned leaving the club with a hefty wage bill and a side not good enough to compete in the top half of the championship.

Nigel Clough was brought in and given his instructions firstly to save the club from relegation, then to stabilise and finally to cut down the playing staff and wage bill.

Despite losses of 7.9m last season, he is actually fulfilling the role he was expected to do.

Had he not shaved £5-7m off the wage bill, the club would be faced with debts similar to those accumulated by previous regimes.

Em only external debt is £15m shown as a mortgage on the ground. The accounts does show another debt of £36m owed by the club to their owners, therefore it's what we regard as a serviceable debt.

More and more players are now graduating from the clubs Academy. Jeff Hendrick, Mark O'Brien, Will Hughes and latterly Mason Bennett have successfully applied their skills whilst on first team duty. Formulating a good youth policy has been vital to the club and there's nothing more satisfying than seeing home grown players make the grade. Hughes has recently been tipped for a big money move to several top sides.

So apart from supplying future players to the first team, transfer receipts received for players that do move on provide valuable income too. Derby as a club seem to be taking the approach of fielding home grown talent and promising young players spotted by club scouts at lower league clubs.

Some fans are untrusting of the board despite their openness of the clubs financial position. Indeed new CEO Sam Rush has recently staged the first of a series of question and answer sessions with fans.

Some fans can't see beyond a promotion being representative of success. After the turmoil of recent years, I am content to take the patient approach. I love my club and never want to stare financial ruin in the eye again.

After a good win, the social media is full of fans praising Nigel Clough and when we lose they are on twitter calling for his head

Now looking across at our neighbours I some fans complaining at the lack of investment by the Al-Hasawi family. First of all, I wish we had some of that. However, they are not going stupid by throwing money around like Leicester or Cardiff.

What will be interesting though is the wage bill down? Players like a Sharp and Cox don't come cheap. Also, again players are coming up for contract renewal. On the one hand, you may want the player as he's a vital part in the push for promotion, but on the other hand is he good enough to make the move up to compete against the games best should promotion be gained.

The club were haemorrhaging millions under the ownership of the late Nigel Doughty, therefore some sort of financial prudence is needed to prevent it happening again. Spending big guarentees nothing but debt. Even if the promised land is reached, you can expect to have a wage bill in the region of £50m and still hover around the relegation zone.

I'm a firm believer that today, evolution is the better option rather than revolution. Sean O'Driscoll was sacrificed for Alex McLeish because the rules of the game plan had changed. Three to five years is a plan, but is an about turn in the middle of the season worth the financial gamble? Swansea are the perfect example of evolution. Portsmouth are the prime example of revolution going badly wrong! In the last couple of weeks McLeish has since left and Reds fans welcome the second coming of Billy Davies.

Perhaps like GSE at Derby, the Hasawi family have realised that under the new Financial Fair Play regulations that the trappings of the Premier League are needed sooner rather than later! Perhaps they have decided that sooner rather than later is the better option. Only those close to the club know the real answer!

There are those who talk about loopholes. They are steadily being closed. Gone is the opportunity for rule bending multi-million pound sponsorships! Sponsorships have to come from a third party and be of marketable rate.

Unless you are 100% confident of promotion within the next two years, it is foolhardy not to prepare.

Despite being a life long Rams fan, I do look forward to the day that both clubs are back in the higher echelons of English Football.

Which approach is the best? Make your own mind up!

A