German prize money

[phantombandit]

I am just wondering if anyone has had any problems with the board considering prize money as income in Germany? Germany doesnt have any TV money or participation money etc... they streamline everything as prize money. Currently my club is losing about 5-600k a month so an estimated 6-7 million a season. However, we are in Bundesliga 2, which means that the prize money for coming dead last is 8 million, meaning the GARUNTEED prize money for this club is more than enough to cover our losses. Despite this, our club is very insecure (are are only about 4 million in debt), my board is cutting my wagebudget constantly during the year (it is currently 2.2 million), and I am getting 'club close to administration' emails, despite actually turning a net profit of millions each year.

My only explanation is that the game does not count potential prize money at all in the calculation of a clubs finances for the year. While this makes sense for most places, as prize money can change and other countries get guaranteed TV money, in germany there is only prize money but it is 8 mil MINIMUM for the second bundesliga, and 30 million MINIMUM for the bundesliga. Logically, the board can take the fact that I will make 8 million in prize money to the bank, just like how TV money is considered in England. I get prize money is harder to calculate, but is it radical to assume the absolute minimum, especially in a country like germany.

So currently, I am playing a club that is highly profitable, despite my board thinking we are a day away from administration, and thus have a wage budget, not only half that of any other team in the league, but would still be the lowest budget in the league below me. The only reason I am able to stay in this league is because my league doesnt have limitations on loans, and I am at times fielding 8 loanees in my starting 11.

[Ronnieekelund]

Having same problem with union Berlin. Started season with 60m in Bank, now down to 8m and having to send players out on loan as I'm losing over 6m a month.

You would think the board would take prize money into account when I'm sitting in 6th with 4 games to go.

[Brasilia88]

Eredivisie (NL) is similar. According to my predictions, I will be 6 million in debt within two years, yet I am well under my spending cap and I´m about to roll into Europe. 

My only hope is to score more sponsors to cover my 100k monthly loss. I´m already at five senior affiliates who pay annually 50k with free loans, so really board: get a better accountant!

[santy001]

One area FM doesn't replicate so well is the actual liquidity a club faces. However, it is still an issue for clubs. Clubs don't factor prize money in with the premier league, its just that the monthly instalments from the TV deal are providing the club with liquidity. 

If your owners are fretting this much about it though it may be an indicator that you have owners who cannot fund the club through these periods. Taking the hit of administration and getting new owners in may well be beneficial. There isn't usually much of a consequence in FM though for your clubs balance going to a negative. You're effectively extended the line of credit you would need without issue. 

[\'Appy \'Ammer]

So is the problem that SI have coded this from an English perspective of how finances work?

[santy001]

No, there isn't really an English perspective of how finances work. It's just that FM's finances works on a simpler money in, money out system. Than a full accounting system. 

The only issue I'd perhaps point out is FM is far more forgiving of those situations where your club has run out of money than real life is in any country. 

If a clubs owners can't finance the club between these spells of income then the club is going to be in some trouble. Usually the gap would be bridged by a loan from the directors or a loan being taken out to help with the day-to-day running of the club in FM terms. 

[enigmatic]

Based on my experiences in FM even with money in the bank, I have a sneaking suspicion they might be right about it not properly modelling prize money (particularly for low reputation promoted sides). I've been given £8m annual wage/transfer budgets in the Bundesliga before, with more than that in the bank and guaranteed to earn at least that for finishing bottom of the division below, never mind the guaranteed large multiple of it for the current season. It would make a little more sense if they were focused on my meagre commercial income and small attendances...

Would make slightly more sense if Union Berlin were in danger of relegation to the division below, which pays very little, as some of those contracts will be multi year, but I'm not sure the financial model is sophisticated enough to be factoring in that sort of thing. The 2 Bundesliga is actually one of the easier countries to break even in because of that prize money (and unlimited loans, decent attendances, cheap players and affordable wages), but the financial model still feels a bit off.

The board obviously need to manage cashflow too, but with guaranteed prize or transfer monies due later in the season, commercial lenders would be able to fill the gap so it wouldn't be much of a concern.