Wednesday, July 14, 2010

Desperate PP

Preseason news from The Valley has been deflating, but hardly surprising.

The club had gambled that our stint in League One would be as brief as possible, but this possibility took off with Nicky Bailey's penalty.

Back in May, I wrote: "Some appear to believe that administration is an inevitability, but this ignores the fact that the debts are largely owed to the same people (ie. the directors) who are responsible for deciding whether to opt for administration."

The financial decisions taken this summer would appear to be consistent with my previously held view.

I believe the Board will now do whatever it takes to make the club cashflow positive at the operating level.

Decisions relating to team matters will be conservative, with less emphasis on taking implicit short-term 'bets'.

Expectations for Phil Parkinson will be lowered to reflect changed circumstances; stability is key for now.

The aim must be to rid the club of any sense that it is becoming a 'basket case', and thus re-emphasise its genuinely attractive traits to future potential buyers even at League One level.

Despite our current lowly position, these traits are real and valuable. Three-quarters of the stadium is modern and large for example, whilst the club's family reputation has been rightly earned.

The club's location in a growth area (just a stone's throw from the bright lights of Canary Wharf) provides scope for further support, in addition to the relative stability of its existing fanbase.

Administration would achieve nothing from the perspective of those directors who subscribed to the large recent bond issue.

Instead they must hope that if some stability can be achieved, they might just be able to walk away financially 'whole', with perhaps some value even ascribed to their equity too.

Even if no suitable buyer can be found, at least they get to avoid making a sad situation even worse by continuing to throw good money after bad. Some of that positive cashflow can at least service the debt, even if it can't yet repay it.

If expectations on Parkinson have been lowered in the boardroom, this is not necessarily true of the 8,000+ season ticket holders who will form the majority of home support.

They will expect play-off contention at least, a tough target given the desperate look of the squad right now. The idea that a Charlton XI will participate in a couple of preseason friendlies is a rather ironic sick joke.

At least reasonable value has been secured for those departed players who were under contract.

The Nicky Bailey deal in particular was generous for a player who is effectively unproven in the Championship (we finished bottom in 2008/9 after all, despite his efforts).

Fraser Richardson's exit was a disappointment, especially given he was captured by League One's hot favourites.

An intelligent and consistent player, he would have made an ideal captain if Christian Dailly does not re-appear in an Addicks shirt.

However in essence his acquisition from Leeds on a free represented one of the above mentioned short-term bets, because his wages must have been relatively high in the absence of a transfer fee. Such extravagance cannot be tolerated in this new era.

I will be sad not to see Lloyd Sam in a Charlton shirt again, even if he left me pulling out what's left of my hair.

In my view, he could have been one of the best players in the Championship let alone League One, but whether for reasons of fitness, motivation or whatever, the end product rarely reflected his obvious potential.

Losing Darren Randolph would appear to be somewhat odd, as if negotiating his contract was forgotten amidst the late-season drama.

He will need to be replaced (perhaps a season-long loan of a young Premiership prospect would make sense here), but it seems strange to train a player for years, see him finally break into the first team, then watch as he disappears to the SPL for free.

It reminded me of Josh Wright's transfer to a Championship side, again for nothing.

The three acquisitions so far (Doherty, McCormack, Jackson) all appear sensible, even if they hardly set the blood racing.

Nonetheless, the pool of available free transfers must be high given the financial constraints pervading domestic football, so the scouting work done by Phil Chapple's team will hopefully now come to the fore.

Parkinson has targeted eight more signings, which would appear to be a minimum assuming others are still to leave the club (eg. Youga, Burton).

I hope the likes of Solly and Wagstaff will now be given a proper chance, in favour of the myopic appeal of the types of loan signings that once again characterised last season.

The new contracts they have been handed tell me that the club believes they are definitely 'good enough' now to warrant that chance.

Little more has been said about the supposed deal struck with Liverpool since Jonjo Shelvey left, but maybe there's a positive surprise coming here. I wouldn't even rule out the prospect of the bald starlet himself returning on a long-term loan.

In the meantime, I'm hoping to attend some if not all of the relatively local friendlies at Bedford, Barnet and Watford, even if I usually severely regret attending a preseason game about seven minutes into it.

I was hoping the World Cup would make me forget about Charlton for a while, but it was so dull that it made me realise what was really important in my footballing life. Up the Addicks!


At 6:31 AM, Anonymous Anonymous said...


At 12:50 PM, Anonymous Pat said...

Its a bit scarey that you think most fans will expect a play-off place. I can't see that happening for a couple of seasons now - if we are lucky and can re-build. Bringing in 8 new players of the standard we can afford isn't a prospect I relish, but we simply can't have over-paid players any more. Incidentally, PP indicated that Josh Wright left because of a pushy father who expected him to play in the 1st team every week.

At 3:33 PM, Blogger Kings Hill Addick said...

I'm hoping for a top six finish. Even though I share your views on the Director's aim to avoid administration at all costs I don't share your view that in the long term the club can be financially viable in this division.

If, as we've been told the season ticket sales only cover the running costs of The Valley I don't see how the minimal TV money and match by match attendances can cover the rest of the running costs.

Thus we need to sell players each year to repay the 'overdraft' created by the shortfall. I'm not sure we have anything left to sell, and I don't think our current approach of offering one or two year deals will make it possible going forward.

Thus, unless we can win promotion and increase our TV revenue (I believe the difference is close to £4 a year) the Directors will need to raise or inject capital that is currently proving very difficult. Thus eventually the money will run out and administration will be the only option left.

For this reason alone, it is imperative that we get out of this division, and I don't be via the trap door.

At 9:52 AM, Anonymous newyorkaddick said...

KHA, I guess we'll have to await the 30 June 2010 accounts to get a sense for how much the revenues were for the first season in League One.

However the 30 June 2009 accounts (the Championship relegation year) show that over 50% of expenses related to staff costs (mainly playing staff), whereas only 25% or so related to 'other operating charges' (which is where much of the cost of maintaining The Valley must sit eg. rates, power etc.).

So if the club can finally get a handle on the staff costs (which it clearly is trying to), then I don't see why the club can't be cashflow positive in League One unless the crowds start falling off a cliff.

At 1:25 PM, Anonymous Anonymous said...


At 4:17 AM, Anonymous Anonymous said...

Pay somebody back in his own coin.............................................................

At 12:50 PM, Anonymous Anonymous said...

good, excellent, nice job!!............................................................


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