The Long Term Under Johnno

Discussion in 'Bulletin Board ARCHIVE' started by Conan Troutman, Dec 6, 2015.

  1. Red

    Red Rain Well-Known Member

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    I don't particularly want to get into debating every detail, because the further we get dragged into the minutiae of our current situation, the more our discussion will get bogged down in it. Nevertheless, I would like to defend Johnsons use of different systems earlier in the season, if only because you have cited my "Minority Reports" in support of your position.

    Just because I defend Johnson, it does not mean that I do not see faults in his teams and his selections. I do, but then again, it is much easier to find fault than it is to be original, especially when the team has lost, or even won, like on two occasions that I have found fault and got rubbished for it. My overall point in these contributions was that the team was short of 4 players, no matter what system the manager played. Unlike many, I am not wedded to any particular system. The system that a manager deploys should depend on the players' individual strengths and weaknesses, rather than selecting a system and finding players who can play it. You are right to say that the manager had problems finding a system that suited the majority of his players in the first third of the season. However, I do not agree that he was searching for a solution when an ideal format was right in front of his nose. As well as identifying square pegs in round holes, my reports also identified that we were 4 players short, what ever system we played, and that this was down to a failure to find the right players during the summer transfer window.

    We now seem to have agreed upon the 4-4-2 system, but it is working primarily because we recruited Adam Hammill. I will make no secret of the fact that I did not think that Hourihane could play in a two player central midfield, and I have said so on numerous occasions. His recent performances have been an eye opener, but they come from an improvement in his defensive alignment, that was not there previously. Now I credit Johnson for this improvement in Hourihane's play, because I saw that it was not there before. Those who give Johnson no credit must have seen something that I did not see. I also forecast, based upon his influence when on loan from Fulham, that Williams will be a big factor in the second half of our season. The space that Williams and Hammill have the potential to create for Hourihane and Pearson/Scowen is something that I am personally looking forward to seeing. There is no doubt that we need two or three more before we have a team that can win promotion, but I am encouraged by what I have seen recently.
     
  2. Con

    Conan Troutman Well-Known Member

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    Ah thanks.
     
  3. Con

    Conan Troutman Well-Known Member

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    I actually agree with all of this.
     
  4. Ors

    Orsen Kaht Guest

    But Cryne owns 50% of the land, and therefore has some say in the usage of it. A purchaser of the (football) club would own 0% and would presumably rent/occupy Oakwell at the pleasure of Cryne/BMBC. Not an attractive scenario to a businessman/consortium, I'd have thought? Fair to say that both seemingly have a benevolent view at the moment, but PC may be disenchanted to be contempalting selling the club, and how do declining local authority revenues affect what view BMBC takes of it's stake?
     
  5. Red

    Red Rain Well-Known Member

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    Being 50/50 owners means that neither can do anything without the others consent. They currently charge rent for using the ground, but the amount seems to change depending on the division the club is currently playing in, and is merely representative of the interest on the capital that they put up to buy the land and buildings from the Administrator in the first place. They are both benevolent owners and neither has any reason to change their current position.

    Any businessman/consortium that decided to buy the football club would enter into a long term rental agreement with the owners of the ground to ensure security of tenure before they went ahead with the purchase of the football club. As I understand the agreement, one party can only sell their stake with the other party's consent, and this is unlikely to happen if a sale was contemplated to an individual or company that was deemed to be unfit by the other party.

    I repeat my belief that this arrangement is good for the long term security of the football club, and is much better than trusting to luck that a future buyer of the land has the best interests of the club at heart.
     
  6. Ors

    Orsen Kaht Guest

    Now this does raise some interesting (but technical, and probably ultimately, irrelevant) questions!

    As I understand the law relating to registered land, the statement you make about not being able to do anything with the land without the co-owner's consent would apply only if the land is held by way of a 'joint tenancy'. That would be interesting, because if that were the case, on Mr Cryne's demise, the surviving joint tenant (i.e. BMBC) would acquire the whole of the interest in the land. In order for there to be seperate, distinguishable shares, then the land would have to be held by Mr Cryne and BMBC as 'tenants in common'. This would give Mr Cryne the right to pass on his share of the legal estate on his death, or even to dispose of it inter vivos. Likewise, it would allow BMBC to dispose of their share of the land independently.

    Now then. Times are hard in local authority finances. They will be even more so following George Osborne's autumn statement. Is it inconceivable that BMBC might reach a point where they say "we have here (a share of) an unproductive asset which could be sold to a third party in order to raise funds to carry out our other statutory duties"? Alternatively, could you rule out further legislation which requires local authorities to divest themselves of assets which are not directly related to the carrying out of their duties? The ambition of the Tories to 'shrink the state' is not exactly a secret.

    Another (possibly academic) point is this. If Mr Cryne's share of the Oakwell land is not to form part of his estate for inheritance tax purposes upon his death, he would have to divest himself of it at least seven years before his demise. The tax authorities do not smile upon arrangements whereby a paper sale/disposal is made but the original owner retains control or de facto possession. So who owns the (share of) the land then, and can we guarantee they would be equally as favourably disposed?

    I have to acknowledge that we probably don't know the half of the legal or other agreements that are in place in relation to this situation, or indeed to Mr Cryne's personal tax affairs. All I'm saying is that it may not be quite so straightforward as you think?
     
  7. Red

    Red Rain Well-Known Member

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    The land is owned by a company. I'm sorry but I forget the name of it, and I'm sorry because I can't be bothered to root out the accounts of Barnsley FC (2002) Ltd to find out. But it is stated in there, because the rent that is paid to that company is a related company transaction because of the ownership of Mr Cryne. Mr Cryne and Barnsley MBC own the shares of that company. I referred to them as the owners of the land as a sort of short cut. The restrictions that I referred to earlier are restrictions on the sale of the shares rather than restrictions on the sale of the land per se. Sorry for not making that clearer.

    The inheritance tax point is not something that I had considered, but because the shares in the company are held 50/50, I believe that the safeguards would still be in place. In any event, the whole thing is a lot safer than putting the land back into the hands of some guy whose intentions would be unclear on the potential takeover of the club.
     
  8. Ors

    Orsen Kaht Guest

    That makes sense, RR. However, I can't see what would prevent one party or the other disposing of the shares in the company, and the IHT point remains, based on the valuation of those shares. Now you come to mention it though, I seem to recall a programme ('Dispatches'?) raising football club ownership and mentioning that BFC (as in the football business, rather than the land) were owned by a limited company. This did seem to me to be a sensible way to organise things, and Mr Cryne did of course have other issues to attend to at that time. I suppose you could have mentioned that Cellino bought Leeds United despite Leeds City Council (?) owning the ground. He expressed an interest in buying it back prior to his latest brush with the FA, so I suppose it demonstrates the type of safeguard you are talking of?
     
  9. Red

    Red Rain Well-Known Member

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    As you say, it does not prevent either party from selling its shares. However, the new owner still only has a 50% interest in the company that owns the land, and as such, needs the agreement of the other party before they can do anything with it. Of course, if both parties sell their shares to the same third party, then they now own all the shares and can do what they like. However, in our case, I think that both the 50% owners have the best interests of the club, the community and the town at heart. I personally think that the future of the land is secured by the above arrangements as far as it could be.
     
  10. blivy

    blivy Well-Known Member

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    From an IHT perspective, the shares he holds in the football club will be covered by business property relief, so there will be no IHT charge on his death. However, the shares he holds in Oakwell Community Assets Limited (which holds the land) won't qualify for business property relief as its merely a company that deals in land (rather than carries on a business). So he'll have an IHT charge of 40% of the value of his shares. The net book value of the land is £5.2 million so he's looking at a hefty IHT charge depending on what the market value is.

    The only ways he could mitigate the charge are, as you say, to gift the shares to another member of his family 7 years before he dies or otherwise to come to some sort of agreement with BMBC to transfer the land to Barnsley Football Club 2002 Limited where it would be covered by business property relief.

    I would imagine succession planning is at the forefront of his mind at the moment.
     
  11. Red

    Red Rain Well-Known Member

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    Something I wondered is whether he could transfer the shares in Oakwell Community Assets Limited to a trust. The object of the trust as covered by the trust deed would be to look after the land in perpetuity for the benefit of the community in general and Barnsley Football Club in particular. The trust would then have to obtain a court order to do anything not covered in the trust deed. It would also place the shares in the hands of a third party, and therefore out of the hands of the tax man.
     
  12. Ors

    Orsen Kaht Guest

    As a total aside, I never cease to marvel at the foresight shown by Barnsley Council in 1951 when they purchased Canon Hall and it's grounds. I seem to recall reading that a figure of £11,000 was paid on the death of the last of the Spencer-Stanhopes to hold the estate (although that figure now seems to have disappeared from the Wikipedia account). If it's correct, I think that would equate to about 300 to 400k at today's prices. What an asset it has been (and remains) for the community of Barnsley. Hopefully they feel similarly philanthropic about BFC and the land. :)
     

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