Don't think anyone else has mentioned this, but there is an interesting and informative article in today's P&J including commentary from PwC Accountants who've just undertaken a review of SPL club finances for the 2011/12 season.

This review established that ICT are the only club in the SPL whose wages to turnover ratio was below 50% (at 43%). Other mentioned clubs were Aberdeen and Hearts whose figures were 60% and 95% respectively (Hearts were at an incredible 116% the previous season!!).

It also noted that ICT's £'s spent per point gained was £38,000 (lowest in the league), whilst Celtic was up at £364,000!!!

Really puts into context the prudence that the club seem to take in running the finances and their comparable petformance on the field - something they should be congratulated for it.

It'll be interesting to read the same statistics for the season just ended once available (especially with RCFC in the league).

Sorry, can't do the linky thingy to the article.

Cownty figures will be pure fiction anyway.

Excellent management and direction full marks to the Board of Directors.

Take note Celtic we don't have to buy our place in the league we earn it.

ICT leads and leads by example. True winners!!

maybe different last season with the bonuses we would have paid out -but hey it was worth it

maybe different last season with the bonuses we would have paid out -but hey it was worth it

if anything the figures will be more astounding for last season given terrys budget was slashed.

In any business paying out 43% of gross revenue would be regarded as high and uneconomic.

Prior to retirement from my service industry business here in Canada, which I ran for 29 years doing all the work myself for many prior years, I set an upper limit of 33% of gross income for wages to which has to be added the taxes applicable (employers did pay a portion of what the employee paid by way of Canada Pension Plan and Employment Insurance premiums and for himself, as the owner, 100% of both deductions applicable to his wage even if employers were not allowed to claim E.I.!)

I did have one past employee who was very faithful and very conscientious so I did pay him 38% to39% of the gross income per annum of the work he actually did and he lasted 4 years until his interest and performance fell off when we parted company on mutual good terms. But this was a low-income-per-job business so he did very well.

What that figure does indicate for ICT is that they are in a business where the normal rules relating to control of expenditures for total year expenses do not apply because it's entertainment. It's a high salary business because the control the club has over the distribution of their wealth is much less due to the fact that players have much more power to bargain, think much more highly of their worth and have a shorter working life in which to build up a nest egg for retirement.

But, compared to the other clubs, this low figure is remarkable and very praiseworthy indeed. Which is enhanced therefore in terms of praise because of the terrific success they achieved this last season. Meaning that someone, somewhere, within the ranks of the employed have done a very shrewd job of player selection, training and motivation.

When you see the situations at Sevco, Hearts, The pars, Killie, etc... it is very reassuring that we are run by sensible people who are not risking the long term future of our club.

And it's even more credit to Terry & Mo performing so well under the tightest financial restrictions of all SPL clubs.

 

I'm always proud to be an ICT fan but things like this make me even more proud.

I feckin wish that somebody at ICT could show my feckin wife how to achieve this.

When you see the situations at Sevco, Hearts, The pars, Killie, etc... it is very reassuring that we are run by sensible people who are not risking the long term future of our club.

And it's even more credit to Terry & Mo performing so well under the tightest financial restrictions of all SPL clubs.

 

I'm always proud to be an ICT fan but things like this make me even more proud.

I was thinking much the same thing looking at the situations with Hearts and Killie, the temptation to splash the cash for a little bit more success, can be very seductive, especially for fans who aren't actually finding the money.... my other club 'Palace, have twice gone into administration, just hours away from total wipeout last time, thats when being a supporter becomes really emotional, now that we have go promoted to the EPL (hurrah!) there are a few fans with short memories who want the owners to spend every last penny of the TV money we get, even before we have got it. So well done Caley, looks like a well run club.

Edited June 14, 201312 yr by Eagle4Caley

We may well have a low wage to turnover ratio but to say we are the most cost effective is maybe not the case. Yes we try to operate within our budget but we have had to depend on loans the last few seasons to meet those budgets. We dont own our stadium so pay rent for what we will never own.

 

As a business football is never going to be cost effective. There is no profit. There is no return for the shareholder and more often than not expenditure exceeds income so a reliance on benevolence becomes the norm. What do I mean by that? Clubs like ours cannot generate income to cover their expenditure so they need the commitment and generosity of many people to subsidise this. Player sponsorship being a prime example. Shrewd business acumen yes. Cost effective no.

Im happy with that, club accoutants must be working overtime to find the best equation for success, it at least means we keep our future as a club secure, something which most clubs seem to take for granted in the SPL.

We may well have a low wage to turnover ratio but to say we are the most cost effective is maybe not the case. Yes we try to operate within our budget but we have had to depend on loans the last few seasons to meet those budgets. We dont own our stadium so pay rent for what we will never own.

 

As a business football is never going to be cost effective. There is no profit. There is no return for the shareholder and more often than not expenditure exceeds income so a reliance on benevolence becomes the norm. What do I mean by that? Clubs like ours cannot generate income to cover their expenditure so they need the commitment and generosity of many people to subsidise this. Player sponsorship being a prime example. Shrewd business acumen yes. Cost effective no.

Not sure you're being fair there Alex. I agree with your points regarding SPL football at large not being generally a viable business venture but - within the context of those businesses within the SPL - we are performing well (or at least were in the 11/12 season referred to in the article).

Most, if not all clubs, rely on or benefit from player sponsorship and generous benefactors. Against that comparative backdrop we are doing pretty well.

As a business football is never going to be cost effective. There is no profit.

While this might be true for most clubs, there are a few examples the other way, most prominently Bayern Munich who created a profit in double figures, million Euros wise. Even if their main sponsors dropped out, they would still be in black figures.

Edited June 16, 201312 yr by Rainbow

We may well have a low wage to turnover ratio but to say we are the most cost effective is maybe not the case. Yes we try to operate within our budget but we have had to depend on loans the last few seasons to meet those budgets. We dont own our stadium so pay rent for what we will never own.

 

As a business football is never going to be cost effective. There is no profit. There is no return for the shareholder and more often than not expenditure exceeds income so a reliance on benevolence becomes the norm. What do I mean by that? Clubs like ours cannot generate income to cover their expenditure so they need the commitment and generosity of many people to subsidise this. Player sponsorship being a prime example. Shrewd business acumen yes. Cost effective no.

 

More than a little unfair.  ICT have ZERO debt and any loans in recent years have been provided to assist with cash flow, not to fill gaps between income and expenditure.  Monies over and above that have been invested and contributors have received shares and/or services in return....much the same as happens in any business.  Whilst football doesn't generally offer any return by way of dividend payments, it does offer a higher degree of community "good will" than you would get in just about any other (for profit) industry I can think of and that in itself holds value.

 

Many other clubs would be satisfied with that situation...i.e. they can balance the books at the end of each financial year...however ICT don't appear to have settled for that. Terry Butcher had the playing budget reduced by £300k last season.  Based on the PWC figures and our turnover then that would equate to somewhere between 20% & 25% of his previous budget.  The sum is also slightly more than the £250k (ish) additional investment that was required annually to balance the books.

 

This would look like a major step towards the clubs desire to replace the £1 Million (or there abouts) we had in the bank prior to being relegated.  It's also very prudent when we don't yet know exactly what the situation is in regards league income for the upcoming season.  If we can continue to secure investment year on year then that speeds up the process of putting money back in the bank, if not then there should still be enough room for the club to have an excess to allow it to happen anyway and/or to absorb any reduced league income (should that occur) without the need for any further drastic cuts.

 

Not owning the stadium and having sold other assets is unfortunate and not a situation I like/d or a course of action I ever agreed with...but it is what it is.  I don't know if we'll ever own our stadium again or not, but I do know that it's far more likely to happen with the club being run as it is now than it ever has been.

I wonder how important Inverness Caley Thistle is to the wider economy? How much has the city of Inverness and surrounding areas benefited from the team's existence? Certainly, since the Sun's headline to the long SPL stay, it has done well for the name Inverness. Think of the impetus to have 'Inverness' in the title. HIE and VisitInverness etc. wouldn't admit it, but I bet ICT does more for the national awareness of the city than all their work put together.

Such a value, unfortunately, has no financial rewards for the club. However, I think if the club is debt free, and sustainable, then all to the good. My only worry is that the debacle of other clubs may harm SPL income in the future, and ICT's as a result, and that is the only real worry I have.