Our chairman released this statement in May 2011, so next year will be the third season on from this. We do now have a Category 2 academy and state of the art training facilities and we're seeing quite a few youngsters breaking in so hopefully as the subsidy lowers we'll become more self-sufficient from our younger players anyway.
I recently made a statement regarding the financial support that is provided to Colchester United and how it has affected the playing budget. (The playing budget being the money spent on all things related to the team. I have listed the main categories of these costs below).
For the last five years, the managers of Colchester United have been provided with a playing budget that was much greater than that provided to other teams that enjoy a similar level of support, although not as good as the budgets provided to the much bigger clubs that we constantly find ourselves competing against in League One.
During the last five years, we have finished 10th and 24th in the Championship and 12th, 8th and 10th in League One. These represent five of the six highest finishes in the club's history. However, the budget is nowhere near enough to "almost" guarantee promotion and is too much to sustain going forward, given current attendances.
For the long term good of the club, two important investments are now being made; firstly, a new training facility which is already underway and second, the establishment of one of the best youth set ups in the country. It is my view that it will be these strategies that will ultimately provide us with the tools to gain promotions into higher leagues and to sustain that status. However, the club can't make both these investments and prop up the playing budget.
Rather than withdraw the financial support immediately, I have decided that it will be tapered off over the next five seasons and I want Colchester United fans to be aware of how this will be done and what they can do to ensure the club continues to progress in the short term.
Over the next five seasons, the playing budget will be made up of 100% of gate receipts, (less VAT), from the previous season, 100% of the basic awards the club receives from the Football League plus a club subsidy, (which is the part that will be reduced each season until it is zero by the end of year five).
The following shows how this will unfold. For the coming season, I have all of the figures I require to determine the playing budget. However, beyond that season I only know for certain the amount that will be added as a club subsidy.
This coming season's budget will be made up of the gate receipts from 2010/11, (£1,139,273), the basic award, (£983,999.88) and our club subsidy, (£1,400,000) - making a total of £3,523,272.88.
The club subsidy amount of the budget will then decrease to the following amounts in the subsequent four seasons:-
So, you can see that unless gate receipts improve or the basic awards increase the playing budget will reduce.
The exception to the rule will be for a year following promotion to the Championship, where only half of the basic award will be provided to increase the playing budget. This is to create our own parachute kitty in case of relegation the following season, because the league does not provide parachute payments between the Championship and League One.
Of course, we don't get to retain 100% of the gate receipts so to give the playing budget 100% of these means the club will have to work hard to cover all of the match day costs. We plan to do this with the funds we raise from other club activities such as sponsorship and match-day hospitality.
We also have many other expenses like the rent, rates, utility bills and staff wages but the deal we have with the council to manage the stadium during the week for events and conferences is designed to give the club the means to keep its head above water. With this deal in place, every event attended goes some small way to assisting the club in this aim.
However, if attendances remain static and the league awards are not increased, the playing budget is going to get reduced by £300k every season for the next five years.
Having stated the obvious, not many clubs can assure their fans that every penny they spend on their ticket is being added to the playing budget and this does give fans some say in what the budget amounts to.
So lastly, what is covered by the playing budget and how is the money spent?
John Ward will have the main say in where this budget is spent but in doing so, he has to cover all of the costs of the following:
• The Team
• Catering for players and youth teams
• Kit etc
• Travel to away games.
If John wants to spend money in one area, he has to balance that against what is required in another area.
It is an unusual step for a club that is under a single owner to be so transparent with this kind of information and I can already imagine all of the other things that our fans will want to know, such as how much is being spent where.
I will make sure that the running total of gate receipts is published throughout the season and before each season, I will make sure the total playing budget is disclosed. However, beyond that, I will not be prepared to divulge any other information.
The reason I am publishing this information is so that fans can see how their attendance at games both encourages the players on the field and provides the manager with the budget to build a team of which you can be proud.
It's worth adding mind you that, although it says: "I will make sure that the running total of gate receipts is published throughout the season and before each season, I will make sure the total playing budget is disclosed", I can't recall this being the case to date.
Edited by dedwardp, 09 May 2013 - 10:10 AM.