By Jason McKeown

“It’s good to be manager of a club with money available for new players but how you spend it is what matters.”

Those were the words of Mark Hughes, 13 years ago, when as Manchester City manager the Welshman was able to spend an incredible £270 million on players between 2008 and 2009. Hughes was in charge of the Citizens when Sheikh Mansour bought and completely transformed the wealth of the club, giving Hughes unprecedented funds to compete at the top.

Fast forward to the present day, and it’s fair to say Hughes will be operating with a very different transfer budget at Bradford City this summer. The big question on the lips of many Bantams supporters is just what sort of resources Hughes will be given, and if it will be sufficient to rebuild a squad that once again badly underachieved this season.

After taking the reins at Valley Parade in February, Hughes was able to coax much stronger performances from the City squad during the final few weeks of the campaign. The 58-year-old has offered encouragement for the way he has set up the team, and the attack-minded brand of football on display. All from the same group of players who operated so dourly under Derek Adams before. The feeling amongst most fans is that Hughes can really take City forward next season, provided he is given the resources to bring in better players.

And that all puts a degree of expectation and pressure on the club’s owner, Stefan Rupp. It was undoubtedly a coup to land Hughes – but will the club give him what he needs? And in order to do just that, does Rupp need to invest more money, or can it be achieved on a similar budget to this season?

In April, Ryan Sparks told the Telegraph & Argus, “We will be placing a very competitive budget on the table, which should give us the tools to achieve our goals.” A month earlier, Stefan Rupp also spoke to the T&A and declared, “We are able to run the club on a self-sustainable basis and that’s what I’m really proud of.”

The words ‘competitive’ and ‘sustainable’ have in some ways become a lightning rod to many City fans. What do they really mean, and are they just an excuse to avoid committing the necessary funds needed to succeed? The debate quickly moves on in a polarised way, with some fans demanding Rupp injects more capital and others arguing against taking risks that could place the club in financial trouble. “We don’t want to do a Bury” has become a refrain that invites nods of agreement from some and heavy sighs from others.

Are Bradford City playing it too safe with the budget? Could and should Rupp do more? Or are we just making a poor job of getting a return on the investment?

How competitive compares

In the latest edition of the City Gent fanzine, the talented Mark Douglas has interviewed Sparks, who made an admission about the budget. “We put on the table the third or fourth highest budget” in the division, according to the CEO.

With City finishing 14th, it’s difficult argue against the charge that the Bantams are League Two’s biggest underachievers this season (though Salford can make a good case too). To have a top four budget and yet finish some 19 points off the play offs would suggest resources have been badly used. Not for the first time in recent years, City have been significantly out-performed by clubs operating on much lower budgets.

And it suggests that competency, rather than resources, is the biggest failing at Bradford City in 2021/22. Football results never perfectly correlate with wage budgets. David will routinely defeat Goliath. But the club has not got close to getting value for money for what it has spent over the past year. Sparks recently said, “We have not achieved our goals, for which the resources made available in August were more than sufficient enough to deliver upon.”

The question is why? The simple answer would be to blame it on Derek Adams and that’s probably largely the case. But there must also be questions about the recruitment activity that saw a change of strategy mid-season. About whether City have strong enough training facilities. Analytical tools. Performance management tracking. You name it.

If all these are great – and who knows, maybe some of them are – then the removal of Adams and appointment of Hughes will hopefully lead to a big improvement.

Either way, it would appear City’s failures are not because of a lack of budget.

Will another competitive budget be enough?

With the arrival of Hughes and appointment of a new head of recruitment, Stephen Gent, the hope has to be that City will be smarter in the transfer window over the coming months. That so many players are out of contract gave Hughes a chance to remove some high earners. The likes of Richard O’Donnell, Gareth Evans and Callum Cooke are likely to be on good wages. Their departures free up money that can be spent more effectively.

Next season’s League Two is yet to be finalised but will probably be tougher. Stockport County have earned promotion from the National League and in Mark Stott seem to have a well-off, and competent, owner. Then there’s the very high likelihood of a return to the Football League of Wrexham, via the play offs, backed by Hollywood money. The clubs coming down from League One all look to be a mess, but historically the likes of Doncaster, Gillingham and Crewe have been very competitive at this level.

That suggests City won’t be the promotion favourites many pundits held them up to be this season. The bar is rising, and a similar budget to 2021/22 probably won’t rank 3rd or 4th highest in a competitive division. 

What is the club’s financial position?

The last few years have clearly been challenging for Bradford City. The summer of 2018 saw Edin Rahic’s big gamble, where unchecked he set a playing budget (which includes players and other football staff) of more than £3.6 million that was badly spent and lead to relegation. When Rupp finally got wise to Rahic’s antics and asked Julian Rhodes to look at the books, a financial blackhole was forming that required additional investment from Rupp to plug. The club lost £1.9 million as they fell out of League One.

The proceeds of a sell-on fee from Oli McBurnie’s transfer from Swansea to Sheffield United was vital, turning what would have been a loss over 2019/20 into a profit of £1.1m. The playing budget was £2.9 million, as City finished 9th in a season that was curtailed because of Covid.

The 2020/21 campaign was played out entirely behind closed doors, as the ongoing pandemic meant crowds were not allowed inside Valley Parade. City recorded a loss of £845,000, with revenue down 31%. They operated with a playing budget of £2.7 million. Slightly lower than the year before, but not significantly less.

We can assume that, with crowds back this season, City should return towards more of a breakeven financial performance. Revenue will be up, especially as average crowds are higher this season compared to 2019/20 (15,450 compared to 14,309) – a year where season ticket prices, and therefore overall revenue, had increased. We will find out in due course whether the playing budget was increased this season, but it’s likely to remain at around £2.7-£2.9 million, possibly just over £3 million in view of the season ticket price rise. Sparks told BBC Radio Leeds’ Jamie Raynor, “We have a budget that is far bigger than 70-80% of this division.” He added City would have a “big budget” next season.

Rupp’s aims of sustainability means that the club stays in the black and its playing budget is funded by the revenue it generates. The financial mess of December 2018 is behind City, as is the pandemic. And though Sparks has spoken about the cost of living impacting on the club’s costs, they have resisted increasing season ticket prices.

Is sustainability the best way forward?

As we’ve written on WOAP before, Rupp is probably the richest owner Bradford City has ever had. He has also invested more of his own money than any previous City chairman. This article estimates his net worth at around £100 million. Whatever the truth, buying City in 2016 was a relatively modest investment for someone who made his fortune building up a business that sold helicopter seats.

Having reiterated his commitment to remain owner, and after turning down a concrete takeover offer from Wagmi United last December, many fans would like to see Rupp invest more money into the club. From improving the facilities to, yes, putting up a larger budget for Hughes. Given Rupp’s overall wealth, such demands are not unreasonable.

Nevertheless, Rupp wants to stick to sustainable. He talks about being a custodian of the club. About one day being able to pass it onto someone else in good health, so it can continue to be here for years to come.

To some this is more than fair. After all, every extra pound put in only adds to how much Rupp would eventually expect to be paid back when he one day sells the club. To others, it’s a sign of a lack of ambition or interest. And what is the point of having a very rich owner if their wealth isn’t going to make a difference to the club’s fortunes?

Digging more into sustainable

The biggest reason to take a sustainable path and live within your means is to reduce the risk of financial problems in future. That’s not just the extreme risk of going out of business, but the more common issue of having to implement future cut backs that have a detrimental impact on the club’s performances.

As Rahic showed in 2018, it’s easy for financial costs to quickly fly out of control. Sack a few managers and watch the pay offs mount up. Commit to several players on big wages over lengthy contracts. This is where sustainable becomes a key consideration. If you start to live beyond your means even for a short period, it’s difficult to claw that back. And that’s where you see clubs like Derby County and Reading end up in a spiraling mess.

For Bradford City, it’s easy to rattle out the examples of 2002, 2004 or even 1983 as reasons to argue against over-spending and keeping ambition in check. But perhaps the most pertinent example of the dangers of not being sustainable is more recent than those.

Let’s go back to 2008/09. The second year of Mark Lawn jointly owning the club. In the first season, 2007/08, City had a playing budget of £1.3 million. They finished 10th, while at the top MK Dons won the league with a playing budget of £2.5 million, just ahead of Peterborough on £1.9 million.

Lawn decided to loan the club an additional £1 million, which was used to give City a more competitive budget and give them a better chance of promotion. Stuart McCall spent these extra riches on recruiting Chris Brandon, Paul McLaren, Michael Boulding and Graeme Lee. The team was much improved. The playing budget was £1.9 million.

But after a late season collapse, City failed to even make the play offs – and then the problems began. Brandon, McLaren, Boulding and Lee were all signed on good wages. They all had two-year deals. But City could not afford to go again with such a large budget. Costs had to be reined. McCall voluntarily took a pay cut, other staff were told they had to do the same – a few were even made redundant. Brandon, McLaren, Boulding and Lee were made available for transfer. But with only two finding new clubs, and Boulding taking a pay cut, they went into the next season with a slightly lop-sided squad (no budget for a goalkeeper, so a young and not fully ready Simon Eastwood was borrowed from Huddersfield). The playing budget was back to £1.3 million, and they came nowhere near to promotion.

The gamble of 2008/09 failed, and the consequences held back the club for the next couple of seasons. In fact, it was only truly put to bed in 2012/13, when promotion to League One and the success of reaching the League Cup Final meant the club was in a position to repay Lawn’s 2008 loan.

There have been calls from some for Rupp to throw extra money into City’s budget for next season. Have a go, to give Hughes a better chance of achieving promotion. But for City to truly thrive this way, the simple truth is Rupp would need to put in a similar amount every year.

You can’t gamble on promotion or nothing one season. Player contracts are typically at least two years long – only offer a one-year deal and watch the most in demand players choose someone else for the greater security. Sustainability means having the resources to keep doing the same thing each year. Not going for it one year, then cost cutting the year after if it doesn’t work.

In other words, it’s asking Rupp to throw in money each and every year. Again, that’s not unreasonable. But is this supposed to be a benevolent act, or something where we would expect he is eventually paid back?

There was a rumour – since disproven – that Rupp was taking an income out of the club. Understandably that idea prompted unhappiness. If Rupp was to put more money in, would we be okay with him taking some form of income return on his investment? Or do we just whack it onto the asking price Rupp places to buy the club?

The club absolutely could benefit from additional investment and Rupp has the resources to provide it. But expecting him to just hand it over sits uncomfortably. It also isn’t a sensible long-term approach for the club to rely on regular handouts. There has to be a return somewhere for Rupp. For any investor.

If you were giving Rupp impartial financial advice you would say it’s not actually worth the financial investment to pour millions more into City. His chances of getting the money back are remote. Success on the field would of course make the club more valuable, but it doesn’t change some long-term financial fundamentals – such as the lack of assets including the fact City don’t own their own ground.

Is sustainability the right model?

You can blame Mark Hughes a little for this. At Man City and under Mansour, that big spending spree of 2008-09 had huge long-term consequences. As Man City made it to the top a few years later, where they have been since, the implications of state money funding the rise of football clubs have been felt across Europe.

Within a few years PSG – backed by Qatar Sport Investments – were signing players on eye-watering fees. They took Neymar out of Barcelona, signed Mbappe for a world record fee. The traditional elite clubs like Barcelona, Real Madrid and Juventus spent millions trying to keep up with state-backed up-and-comers, but ended up building colossal debt. Last summer’s transfer of Lionel Messi from Barcelona to PSG was deeply symbolic.  

English football clubs have largely avoided the sort of financial problems impacting Barca and Juve, thanks largely to the lucrative global TV deals of the Premier League, but the attempts to keep up have seen more and more money needed to be spent in order to compete at the top. And with it more and money needed just to stay in the Premier League. That’s helped to fuel a Championship that is now full of clubs in heavy debt, committing to wage bills that are higher than their actual turnover. In effect you’ve got around 16 clubs gambling on three promotion spots, whilst competing with recently relegated clubs receiving parachute payments.

At the top levels of the game home and abroad, it’s not about sustainability. It’s about debt. Buy now, pay later. Hope that the music never stops. We might have expected Covid to have caused huge financial problems across the game. But doom-laden predictions of dozens of clubs going out of business never came to pass. The debt approach continues to survive and thrive.

In other words, clubs higher up the ladder are operating to a different set of principles to Bradford City. It’s not about sustainability, it’s largely about borrowing money and running up debt. It catches up with some, like Derby, but by and large they keep going. An owner might get into trouble, but they’ll quickly sell to another rich owner. Wigan looked in a huge mess a couple of years ago, this year they’ve bounced back to the Championship while spending relatively huge sums. Pause and reset.

In 2015 Mark Lawn had admitted he couldn’t afford to fund City if they reached the Championship – because the financial commitments needed to compete are not reflected in the income clubs receive. It’s unlikely Rupp would have the appetite to fund debt either, if success meant having to invest millions the club doesn’t itself generate, just to compete.

With each passing year, the gap between each of the leagues seems to widen. It’s nearly 18 years now since Bradford City last played second tier football. And the landscape is now radically different.

Julian Rhodes has argued – with a lot of justification – that the self-sustainable model so nearly took City back to the Championship. They were almost promoted in 2016/17, despite operating on a much lower budget than the likes of Sheffield United, Bolton and Millwall, who triumphed at City’s expense. Then there’s the inspirational tale of Luton – currently in midst of taking part in the Championship play offs – who run a break-even model and have prospered. They have the third-lowest wage bill in the Championship yet have just finished 6th. Check out this snippet from an article about Luton for inews:

“It is tempting to present this as some mini-miracle… But the opposite is true. Presenting this as miraculous is counterproductive and unfair. There are no secrets and there is certainly no magic. Luton have a crystal clear set of principles that stretch from what Jones wants from his players and how the team should play to how the club must avoid the economic mistakes of the past. They have an efficient and forward-thinking recruitment model and they use extensive video analysis to help the players improve. More than anything, two different members of staff tell i that Luton Town is simply a brilliant club to work at.”  

The question is – can City do something similar on the same break-even approach? Or is the prudent, self-sustainable model one that dooms them to a lifetime as a lower league club?

A big year for Rupp

The 2021/22 was the first season where Rupp came under pressure from a section of City supporters. Up until the appointment of Hughes, there was a growing level of muttering that was no longer confined to social media and message boards. It began to become visible on a matchday.

For now, Rupp retains the backing of most fans. Attempts to set up any kind of anti-Rupp protest have fallen flat. I think the overall level of backing for the owner is fair. Rupp is not the perfect owner but has helped to protect City financially during some rocky recent times. His refusal to deal with Wagmi United deserves credit, given the huge sums of money on offer. Rupp could have recouped his investment and left us to deal with the huge unknowns that Wagmi United represent (the value of NFTs is down, with global monthly spend falling month on month after a January 2022 peak). That Rupp turned it down shows he is committed to safeguarding the future of the club.

But it is all coming to a point where further failure, next season, will really test patience levels. If City don’t mount a promotion push in 2022/23, the questions will return and they will get louder.

In short, a competitive budget has to lead to a competitive Bradford City. The club appears to be in a strong position after the turmoil of late, and in Hughes they have a manager with a track record in the game for success. They have to kick on in 2022/23. They can’t muddle around in mid-table again.

Spending more money might aid that, but the biggest factor remains competency. And on that note, there is encouragement. Hughes brings a new level of professionalism to the manager’s role. And there has been a lot of progress behind the scenes to professionalise the commercial and back office management of the club. These combined factors suggest we are now in a far stronger position. It is very difficult to drive a sustained turnaround and turn a ship. Finally there is good reason to believe that we are getting positive momentum – and it is positive momentum and energy that ultimately makes a turnaround successful.

City might not be the big spenders that some fans would like. But if they can start to make better use of their resources, it will be a major step forward in restoring confidence in the leadership of Bradford City.

Categories: Opinion

Tags: BCAFC