Investment

Interesting read this - some valid points.

I would suggest that the money from sales was probably taken out of the club by PC before he passed on - to compensate for the money he'd put in over the years, as no doubt he's made a loss running the club from when he took over -and secure the future of his family.

This isn't a crime but it would be nice to know for certain, as at the minute there's north of 20 million from the last 4 or 5 years that is unaccounted for - as Jay and others mention.

I doubt we ever will find this out though, which obviously irks some people more than others - but to jump down someone's throat for questioning where the money is comes across as a little defensive.

 

Agreed move on and take our club to the next level

 

This post was not intended to look back , but to look forward

 

Normally that’s correct, bank balance is an asset and therefore directly affects the value of the company.

 

Interesting thread. For what it’s worth my understanding of the situation is that at the point of sale the companies valuation would have taken into account the full assets including cash in bank, debts, future creditors and debtors.

The full value of players being sold over recent years would usually be staggered over a number of years, but for the valuation of the football club that player as an asset also no longer exists, which contributes to the valuation of the club. Although that is based on contract value and duration, and the initial outlay, rather than the market considered valuation.

The new owners purchased the club at a price they were happy with, and Patrick was happy to sell at. I’m not sure we’ll ever know the full breakdown of that deal. But the valuation of the club will have taken into account the full balance sheet at point of sale. Cash from player sales treated in the same way as future debtors for those sales, debtors and creditors. Perhaps the simplest element of valuation of the club would have been cash at hand. That either comes off or is added on to the valuation depending on its value.

What I’m looking forward to is seeing how the new owners can invest more into the playing squad rather than reliance on player sales just to cover the significant costs of running the club. For a number of seasons we would lose £4-£5m and needed the sale of players just to plug those losses. Now, hopefully, we can see any player sales being fully reinvested into the squad.

 

The most we've ever got to know about the finances of the club is from John Dennis and that was years later when he wanted to sell his book.

 

I've been involved in a few business sales/disposals, and occook is accurate in terms of business valuation and how a deal might be agreed. A lot goes into a valuation, and its not always just financial. Typically, as someone else mentioned, cash is commonly taken out of the company being sold if its tax efficient to do so. Seeing as Patrick made several loans down the years, freed up capital numerous times and had shored up the balance sheet neutralising many millions in historic losses, he/ his family, could extract money pretty easily without it being taxed, so offsetting/ being reimbursed for old losses. The net effect in the accounts wouldn't be impacted either. A loan to director (if that's how it was stated) satisfied by cash in bank. The net effect of paying that loan back is nil in terms of valuing the business and the net assets the business holds.

The buyer, if they wished to extract that cash from the business post acquisition, would be taxed on it. We've not heard what the owners wish to do. If we're a cash cow for regular milking, or if they have a wider aim that involves success. It may be as some owners have done, that they wish to have a loss making entity to net off losses from other holdings and mitigate tax. We just don't know.

I think its natural for people to ask what has happened to significant transfer fees over the last few years, but not all those fees will have been received yet, and we don't know the exact amounts in, or the exact amounts out. It wouldn't surprise me if we've spent a lot more than we initially think on players, and we did pay off quite a number of players too. You've also got significant fees for loans now too that PL clubs can apply.

But at the end of the day, soulless as it may seem, unless you're a shareholder of the company that owns the club (and I think having looked a while ago, it seems the investment vehicle is offshore (think it was Singapore stock market), you're not entitled to know what happened to any money.

As fans I can understand feeling like we have greater privilege to know whats happening behind the scenes than a supermarket customer buying beans, wanting to know detailed information that's not publicly reported at Tesco. But we aren't. That's just the way it is.

 

But any liability to the selling party would also affect the value of the company and, as I understand it, would generally be settled prior to sale.

 

Thanks for this, helped explain a few things.

I understand the Tesco analogy and appreciate this didn't come from you but for the vast majority of us we couldn't care less what happened to a supermarket if they were to meet financial difficulty, whereas the club is seen as belonging more to the town than the owners themselves, them merely being temporary custodians. I think fans have a right to know what happens to their investment (buying season tickets etc.) for this very reason.

 

True and even then it's years after the events. I don't think the club will reveal the same details for the period in question as candidly as we would desire.

 

It's actually not our club and never has been. It's the club we choose to support.
If you don't like the way it's being run either buy it yourself or withdraw your support if you feel that strongly about it.

 

I think you're missing my point. My point was that as supporters we are allowed to DISCUSS these things

 

Of course fans are stakeholders. And in a sense it's our club. If nobody turned up, then there'd be no club.

 

As I said. You have the ultimate sanction. Stop going. It still doesnt make it your club. You can twist it any way you like, it doesn't alter the basic fact.

 

Very, very much agree on this.

I hope Patrick's family were repaid by him saving the club. That is at least fair.

I can see the club is turning itself around already in terms of really good PR.

Transparant info would be great too. They may already be moving towards this.

I'm not totally in thrall to the new owners yet, as a lot needs to be done at the club. Ticket sales reflect my view, that something exciting is happening. We may go up this year, but could also be next. They really seem to be moving is forward in terms of community stuff & PR in general

 

Well it is my club, but then again "my" does cover a multitude of interpretations. Like "our" club does. If you're asked "which is your club?" in the pub you are unlikely to say "I haven't got one - it's owned by a wealthy conglomerate".

You seem to think, and quite rightly, that ownership makes it someone else's club.

But "stakeholder" seems to me to be a definition door that can be pushed open when it comes to a football club (and in particular when you're a season ticket holder).

The owners want you to be a "stakeholder". A positive one. Many sources of revenue. Your fellow fans even have the ability at the end of the day to make or break the senior staff, even the owner, by expressing discord at matches.

That's enough of a stake for me to hold.

 

It's not been enough to shift Ashley out of Newcastle, the Oystons out of Blackpool, Sisu out of Coventry or Venkys out of Blackburn.
Football fans can have a lot of power but until they choose to unite nationally and wield it nothing will change.
In the meantime stakeholder means little. You may as well by a jumper in M&S then demand to go up to the CEO's office and then demand to rummage through the filing cabinets.

 

Well if you'd be happy with 5 shares in Lloyds Banking Group, calling yourself a stakeholder, and thinking you can change the structure of the board because you can call yourself a stakeholder, then fair enough. Your power is less than the average BFC season ticket holder.

Who has the greatest stake - you with your 5 shares or someone who forks out annually, and avidly, to watch the reds? (OK - I wasn't avid after Saturday's "woeful" show).

As for "unite nationally" - what that means I have no idea.

Though I would like an American football approach to recruitment.

 

It has to be right on the park ,that’s what brings the fans in , although I agree there is a balance to be achieved with facilities