Some of us need to refocus on the BIGGER picture

Discussion in 'Bulletin Board' started by Young Nudger, Dec 12, 2017.

  1. Red

    Red Rain Well-Known Member

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    If a rich owner has say £100m on deposit at a bank, he is earning £5m a year on that sum. If he invests the same £100m in a football club, he is earning nothing. The football club is re-investing all its earning in wages and transfer fees, so there is no way that it can repay the sum invested or indeed the interest on that investment that is lost. So even if you are correct, and no further investment is required by the owner, he is still £100m out of pocket plus £5m per year in lost interest. For a rich man who loves his football club, or a rich man who wants a toy, or even a rich man who wants to die much poorer, there is no problem. For a rich man who regards football as a business opportunity, there are a few holes in the business plan. There is every chance that even in the Premier League, a club will have to reinvest every penny it owns back into the business in order to guarantee that it stays in the Premier League. (By the way, I disagree. There is no guarantee that a club like the two quoted can remain in the Premier League.) There is no chance of loan repayments, loan interest or any other return on the investment unless the club can be sold. In which case the owner has to hope to sell the club for a sum greater than the sum invested and the accrued interest that he has missed out on. This is why I do not see a Football Club as a business opportunity, but I look forward to reading a counter argument.
     
  2. Cam

    Cambridge Red Well-Known Member

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    You mean like Sunderland Hull Boro ..... Leeds, Birmingham, Bolton, Wigan ... etc etc etc
     
  3. Cam

    Cambridge Red Well-Known Member

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    Agreed. The only owners I'm aware of who cashed in for being in the Prem are the Oysters[?] at Blackpool. I think we all know how that turned out for the club
     
  4. Hud

    Huddersfield Red Well-Known Member

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    Dean Hoyle Huddersfield, promotion doubled his investment in the club, a sale while in the premier league would make a significant profit as I understand.
     
  5. Con

    Conan Troutman Well-Known Member

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    First three examples don't really work.

    Leeds were relegated before the megabucks came into the came and at the time they were in the Premiership their ambition and business plan was totally different to Bournemouth, Burnley, Swansea, Watford et al.

    You do seem to think that Patrick Cryne ..... .. .. ..... because he failed to do his due diligence when he bought the club or sold his business so I'm not sure what that tells us.
     
  6. Ext

    Extremely Northern Well-Known Member

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  7. Con

    Conan Troutman Well-Known Member

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    Bit of artistic license in that post RR. Your £100m figure is completely arbitrary. Have the owners of Swansea, Burnley, Bournemouth, Hull, Huddersfield, Watford, Brighton all spent £100m out of their own pocket? I don't know. Nor do you. I severely doubt it though.

    You also assume that they see it as a business proposition. The Glazers obviously do and it's worked for them. Abramovic and the owners of Man City obviously don't. I would presume that those wanting to make a profit have been relatively frugal i.e Burnley while others may see it as a vanity project and blow the lot. You don't know the motivation.

    I'm not sure where I guaranteed that any club could stay in the Premiership?
     
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  8. Young Nudger

    Young Nudger Well-Known Member

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    No that's totally wrong.
    Most owners don't want to see a return on their investment into football.
    People with money do NOT get involved in football to make more money.
    People with money get involved in football because they want to be part of the game.
     
  9. Red

    Red Rain Well-Known Member

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    The problem is that you believe one thing one day and something else the next. You refuse to be tied down to any set of beliefs in case anyone remembers and quotes it later. You ask plenty of questions, but you give very few answers.... and then there are the weasel words that allow you to escape being cornered. The plausible deniability that keeps all politician out of hot water. So rather than asking me what I believe, I would like to know what you believe. I promise not to hold any of it against you, but it would be nice if I knew what was important to you, what statements of opinion you are prepared to defend.

    My first question is a biggie. How can Barnsley FC ever be promoted to the Premier League and how much will it cost?
     
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  10. Con

    Conan Troutman Well-Known Member

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    I'm disappointed in you. I thought your posts were always based on logic. There appears to be quite a degree of emotion in that post. Most unbecoming. You know what I believe. I have said on many occasions that what we need an owner richer than Patrick Cryne and I would think that would be obvious to anyone. It is my hope that one day we get one.

    As to how much it will cost - I don't know. Neither do you. In theory it should cost less for a better manager to assemble a squad capable of promotion but there are no definites. I would imagine that Newcastle and Brighton spent significantly more than Huddersfield last season but the end result was the same.

    Speaking of behaving like a politician, you have not responded to any of the points I raised. Where has your figure of £100m come from? Do you think the Burnley chairman (whoever he may be) has spent £100m from his own pocket and you think he has no long term plan in place?

    You don't appear to like being challenged and you see it as almost disrespectful. If so, what's the point of posting on an open forum? Just pm your views to your acolyte m'Lord, and he can tell you how correct you are. Over to you.
     
    Last edited: Dec 12, 2017
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  11. Ex Bournemouth Red

    Ex Bournemouth Red Active Member

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    At Bournemouth Max Demin bought the club in Div 1. He then bankrolled the club to 2 promotions to the prem incurring total losses of approx £53m (as a loan).

    After promotion to the Prem he sold 25% to an American investment group. No doubt he recouped a substantial amount as I guess the share price was higher in the Prem then when he bought the club in Div 1 (I imagine the debt would have been factored into the share price, without the debt the share price would be higher). Demins' loan is from one of his other companies, his 75% share holding is in a family trust.

    Now there are two owners, and the big debt is to a 3rd company i'd be surprised if there aren't repayments each year on the loan - why with two owners would he risk losing the loan of £53m and the amount he invested when purchasing the club, when the second owner would only lose the amount the paid for their shares if it went tits up?

    Also, he can't just ask for what he sees fit when he comes to sell now (in your example hoping to recoup initial investment plus lost interest) as the investors with the other 25% wouldn't want their shares being under or over valued, so he'd only get a fair market price.

    Is this a shrewd move in order to get what he's put in back?
     
  12. Red

    Red Rain Well-Known Member

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    Sorry, I will clarify. How much will it cost to get Barnsley promoted. How much spare cash does your multi-millionaire need to have. If we are shopping at the multi-millionaire shop, surely we need to know which one we should chose. Mr Cryne reputedly had £50m and has spent about £10m since 2002, but that has only got us to the foot of the Championship. How many of our current first team squad of 23 are good enough to get us into the Premier League. Surely, it is simply a matter of recruiting the difference between that number and the number you think we need multiplying by an average transfer fee and adding 50% per year for wages.

    Then when we get promoted, we need to start again with players who can keep us in the Premier League. My guess for the total sum required is £100m, and based upon the percentage of his wealth that Mr Cryne has invested, that means we are looking for someone with £500m. All I want to know is what your *** packet figures are so that we can begin our search for a suitable new owner.
     
  13. Con

    Conan Troutman Well-Known Member

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    So your "guess" is £100m? Is that to get there and stay there? Does that include the £100m per season for being in the Premiership plus the increased commercial activity or not? Not sure how you think it's acceptable to come up with this and ask me for my "*** packet figures"? You've not answered my question about the Burnley chairman either.
     
  14. Red

    Red Rain Well-Known Member

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    I tried to look at the Bournemouth accounts earlier at Companies House, but frustratingly I could not find them, so I have not had chance to verify your points. However, assuming that you have given a true account of the current state of play, I will make a few comments.

    The loan will appear as a credit in the Balance Sheet. It seems likely that the P&L account will be heavily in debit as a result of the losses over the years. The value of goodwill is not recorded on Balance Sheets, other than the difference between assets,liabilities and an amount paid when one company purchase another. The transfer fees paid for players is written off over the term of their contract, so there is usually an asset recorded for the amount not yet written off. Players who have not been signed for a transfer fee, but who are under contract and players whose value is higher than was originally paid do not appear on a Balance Sheet. All that was to explain a couple of the reasons that the true value of a company is often higher than the Balance sheet figures would indicate.

    The loan is separate to the value of the shares and would be treated as a separate transaction in the event of a sale. A purchaser would purchase the company first. The company valuation would include the loan and would consequently be affected by that huge creditor. The valuation of each share, no matter whose hands they are in, would be equal. Having taken over the company, the new owners would fund repayment of the loan to the associated company.

    As an aside, I am not sure whether the loan would represent the whole of the investment by the Bournemouth owner. Do not forget Financial Fair Play. During our promotion season, Barnsley would have broken the FFP rules except that Mr Cryne made a donation of about £500k to reduce our losses that year. We cheated, but I am grateful to Mr Cryne that we did.
     
  15. Red

    Red Rain Well-Known Member

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    I do not have the answer to your question about the Burnley chairman. Sorry!

    I am asking for your opinion. Why are you so unwilling to give an opinion? I gave you mine and you have repeatedly dismissed it without countering it with your own. It is usual in a debate for one opinion to be countered by another. That is how debating works, particularly when neither of us knows the true costs. Don't worry. I know why you do not want to give an opinion. Let's just leave it there.
     
  16. Con

    Conan Troutman Well-Known Member

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    I have said I don't know how much it would cost and neither do you. Earlier you were giving a figure of £100m as if it was a fact and I disputed it. I think a good manager like Paul Heckingbottom could achieve it with a generous budget. I don't think Simon Davey could achieve it with a bottomless pit.
     
  17. Red

    Red Rain Well-Known Member

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    Right from the start I wrote "say £100m". This was to indicate that this was my guess. So what would be your guess, your calculation done on the back of the *** packet, based on Hecky being our manager and based upon the formula that I gave. You can break the sum down between getting to the Premier League and staying in the Premier League if you wish, but I really think you should give some sort of estimate, for sake of credibility.
     
  18. Ex Bournemouth Red

    Ex Bournemouth Red Active Member

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    Maybe if it's an individual, but if it's an investment group or consortium why would people put money in to take a back seat and not want to make a return? They could just put that money in a bank and earn interest.
     
  19. Ex Bournemouth Red

    Ex Bournemouth Red Active Member

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    Thanks for the reply, although don't 100% understand it all.

    The figures come from these - not sure how accurate they are.

    I also notice the Guardian one shows interest payable of £1.7m - would this be per annum on the loan?


    https://www.insidermedia.com/inside...veal-afc-bournemouths-premier-league-windfall

    https://www.google.co.uk/amp/s/amp....7/jun/01/premier-league-finances-club-by-club
     
  20. orsenkaht

    orsenkaht Well-Known Member

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    A very simple thought here. For us, the Championship as it now exists IS the Premier League.

    The difference between this league and League One is huge. I would be more than happy if we could manage to comfortably stay in the Championship for the medium term, and to see games like Derby, QPR and Leeds (last season) and Forest, Sunderland and Middlesbrough (this season) is plenty entertaining enough. That's not to say we wouldn't take Premier League promotion if it fell our way, but comfortable survival in this more demanding league has to be our goal. But I'm far from convinced we've arrived at that state just yet. As the next transfer window is now just over a fortnight away and nothing has been heard, I think our safest assumption as fans is that the takeover is off. The club's owners never really wanted to make the discussions public anyway, until the Daily Blackshirt intervened. So we are back to the conundrum that we are basically underfunded in terms of ensuring Championship survival unless we drop lucky and happen upon a squad with a Hourihane, Mawson, Roberts, Scowen and Winnall in it. That is likely to prove the exception rather than the rule.
     

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