BFC Accounts May 2022

Yeah and the club made the repayments

 

So the Glazers got the club for free then. Proper stinks and shouldn't be allowed. Same with Burnley, when they got relegated, a massive loan repayment became due from the club.

 

It is illegal to borrow against the target as part of an acquisition. What private equity and the glazers do is borrow the money from elsewhere against their other assets, make the purchase and then pay back their original borrowing by putting debt in to the business they have bought .

This is how the world of private equity works.

 

I thought Peter Doyle bought BFC by raising funds on the Ponty car park which he didn't own till he'd bought the club

 

So the famous £750,000 we pressed for answers on for so long is actually £3million. A year's season ticket receipts and then some. Or about 20% of turnover.

It's a despicable practice and something any new independent regulator (as is being talked about) should outlaw. But our sale being in installments seems to have allowed for it since day one.

Whoever is responsible for wittingly setting the club back this way to have it become someone else's property who hasn't paid for it should be treated with high scepticism by fans.

 

The owners have put in around £6.6m of equity in to the club. Now if you take the original £750k loan that they wrote off and the now £3m debt to Oakwell Holdings they are still net contributors of £2.85m.

By putting the money in to the club and setting a longer term payment profile it does provide working capital to the club and is a nett contribution.

This is a much better solution than simply paying the £3m direct to Oakwell Holdings from BFC investments in terms of the club finances.

 

Look what bad management gets you

 

£4m brought in in transfer fees? Guessing a decent chunk of that would be for Ismael and backroom staff. Can't see much being brought in for Solbauer, B Williams and Sibbick. Probably highish 6 figure fee for Chaplin.

 

Didn't we get 2million for ismel that was the release fee set

 

Might not have got it all at once though? Or would it still show in the accounts somewhere.

 

I've just had a quick read through them for the first time. Financially, they look horrible, but we knew to expect that from what we could infer in previous seasons. However, the thing that stands out to me is the extent to which the new board have gone to keep the club in business. Anyone still clinging to the fallacy that it's just the same as the old board after reading them would be seriously deluding themselves. If Conway and Lee were still directors of this company, it would no longer be in existence.

First of all, there's more transparency in the directors report, and an admission of fault on behalf of the previous board. They refer to "a snowball effect of one summer of poor decisions" in the business review, which is refreshingly honest, particularly when viewed in light of previous deflection and obfuscation.

We also get clarity on the dispute with the Cryne family and the extent to which the liability went well beyond the initial £750k, as we'd predicted. The settlement of this, as @Archerfield has referenced, is as good a sign of good intent from the new board as anything. The Cryne's have settled at a figure of £3m, but have agreed to a long-term payment plan to be paid this. The shareholders have then injected share capital into the company to keep it afloat. The fact that it's a capital injection, not further loans, protects the financial position of the company from looking even worse, and indicates that the shareholders are taking a long-term view on the business, as there's no prospect of any immediate return from these share investments. The main capital injections happened after the year-end so are referenced only in the notes, and don't yet form part of the accounts themselves. The accounts only reflect £612k of share issues, with a further £5.8m to be reflected in the next set of accounts.

Consequently, we're looking at accounts that recognise all the bad news we were aware of in the background, but don't fully reflect the extent to which the shareholders have invested to keep the company in business, albeit we were already aware of the share capital issues from what the board have told us previously.

Having read the accounts, it's fair to say that the intervention of the board in the last 12 months to keep the club afloat is as significant as the one by Patrick Cryne when he purchased it. Doing so as a capital investment, rather than loan, means that the board have to seek ways to make the value of their shareholdings increase, should they wish to make a return on this investment in the long-term (or for it to be so cash-rich that it can pay dividends to them at some point). Realistically, this aligns their aims with that of the supporters, as the only way to achieve this meaningfully is to improve the on-field product and to get as high up the football pyramid as possible (with the knock-on effect that this improves your chances of generating positive returns from player trading).

So, bleak as the immediate picture is from these accounts, there's a lot within them for us to be thankful for, as supporters.

 

Time to add JAQ to the Preedy banner.

 

Thanks for that Curt! Beautifully summarised.

 

I'm waiting for a day of reckoning for more Championship clubs, the likes of QPR, WBA, PNE, Swansea, Cardiff.....all must be spending well beyond their income.

 

That's what I thought. Then maybe some more for the hoards of backroom staff that left to various clubs as well.

 

I think the rules are you are only allowed £5million loss in any one year, BEFORE any capital injection by shareholders/owners. I guess 3 million is one-off cost against the legal dispute - not sure if they take that into account when deciding if you broke the rules or not?

 

I thought in the Championship it was something stupid like £39m over 3 years.

If it was only 5, we'd probably be in the Championship play offs again purely off the back of points deductions

 

If a club loses or is set to lose more than the threshold during the three-season period, they must provide future financial information by March 31, proving the club can meet its obligations.

The club must also provide a calculation of estimated aggregated adjusted earnings before tax.

If clubs in breach cannot provide the future funding within the timeline, the assigned executive has the powers to punish them.

 

I think a few of us have been waiting years for that to happen.

It just isn't