By Jason McKeown
The other week, I got chatting to a sales manager about how he is going about motivating a team he has just taken charge of. He talked about how he had issued them the challenge of increasing their sales, by urging them to think bigger.
“Instead of trying to go from 50 a week to 60, why not aim for 70? Because even if you fail to reach 70, you will probably be in the 60s.”
It is a thought process summed up by the saying: “Shoot for the moon: and even if you miss, you will land amongst the stars”. When I was in sixth form several years ago now, there was a giant mural in our break area with that motto written across it, and it has always stuck in my mind. Aim bigger, and if you fall short you will probably still have achieved something notable.
And that dilemma is one that arguably faces Bradford City right now. With 10 games left to go, the target is to finish in the League One play offs and, ultimately, to make it to the Championship next season. That seems almost unnerving, after a stop-start season of fairly low achievement. Could the club really be playing in the second tier next season? And if they were to be promoted, what would happen to them?
Is this really the ambition we want to aim for?
Why wouldn’t you want to get promoted?
As Bradford City fans, we would probably all agree that our natural place in English football’s pecking order is the lower echelons of the Championship. Current attendances might be somewhat artificially boosted by low season ticket prices, but a huge fanbase is there and crowds this season are better than many clubs in the second tier. Valley Parade is a stadium more than good enough to stage Championship football. The basics are all there.
Yet on the field and from a financial perspective, the club seems way behind.
Is the team good enough?
It has been a popular talking point amongst my friends of late: who, in the current Bradford City team, would be good enough to play in the Championship?
The obvious answers – Reece Burke, Josh Cullen and Wes Thomas – are loanees. Rory McArdle (with credible ambitions of playing for Northern Ireland at Euro 2016) and James Hanson would fare okay, as would James Meredith if he could find greater consistency. Beyond that, you’re probably struggling.
Which would suggest that any Bradford City promotion this summer would mean an urgent need for major signings, bringing us onto…
Could the club afford to be in the Championship?
It’s 12 years since City were last in the second tier, and the standards appear to have improved hugely. Clubs at the top are spending astonishing sums of money on players. The levels of debt carried by most clubs is frightening (in 2013/14, only three Championship clubs made a profit). The Premier League parachute payments that relegated clubs receive has created a huge imbalance.
You have to build a team that can compete against clubs that think little of spending £10 million on a striker, and face relegated Premier League clubs with a huge war chest to spend as they attempt to get back to the promised land.
And there are the wages. According to the excellent Swiss Ramble website, which looked at the wage bill of clubs in the 2013/14 season, you would need a wage budget of at least £10 million to survive.
QPR’s wage budget was a staggering £75m (although they are an exceptional case). Leicester City, who were champions that season, had a wage bill of £36m. The three clubs with the lowest wage bills (Barnsley, Doncaster and Yeovil, who all had under £10m) were the three clubs relegated. Bournemouth, who along with Doncaster and Yeovil were promoted to the Championship that season, stayed up with a wage bill of £17m.
It is rumoured that Bradford City’s wage bill this season is around £3m. So a huge increase in spending in this area would be needed.
The Financial Fair Play rules also hinder how much money you can throw at the problem. It has been the norm to see Championship clubs hit with a transfer embargo for spending more on players than their revenue streams allow. This would be a real challenge for City in view of the season ticket initiative. More bums on seats doesn’t mean huge takings at the tills, and this would limit the transfer budget that Phil Parkinson would be allowed (assuming the chairmen are not able to put in more money themselves).
Merely surviving in the Championship would be a huge, huge achievement.
How big is the difference in revenue?
Huge, absolutely huge. And from 2016/17, when the new £5.1bn Premier League deal comes into effect, this will have an instant knock-on effect for Football League clubs.
From next year, the parachute payments for relegated Premier League clubs are changing, reducing from four seasons worth a year, to three (clubs relegated after one season will only receive two years worth). The parachute payment amount is calculated as a percentage of the equal share of broadcast revenue paid to Premier League clubs (ie how much each Premier League club receives as a minimum). Clubs receive 55% of this amount in the first year after relegation, 45% the following year and 20% in year three.
Based on the estimated average TV money windfall of £85m that each Premier League club will receive under the new TV deal, this means relegated clubs would receive £44.5m, £36.4m and then £16.2m over these three seasons.
To help compensate for this imbalance, the Premier League provides an annual solidarity payment that is split between all of the other Football League clubs, worked out as a percentage of the third-year parachute payment.
So from 2016/17, Championship clubs will receive 30% of that third-year parachute payment, League One clubs 4.5%, and League Two sides 3%. Based on that £16.2m figure, this works out as £4.9m per year for Championship clubs, £729k for League One and £486,000 for League Two.
Back in 2010, the solidarity payment was £2.2m per year for Championship clubs, £330k for League One outfits and £220k for League Two teams. That was nearly £2m a season difference between the Championship and League One, and from next year this annual difference will be more than double.
But it’s not just the solidarity payment. Under the current TV deal with Sky Sports and Channel 5, each Championship club receives £2m per season. League One clubs receive £360k and League Two £240k. Another huge disparity between the divisions.
(And before any City fan gets too outraged by this imbalance, it should be noted that the person who instigated all of this, back in the day, was Geoffrey Richmond.)
What does this all mean? The difference for Bradford City in getting promoted or staying in League One, in terms of their solidarity payment and TV money next season, will be around £5.7m. In the Championship they would earn roughly £6.9m, in League One roughly £1.1m.
That earnings gap will have a real impact in time, given it will continue season after season. It is creating a huge dividing line. All of which begs the question…
Can the club afford not to be in the Championship?
The gap between the Championship and League One is growing, and it is becoming harder and harder to bridge it. Under the new arrangements for solidarity payments, and with the Football League TV deals so weighted towards Championship clubs, League One and Two sides simply won’t be able to break into the second tier of English football unless they can get there quickly and hang on.
What if City went up and it went wrong?
On the day after Bradford City celebrated the League Two play off final win at Wembley, a much bigger fairytale took place at the same stadium. Little old Yeovil Town – non-league for most of their history – were promoted to the Championship after beating Brentford. It was an amazing story.
Yeovil went straight back down despite fighting valiantly. But then they were relegated again from League One, last season. This time around, they are languishing near to the bottom of League Two.
What went wrong? According to Glovers chairman John Fry, “When we came into that Championship I could see what was coming. I was probably the one person that day when looking around at the celebrations and I thought ‘hang on a minute, we have to get the money in here’.
“Probably my biggest regret is I could not think of a way. My key worry was making sure this club did not go broke…We have hit the world of Financial Fair Play, you can spend so much, but you can’t spend beyond that. When you’ve built a team for the Championship and the salaries they would have been paid to the revenues you get in League One and League Two, you have to change things. You have to terminate contracts, get people off the books and I’m telling you it’s an absolute nightmare in trying to develop your business, because all the time you are having to change people.”
Yeovil went up to the Championship, tried valiantly to compete, and then faced the consequences of adjusting back to lower revenue from Leagues One and Two. Spending significant money to compete with your new higher rivals, and agreeing long-term player contracts on salaries that wouldn’t be affordable if relegation occurred, is a gamble.
It’s also one that this club knows only too well.
What if City went up and were realistic?
In 2014, Burnley were promoted to the Premier League despite being one of the favourites to go down (they were promoted on a wage bill of £15m, were still receiving parachute payments from their last time in the top flight, and yet still made an £8m loss that season). There were questions raised at the time over whether it was too soon for Burnley to go up – excellently answered in this article – although they were instantly relegated from the Premier League.
Yet the Clarets never broke the bank when in the top flight. They gave it a go but weren’t quite good enough. They returned to the Championship boosted by parachute payments and the club generally in stronger health.
With nine games to go, Burnley are currently closing in on an immediate promotion back to the Premier League.
What if City were promoted to the Championship, didn’t go for broke and came back down? With a manageable wage budget for life back in League One, and the profits from a year in the Championship, City could gradually build and challenge straight away for an instant return to the second tier. And if they succeed and get back to the Championship, they would be well positioned to make a better fist of staying there.
As the Burnley article states, “if a team promoted a division is relegated at the first attempt, they should ensure they are stronger for the experience with the view to one day returning and staying.”
(And another lesson to take from Burnley’s 2013/14 promotion is that having a low budget in the Championship doesn’t mean you can’t still over-achieve.)
What if City didn’t go up?
Just short of a year ago, Chesterfield triumphed 1-0 at Valley Parade in a promotion six-pointer. The Spirietes finished sixth and inside the play offs, with 69 points. City came seventh and outside the play offs, with 65 points. Had City beaten Chesterfield that night, they would have finished inside the play offs.
Yet Chesterfield’s reward for a top six finish was a 4-0 aggregate play off defeat to Preston. And now this season they are fighting relegation to League Two. A dreadful and painful hangover from the disappointment of the Preston defeat, demonstrating just how fleeting success can be.
City are currently targeting a play off place again, and if they achieve it but lose, we supporters might still consider that to be a sign of progress. But the pain of losing in the play offs could prove destabilising.
If City make the play offs, we will surely want to win them and be promoted. Otherwise why bother? So everything would be on the line – glory, or crushing disappointment. Both would need managing.
Is investment needed?
How can it not be?
By getting to the Championship, Bradford City would get more matchday income, more commercial revenue, more TV money, and a greater share of Premier League solidarity payments.
And yet that still wouldn’t be enough.
Mark Lawn and Julian Rhodes have taken a very principled approach of keeping City in the black over the past nine years. Yet if the Bantams have to effectively triple their playing budget in order to compete (and even then they’d be one of the division’s lowest spenders) they would need further investment from somewhere.
Would Lawn and Rhodes be willing to pump further money into the club? Perhaps, perhaps not. Financial Fair Play Rules state that the maximum permitted loss a Championship club can make is £5m, unless the owner injects equity, in which case the maximum permitted loss is £13m.
Although as it stands, and very understandably, Lawn and Rhodes do not want to go into the red.
Would the answer lie in attracting outside investment?
A German consortium have held talks about investing into Bradford City. A year ago, Gianni Paladini unsuccessfully attempted to buy the Bantams.
Interest is out there, and it’s growing.
A year ago Mark Lawn admitted he and Julian couldn’t afford to fund the club in the Championship. He went back on that statement later, but the doubts clearly remain. They are largely trusted to have the fans’ best interests at heart, and have stated they wouldn’t sell the club to anyone who didn’t share that viewpoint. The talks with the German consortium are said to be ongoing. Everyone watches on with interest.
Shoot for the moon…
Mark Lawn’s comments last year about not being able to afford the Championship continue to be used against him by some. After a season of struggling to stay in the play off hunt, a conspiracy theory has been floated by some (and we can call it a conspiracy theory given it is pure speculation) that the club don’t want to get promoted, and so are “accepting mediocrity”.
The financial rewards available from promotion to the Championship are huge, but the problem for any League One club with short or long-term ambitions to get promoted is that every other club in the division receives that money too (if not a lot more through parachute payments). It’s like the Government suddenly announcing that a £1 coin is worth £10. We would suddenly be richer, but so would everyone else and so the benefit is negated.
But clearly, staying in League One risks being left behind. The gap between the two divisions is only going to get wider, and the sentiment “there’s always next season” risks building up a bigger problem. Slow and steady may not win the race.
If City aren’t promoted this season it won’t be the end of the world, but it could go a long way to determining the club’s long-term existence. If the play offs are missed out upon, everything will largely carry on as it is. But if the top six can be reached and the play offs won, it could prove a life-changing experience for the Bantams.
Shoot for the moon, settle for the stars if needed, but beware of black holes too.