How do we understand the word Budget when used by Bradford City?

When talking about what can be spent on the playing squad Bradford City use the word “Budget” in a way which seems to cause some confusion amongst supporters. When we hear the word “budget” in connection to Bradford City it tends to mean “what the business can afford” and this distinction is more than linguistics.

The business of Bradford City is – Julian Rhodes tells us via the unquestioning T&A – ready to go “£500,000-£600,000” over budget and of course that statement is a nonsense in itself. If the club is prepared to spend £1.5m on players or £2m on players then that is the budget.

The budget cannot be over-budget any more than the weather can be hotter than it is. As soon as more money is put into the budget the budget is that new figure and when talking about a future figure the best one can say is that it is over a previous budget or a revised budget.

Again, not just linguistics.

What is being said that the business will be spending that amount over what it believes it can afford and that is a much different proposition.

This might not always be true. It might be that the business has reserves which it does not plan spending and the word budget is not so keyed into what we can afford but that seems unlikely in this case.

If the business generates enough money to pay players £1.5m a year and it decides to spend £2m without another income stream then the business is running at a deficit. When a business is running at a deficit then, eventually, it has to get that money from somewhere. Being over-budget is a way of saying that we will spend more than we can afford.

What does a business do when it has spent more than it can afford?

A business can raise capital by selling an asset. Its a good idea in business to never be in a position to sell fixed assets to pay variable costs. Football has a curious view on what is an asset though and this is not an uncommon strategy. You can make up the money you have over-spent by selling a Nahki Wells type player but can you expect to produce a Nahki Wells to order when a bill comes in? It may be a way to manage windfall but not to pay debts.

A business could repay over-spend by cutting costs by a similar amount to that which it had over-spent. If £500,000 is added to player expenditure this year to push it up to £2m then for the following season – if other revenue streams do not increase – then player expenditure is £1m. One weighs up the chances of being ahead one year with the certainty of being behind the next.

A business cut its expenditure in other areas although with Bradford City being largely a business about playing football one doubts that it could make £500,000 of cuts outside of the playing squad.

A business could increase income which if other spending was kept at a level would repay the over-spend. This is betting on promotion with the stakes of the financial health of the business and I’d suggest that using that as a business strategy is laughable at best and sinister at worst.

The final way for a business to cover over-spend is to borrow the money.

Bradford City’s credit might be good somewhere – two administrations and all – but if the business can get loans to cover this over-spend then it would have to pay interest on those loans which would feature on balance sheets to come.

The legacy of Bradford City at Wembley was a substantially debt free business. Why put ourselves in the position where that is no longer the case and the future of the club was in the hands whoever had lent us money? We can see the effects of that being played out in gruesome detail at Elland Road right now.

What would we want to do it for? To buy some “better” players to improve the team that beat Arsenal while on a fraction of the Premier League club’s salaries? If the adventures of Bradford City over the last few years tell you anything it is that (while finance is not unimportant) throwing more money at a squad is not the way to improve it.

But make no mistake that is what is being talked about when football clubs talk about being “over-budget”. In this case we are talking about the business of Bradford City spending money that it does not have on players that it cannot afford.

Again.

And that is what needs to be understood when the “budget” is said from football clubs and perhaps from Valley Parade. If we are spending too much how are we going to pay for that? What is the contingency if that over-spend does not lead to increased revenue streams? (Read: without promotion) How realistic are the aims we are setting to enable us to cover over-spending?

There could be very good answers to these questions but as supporters of Bradford City the club we have had to pick up the pieces after Bradford City the business have decided that it should go beyond its “budget” before.

Mark Lawn and stopping thinking about promotion

Mark Lawn’s successes at Bradford City are limited.

Whatever one thinks of the man and his actions – not talking to his manager for nine months, threatening to wind the club up when three or four idiots vandalised his car, authorising spending £600,000 of money the club did not yet have for selling on a youngster Fabian Delph on players rather than facilities – it is hard to suggest that the vast majority of them have had the aim he desired.

That is because Lawn’s aims are two fold and firstly – and most obviously – it is promotion and three and a half years since he arrived the closest the Bantams have come to troubling League One seems to coincide with the moment when Lawn’s relations with his gaffer went sour. We all recall the hours and the times.

But I come not to bury Lawn but to praise him for his second aim – and the one which he is most tempted to drift away from – is perhaps more important than promotion. It is the financial stability of the club and the fact that in a game fuelled by Bradford City – on the whole – are in the black.

Season on season since Mark Lawn arrived Bradford City’s balance sheet has – more or less – shown the the club is not losing money and considering the significant and huge drain on the resources that the rent of Valley Parade from the Flamingo Land Pension Fund represents this is not to be underestimated. The club owe Lawn (and Julian Rhodes) a chunk of cash but that loan is (it is understood) offered at a rate that allowed the Bantams to stop paying debt maintainable and use those funds.

So when talk emerges that Bradford City are being looked at by investors as a potential purchase it comes as no surprise. A rare beast in football, a club that when they are purchased ostensibly at the price of paying back Lawn’s (estimated, correct me if I am wrong) £1m and whatever the club owe Rhodes then the business side is solvent from the first day of trading.

Lawn – apparently – is not short of offers for the club but most of them are more Peter Etherington than Geoffrey Richmond and the joint chairman sums up the situation saying “At present nobody can come along with the sort of investment that would make a difference.”

It would seem that Lawn is as stuck with his critics as his critics are with him and the frustrations of owing and working under the restrictions of ensuring solvency of the club show in his statements. He talks about supporters with wide eyes looking at other club’s spending saying “So unless somebody can find a magic money tree and give it a shake for us, (City’s ability to sign players in January is) not going to change.”

Lawn talks about waiting for the right man to take over rather than someone who would look to make a quick buck and he is right to talk in such a way but perhaps he is the right man.

One could talk about the business sense of the Bradford City board – The Santa Dave leaflet, please no – but the main problem seems to be a kind of cart before horse approach to that aim of promotion where everyone at the club is part of a mad scramble trying to get into the top three of League Two.

Promotion is set as the aim – Julian Rhodes talked about back to back movements up to The Championship – but with that contradicts the talk of solvency when teams like Notts County or Peterborough United are stealing the League Two title. Those clubs spend buckets of cash on the idea that they must ascend the leagues as soon as possible.

Those teams tough represent the exception and the rule in football is that things are won by the club with biggest club, rather than the biggest spenders. Blackburn Rovers, Chelsea and (perhaps this year) Manchester City have all opened the wallet and tried to buy the Premier League title but if those big spenders fail then Manchester United win it as a default setting. No mad scrambles at Old Trafford, just maintaining the pace.

So rather than setting promotion as an aim create some objectives, set some areas in which City are to improve. I make no apologies for talking again about facilities because the higher up football one gets the bigger and better they are but the correlation between facilities and league position is unignorable.

There are plenty of things which are done by others which should be – and sometimes are – replicated at Valley Parade. Peter Taylor’s insistence on overnight stays is a good example of this as his desire to have a better playing surface (although his desire to suit and boot the players contrasts to Arsenal’s leisure suited lads).

Innovation has its place but is is naive to disguise failure to compete on various levels as new thinking and using the established pattens which have brought the promotion that Lawn and City crave to clubs like Rochdale and AFC Bournemouth – making the setting up of those established pattens as the aims – could prove more fruitful.

When asked about where the club will be in five years the tendency at City is to list a division – famously and with some effectiveness in building belief Geoffrey Richmond said “The Premier League” – but if the answer were about an increased turnover, better facilities, and so forth then perhaps the horse would go before the cart.

Perhaps making Bradford City a bigger club, a club with more of the trappings of a successful club, will bring that success and there is no reason that Mark Lawn – with a sound financial head – is not able to stop talking about promotion or bust and start talking about how he is going to make City bigger and better by whatever increments he can and let osmosis take the Bantams up the leagues.

At the moment Lawn is a Dave Simpson of a chairman – a hand on the tiller and not someone one always agrees with but someone who has as many good limits as bad – but there is no reason why the current chairman should not change the priorities of the club towards stable improvement in increments rather than boom or bust thinking.

Bradford City and financial reality

Commercial reality works two ways in football. The fans and the directors may look at money matters from different perspectives, but the club is still there in the middle. David Baldwin and Mark Lawn have both been telling the media in the last few days how they see that reality at Bradford City. Fans trying to come to terms with short-time working or no work at all can hardly be expected to forget about four consecutive defeats before the deadline for the cheapest tickets passes.

Bradford City are victims of their own publicity in two respects. At the start of last season the manager said that anything less than promotion would be a failure. So, by those standards, a failure it was. This season it was the board’s turn to explain on more than one occasion how they had put together a budget that they expected to produce a £600,000 loss, which would be justified by the much hoped for promotion.

In this respect City are not alone. Brentford, for example, are apparently aiming to wipe out the best part of a £10 million debt by getting themselves promoted. Just how the prospect of League One football produces anything like that amount of extra income may baffle some of us, but Brentford’s board are best placed to decide these things. And we won’t even begin to consider how Darlington’s business plan for the season depended on gates of almost double their actual attendances.

But by far the best piece of publicity City have achieved in recent years, even bringing them a trip to the House of Commons (I wonder what the second prize might have been!), was the cheap season ticket deal from two years ago. In those days when Julian Rhodes was the only chairman we had, he made it plain that the offer would only be taken up by the club if 10,000 or more supporters signed up for the deal. You do not need to be Einstein to work out the sums. Then along came Mark Lawn and his money, which allowed a little bit of juggling to extend the deadline for those 10,000 and eventually, including the free tickets for under elevens, over 12,000 were on the list.

The disappointment of a mid-table finish reduced that number by 1,000 or so for this season, but the excitement of automatic promotion prospects kept the idea very much alive for next season. The cheapest tickets (£99 in the Bradford End, but generally £150 for an adult) had to be bought by the end of December and then the £175 ticket deadline was the end of this month. The December sales went well, not least because on deadline day the team was just goal difference away from an automatic promotion spot. The later sales, we now know, have gone less well and it isn’t difficult to see why.

The problem, however, is that within two years the fans have come to regard a revolutionary idea as something perfectly normal. Those running the money side of the club are desperate to point out the huge price differences between City season’s tickets and those at virtually every other club in this league. It is, in my view, unfair to single out any individual club for comparison, such are the vast differences between the have-nots and the have-even-lesses of the fourth division. But, if you take the average price of season tickets in this league, City’s prices will be as far below as our average gates are above those of our rivals.

A few things clearly need spelling out. The first is that the prices for 2009-10 are fixed, no matter how many people take up the offers available before or after the end of March. Any scrapping of the cheap ticket scheme will not be before 2010-11.

Whatever income the club gets from its season tickets goes a very long way toward fixing the players’ budget. Match by match income is unpredictable and guesswork is no way of running a business that has, to say the least, had its recent financial problems. So every season ticket that isn’t sold is that much less to spend during the summer on players’ contracts.

Of course fans are currently very disappointed about recent form, none more so than those who have spent money, which brings no benefit to our club, in watching defeat after defeat away from home. That disappointment will only grow if promotion by one means or another is not achieved. Such are the expectations which nobody has seriously tried to dampen. Nor should anyone be anything other than positive.

But football fans generally concentrate on matters on the field of play, sometimes paying insufficient regard to matters behind the scenes. Whether it be £175 this month or £250 next, a Bradford City season ticket is great value in the fourth division, even if the product may not do exactly what it said on the tin, and excellent value in the third. For some fans, the state of their finances will have deteriorated since they bought this year’s season ticket. No football club can ignore that, but, equally, no club can lower their prices to the extent that would help those on a vastly reduced income.

The question that the rest of the fans have to face is whether they are prepared to pay £175, £250 or the instalments plan of £200 to give Bradford City the best chance of having a strong squad in 2009-10, regardless of which division they are playing in. The alternatives – a weaker squad and/or paying £20 a game and presumably not getting to as many, if any, matches – are just about all there is to consider. This is the financial reality of being a Bradford City supporter.

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