A cold hard reason to get promoted..

The dreaded financials came out today - and it transpires that despite improving things on the balance book front, languishing in the third tier is still hitting Forest - or more accurately Nigel Doughty - pretty hard in the back pocket.  Hit for £4.2m for the year ending May 2007 to be precise.

This is actually an improvement on last year - when a comparable period saw £8m losses.  It is estimated that each season outside the Championship is costing the club £4-5m - which would imply that should we attain promotion and the costs remained similar, we should be just about breaking even - which is certainly a more healthy position than we’ve been used to.

Our turnover was £9.2m, the majority of which was swallowed up by staff costs rather unsurprisingly - despite a reduction of £1.2m in these.  All in all, it just goes to show what a ludicrous amount of money we spend really!  Gate receipts were up year on year, boosted by lucrative cup games against Charlton and Chelsea - as was commercial income from TV coverage of said games.

The reduction in staff costs was driven by players such as Paul Gerrard, Gareth Taylor, David Johnson, Neil Harris and Alan Rogers leaving - it’s hard to believe any of those perhaps with the exception of Gerrard and Johnson were on big money!  But apparently players acquired since these have been on more sustainable wages, with rewards built in for achievements - which I wholly approve of.

However, 90% of our turnover being taken up by staff costs is a rather ludicrous business model in anyone’s language - the ‘benchmark’ for clubs at our level is 75%.  This is where Nigel Doughty acting as sugar daddy comes in - as he’s able to absorb this rather unsustainable way of operating, which is why - whatever your stance on him - we’re certainly tied together for the forseeable.

The club acknowledge they are in excess of other clubs in the division, with operations such as the Academy which costs £1m a year, with only £130k funded by the Premier League and the FA.  This level of - in effect - overspending for our level underlines why nothing less than promotion this season is undoubtedly going to be considered a failure.

Given our spending in the summer, it would seem likely that a similar pattern will happen next season too - with a few significant purchases occuring preseason, not to mention a reduction in season ticket prices and so far, a slightly lower attendance number - and only one more chance at a cup run given our exits from the Carling Cup and JPT.

The cash put in by Nigel Doughty has been in the form of loans rather than gifts, whether this is due to some kind of convoluted business reasoning, or because he expects these loans to be repaid at some point remain to be seen - certainly it would take a real cynic to suggest he is investing his cash with an intent to turn a profit out of us, given our recent form.