BfB

When talking about what can be spent on the playing squad Bradford City use the word “Budget” in a way which seems to cause some confusion amongst supporters. When we hear the word “budget” in connection to Bradford City it tends to mean “what the business can afford” and this distinction is more than linguistics.

The business of Bradford City is – Julian Rhodes tells us via the unquestioning T&A – ready to go “£500,000-£600,000” over budget and of course that statement is a nonsense in itself. If the club is prepared to spend £1.5m on players or £2m on players then that is the budget.

The budget cannot be over-budget any more than the weather can be hotter than it is. As soon as more money is put into the budget the budget is that new figure and when talking about a future figure the best one can say is that it is over a previous budget or a revised budget.

Again, not just linguistics.

What is being said that the business will be spending that amount over what it believes it can afford and that is a much different proposition.

This might not always be true. It might be that the business has reserves which it does not plan spending and the word budget is not so keyed into what we can afford but that seems unlikely in this case.

If the business generates enough money to pay players £1.5m a year and it decides to spend £2m without another income stream then the business is running at a deficit. When a business is running at a deficit then, eventually, it has to get that money from somewhere. Being over-budget is a way of saying that we will spend more than we can afford.

What does a business do when it has spent more than it can afford?

A business can raise capital by selling an asset. Its a good idea in business to never be in a position to sell fixed assets to pay variable costs. Football has a curious view on what is an asset though and this is not an uncommon strategy. You can make up the money you have over-spent by selling a Nahki Wells type player but can you expect to produce a Nahki Wells to order when a bill comes in? It may be a way to manage windfall but not to pay debts.

A business could repay over-spend by cutting costs by a similar amount to that which it had over-spent. If £500,000 is added to player expenditure this year to push it up to £2m then for the following season – if other revenue streams do not increase – then player expenditure is £1m. One weighs up the chances of being ahead one year with the certainty of being behind the next.

A business cut its expenditure in other areas although with Bradford City being largely a business about playing football one doubts that it could make £500,000 of cuts outside of the playing squad.

A business could increase income which if other spending was kept at a level would repay the over-spend. This is betting on promotion with the stakes of the financial health of the business and I’d suggest that using that as a business strategy is laughable at best and sinister at worst.

The final way for a business to cover over-spend is to borrow the money.

Bradford City’s credit might be good somewhere – two administrations and all – but if the business can get loans to cover this over-spend then it would have to pay interest on those loans which would feature on balance sheets to come.

The legacy of Bradford City at Wembley was a substantially debt free business. Why put ourselves in the position where that is no longer the case and the future of the club was in the hands whoever had lent us money? We can see the effects of that being played out in gruesome detail at Elland Road right now.

What would we want to do it for? To buy some “better” players to improve the team that beat Arsenal while on a fraction of the Premier League club’s salaries? If the adventures of Bradford City over the last few years tell you anything it is that (while finance is not unimportant) throwing more money at a squad is not the way to improve it.

But make no mistake that is what is being talked about when football clubs talk about being “over-budget”. In this case we are talking about the business of Bradford City spending money that it does not have on players that it cannot afford.

Again.

And that is what needs to be understood when the “budget” is said from football clubs and perhaps from Valley Parade. If we are spending too much how are we going to pay for that? What is the contingency if that over-spend does not lead to increased revenue streams? (Read: without promotion) How realistic are the aims we are setting to enable us to cover over-spending?

There could be very good answers to these questions but as supporters of Bradford City the club we have had to pick up the pieces after Bradford City the business have decided that it should go beyond its “budget” before.