Saturday, October 07, 2006

Alistair Mackintosh Speaks! Ollie Reflects!

Alistair Mackintosh rarely gives interviews but this week he has spoken. Looking back through the archives I can only find two recent interviews. One given to The People and published on 6 February 2005 and the other given to Accountancy Age and published on 9 March 2006. Following his latest interview I thought that I would reflect on comments given in all three and what has happened since his first interview in The People.

Most of you will remember that AM's interview with The People came shortly after Nicolas Anelka was sold at the end of the January '05 window leaving Kevin Keegan, the manager at the time, with no real time to bring in a replacement. Most fans feel that Anelka's goalscoring ability and pace on the pitch has still not been replaced. But if Stuart Pearce's comments at the time and more recently Shaun Goater's are to be believed Nicolas Anelka is not missed in the dressing room.

In early February '05 AM decided to comment publicly (something he doesn't do very often) following claims that the Club was near financial meltdown. AM said at the time "it is nonsense to suggest that we are on the verge of financial meltdown - our debt is in control and manageable". He went on to say "we have a main debt of £44m, which is serviced like a mortgage in that repayments are structured over a mostly 25 or 15 year period".

In the Accountancy Age interview in March this year AM is still talking along the same lines saying the same things. He mentions the debt being manageable and well structured. Interestingly he is directly quoted as saying "there are many ways for clubs to mitigate the risks they face, such as operating flexible contracts with players...monitor wages against turnover - where you finish in the Premiership should be reflected in the wage budgets. It's about being within a responsibly run business, of which accountancy is at the forefront".

Fast forward seven months to AM's recent interview and he appears to be returning to the same themes and same comments about the long term debt but appears to have changed his opinion about wages. He mentions that City has the seventh highest wage bill in the Premiership and is directly quoted as saying "In football you've got to be aware of what your competitors are doing and sometimes you have to take the extra risk" but he does return to form with his next line "Sometimes you've got to mitigate the risk wherever possible".

And then maybe he gives us a brief insight into what we can expect in the next set of accounts saying "we've invested heavily in our wage bill. And whilst the players may have come here on Bosman transfers, they generally have a high wage attached." He goes on to finish by saying "It's a strategic choice to have a high wage bill. But then you want performance that is commensurate to that as possible".

So what has happened since The People interview? If you want an in depth read of City's financial situation take a look at Colin Savage's articles he is publishing in MCIVTA which have been re-published here with their and his kind permission. Whilst I'll try and avoid too much financial detail I must pre-warn you that I will be comparing a few figures!

Looking back at the last eighteen months or so, it is clear that there has been a change in staff numbers. According to the Club's accounts as at the end of 31 May 2004 the playing staff had fallen from the previous year's 53 to 47 and the football & commercial staff had risen from the previous year's 184 to 199. By 31 May 2005 the playing staff had fallen further to 45 and the football & commercial staff had risen further to 204. When the 31 May 2006 accounts are published I will be interested to see what these figures are but it's clear to me that the playing staff is much reduced, in fact Stuart Pearce directly blamed the lack of numbers on the poor finishing position in the Premiership last season.

From AM's comments in early February '05 to date he has overseen a net 10 players leave. I won't list the comings and goings but I have obtained those figures from City's own website. The notables coming in include Darius Vassell, Georgios Samaras, Ousmane Dabo, Dietmar Hamann, Paul Dickov, Bernado Corradi, Andreas Isaksson & Hatem Trabelsi. The notables going out include Bosvelt, both Wright-Phillips, Fowler, Croft, Flood, James, Cole & Sibierski.

So what does this all tell us? Well quite clearly the amount of players on the books has fallen but the wage bill has not fallen in such a dramatic fashion. Despite AM's comments, the wage bill does not reflect the performances in the league last season. Who is to blame there? I don't know but clearly the manager is operating with one of the Premiership's smallest squads so there is little room for injury problems for example.

You can all draw your own conclusions from AM's comments I have one in particular which I will draw you to at the end of this article. By the way, a Supporters Trust, isn't there to have a hand in transfer dealings, set policies etc so please do not think this is a statement given out by us, it is not, it is simply me thinking personally about AM's comments in the media.

The one point I would like to make is this, AM has confirmed that the bosman signings are expensive (by being on high wages). Undoubtedly the older players bring with them experience but is this the correct policy bearing in my City's precarious financial position?

For my example I'll look at it in very basic terms by comparing two players Dietmar Hamman and Steve Sidwell. Hamann cost the club an estimated £300k in compensation to Bolton and is probably on a hefty wage say £30k a week. Sidwell almost came to City but the clubs couldn't agree terms. Let's say we sign Sidwell for £2.5m and give him a four year contract. I read at the time of the possible move that Sidwell had accepted a wage of £18k a week.

If we look at the cost (without bonuses, agent's fees and bungs - that last part's a joke!) over say a three year period then Hamann will cost a total of £4.98m. Sidwell over the same period will cost £5.3m. So over a three year period it would cost us an average £100k a year more to sign Sidwell. I admit that Hamann brings experience but on the other side of the coin Sidwell brings youth and the possibility of him continuing to improve. Perhaps most importantly and certainly whilst City operates a squad small in numbers, Sidwell statistically will be injured a lot less than Hamann, in fact Hamann and the rest of the older Bosman signings this summer (with the exception of Corradi) have had injury problems in the first six weeks of this season.

The most interesting thing though, is if we look forward three years. Hamann will be retired and will not earn City a penny (the club will therefore have to come up with finance to afford a replacement) and Sidwell will be in the final year of his contract (the club could still recoup a transfer fee to be used towards a replacement player) so at the end of the day it would actually be cheaper and more profitable to sign the younger man. Of course, the other thing to keep in mind is that if Sidwell excelled for the club in the first two or three years he could be sold for a profit which would help provide the balance in the books that AM requires.

I have looked at this in a very simplistic way and by all means drop me a line but my point is, that perhaps our transfer policy is a little flawed as it seems balanced too far toward older players on bosmans when actually the cheaper, more profitable and less riskier option (from an injury perspective) would be to sign a few more younger players.

As mentioned this is my personal point of view and not a statement by the group I am part of. As with all things published here I welcome comments, input etc to


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