Oakwell and the land.

Last full accounts were 2005 as far as I can see.

 

We rent the ground because the football club don't own Oakwell. So we play at a ground we don't own and pay rent to the joint owners, one of which is the football club owner so he gets rent from the football club he owns for using the ground he half owns. That's how I thought it was???

 

But if they cost £5m as you say then how come the assets are listed as £245,303? Sorry if I'm being a bit thick.

 

The situation as I understand it is as follows:

The Administrator sold the land and buildings of the old Barnsley FC to Oakwell Community Assets ltd. I guess that the purchase price was £4m (although my memory from that time was £6m) because that it the amount of share capital that was invested by Patrick Cryne and Barnsley Council (£2m each). The land and buildings were separated from the football club because the football club had gotten itself in trouble by pledging its assets against a loan that it had little hope of repaying and at an interest rate that it could not afford if its income fell (which it had done because of relegation). In my opinion, this was a very wise decision as it prevented the club replicating the conditions which forced it into administration in the first place. The join and equal ownership meant that the two owners would have to be in total agreement in order to amend these arrangements, another clever move in my opinion. In the last financial year, the football club paid OCAL £150,000 rent for use of the land and buildings, a reasonable sum, in my opinion.

The Accounts of a company are largely a statement of historical costs. When the land and buildings were purchased from the administrator, the agreed purchase price would have been split between a value for land and a value for the buildings. The value of the land is not depreciated, but the value of buildings is depreciated, probably over 50 years. This depreciation is written off to the profit and loss account, where it is deducted from income, that is the annual rental income received from Barnsley FC. Any net profit after the deduction would be available to pay the shareholders a dividend, which given their £4m investment, does not seem unreasonable to me.

 

That is my understanding too. Thanks RR couldn't have put it better.

Couple of minor things (picky)

No depreciation - assets are subject to impairment review.

No dividends can be declared at the moment as the company has not generated sufficient profits.

 

I refer you to Red Rain's excellent summary

 

Fair enough. I couldn't be bothered to download a copy of the accounts and I assumed there was depreciation because the Net Worth had reduced in previous years and I could not think why other than depreciation.

Thanks for putting me right.

 

and with the council owning 50% it stops anyone developing a shopping area and really ******* the plans for development of tarn centre, very far thinking

 

Burgundy is referring to the figure relating to Current Assets. For his benefit, Current Assets are comprised of Cash and Bank Balances, Debtors and Stocks and Work in Progress.

 

Sorry, I just couldn't resist No offence meant.

Seriously though I think you are right regarding the cost of the assets.

IIRC there were loans as well as share cap. £1.5m seems to ring a bell and I think PC wrote off his loan a few years back. I could be wrong though.

 

That explains it. Even to me. Thanks.

 

There is a long term creditor of approx £1.4m. I wonder if this is a loan from the council ?

 

If we rent the ground (I can't call it a stadium) does that mean OCAL pay for its upkeep?

 

I think that most of the area occupied by the training pitches is currently green belt and that is why the indoor training facility had to be located in its current position.

A number of year ago, there was an application to extend the road that serves the offices below the east stand from Pontefract Road, so that the huge area between Harborough Hills and Pontefract Road might be opened up for development. It was turned down by a government enquiring, so I would not go looking for ulterior motives if I were you.

 

I have often wonder about things like that myself. My query was more about who would pay for any development of the ground, e.g. the proposed new scoreboard. In theory, it would be paid for by OCAL, Barnsley FC would keep any income generated by it, but the rent paid by BFC to OCAL for the ground would increase slightly. This is pure speculation on my part though, as would any direct answer to your question.

 

I very much doubt it. If you rent a council house the council don't come round and hoover your stairs. I know that's being facetious, but in the same vein I would imagine there are terms within the contract that state BFC are responsible for the upkeep. It would be unworkable otherwise. If we needed work to be done to retain the safety certificate we couldn't be reliant on a cash strapped council to meet the deadline as we would be unable to play without that certificate. Or allow fans in at any rate. There's a pothole near our house that you could lose small children down, which has been there for years. With that in mind I don't fancy BFC's chances of the council fixing the wiring on one of the floodlights.

 

I said in my original post that I thought that the original purchase price of the land and buildings from the Administrator was £6m split equally between Cryne and the council (i.e £3m each). Could it be that it was originally set up with £4m share capital and £2m loan of which £0.6m has now been paid back using rental income paid by BFC. Just a thought as I do not have a copy of the accounts.

 

I'm not, I'm stating a fact, the council are spending millions on redeveloping the town centre, a meadowhell like development built on the land ajoining oakwell would not do the town centre redevelopement any favours but if you own/part own that that land end of problem

 

Not sure about this one but say OCA is responsible for the upkeep of the ground then it would have to pay for the upkeep from its income.

To my knowledge its income is derived solely from BFC so the upkeep would be recovered from BFC via increased rent ? Unless OCA were to raise capital by a new share issue or loan.

 

They won't carpet it, decorate it, improve it. But they are responsible for meeting Decent Homes standard, gas servicing, general repairs, new kitchen and bathroom at regular intervals.

I was guessing that we wouldn't and the deal would not have been done on that basis, but I think it is a valid question as to why. £150k pa seems a pretty good deal if there's no liability for the ground's maintenance but maybe less so if it's all our liability