How Do You Solve A Problem Like Finances?

Something that has irked me ever since I started playing FM is the way we are held accountable for financial problems at our clubs. FM08 and the introduction of the confidence system made us fully culpable for financial miss-management, when as far as I’m concerned real life managers would have little or no say in the financial goings on of a football club and as such could not be held responsible for any financial problems.

We should not be able to exceed our wage budget at all, and the board should not provide a wage budget that may leave the club in difs. At FC Bayern I ran a loss every month despite managing a wage spend of less than 50% of the budget. The board must have been in a suicidal mood when they assigned the wage budget, if I had spent anywhere near full budget, and not achieved any success, the club would have been in serious trouble.

There appears to be no level of forward planning from the board at all, and little or no oversight of transfer activity. We can easily spend our full budget on one player without interference/suggestion/concern expressed by the board about the future of the club.

On checking finances you will see a variety of other costs that we have no control over, and tbh are so ambiguous that I don’t know what they include. Non-footballing costs, affect our finances, but we can’t do anything about them, even if they seem too expensive.

There were well documented examples of United, Chelsea, Arsenal and Liverpool all maintaining their loan debt despite having the budget to pay the debt off.

It does feel like some boards are on a suicide mission.

The major problem is that, we are held accountable for these problems and can be sacked as a result of poor financial management, when we receive no help or guidance from the board.

I’m usually one of the first to say “no” when people ask for unrealistic features such as ability to alter ticket prices etc. However, I’m starting to come round to the view that either we are given full financial control and if it goes wrong we’re at fault, or no financial control (as is) and so we cannot be considered responsible and it will not affect our position.

Of course that’s not an answer, but I don’t work for SI I don’t envy anyone who might be tasked with fixing the problem with finances.

our major finances are incoming at the end / beginning of every season, almost expect to make a loss in between really.

I was thinking along these very lines recently. All I can really do is reiterate what you said. Finances are not the manager's responsibility. All we should have to worry about is spending the money we're given. It's up to someone else to decide how much to give us. It is not our job to make sure the club stays financially secure. Our job is to manage the team. I really don't know where this got lost.

our major finances are incoming at the end / beginning of every season, almost expect to make a loss in between really.

You expect to make a loss, but you aren't necessarily the cause of that loss and so finances shouldn't be part of your confidence section or play any role in your job security.

I want a rich owner ffs, Billericy (sp) had about £5mil tranfers budget when i had £0. No wonder they beat me 5-0, its just not fair.

... as far as I’m concerned real life managers would have little or no say in the financial goings on of a football club and as such could not be held responsible for any financial problems.

Disagree with this. I'm reading Ian Ridley's book about his time as Weymouth chairman at the moment. He gave his manager, Steve Claridge, a wage budget and Claridge was expected to manage that budget. When Claridge wanted to bring in new players, he had to consider his budget and the overall finances of the club. At one point, Claridge wants to sign a new centre-back and forward which could push him over his budget limit and Ridley, the chairman, is deeply concerned about the wage budget he has set. I'm only half way through the book but you can imagine that if Claridge had overspent and the club's finances had suffered as a result, Ridley's confidence in him as manager would have been shaken.

We should not be able to exceed our wage budget at all, and the board should not provide a wage budget that may leave the club in difs.

I agree that chairmen should be very strict about their wage budgets, however I have not really experienced many cases where I have been allowed to hugely overspend in FM08 or FM09 anyway. There has to be a little bit of opportunity to overspend because it happens in real life.

What I would like to see is a cup run actually having an effect on finances and the wage budget. I would like to be able to factor in a cup run, should I achieve it, and spend the extra funds on improving the team. This is obviously most appropriate to managing a lower league side although could be equally applicable to a Champions League club.

At FC Bayern I ran a loss every month despite managing a wage spend of less than 50% of the budget. The board must have been in a suicidal mood when they assigned the wage budget, if I had spent anywhere near full budget, and not achieved any success, the club would have been in serious trouble.

It happens all of the time in real life. A huge amount of teams overspend and have a board that plough funds back into the club. Goodness knows what percentage of football clubs are in debt.

Going back to the Ridley book, he talks about how some non-League clubs overspend on their budget without the funds to spend from gate receipts etc. and then live permanently in their overdrafts. Some of them even factor in a run in the FA Cup and then are in deep trouble when they get knocked out in the qualifying rounds. It's the same at every level as well. So many clubs in financial troubles and constantly borrowing money.

There appears to be no level of forward planning from the board at all, and little or no oversight of transfer activity. We can easily spend our full budget on one player without interference/suggestion/concern expressed by the board about the future of the club.

I agree with you here. I think I would like to see more of a fight put up by the chairman if you're doing something ridiculous. Even if he doesn't reject your decision, he should at least warn you that it will cost you your job unless you achieve certain results.

On checking finances you will see a variety of other costs that we have no control over, and tbh are so ambiguous that I don’t know what they include. Non-footballing costs, affect our finances, but we can’t do anything about them, even if they seem too expensive.

They are ambiguous, yes, but it would be difficult because how much detail do you go in to? Do you go down to the level of the coach bills or the programme printing costs, for instance? Or perhaps just the big ones, like electricity, water, maintenance, health and safety, security. Then there is all of the employees at a football club. I mean, did you know Manchester United employ a club chaplain? Ironic that the red devils, and one of the less moral clubs in our country, have a chaplain.

My point is that there are so many hidden costs that it would be very ambitious, and impossible, to try to detail them all.

It does feel like some boards are on a suicide mission.

Welcome to real life.

The major problem is that, we are held accountable for these problems and can be sacked as a result of poor financial management, when we receive no help or guidance from the board.

I've never been sacked for financial mismanagement in the game. I have usually managed my budget well and, even when the club is making a loss, as long as this is the case I have had no problems. Seems quite realistic to me.

Have you actually been sacked due to financial issues outside of your control?

I’m usually one of the first to say “no” when people ask for unrealistic features such as ability to alter ticket prices etc. However, I’m starting to come round to the view that either we are given full financial control and if it goes wrong we’re at fault, or no financial control (as is) and so we cannot be considered responsible and it will not affect our position.

Definitely don't want to see full financial control.

I'm actually of the opinion that, when a club is in financial trouble, the manager's position should be questioned. Think about it. The board will be thinking to themselves, can we get another guy in who can: 1) raise the profile of the club and bring in funds, 2) do more with less, 3) achieve stability with a small squad or 4) push on and take us to the next level thus bringing the club success. So in this respect, the game is right to take into account the club finances in working out manager confidence. Finally, I believe that as manager, you should manage your delegated budget and if you fail in a significant way you should rightly be sacked. That's part of the job.

i find finances a part of the game i could do without i see no reason why its up to me to sort it out i should just be given a wage budget and a transfer fee the board should sort everything else out i find it amazing that even tho i am way under my wage budget the club is losing money at an alarming rate and that shouldn't be the case

Crouchaldinho, I agree that it may be an aspect of management in lower and non league football, but FM shows no distinction in financial responsibility between Premier League and Blue Square. Claridge may well have had quite a lot of control, but I doubt that the likes of Ferguson or Wenger would have that much control because their teams can afford to hire accountants etc.

Something that has irked me ever since I started playing FM is the way we are held accountable for financial problems at our clubs. FM08 and the introduction of the confidence system made us fully culpable for financial miss-management, when as far as I’m concerned real life managers would have little or no say in the financial goings on of a football club and as such could not be held responsible for any financial problems.

We should not be able to exceed our wage budget at all, and the board should not provide a wage budget that may leave the club in difs. At FC Bayern I ran a loss every month despite managing a wage spend of less than 50% of the budget. The board must have been in a suicidal mood when they assigned the wage budget, if I had spent anywhere near full budget, and not achieved any success, the club would have been in serious trouble.

There appears to be no level of forward planning from the board at all, and little or no oversight of transfer activity. We can easily spend our full budget on one player without interference/suggestion/concern expressed by the board about the future of the club.

On checking finances you will see a variety of other costs that we have no control over, and tbh are so ambiguous that I don’t know what they include. Non-footballing costs, affect our finances, but we can’t do anything about them, even if they seem too expensive.

There were well documented examples of United, Chelsea, Arsenal and Liverpool all maintaining their loan debt despite having the budget to pay the debt off.

It does feel like some boards are on a suicide mission.

The major problem is that, we are held accountable for these problems and can be sacked as a result of poor financial management, when we receive no help or guidance from the board.

I’m usually one of the first to say “no” when people ask for unrealistic features such as ability to alter ticket prices etc. However, I’m starting to come round to the view that either we are given full financial control and if it goes wrong we’re at fault, or no financial control (as is) and so we cannot be considered responsible and it will not affect our position.

Of course that’s not an answer, but I don’t work for SI I don’t envy anyone who might be tasked with fixing the problem with finances.

I completely understand your point here, but it is very difficult to decide where to draw the lines in a game like this. For many clubs, the buying and selling of players is also out of the manager's hands. Many clubs in real life distinguish between a first team "coach" and a club "manager". They imply a differerent scope of responsibilities.

For me, the finances within the game is a bit like the tactics. You can really get involved and understand how and why certain things happen and take steps to change and improve things. When you do, the game is more enjoyable because you can achieve much more with less. Equally, I accept that not everyone wants to do this. The best thing to do if you don't want to have to deal with this is to set the business skills of the chairman to 20 using the editor. I've noticed that the club manages the finances much better under these circumstances.

But, if you just spend a little time on this side, you'll find how rewarding it can be. Even the poorest club can be turned around within a period of 4-5 years if you take careful steps to manage the cash. And just like tactics, if you get involved deeply in it, it can be one of the most fun aspects of the game. But, being in investment management, perhaps you'd expect me to like this.

Crouchaldinho, I agree that it may be an aspect of management in lower and non league football, but FM shows no distinction in financial responsibility between Premier League and Blue Square. Claridge may well have had quite a lot of control, but I doubt that the likes of Ferguson or Wenger would have that much control because their teams can afford to hire accountants etc.

This book I'm reading by Ian Ridley has been a bit of an eye opener for me in terms of football finances.

He says, in the book, 'I quickly learned that running a non-League football concern differs only from running, say, Manchester United in the number of noughts on the balance sheet'.

I stick to what I said above, which is that when a club is in financial trouble, the manager's position should be questioned.

The board will be thinking to themselves, can we get another guy in who can: 1) raise the profile of the club and bring in funds, 2) do more with less, 3) achieve stability with a small squad or 4) push on and take us to the next level thus bringing the club success. So in this respect, the game is right to take into account the club finances in working out manager confidence.

If Wenger or Ferguson were suddenly making erratic signings that took them over their wage budget and were not achieving the kind of success that the club required in order to be financially secure, they would be out of the door immediately.

i find finances a part of the game i could do without i see no reason why its up to me to sort it out i should just be given a wage budget and a transfer fee the board should sort everything else out i find it amazing that even tho i am way under my wage budget the club is losing money at an alarming rate and that shouldn't be the case

Which club are you managing bigguyinthesky?

If Wenger or Ferguson were suddenly making erratic signings that took them over their wage budget and were not achieving the kind of success that the club required in order to be financially secure, they would be out of the door immediately.

IMO Wenger and Ferguson would never have the chance to go over their wage budget because the board would exercise some level of control. In FM the board take nothing to do with it, and the manager is allowed to go over the wage budget slightly.

I'll take your word for it on the book you discuss, and most of my post is guess work, but I still maintain that we should either have full control or no control over finances.

IMO Wenger and Ferguson would never have the chance to go over their wage budget because the board would exercise some level of control. In FM the board take nothing to do with it, and the manager is allowed to go over the wage budget slightly.

Yes, like I said before, I agree with you here.

I'll take your word for it on the book you discuss, and most of my post is guess work, but I still maintain that we should either have full control or no control over finances.

It is an interesting read for the 'behind the scenes' at a football club.

I've already made the points I wanted to now but I just want to repeat the fact that I don't think the finances are too bad. Definitely room for improvement of course.

As long as you stay within the wage and transfer budget given to you by the board, there should be very little confidence issues towards you from the board even if the general club finances are not so good. This was specifically adjusted for FM09 since the manager does have very little control over the finances outside of the playing budgets (wages and transfers).

Yes, this is certainly my experience of the game.

This was specifically adjusted for FM09 since the manager does have very little control over the finances outside of the playing budgets (wages and transfers).

Well that's good to hear, I based most of my OP on 08 experiences.

I would never want a situation in which I am not in control of my wage and transfer spending so if I'm in control of them then I'm happy to be held accountable. Given what Riz said the rest of finances don't matter so much.

I disagree that the board should never give the manager a budget that would put the club into serious financial difficulty though. Some boards are just not very good at financial management or run a very high risk strategy (Leeds Utd anyone?). I've been given budgets in FM07 and FM08 at a few clubs that would send us to the wall if I spent them. Werder Bremen are similar to Nomis07's Bayern Munich, albeit with even less money, but still big wage budgets generally, relative to the pitiful gate receipt income.

Funniest example though was at Greenock Morton in FM07. I had a strong scouting network in Scandinavia, Hungary, Ukraie, Lebanon and other areas which brought various talented players to my attention that I bought relatively cheap and sold for massive amounts, resulting in a transfer budget at one point of £42 million, this despite the fact that our bank balance had been dropping steadily because of high wages (albeit still within the board's again very generous allowance, all of which was based on our originally very high bank balance). Bank balance currently is ~£6 million. As manager I wasn't stupid enough to spend all that money - infact our budget was £35 mill at the start of the season so I've actually sold £7 million worth of players net this season because I am trying to balance finances my way rather than take the board's noose and put it round my neck.

So, in summary, I don't really mind taking the responsibility for club finances - if the club is spiralling into debt so much that even if I had a £0 wage bill and never paid for a player we would still be losing millions per month then clearly that is not good, but then if I got sacked for that I'd not be too fussed because they are conditions in which it would be almost impossible to manage the club.

I would never want a situation in which I am not in control of my wage and transfer spending so if I'm in control of them then I'm happy to be held accountable.

I'd never want a situation like that either, but I think there should be more board involvement in how we spend our cash. It's a bit bizarre that as Juventus in 08 I signed Ronaldo for £67m and the board din't seem the slightest bit interested, I don't want them to say no or yes, but i'd like to see them give me some sort of opinion.

Was there not a previous version that had the board cancel transfers out and in because they felt the fee was unrealistic?

In fm09 my team were 20 mill in debt, but they restruted it and took out a bank loan, making the debt only 3 mill, but now i hav an extra loan to pay. I also have found the club/chairman dont moan or blame the manager for the financial state, unless your over the wage bill etc.

I'd never want a situation like that either, but I think there should be more board involvement in how we spend our cash. It's a bit bizarre that as Juventus in 08 I signed Ronaldo for £67m and the board din't seem the slightest bit interested, I don't want them to say no or yes, but i'd like to see them give me some sort of opinion.

Was there not a previous version that had the board cancel transfers out and in because they felt the fee was unrealistic?

Yeah, I don't know why that was removed (or maybe it was just tuned to only affect really really really excessive transfers). It would seem to me to go hand in hand with the implementation of the board stepping in and selling your players without asking you. It always seemed stupid to me that the board can do that because the offer is "too good to refuse" and yet still give you 100% of that money to spend on transfers so you can go and spend it all instantly on a total duffer to replace the wonderkid they just sold!

As there was an official response now which matches my impressions, I'm happy not to have to provide my own opinion on this as then it should be about right.

Needless to say that we have the control over wages and transfers, but indeed there should be nothing hunting you as long as you stay within the budgets.

What I can do maybe is shed a bit more light is on the financial background and the unexplained costs from my experience within a football club. As the background is not explained, I assume that the financial model of the game is somewhat flawed, but of course I cannot tell how and why SI calculate these amounts, but irl there are massive expenses for all kinds of stuff which are usually bigger the higher you are up there.

- Cleaning. Do you know what it costs to clean a 30k or 50k seater stadium 20-25 times a year? With all the surrounding as well and the offices on a daily basis?

- Stadium rents cost millions if you don't own your ground. As do bank interests if you do.

- Big clubs have office staffs of 100-200 people. Multiply that with the average income.

- Ticketing costs fortunes. You need an online shop system whose provider takes commissions, you need to print 50k tickets per match. Costs a 7 figure amount each year.

- Agents. Apparently totally absent from FM. Add 5-10% to every player's salary. Plus even higher amounts if you are in a weak negotiating position.

- The car park. Busses, cars for staff etc.

- Many clubs cooperate with marketing agencies and pay them 10-20% of all sponsoring and TV income.

- Taxes. Bottomless pit...

I could go on, but indeed there are big expenses in many corners that people don't think of.

As a last example the percentage which clubs spend on wages is around 60% in most top leagues, just Germany has only 45-50% and bad led clubs are around 70%. That means that 30-50% of the income are paid for other things - and transfer fees are not the main part of that.

hth

I'd never want a situation like that either, but I think there should be more board involvement in how we spend our cash. It's a bit bizarre that as Juventus in 08 I signed Ronaldo for £67m and the board din't seem the slightest bit interested, I don't want them to say no or yes, but i'd like to see them give me some sort of opinion.

Was there not a previous version that had the board cancel transfers out and in because they felt the fee was unrealistic?

heh as long as you don't mean Roman Romanov stylee

Very interesting post jayahr.

I understand that non footballing costs can account for a lot of the expenditure that we don't feel we should be incurring, my problem is that over time if I didn't keep as close an eye on my wage bill as I currently do, my wage costs may be blamed for the financial problems.

I.e. I am spot on my wage bill, and the club continues to lose money until it's in a dangerous financial position. Am I viewed as at fault for this, despite staying within my limitations or is the board at fault for telling me I can spend that amount when I probably shouldn't have been allowed to.

According to Riz, FM09 has looked at this and hopefulyl it isn't the case. But there were many threads about 08 in which people were sacked because they had entered administration, which seemed to have been caused by loan repayments rather than poor budget management by them.

Very interesting post jayahr.

I understand that non footballing costs can account for a lot of the expenditure that we don't feel we should be incurring, my problem is that over time if I didn't keep as close an eye on my wage bill as I currently do, my wage costs may be blamed for the financial problems.

I.e. I am spot on my wage bill, and the club continues to lose money until it's in a dangerous financial position. Am I viewed as at fault for this, despite staying within my limitations or is the board at fault for telling me I can spend that amount when I probably shouldn't have been allowed to.

According to Riz, FM09 has looked at this and hopefulyl it isn't the case. But there were many threads about 08 in which people were sacked because they had entered administration, which seemed to have been caused by loan repayments rather than poor budget management by them.

As I said, with this issue I fully agree. If you stay within the budgets and still the club is losing lots of money it is the board's fault and you should not be punished for that.