Debt is a common issue in football but the leveraged buyout of Manchester Utd was an absolute disgrace - the Glazers purchased the club, entirely legally, with a combination of equity and debt, using the cash flow of the club as the collateral to secure the debt. This took the club from a profitable position to being (as Thad points out) substantial indebtedness. Using debt to purchase assets is usually cheaper than purchasing outright.
Managed debt within football clubs is very common and as long as the debt is managed then it doesn't normally cause problems. Much of the debt in football is vested in directors' "soft" loans - a common version is to "loan" the capital and allow the club to invest the interest - with the understanding that the loans will be translated to equity in the club. While the loans have to appear as a liability against the club, in most cases these loans will not be called in.
It only becomes a potential problem if a director wants their money back.
As the old saying goes, how do you make a small fortune out of a football club? - start with a large fortune.
I guess the issue then becomes - HKP might be interested in this comment - that busy-body interfering stirrers (guilty as charged) then end up - fairly or unfairly - treating benign/irresponsible owners, with the same degree of cynical wariness.
I went through the details of the CVA with Begbies & you could drive a horse & coaches through it. I queried all the debt related to the Majeeds new year bash, which was never a club event (in fact the club could have charged a venue hire fee). There were nebulous personal loans, supposedly to pay creditors, but then I asked, how come they had not been paid...?
The system at that point was weighted in favour of the crooks. However the FA & EFL claim it has all changed since... I am really not convinced...!
The last two posts actually highlight the thorny issue, namely...
...the blurred line between an individuals expenditure choices, for how they elect to spend - prudently or recklessly - their own personal disposable wealth...
...and the club discovering that it has suddenly acquired a large financial liability...!
ie. At what point does a 'gift' become a 'loan'...?
Maybe at the point the administrator tries to claw back the money from one entity to the one that it was taken from? Not wishing to lessen financial misdeeds in football but I wish people would get as exercised about some of the real big time crooks and swindlers over the last many years, namely high level bank executives (and as a personal dislike insurance company bosses) who overall seem immune to anything close to the abuse and punishment that their recklessness (and downright criminal acitivities?) deserves, something which affects us all a lot more than lower league "dodgy" football owners - but I guess that is another matter for a different platform and they have friends in high places!!!
Believe me Mick, i could do without the grief... but feel strongly that fans have to let owners know that they are being watched, cos we have all experienced what happens when no-one is looking...
...and you are right, City Bankers get paid huge salaries & bonuses for managing risks, then when it all goes pop, the public purse bails them out... what risk? The Chancellor should have asked them all for the deeds to their properties, before handing over a penny of our money.
Believe me Mick, i could do without the grief... but feel strongly that fans have to let owners know that they are being watched, cos we all know what happens when no-one is looking...
...and you are right, City Bankers get paid huge salaries for managing risks, then when it all goes pop, the public purse bail them out... what risk? The Chancellor should have asked them all for the deeds to their properties, before handing over a penny of our money.
Not saying there shouldn't be sensible scrutiny Thad but a bit of proportion from some (generally on twitter) wouldn't go amiss, slating an owner who puts in a few million but lives abroad and doesn't attend every week would be one piece of nonsense, often spouted by "fans" who are withholding their ticket money!!!
Not sure if you have seen The Big Short but a line near the end when Ryan Gosling jokingly tells us how many financial crooks (sorry, bankers) went to jail over this massive fraud (one I think and for something relatively minor) I thought was quite telling. Agree with your last sentence but rather than being the higher you are the more you should lose, it is the exact opposite!?
With this and some of our past ownership questions being dredged up in the Evans thread, the question I ask is why would anybody want to "invest" in a lower league club unless they had a personal attachment (such as Bruce W)? Constant scrutiny of how you spend many thousands of your own money, microscopic analysis of past failings, ridiculous condemnation if you choose to "just" throw in huge sums of money without actually watching the results week in week out - why do they bother, has anybody made any money from such an investment?
Why would anyone want to "invest"? Well in most cases it isn't an investment, the money goes in as a donation. In some cases there may be tax breaks involved in doing it too. And why - well frequently those involved like the buzz, or even the ego trip, of doing it. Football has always been full of big characters, however the likes of Mike Ashley are not in it because he has supported Newcastle since he was a nipper and wants to give something back.
Why is there scrutiny and why do questions get asked? Because we all know that in many cases the money man gets bored and the ride stops abruptly. I would have thought any long term supporter of Crawley would have known that with 2 administrations in recent times, however ask supporters of Telford, Hornchurch, Rushden, Aldershot, Farnborough and even Lewes. With hindsight most of them would tell you they wish they had asked the questions at the time rather than after the shit hit the fan.
In my view if you make big claims (for example being football people, having a successful background in Turkish football, "this side will compete, quote me on that" etc) you should be willing to provide the explanations when such comments are exposed as nonsense. When you boast of having increased playing budgets by 87% and providing a top 10 budget, then people will always ask questions when the results don't stand up. And when you have people at the club who are clearly involved in its management then why would you expect not to comply with the FL rules on owner and director tests.
I would never condemn (as you put it) anyone who puts in £1m a year of their own money, however my gut feel is there is something not quite right at present. If heaven forbid we encountered more financial problems I would rather have asked the questions at the time than sat meekly by and kept schtum.
Post by townmeadleftover on Feb 28, 2019 8:37:01 GMT
Paragon Interiors are now officially in administration, Hardy is still insisting that it will have no effect on NCFC and that he expects an offer from an 'oversea consortium' this week (again) and that this will all have 'no effect' on NCFC, I have no knowledge of the ins and outs of administration but I'd be extremely surprised if 'no effect' is anywhere near reality
Timing is getting crucial, as things stand the club have given themselves an outside chance for survival, but any points deduction for entering administration would almost certainly be a setback too far...
...would anyone want to take over a club in that position, even if there was no fee involved...?
With this and some of our past ownership questions being dredged up in the Evans thread, the question I ask is why would anybody want to "invest" in a lower league club unless they had a personal attachment (such as Bruce W)? Constant scrutiny of how you spend many thousands of your own money, microscopic analysis of past failings, ridiculous condemnation if you choose to "just" throw in huge sums of money without actually watching the results week in week out - why do they bother, has anybody made any money from such an investment?
Why would anyone want to "invest"? Well in most cases it isn't an investment, the money goes in as a donation. In some cases there may be tax breaks involved in doing it too. And why - well frequently those involved like the buzz, or even the ego trip, of doing it. Football has always been full of big characters, however the likes of Mike Ashley are not in it because he has supported Newcastle since he was a nipper and wants to give something back.
Why is there scrutiny and why do questions get asked? Because we all know that in many cases the money man gets bored and the ride stops abruptly. I would have thought any long term supporter of Crawley would have known that with 2 administrations in recent times, however ask supporters of Telford, Hornchurch, Rushden, Aldershot, Farnborough and even Lewes. With hindsight most of them would tell you they wish they had asked the questions at the time rather than after the shit hit the fan.
In my view if you make big claims (for example being football people, having a successful background in Turkish football, "this side will compete, quote me on that" etc) you should be willing to provide the explanations when such comments are exposed as nonsense. When you boast of having increased playing budgets by 87% and providing a top 10 budget, then people will always ask questions when the results don't stand up. And when you have people at the club who are clearly involved in its management then why would you expect not to comply with the FL rules on owner and director tests.
I would never condemn (as you put it) anyone who puts in £1m a year of their own money, however my gut feel is there is something not quite right at present. If heaven forbid we encountered more financial problems I would rather have asked the questions at the time than sat meekly by and kept schtum.
My question of why "invest" was pretty much a rhetorical question as there isn't really a logical or sensible reason I can see unless like Bruce W you have a historic affiliation to that club. Or maybe you have the answer with your mysterious "something not quite right" line at the end of your post? As for the rest of your post that is pretty much why I said "sensible scrutiny" in my full post (which despite you seeming to take this personally was more targeted at some of the crap coming from some mainly on twitter who will not even stump up an admission fee) rather than a lot that isn't fair, informed or often correct and deflects attention away from legitimate and valid questions on the running of the club!? Not sure the quotes on budget are really boasts, they are often announced more as a riposte to often ill informed comments about no investment etc. Why this budget isn't actually giving us top ten football is more a football question and if people knew the answer to why you don't always get what you pay for in football then they would all be working on that?
Why would anyone want to "invest"? Well in most cases it isn't an investment, the money goes in as a donation. In some cases there may be tax breaks involved in doing it too. And why - well frequently those involved like the buzz, or even the ego trip, of doing it. Football has always been full of big characters, however the likes of Mike Ashley are not in it because he has supported Newcastle since he was a nipper and wants to give something back.
Why is there scrutiny and why do questions get asked? Because we all know that in many cases the money man gets bored and the ride stops abruptly. I would have thought any long term supporter of Crawley would have known that with 2 administrations in recent times, however ask supporters of Telford, Hornchurch, Rushden, Aldershot, Farnborough and even Lewes. With hindsight most of them would tell you they wish they had asked the questions at the time rather than after the shit hit the fan.
In my view if you make big claims (for example being football people, having a successful background in Turkish football, "this side will compete, quote me on that" etc) you should be willing to provide the explanations when such comments are exposed as nonsense. When you boast of having increased playing budgets by 87% and providing a top 10 budget, then people will always ask questions when the results don't stand up. And when you have people at the club who are clearly involved in its management then why would you expect not to comply with the FL rules on owner and director tests.
I would never condemn (as you put it) anyone who puts in £1m a year of their own money, however my gut feel is there is something not quite right at present. If heaven forbid we encountered more financial problems I would rather have asked the questions at the time than sat meekly by and kept schtum.
My question of why "invest" was pretty much a rhetorical question as there isn't really a logical or sensible reason I can see unless like Bruce W you have a historic affiliation to that club. Or maybe you have the answer with your mysterious "something not quite right" line at the end of your post? As for the rest of your post that is pretty much why I said "sensible scrutiny" in my full post (which despite you seeming to take this personally was more targeted at some of the crap coming from some mainly on twitter who will not even stump up an admission fee) rather than a lot that isn't fair, informed or often correct and deflects attention away from legitimate and valid questions on the running of the club!? Not sure the quotes on budget are really boasts, they are often announced more as a riposte to often ill informed comments about no investment etc. Why this budget isn't actually giving us top ten football is more a football question and if people knew the answer to why you don't always get what you pay for in football then they would all be working on that?
Don't worry, it wasn't taken personally. All in the spirit of debate.
As far as "something not quite right" is concerned I suppose the coming days and weeks will tell, however my guess is that having worked out how much it costs just to stand still (or in fact go marginally backwards) Eren is not really in it for the long term.
My question of why "invest" was pretty much a rhetorical question as there isn't really a logical or sensible reason I can see unless like Bruce W you have a historic affiliation to that club. Or maybe you have the answer with your mysterious "something not quite right" line at the end of your post? As for the rest of your post that is pretty much why I said "sensible scrutiny" in my full post (which despite you seeming to take this personally was more targeted at some of the crap coming from some mainly on twitter who will not even stump up an admission fee) rather than a lot that isn't fair, informed or often correct and deflects attention away from legitimate and valid questions on the running of the club!? Not sure the quotes on budget are really boasts, they are often announced more as a riposte to often ill informed comments about no investment etc. Why this budget isn't actually giving us top ten football is more a football question and if people knew the answer to why you don't always get what you pay for in football then they would all be working on that?
Don't worry, it wasn't taken personally. All in the spirit of debate.
As far as "something not quite right" is concerned I suppose the coming days and weeks will tell, however my guess is that having worked out how much it costs just to stand still (or in fact go marginally backwards) Eren is not really in it for the long term.
It's the easiest thing in the world to find fault or have doubts...eventually you will be proven right if you doubt enough things and then our exitInce in your dark cold gloomy shell will appear to be justified...mean while I prefer to be a little more optimistic and support the team I watch as often as I can...😀😀
Don't worry, it wasn't taken personally. All in the spirit of debate.
As far as "something not quite right" is concerned I suppose the coming days and weeks will tell, however my guess is that having worked out how much it costs just to stand still (or in fact go marginally backwards) Eren is not really in it for the long term.
It's the easiest thing in the world to find fault or have doubts...eventually you will be proven right if you doubt enough things and then our exitInce in your dark cold gloomy shell will appear to be justified...mean while I prefer to be a little more optimistic and support the team I watch as often as I can...😀😀
Shame Stephen. You always come on here telling us how wonderful it all is, but having challenged us all to turn up at the fans forum to introduce ourselves and speak openly you personally missed your big opportunity to congratulate the panel on the job they are doing and then headed off at the end like Usain Bolt.
Nothing like hiding behind you keyboard, then suffering a bit of laryngitis on the big day.