The Villarreal model introduced to the club by owner Fernando Roig incorporates a financial strategy to make the club self sufficient after an initial investment by Roig himself. Roig wanted to ensure his investment created success on the field therefore increasing legitimate income off the field. So what is illegitimate income? and what is legitimate income?
1. Illegitimate Income is defined by money invested in the club by the owner, grants, loans and any other lenders.
2.Legitimate income is defined by money generated by the club by Ticket sales, Marketing,TV rights and European participation.
So in my Voyages On The Yellow Submarine save at this present time the club debt is a loan which we have £9m left to pay on it, which ends in 2018. After that date the club will be debt free as long as the club is self financing.
A big plus for us is that we have qualified for the Champions League that will generate more Legitimate income by Paricipation, TV Rights, Marketing and ticket sales. We did not expect to qualify for the Champions League so soon but by winning the title we go straight in to the group stage. I was looking for Europa League qualification at the start of the season so it’s a bonus for the club’s finances by achieving qualification earlier than predicted.
I remember reading a article on the Higher Tempo Press by Chris Darwen on how to balance the books it’s a really good article that got me thinking differently about club finances, in fact here is the link:
I will certainly be approaching the club’s finances with the use of the above article to assist me in my attempt to make the club self sustaining.
Has we enter pre season a number of players with in the club are being released has their contracts are coming to an end over the next few weeks. My aim will be to get the wage bill to a sustainable level whilst still being competitive on the field. Of course one of the ways to keep the wage bill down is to develop players within the club.
Our player recruitment strategy is geared up to buy cheap sell big which hopefully will enable us to play the market to our advantage and bring profit in to the club. Last season we made a profit of £43m in the transfer market. We have a very good network of scouts who should be able to identify targets at the right time for us to sign at the right price. In Spain everyone has a price with every player having a buyout clause / release clause in their contract, so it’s important for us when negotiating contracts we need to make sure we are getting a good deal for the club when the so called big clubs come in for our players. It is going to be an interesting pre season because I am expecting a number of players to be targeted by the big club mentality that more often than not unsettles players.
So that brings me to the end of this quick update, I hope everyone enjoys the beta release tonight, thanks for reading and enjoy the evening. Pre season update to follow.