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|The Â£100 Million Debt |
at 12:58 2 Dec 2020
ITFC reportedly pays interest at a rate of 5.4% on loans it has received from Marcus Evans and his companies. If this is the case, and the loans total around Â£100 million, the annual interest payable is over Â£5 million.
Deferred interest may be being added to the loan balances; and this could represent a portion of the approximately Â£6 million that Mr. Evans contributes annually to ITFC.
The loan arrangements were almost certainly set up in a way that provides legal tax benefits to Mr. Evans and his companies.
|A Reassessment of the Paul Hurst Era ...|
at 15:13 25 Nov 2020
The conventional wisdom is that Paul Hurst was the worst manager in the history of ITFC. An alternative view is offered below.
1. Evans made a huge mistake in offering Hurst the job. With hindsight, it is obvious that Hurst lacked the experience needed to manage an experienced (but mediocre) squad that was deeply upset by the departure of its previous manager. Brian Clough encountered comparable circumstances during his 44 day tenure at Leeds.
2. Hurst should not have accepted the job. He over-estimated his ability to manage a squad that remained loyal its previous manager. His naive attempts to impose his authority made the situation worse.
On the other hand:
3. Hurst did NOT 'choose to dismantle the squad'. Webster was already on his way out; Waghorn and Garner wanted out, and the money being offered for them was too good to turn down; and in any case, Evans has the final say for all transfer market transactions. Net income from player sales was around Â£10 million, and the amount made available to Hurst was around Â£5 million. This suggests a reduction in squad talent of around Â£5 million.
4. Hurst brought in several players who had talent and/or potential, e.g. Edwards, Harrison, Jackson, Nolan, Nsiala, Donacien, Jordan Roberts and Jordan Graham. He overpaid for some of them. This was because other teams knew that he had a budget and an urgent need to bolster his squad.
5. Hurst signed several useful players on loan. These included Chalobah, Pennington and Jonathon Walters. Pennington was arguably the ITFC player of the year, and Jonathon Walters could have had a major impact had he not got injured.
6. Hurst identified and started to address, weaknesses in the areas of the conditioning, strength and fitness of the squad, and the quality of the sports medicine.
7. Hurst reportedly engaged well with the younger players.
8. Hurst could not have foreseen that Bialkowski's form would take a huge dip, and Chambers would be dealing with personal issues, during the season.
9. Prior to his last two games in charge, when he was a dead man walking, Hurst's record was W1 D7 L5, or 0.833 points per game. Although this was poor, the team had not lost contact with the relegation pack. With Lambert in charge, the team obtained 21 additional points from 31 additional games, or 0.667 points per game.
Last season, playing in a lower division, Lambert ended on a run of W1 D1 L6, or 0.5 points per game. Can anyone explain why Evans fired Hurst, but gave Lambert a five year contract extension?
This story has all the elements of a Greek tragedy. However, Marcus Evans and Paul Lambert, not Paul Hurst, are the central characters.
|The future of ITFC ...|
at 16:04 19 Nov 2020
ITFC has become a Zombie club. It needs to adapt to hugely changed circumstances (e.g. the Premier league sucking up all the money, the League 1 salary cap, and the impact of Covid); but its ability to adapt is constrained by debt of around Â£100 million, a lack of vision, a diminished culture, and a decaying infrastructure. Since Joe Royle left in 2006 (by mutual consent, having reached the playoffs 'only' twice, with a winning percentage of 'only' 42.6%) the club has become a graveyard for managers.
The next two years will involve difficult adjustments to the Â£2.5 million salary cap. Players who have value in the transfer market will be sold. No transfer fees will be paid, few contract options will be taken up, and few contracts will be extended. This need not be a disaster, since league-wide financial constraints will make many useful players available as free agents and salary expectations will be lower. In order to prosper, teams will need to wheel and deal effectively in the new labor market and use more young players. Successful managers will be those who 'do more with less'.
There is hope for ITFC in this scenario. In the context of League 1, the club will be a 'whale'. Assuming that support does not decline precipitously, players' salaries will be more than covered by sales of season tickets. The club could easily operate with positive cash flow (i.e. have positive net earnings before interest, taxes, depreciation and amortization); and it would have the financial resources to implement a coherent vision, establish a renewed culture, and invest in infrastructure. Focused investments in fitness and conditioning and sports medicine should lead to better on-field performances, fewer injuries, and faster recovery from injuries; and the club would have significant advantages in recruiting free agents. In this rosy scenario, ITFC should, at a minimum, be capable of yo-yoing between League 1 and the championship. At some point, a trip to the championship would be sustained. Then, even better things could happen ...
The core problem is that an unhealthy co-dependency inhibits a successful transition from the Zombie State to the Rosy Scenario. While ITFC was becoming Marcus Evans' tar baby, Marcus Evans was becoming ITFC's tar baby. The 'tar' is the Â£100 million debt that can not be repaid by ITFC nor written off by Marcus Evans.
Can the club and its owner be disentangled? Perhaps, if Evans to agree to a debt-for-equity swap, in which he would write off the debt that he and his companies hold, in exchange for a modest amount of cash (say 10p on the Â£) plus a significant amount of non-voting, non-cumulative preferred stock whose value would become significant if the club were to operate profitably.
Another important requirement for a successful transition would be to hire a manager who 'can do more less'. This would not be Paul Lambert - but there are plenty of other candidates.
|Hustle and Flow ...|
at 12:43 29 Oct 2020
Successful teams force opponents to react quickly and make mistakes. Playing out ponderously from the back, and passing the ball around triangles in midfield until it is given away, do not achieve this (but make possession statistics look good ...)
Running at opponents with good control of the dribble (Bishop, Dobra, Lankester), utilizing pace (Edwards, Jackson), and hustling robustly (a fit Norwood) are various ways of forcing opponents to react quickly. So are judicious overlapping by experienced full backs (Ward, Chambers) and incisive passing (Dozzell).
Managing a football team is like baking a cake. The right high-quality ingredients, mixed in the right proportions and cooked at the right temperature, look good and taste good, and leave people wanting more. The same ingredients, mixed in the wrong proportions and/or cooked at the wrong temperature, will fall flat or be burned. Lower quality ingredients ...
The diverse contributions of KVY were important to the success of the team during the early part of last season. I hope that he will back at some point during this season.
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