It's been said for years that a club at any level shouldn't spend more than 60% of its turnover if it wishes to maintain its financial health.
So many EPL clubs have ignored this orthodoxy, and in the Championship it is ignored almost as a matter of course. Manifestly, clubs couldn't have predicted a pandemic, but they've given themselves precious little leeway to deal with an unforeseen development of any kind.
Mind, a lot of our business people are semi-socialists - they believe passionately that the government should wherever possible pay for their outgoings and unsustainable debts. It's in the protection of their income where the rabid capitalism kicks in.
Exactly.
I deal with "predictions" professionally and it is always funny to me discussing with CFOs about some agency or whatever that is forecasting some future development. Even when I show them how wrong these forecasts have been historically they will come back 3 months later to ask for a plan based on the same forecasts. It really is communist mid level manager 101. Cover your a¤¤ with some external source and when the s¤¤¤ hits the fan you can refer back to something else.
Simplified the world can go three ways, up - the same - down. So every football club should evaluate what happens in all those scenarios. It could be a pandemic, a war, or whatever so-called unknown known. Knowing what exactly causes a downturn is not really that important, but that is where the focus is, knowing how robust you are when it happens however is extremely important - that often becomes just something "abstract".
And what do you do if you run a football club? I don't know how many times I have heard the phrase "Levy isn't investing enough". So unless you are living hand to mouth you are somehow not "ambitious" or something equally silly. Having reserves as a football club is almost considered a sin (and that I believe is universal and not specific for Spurs).
I wish I was a communist mid level manager in charge of European football. I would have forced every owner, director etc. at football clubs to read Nassim Taleb. Black swans happen so make sure to make yourself anti-fragile. And not a single football club would have been rescued. If you go bankrupt you are bankrupt.
