Hello BrendanCounty123456789 wrote:
Sorry I must have missed your reply. I do have to disagree with you strongly because fans and directors putting money into a club is not the same as normal operating income and is probably the key point which explains why football clubs do not go bust like normal businesses.
If a club spends 1 million but only receives 800 thousand in operating income then it has made an operating loss of 200 grand. If a benefactor loans or gifts the 200 grand shortfall then the club has still made a 200 grand operating loss despite the club not actually being 200 grand down.
So when you asked the question ‘clubs are losing money, year in year out, how do they stay in business’, the type of thing I have exampled is a reason why clubs lose money but stay in business.
Don't apologize, an interesting discussion has been sidelined by our Australian friend resorting to insults.
I think your analysis is wrong in two discrete areas,
Firstly income is income. Just because it come from a benefactor(s) doesn't negate that fact. Therefore your premise is flawed.
However even if your premise is correct I fear you don't recognize a fundamental of economics.
The figures I use are for illustration. Although we do know that on gate receipts the average person contributes about £15. (Taking into account concessions etc) Now let us say to break even a League 2 side requires a gate of 5,000.
On a gate of 4,800 over a season of 23 League games and a net deficit of 200 spectators the benefactor needs to make up a loss of £69,000. At 4,000 spectators it is £345,000 and at 3,000 spectators, over a season £690,000. In effect the poorer the club the more generous a benefactor has to be. And frankly to a massive scale.
Not really plausible, is it?