How can I solve a big economic crisis?

[TaPele]

So my club is like $10M in the red. The main issue is that i was given $1,4M for spending on salaries so I started to hire more and better players. Once I noticed the red numbers I found out that in spite of having that salary budget, the club raises $240000 each month. 

 

So that alone made a big gap. Now I'm almost to get in Copa Libertadores (South America Champions League) and that will give me $3M and will get another $3M for finishing in the top spots of the league table. But then? Should I sell my best players to cut off salaries and get some money for selling them? Maybe I shouldn't care because at the end of the day I still can manage the team?

Thanks for reading and move the topic if it doesn't belong here!

[ThinkZebras]

How about sponsorships? Those are paid as a single payment at the end of the season and often tip the scales in the end (at least in European clubs, not sure how big those are in SA). Check the income from last season.

Otherwise, you'll have to sell players (or get fired) if you don't pass. 

[Grifty]

12 hours ago, TaPele said:

So my club is like $10M in the red. The main issue is that i was given $1,4M for spending on salaries so I started to hire more and better players. Once I noticed the red numbers I found out that in spite of having that salary budget, the club raises $240000 each month. 

So that alone made a big gap. Now I'm almost to get in Copa Libertadores (South America Champions League) and that will give me $3M and will get another $3M for finishing in the top spots of the league table. But then? Should I sell my best players to cut off salaries and get some money for selling them? Maybe I shouldn't care because at the end of the day I still can manage the team?

Thanks for reading and move the topic if it doesn't belong here!

You don't necessarily have to sell your best players to get you back in the black. You're able to keep them if you can sell 2/3 squad players for £3-4m each and they will also be easier to replace for free/cheap.

For example, my English Prem team is spending £4.2m p/w on wages, and despite TV money, previous season league placement money and Champions League money, the small size of our stadium (23,000) cannot maintain that level of wages. I build up around £80-90m in my bank account at the start of the year and then by the end of the year I'm close to the red.

I wait until the end of season before my back up players contract expire and any who are worth a bit but don't perform as well as I want them too or if I find a better young player, I will offer out for just under their actual value. If they are valued at £36m, I'll offer them out for £30m and you normally get a couple of offers at that.

I've just sold 3 players like this for a total of £82m and replaced them with 3 new back-up players for £46m (£22.5m, £23m and a free). I've also reduced my wage budget by around £100k p/w. That extra £36m is my buffer to swallow my large wage budget.

[phd_angel]

As long as you stay within the payroll budget, I don't think you it's your responsibility to fix the structural financial holes of your club.

It is often the case that the board will keep injecting money (or borrowing loans) to fill the gap. Of course, there is a chance that the debt may force the board to cut your payroll. In that case, you better off finding a job elsewhere.

[Mike J]

I find as long as you stay within the wage budget the finances usually sort themselves out. You'll may have to deal with lower transfer budgets if things are bad, though. You should also be aware that money in football often comes in big chunks in the off-season. Annual sponsorship money, prize money and TV revenue almost always comes in between seasons, leaving you with a massive bank balance for a few months that get whittled away over the rest of the year. The important thing to track is the state of the finances over multiple 12-month periods. Looking at a snapshot in the middle of the season won't give a true picture.

[Harper]

As people have stated, your primary means of income are all lump sum payments. The biggest payments are prize money, TV money, season tickets, and sponsorships. They are usually paid in the offseason: June-August. While most expenses are on-going throughout the season. If you stay within the prescribed budgets, your prize money and TV payments should bring your balance back to black.

These four items are the highest revenue items (excluding player sales): prize money (purple), tv money (red), sponsorships (green), and season ticket sales (blue)

 

My top four expenses (excluding transfer expenses): bonuses (purple), staff wages (yellow), taxes (orange), and player wages (blue) are all higher throughout the season.

 

If you look at the season, I have profit in the offseason, but run at a deficit throughout most of the season (the lump between Dec 2024 and April 2024 is from player sales in January). If I could exclude player sales from this graphic, you'd likely see a deficit from August - May.

 

Edited August 12, 2021 by Harper