Profitablility of Friendlies - it doesn't work like you think

[glengarry224]

When you schedule a friendly, the game shows the "Fee" and "Income" for that proposed friendly.  Expectation (what most people have written/said) vs Reality:

Home Friendlies: 

·         Expectation:  Your Profit/Loss = Income – Fee, because you earn the Income and pay the Fee to your opponent.

·         Reality:  that formula is incomplete, and you usually earn far less because:

• • The Income is estimated, but is usually higher;

  • You pay Match Day Expenses, which are often substantial; and

  • You pay VAT tax of 22% of Gate Receipts

Away Friendlies:

·         Expectation:  I’ve read 3 versions:

1.      Profit/Loss = the Fee, because as the away team, you get the Fee and the Home team gets the Income (reverse of Home Friendlies);

2.      Profit/Loss =  the Income; or

3.      Profit/Loss =  Income - Fee, just like Home Friendlies

·         Reality:  #2 is closest, but also incomplete, because:

·         You do earn the friendly’s “Income” and not the “Fee”;

·         You do not pay the “Fee” to your opponent;

·         You also earn part of the Gate (I believe 10%); BUT

·         You must pay travel costs; and

·         You still pay VAT Tax of 22% of your Gate Receipts

Big problems:  the game does not tell us what the Match Day Expenses or Travel Costs will be.  These would be known, in advance, by your club and without them, your P/L estimates can be way off.

Note:  Away Friendlies can be much more profitable than expected, if the travel costs are low and the Gate is large.  The Home Friendlies formula seems much more inaccurate and some friendlies, which look very profitable, even become losses.  Data in the next post:

 

[glengarry224]

The profitability of friendlies always seemed straightforward to me but I was getting in-game feedback that it wasn't working the way I thought.  Not much info on this subject here and elsewhere, and that info was not consistent, so I did a little experiment.  And what I found out is that the game doesn't give us enough information to figure out how profitable a friendly will be.

I took over Padova and Norwich and re-ran an initial friendly, then studied the Financial Data.  Here are the summaries of my studies:

Padova:

 

Norwich:

The Celtic Home friendly became a loser because there were @ 62k in Match Day Expenses.  The Celtic Away friendly was far more profitable than expected because travel costs were low and there was a large Gate, which we shared in.

[edit:  sorry, on those charts it should read Projected * = Stated Income [minus] Stated Fee, for home friendlies]

Edited May 31, 2021 by glengarry224

[phnompenhandy]

Oh, that's really interesting. I wonder if any experiments have been done to give a closer estimate of the real financial outcomes of this.

On a partially-related note, here's a tip for a lower-league manager. When a big club come to poach one of your star youths and offer a derisory transfer fee, don't be too quick to reject it. Throw in an arranged friendly with them and your fee from that could be over ten times the transfer fee. I've got some nice little facility improvements from such arrangements in the early years of my career.

[glengarry224]

5 minutes ago, phnompenhandy said:

Oh, that's really interesting. I wonder if any experiments have been done to give a closer estimate of the real financial outcomes of this.

On a partially-related note, here's a tip for a lower-league manager. When a big club come to poach one of your star youths and offer a derisory transfer fee, don't be too quick to reject it. Throw in an arranged friendly with them and your fee from that could be over ten times the transfer fee. I've got some nice little facility improvements from such arrangements in the early years of my career.

That's a good idea.

 

[richard.cheeseman]

12 hours ago, phnompenhandy said:

Oh, that's really interesting. I wonder if any experiments have been done to give a closer estimate of the real financial outcomes of this.

On a partially-related note, here's a tip for a lower-league manager. When a big club come to poach one of your star youths and offer a derisory transfer fee, don't be too quick to reject it. Throw in an arranged friendly with them and your fee from that could be over ten times the transfer fee. I've got some nice little facility improvements from such arrangements in the early years of my career.

All good if it’s a negotiable offer if not reject away 🙄🙄🙄

[phd_angel]

@glengarry224 - Your analysis is quite interesting, thanks!  On the table above, what's the formula you used for "Actual P/L"? (I can't figure it out). 

The fees and incomes you use in the exercise above are of a similar order (breaking even almost). There are plenty of opportunities for highly profitable friendlies, with a massive difference between income and fee (at home, for example, a 300k income minus 10k fee), or massive fees (in away, 200k fee). Cheers.

[glengarry224]

On 18/07/2021 at 22:44, phd_angel said:

@glengarry224 - Your analysis is quite interesting, thanks!  On the table above, what's the formula you used for "Actual P/L"? (I can't figure it out). 

The fees and incomes you use in the exercise above are of a similar order (breaking even almost). There are plenty of opportunities for highly profitable friendlies, with a massive difference between income and fee (at home, for example, a 300k income minus 10k fee), or massive fees (in away, 200k fee). Cheers.

The 'Actual P/L' cells were referenced to more a more detailed sheet, which recorded all of the changes in the in-game Finances, under the tabs: summary, income and expenditures.  For example, from my above summary, for the Lisse match which Norwich played, and which did have what looked like it would be much more profitable:

[glengarry224]

On 18/07/2021 at 22:44, phd_angel said:

The fees and incomes you use in the exercise above are of a similar order (breaking even almost). There are plenty of opportunities for highly profitable friendlies, with a massive difference between income and fee (at home, for example, a 300k income minus 10k fee), or massive fees (in away, 200k fee). Cheers.

I also ran a bunch of other test matches, many of which tested (a) for home matches, bigger differentials between income and fee and (b) for away matches, bigger fees.  In addition to the same two causes for discrepancies between what was projected and actual results (as noted in my earlier post):

(1)  for home matches, the projected income did not include 'match day expenses'; and

(2) for away matches, the projected income did not include 'travel costs'.

I also found that for home matches, when there was a much higher projected income -- i.e. much higher than what I'd expect or than for other similar matches -- those expectations were not met.  In other words, if it looks too good to be true.....

My general advice if your concern is making money off of friendlies:

Don't schedule far away friendlies.  If it's a close drive, the travel costs might be zero; and

Don't believe it if the projected income looks too tempting.

 

[Daveincid]

IMO there is a important point missing in this calculation. Depending on where you arrange a friendly and which Club you are playing you will see an increase of merchandise-sales. Even if you might loose some money with friendlies you probably still make much a bigger profit in the mid-long-run.

[glengarry224]

8 hours ago, Daveincid said:

IMO there is a important point missing in this calculation. Depending on where you arrange a friendly and which Club you are playing you will see an increase of merchandise-sales. Even if you might loose some money with friendlies you probably still make much a bigger profit in the mid-long-run.

Agree.  Certainly that's a benefit of going on a tour too.  I was only examining what we are told about friendly profitability:  Fee and Income

[Daveincid]

vor 6 Minuten schrieb glengarry224:

Agree.  Certainly that's a benefit of going on a tour too.  I was only examining what we are told about friendly profitability:  Fee and Income

Exactly!

I know, all good on that  I just thought it's important to include that, not that people don't arrange friendly's anymore because the financial benefit doesn't look that huge

[Kakidaniel]

First of all, thank you @glengarry224 for making this test. I know many of us have been wondering but not doing the actual research. Even if this is over a year old, nearly two, I think this still works the same.

The second, in which case the friendlies is a matchmaking where you can boost the morale - but it will probably have a negative effect on your economy because you'll want to play against weak teams. I have always made the worst economic decision according to this when i play friendlies at home against real weak teams..

This is a difficult balance. You want to have a good economy and maybe struggle to compete in your league and therefore you'll need to arrange some friendlies mid-season(if you have that in your league) so you can, as I said before, boost your morale. If you arrange a friendly home against a weak team, you'll have a negative outcome. The same can apply on away-games against weak teams.

So.. the balance is - play against 2-3 better and bigger teams away in the beginning of the season to save up money for the rest of the season so you can play against weak teams before the first league games and/or in the middle of the season.