Long-winded moan about the boardroom & budget which ultimately Lai signs off on:
Our income which is guaranteed over the next four seasons, excluding player trading and any commercial revenue is circa £205m as follows:
-£100m (2020/21)
-£50m (2021/22, parachute payment)
-£35m (2022/23, parachute payment year 2)
-£20m (2023/24, final year of parachute payments)
Our wage bill at the end of 2018/2019 was £46.8m, that was then reduced further last summer, if you look at the players that went in and out. Factoring in we have now released Brunt and Barry, our wage bill would have shrunk to a circa £40m but then also increased with players on premier league contracts previously going back having their wages doubled, which includes Kanu, Gibbs, Hegazi, Livermore and Phillips. A crude estimate I would expect our current wage bill to be in the region of £60m, possible less than that currently but I am being cautious.
Against that we have £100m income this season give or take. So that's £40m to spend on transfers and wages which fits in with what we know. What is winding me up royally is the refusal of the bean counters to allocate any of the 2021/22 income towards our squad rebuild. We should be using a lot of £50m as well in one huge effort this summer to build a premier league quality team. After all we not looking to sign players for just 12 months, and transfer fees are going to be staggered over years.
The flex up on the wage bill is limited to our income. We usually run around 90% or more. Which means our wage bill ceiling is around £90m. So we should be allocating in my view up to £30m extra on wages (which in perspective is an additional ten players on £50k a week on average, obviously depending on who we sign we sign some would be on more or less, scope to pay £100k a week for a best players) which gets our wage bill up to £90m, which is affordable (less than our wage bill in the PL previously which was £92m-97m under Hodgson and Pulis)
That then leaves the small matter of transfer fees. If we allocate £30m on wages that leaves us just £10m from this years pot of income. Nowhere near enough. Hence why we need to allocate 50% of the parachute money in as well, which is £25m. If we took that approach we would have the punching power to spend £35m on transfer fees and to increase the wage bill by £30m up to £90m. So that's a total of £65m spent this season on fees and wages against our income guaranteed of £205m over the next four years - it's a millions miles away from a Peter Ridsdale approach, i.e. it would not put the club at risk.
That would be enough IMV to build a premier league quality squad again.
Suppose it went wrong and we got relegated. Well our wage bill would halve to £45m due to the relegation clauses we insert in all contracts (which are now common for most PL clubs outside the top six). We would still have £80m guaranteed income up to the end of 2022/23 so enough to self-fund that squad for the first 2 years. Thereafter, if not before we would need to raise £20m to break even by player sales. We would also have a squad with a much higher value having spent more on transfers.
The clubs approach appears to be to only spend this seasons income, which is very short sighted in my view. It's the same reason no sensible person buys a house in one year - you get a mortgage.
Bilic is a qualified lawyer, I suspect he has done the same maths and is banging his head of the table at the boardroom antics.
The bottom line is this year's budget alone is not enough to build a team to compete in the premier league and the failure to build a decent team results in relegation and a massive loss of income - so not only it wrong from a playing side it is also economically stupid.
