Lower League finances. Is there a problem?

I've been looking at the finances in my league in more detail and I'm afraid it really doesn't look good, even after just 2 seasons. 

The general trend, (if we ignore B Teams), is overwhelmingly that they're not financially viable even if they stay within their wage budgets, and only 2 clubs other than ourselves have done that. 

The boards of these non-B Teams have already invested £4.5M into these clubs to help with the running costs, (in just the 1st 2 seasons of the save), and 2 clubs have already consolidated their debts into loans and obviously continue to have the same problems now because on top of the standard expenditure that they couldn't cope with they now have loan repayments. 

I appreciate that in this climate money is tight at many football clubs, and especially at this level, but for the game to work the financial model has to work even if this is accurate and it doesn't work in real life. 

You have to remember that there is another playable level below this and things seems in a similar state there. 

I checked Melila in the 4th tier and their budgets were very similar to ours, but they were just spending over their budgets, had missed out on promotion for the 2nd season running and were no building up a sizeable debt. 

Is this really how you intended the finances at this level to work? 

Thank you for the detailed post and save files, we will take a look.

Same for me - midsize club in Conference National, lowest wages in the league, yet losing £500k per annum.

I know most clubs aren't profitable at this level but seems excessive, or at the very least much more pronounced then previous games. 

Losing £500k per year isn't actually a big deal for a Conference club @dannyfc

I'm a Barnet fan and our Chairman, (and his other business' at The Hive), subsidises the football club to the tune of £1M per season. 

3 years ago the minimum prize money for a League 2 club was £472,000 per season and there is also a payment, (with funds from Premier League clubs), amounting to £430,000 per season. (Again, this was 3 years ago so these figures are likely to have risen). 

So that's a difference in income straight away of about £900,000 when you get relegated, (and the parachute payments stop). 

From my point of view, a National League/Conference side losing £500k per season is on the conservative side, (but just my opinion as a fan of a National League/Conference side). 

1 hour ago, Jimbokav1971 said:

Losing £500k per year isn't actually a big deal for a Conference club @dannyfc

I'm a Barnet fan and our Chairman, (and his other business' at The Hive), subsidises the football club to the tune of £1M per season. 

3 years ago the minimum prize money for a League 2 club was £472,000 per season and there is also a payment, (with funds from Premier League clubs), amounting to £430,000 per season. (Again, this was 3 years ago so these figures are likely to have risen). 

So that's a difference in income straight away of about £900,000 when you get relegated, (and the parachute payments stop). 

From my point of view, a National League/Conference side losing £500k per season is on the conservative side, (but just my opinion as a fan of a National League/Conference side). 

Thanks for the context, out of interest what's their annual revenue?

Maybe what's missing from FM is the intervention from the Chairman in that case to keep clubs solvent. 

Bromley started with a £200k balance at the beginning of the game so presumably they're also being propped up by a backer.

My concern is at that level of sustained losses, without the external backing to plug the accumulative losses by a few seasons in the transfer activity will grind to a halt.

Edited November 12, 2022 by dannyfc

53 minutes ago, dannyfc said:

Thanks for the context, out of interest what's their annual revenue?

Maybe what's missing from FM is the intervention from the Chairman in that case to keep clubs solvent. 

Bromley started with a £200k balance at the beginning of the game so presumably they're also being propped up by a backer.

My concern is that level of sustained losses, without the external backing in a few seasons the transfer activity while grind to a halt.

It's really hard to to you what the total annual revenue is, because Barnet is an unusual business model and everything is separated. 

In case you don't know, the club moved away from Barnet a few years ago to play matches at their "training complex" The Hive. 

The standard business model at your average National League club is that income is generated from season tickets, gate receipts, sponsorship, merch, match day sales etc etc etc. All the usual sources of income. 

Barnet isn't typical though. In addition to all of the above, despite being a National League side, they have a training complex, (quite local to Wembley), which is of good enough standard that International sides like Brazil and Italy, (just 2 of many), pay to train there. In addition to that, we have a whole 45 acres of synthetic/grass pitches for hire and 13 different bars/function room. On top of that there is a successful wedding venue operating at the site, (again owned by the owner of the football club), a full gym open to the public, and a 500 seater car-park, (charging £8 per pop) that also funds the football club indirectly. It also hosts the most advanced sports medical scanning unit in Europe. All of this generates income, and the idea is that this in turn funds the football club. 

Whether you consider that these business, (all owned by the owner of the Football club), are separate or linked to the football club, (for example all the foot/drink sold on matchday goes to 1 of these catering companies rather than the football club), is irrelevant, because according to the football authorities, the way that the business'a are operated is such that were there to be a salary cap based on income, (as has been proposed), the the income of all these sub-companies would be allowed to be included.

So in answer to your question, "where is the intervention of the Chairman/Board?" I have had huge investment in my Spanish save in FM23. £3.9M over the 1st 4 seasons in the 3rd Tier in Spain. Depending on your Chairman/Board, they will provide funding for the club if you're running at a loss, but how much they invest depends on them. It's variable. Even a Chairman/Board who don't invest heavily will invest some money & at some point will probably consolidate the debt into a loan at some point to repay it over a longer period. 

I also checked other clubs in my league and in the 1st 2 seasons Owners/Boards had invested £5.5M into clubs to keep them running, and 2 clubs had already consolidated existing debts within the 1st 2 years of the save.

The biggest problem with the National League is the 2 up/down to/from League 2, when there are 4 teams relegated to National League North/South, and also 4 teams promoted from League 2 to League 1. This in effect creates a bottle-neck in the National League and as a result the standard of the National league is now ridiculously high. Maul Mullin is just 1 shining example of a player, (top goal-scorer of a promoted League 2 side), deciding to drop down effectively 2 leagues to play in the National League, but even after all their spending there is still no guarantee that Wrexham will get promoted this season, (because I personally think Notts Co will win the league and the Playoffs are a lottery. 

2 of the bottom 4 in the National League now are Scunny & Oldham, (who were the 2 relegated teams from League 2 last season). 

Now look at the bottom half-dozen or so clubs in League 2 and they are all averaging less than 1 point per game. Whicher of them get relegated will find the National League just as unforgiving next season. Clubs are playing players who should be playing higher, and are paying them a premium because they are asking them to drop down. The premium is also bigger than it might otherwise be because there is just 1 auto-promotion spot so everyone is literally pumping money in, but there are only 2 clubs going to get promoted so there are going to be lots of clubs who have invested and invested year on year but have got nowhere. 

People used to say the English Championship was the toughest league to get out of. I think the National League is tougher. 

There is lots of thinking "outside the box" done in the National league and Wealdstone for example funded the signing of Max Kretzschmar 100% on the back of direct fan investment. A group was formed to raise money and offered this support to the club for the signing of a player and then when the player was identified the group either paid the club the funds up front or gave legally binding declarations to pay the required sum over the set period of the contract. 

Robin Stanton-Gleaves is the owner at Bromley and the 1st wiki link I could find suggested that he has a total net worth of £181M. Rich owners tend to not just put cash into a football club though. They can afford to. They just choose not to. Instead they use their wealth as a guarantee that the debt will at some point be repaid. 

8 hours ago, Jimbokav1971 said:

It's really hard to to you what the total annual revenue is, because Barnet is an unusual business model and everything is separated. 

In case you don't know, the club moved away from Barnet a few years ago to play matches at their "training complex" The Hive. 

The standard business model at your average National League club is that income is generated from season tickets, gate receipts, sponsorship, merch, match day sales etc etc etc. All the usual sources of income. 

Barnet isn't typical though. In addition to all of the above, despite being a National League side, they have a training complex, (quite local to Wembley), which is of good enough standard that International sides like Brazil and Italy, (just 2 of many), pay to train there. In addition to that, we have a whole 45 acres of synthetic/grass pitches for hire and 13 different bars/function room. On top of that there is a successful wedding venue operating at the site, (again owned by the owner of the football club), a full gym open to the public, and a 500 seater car-park, (charging £8 per pop) that also funds the football club indirectly. It also hosts the most advanced sports medical scanning unit in Europe. All of this generates income, and the idea is that this in turn funds the football club. 

Whether you consider that these business, (all owned by the owner of the Football club), are separate or linked to the football club, (for example all the foot/drink sold on matchday goes to 1 of these catering companies rather than the football club), is irrelevant, because according to the football authorities, the way that the business'a are operated is such that were there to be a salary cap based on income, (as has been proposed), the the income of all these sub-companies would be allowed to be included.

So in answer to your question, "where is the intervention of the Chairman/Board?" I have had huge investment in my Spanish save in FM23. £3.9M over the 1st 4 seasons in the 3rd Tier in Spain. Depending on your Chairman/Board, they will provide funding for the club if you're running at a loss, but how much they invest depends on them. It's variable. Even a Chairman/Board who don't invest heavily will invest some money & at some point will probably consolidate the debt into a loan at some point to repay it over a longer period. 

I also checked other clubs in my league and in the 1st 2 seasons Owners/Boards had invested £5.5M into clubs to keep them running, and 2 clubs had already consolidated existing debts within the 1st 2 years of the save.

The biggest problem with the National League is the 2 up/down to/from League 2, when there are 4 teams relegated to National League North/South, and also 4 teams promoted from League 2 to League 1. This in effect creates a bottle-neck in the National League and as a result the standard of the National league is now ridiculously high. Maul Mullin is just 1 shining example of a player, (top goal-scorer of a promoted League 2 side), deciding to drop down effectively 2 leagues to play in the National League, but even after all their spending there is still no guarantee that Wrexham will get promoted this season, (because I personally think Notts Co will win the league and the Playoffs are a lottery. 

2 of the bottom 4 in the National League now are Scunny & Oldham, (who were the 2 relegated teams from League 2 last season). 

Now look at the bottom half-dozen or so clubs in League 2 and they are all averaging less than 1 point per game. Whicher of them get relegated will find the National League just as unforgiving next season. Clubs are playing players who should be playing higher, and are paying them a premium because they are asking them to drop down. The premium is also bigger than it might otherwise be because there is just 1 auto-promotion spot so everyone is literally pumping money in, but there are only 2 clubs going to get promoted so there are going to be lots of clubs who have invested and invested year on year but have got nowhere. 

People used to say the English Championship was the toughest league to get out of. I think the National League is tougher. 

There is lots of thinking "outside the box" done in the National league and Wealdstone for example funded the signing of Max Kretzschmar 100% on the back of direct fan investment. A group was formed to raise money and offered this support to the club for the signing of a player and then when the player was identified the group either paid the club the funds up front or gave legally binding declarations to pay the required sum over the set period of the contract. 

Robin Stanton-Gleaves is the owner at Bromley and the 1st wiki link I could find suggested that he has a total net worth of £181M. Rich owners tend to not just put cash into a football club though. They can afford to. They just choose not to. Instead they use their wealth as a guarantee that the debt will at some point be repaid. 

Appreciate the detail on this - alleviates my concerns about progressing with my game.

Have no issue dealing with financial constraints as tbh will actually make the save more interesting, just wanted to be sure it's working as intended rather than just a miscalculation. It does feel more pronounced than the last time I played in FM 21, where I would usually incur a loss at that level but at a much slower rate.

Also - I've actually been to the The Hive to watch the EUROs final on a big screen. Tickets were £40 or something daft so have somewhat contributed to your 2022 wage budget  

I would check if you are getting hit with a transfer expenditure every month. Seems to be a bug. My save with Man Utd went over 100 million in the red in less than a season. That's after I sold Ronaldo and AWB and only bought 4 youth prospects. 3 of them was under a million and the 4th was 11 million. Still got hit with a 30-40 million transfer expenditure every month.

No, no transfer expenditure for me @jonjgoodwin.

You're managing Man Utd. Is it possible that there are future transfer fees pre-set at the beginning of the game relating to historical transfers?