Can someone explain 'financial projection' please?

[red dragon1978]

I have a feeling that the financial projection doesn't take into account guaranteed income for the forthcoming season, which to my mind makes the whole thing a complete waste of computing power and game space. But I don't know, so would be grateful if someone can confirm or refute my suspicions.

Playing as Finn Harps, Irish Premier Division, I'm sitting on a healthy balance of £128,658. Largely, this comes from £135,000, in round figures, that we made last year in prize money after winning the FA Cup and promotion to the Premier via the play-offs.

Now, here's my issue. The projection for this season is £62,000 in the red. Next season, £241,000, and the following season an eye watering £411,000.

Whilst I obviously can't speak for next season, I'm guaranteed almost as much prize money this season as I achieved last year, so I can't see how these projections are taking that into account:

I'm in the All-Ireland Cup. If that follows the IRL rules, I get £4,500 for turning up.

The Euro Cup will net me £84,000 for showing my face.

If I finish bottom of the Premier, I still get £32,0000

If, as in England, the Premier clubs enter the FA Cup at the 3rd Round stage, that's £4,300 if we win, £1,700 if we lose.

I've been guaranteed £25,000 over the season for TV rights....we made £35, 000 last season, I don't know if that'll rise if/when I actually get on TV?

Can't get the game to give me League Cup prize money.....we were out of it before I took the job.

So, a quick blast of maths tells me that we're guaranteed around £146,000 combined prize and TV money this year, compared to £170,000 last year. That could rise if we win matches, of course. Last year, I brought in £8,000 in season tickets. Before even reachin my first friendly, almsot 2 monthe before the start of the season, I've made £26,000 in season tickets. So shortfall practically covered.

A new HOYD has added £25 to my staff bill, my playing bill has doubled (but the board quadrupled my budget, so I'm well in line). So it seems very apparent that the projection is 'live' and only takes into account prize money as you enter the competitions, which is surely a bit daft.

Unless I'm wrong....if those projections include guaranteed income, I'm stuffed like a turkey.

[Wiitastic]

It means what the game thinks what profit you will make that season. You obviously need to make more money than the amount UEFA have set to be able to play in Europe without getting any sanctions for poor money management.

[Cougar2010]

I think you've pretty much covered it red dragon.

It serves little purpose IMO and as you say doesn't include some guaranteed income until you actually compete or receive it.

[phnompenhandy]

It is a nonsense. It's the salary projections that get me. It always assumes that even with promotion, every year the weekly salary total will fall! Never mind most of the squad being on 25% promotion pay rises and so on.

[Cougar2010]

It is a nonsense. It's the salary projections that get me. It always assumes that even with promotion, every year the weekly salary total will fall! Never mind most of the squad being on 25% promotion pay rises and so on.

Salary falls because it only takes account up to the end of the players contracts and they have different lengths to run from one year to maybe five years.

[phnompenhandy]

Salary falls because it only takes account up to the end of the players contracts and they have different lengths to run from one year to maybe five years.

Well exactly. Can't a projection include the certainty of extending contracts and signing new players? Nonsense otherwise!

[red dragon1978]

Thought as much, and I agree it's effectively useless and a nonsense in its current form. I don't know if this is effective, but I am simply looking at the projection for this season, - £62,000, subracting that from my guaranteed income and arriving at the fact that my projection this year should be £84,000 in the black.

If this game is supposed to give an accurate, or at least fairly accurate, representation of managing a football club it will in the best case scenario involve a long-term financial plan. This is made extremely difficult by the ineptitude of the projection system. I assume, but do not know, that it takes into account guaranteed expenditure, such as wages. So to not take into account guaranteed income, is completely unbalanced. I can see a number of ways this side of the game can be made more immersive, detailed and life-like.

Guaranteed expenditure (wages etc) & guaranteed income (prize money, tv rights, etc) taken into account.

As far as I can see, there are few financial 'goals' other than 'reduce the wage bill as soon as possible'. And the league/cup expectations are, I believe, based solely on your reputation. I would find it really interesting to have a situation where the board state that 'we are projected to make a loss of XXXXX amount. Therefore, we expect the team to reach the 3rd round of the League Cup, or the 5th round of the FA Cup, or no lower than 6th in the league to improve the financial situation.' This could then be dynamic, so for example you do better in the League Cup, expectations are reduced in the League and or FA Cup. This doesn't need to be every season, and of course is completely irrelevant with 'super rich' clubs...but would be an interesting additional challenge for the LLM and up-and-coming teams. But say you got knocked out of the first round of the FA Cup. Do you then go for the guaranteed income of the League CUp and try and do much better than the expected round, or do you push for League position and try to re-coup the losses that way? I think that would be a very interesting LLM challenge.

I know it is possible to go to each player who's contract is expiring, offer them terms, then move to another player and check their terms without 'walking away'. But I would like to see an addition similar to when your scout says a player will ask for between this and that amount, for your own players, maybe from your assistant. I've noticed that in some cases, the closer you leave it to their contract expiring, some players will ask for less than if you ask them earlier, some for the same, some for more if they think they're invaluable. If your assistant could say ' Joe Smith is a balanced character, and will be happy to be offered a contract. I feel he will take £20,000 pw now. However, I believe closer to the date of his contract expiry, his demands may drop to £15,000'. Or vice versa ' Fred Jone is a slightly arrogant character who feels himself an integral part of the team. He will settle for no less than a key player squad position, and expect a wage of £20,000. I believe his wage demands will only rise as his contract nears expiry.' This might give you advanced warning of a player holding out for a big deal when you can nip into the transfer market and pick up someone with a different personality who will take a lesser wage.

Implementing the point above, it might be possible to have a dynamic wage projection...as your Assistant feels different players will take differing amounts, as I've just talked about, your salary projection could change. This in turn could change your expenditure projection, which would change your overall projection, adding a whole new thing of 'Do I offer this player a contract now, or wait and risk his demands going up'. It would add another reason for their personalities, other than their on pitch performance....a balanced youngster might be just happy to get a contract, a balanced veteran happy to accept a wage in line with the wage structure. A resolute player might be a hard negotiator who looks to get the absolute best (I know we have those notes now in the contract negotiations, but I don't know if they're tied into the personalities).

I know managers aren't generally involved in ticket or merchandise pricing, but it might work to have a scenario where, because you haven't reached the goals given to bring in extra prize money, the board take the decision to raise prices. This would result in either income going up, as fans simply pay the new prices...more likely in a major club.....or income going down as fans refuse to pay, possibly more likely in a smaller club. This could then lead the board to put pressure on you the following season to improve performances, allowing them to slightly reduce prices. That would result in yet another form of pressure on you, the manager, to get results.

Just my two-pence worth of thoughts.....feel free to call me an idiot. I probably am.

[cerud]

Much of what you say here, red dragon is very good! The introduction of a dynamic wage system would be great and your explanation of how this would tie into financial projections would be very beneficial to a manager. Not sure how much control a manager has over ticket prices, but an interesting point to be sure. Quality ideas

[russ the womble]

I have a similar query in that, on the FFP updates, it projects that I'll make an £80m profit, but on the finances screen, it shows a projected £50m loss. No iea which one is nearer the true figure! I wont make £80m, but pretty sure £50m loss is slightly overstating matters.

[danthemanwhocan]

Agreed! Especially with the FFP rules now in the game and something that we all need to be mindful of. I think that SI need to employ a couple of accountants or CFO's of football clubs to help with how they re[present the finances of the football world. This doesnt cut it.

As we are expected to do more and be more vigilante with finances, we should have more control over prices for things, or at the very least be able to bring in marketting guys, merchandise, media etc to improve the financial clout of the club. Its no longer just managing the football side of things, managers are asked to do more and more within the financial aspect of their clubs.

[Xinxin]

Agreed! Especially with the FFP rules now in the game and something that we all need to be mindful of. I think that SI need to employ a couple of accountants or CFO's of football clubs to help with how they re[present the finances of the football world. This doesnt cut it.

As we are expected to do more and be more vigilante with finances, we should have more control over prices for things, or at the very least be able to bring in marketting guys, merchandise, media etc to improve the financial clout of the club. Its no longer just managing the football side of things, managers are asked to do more and more within the financial aspect of their clubs.

red dragon 1978: very good suggestions! I like what you suggest! The financial bit of the game is (and has been for a while) too meagre and difficult to understand. We need more details and more feedback. For example: why are feeder clubs which are acquired to boost income and reputation abroad diferently priced? Will an abroad feeder club which costs me 20.000 a year net me more income from abroad than a club which costs me 10.000 a year do? danthemanwhocan points out some very good reasons for why an improved system for finances is needed. I strongly feel that we should be given a better chance to influence the financial choices of the club, maybe through board interaction and requests?

[Wiitastic]

Agreed! Especially with the FFP rules now in the game and something that we all need to be mindful of. I think that SI need to employ a couple of accountants or CFO's of football clubs to help with how they re[present the finances of the football world. This doesnt cut it.

As we are expected to do more and be more vigilante with finances, we should have more control over prices for things, or at the very least be able to bring in marketting guys, merchandise, media etc to improve the financial clout of the club. Its no longer just managing the football side of things, managers are asked to do more and more within the financial aspect of their clubs.

What other club manager in the real world has a say who the big boss brings in for his office staff and ticket prices?

[danthemanwhocan]

Ticket prices, in my opinion directly related to how well the team is doing. I elaborated in my post in the ways to improve future versions.

But a synopsis would be.

If you set a high season ticket or per game ticket and your team is playing ***** football you could get a notice from one of the directors, Chief financial officer or whomever that says: that due to the decline in match quality this season, and with our reluctance to reduce the season ticket prices for next season the board requests that you no longer player, defensive football. But a style that is attacking/possession based. After a conversation with ABC our supporters spokesperson, we highlighted areas of improvement, ABC bought to our attention that fans have began to get disgruntled with the prices of tickets when the quality on the pitch is lacking.

SI need to consult a CFO, or accountant that works in football club finances to discuss how this model could be improved. Like it or not real world football is heavy on the financial side, its about time FM revamped the finances anyway. With these ever changing rules and the introduction of FFP Managers need to have, in football manager terms, more of a say when it comes the financial future. Maybe not directly by choosing prices. But maybe indirectly buy having CFO's tell us how much they predict the cub after signing x popular in china, or whatever the case may be.

Should manager choose the price of tickets? Probably not, but they most certainly do have an influence in how much is a reasonable price based on what supporters purchase the tickets for in the first place...to be entertained........