On this thread this shall be my last off topic post as it has been successfully derailed. I suggest you do the same you dog botherer.
This is something that I was considering the other day and I have already written a an article, which I will publish on here at a future date, but just to whet your appetite, here are a few thoughts. The company that owns Barnsley Football Club (2002) Ltd 100% is registered in Hong Kong, and unlike companies registered in the UK, we cannot look at either their accounts, or their company ownership structure. All that we know is that the company was set up for the sole purpose of buying the share capital of BFC(2002). We do know that Mr Chien Lee owns between 25% and 50% of that company, because he has submitted a return to Companies House which says exactly that. We do not know if the investors in the company that owns BFC(2002) invested just enough to buy the company and no more, or whether the investors invested enough to fund growth, land purchase or west stand replacement. Now you might think that this sort of consideration is not important, but if the company needs more cash to fund those things at BFC(2002), and it wants to do so through a call on share capital, it must raise that capital in exactly the same proportions as it raised the original capital, otherwise the delicate structure of ownership percentages and voting rights changes. That is fine provided all the shareholders agree that raising more cash is a good idea, and provided all the share holders can raise their share of the additional investment. The problems come if there are dissenting voices. This is a problem for consortia that does not arise in sole 100% ownership. All the members of the consortium have to agree that increasing share capital is a good idea. Of course, the money does not have to be raised through share issue. It can be raised via the commercial loan market, but as we have seen from the Bury and Bolton collapses, there are risks associated with raising money through the commercial loan market. For a start, because football is a risky sector, the interest rate will be high (let us say 10%). A football club has few quickly realisable assets that can be used as security for the loan. Realistically, the ground can only be used for football and players can only be sold when a transfer window is open. But let us assume that the owners decide to proceed using the commercial loan market. That money is not loaned to the shareholder company, nor to the shareholders of that company. It is loaned to BFC(2002), because that company is an entirely separate legal entity from the company that owns its share capital and from the individuals that own the share capital of that company. Are you still with me? The problem for football clubs in committing to large loans is this. Our income whilst we are playing in the Championship will be about £14m pa. When we are relegated to League 1, that income falls to £8m. Let us say that the Cryne Family and Barnsley MBC want only what they paid for the land (£6m), the annual interest on £6m @ 10% will be £600k. That might not be a big problem for a football club with an income of £14m, but it is a much bigger problem for a football club with an income of just £8m. All of these figures assume that the football club does not also have to find loan repayments designed to repay the loan over say 20 years (£300k per annum). Let us assume that the new west stand will cost £10m. There is a payback on the investment in the land. BFC(2002) saves £150k per annum in rental costs paid to BMBC and the Cryne Family. Are we absolutely clear that there is a payback on the investment in the new west stand. There is still plenty of capacity in Oakwell, without adding new capacity, and surely, that is part of the test as to whether there is a payback. Payback for football clubs is a particularly difficult calculation because if interest charges (£1m per year) and loan repayments (£500k per annum) on top of the interest charges and loan repayments for buying the ground would mean that investment in players and their pay is further restricted. That will cause performances to suffer, and fans will stay away as a result. Football finance involves tough decisions and high risk. That risk will put in doubt the future viability of the football club. That risk is why the old BFC ended up in Administration.
Ah, sorry got u now.... ur saying u want me to go out, create jobs, wealth so thick #uc#’s like you & Gally can sit at home while I put food on ur tables & feed YOUR families. At the same time I should allow thick f#c#’s to criticise me for doing so?!?? Ah ..mmmmmm... maybe not!
I don’t like or have dogs ... filthy smelly creatures which roam houses with no carpet in Athersley..... much like urs I guess!
It's a weird position we find ourselves in mate. Not prepared to change our strategy in order to be competitive in this league, but a big fish in league one. Many clubs in the bottom 2 divisions would give anything to be us, but it's still very frustrating seeing the team broken up after every decent spell.
Great points, Red Rain. And to be fair, that is a view of football finances that you have espoused over several years contributing on here. The present owners look set to continue their "within our means" policy, which is undoubtedly wise financially, but offers very limited hope of progress. The constant turnover of players means that we are continually going back to square one. So we have the "Wembley twice" year, followed by fire sale and relegation. We have Stendel Year 1, followed by what is looking likely to again be a relegation scrap. We have the false dawn of the amazing Fulham performance, followed by 4 of 5 ones that were pants. This can and does take a toll on supporters. I take your point about filling a redeveloped West Stand. There are the diehards who have always sat in that part of the ground, but new customers would be needed. Rotherham's New York Stadium cost a reported £20 Million to build, yet last season's average attendance in the Championship was only 9,880 (Capacity: 12,000). Of course Rotherham had no option but to find a new home following Mr Booth's antics. As you point out, £16 M to buy the ground back and build a new West Stand on it would be an investment with little economic payback. The trouble is, accepting that would seem to make our ambitions limited both on and off the field. And that in turn leads back to the vexed question of what are our owners' real motives? So what do we want? The crowds can only rise with success on the field, but that is unlikely to come our way with such a limited approach to "investment" in the team - a concept I know you view extremely sceptically! New owners prepared to put money into the playing staff would undoubtedly come with big risks, but do we want to die on our feet or live on our knees? Answers on a postcard!
There's not plenty of capacity in Oakwell with half of the West Stand shut, the home ends have been near capacity for the opening 3 games - against not very attractive opposition (barring Fulham).
I agree, but our reputation as a great club to go to be developed goes against us in this. It’s a double edged sword, attracts the young players but in turn the players sign knowing its a stepping stone in their career.
All of the conclusions that you list are conclusions that are inevitable if you follow the logic that I have laid down. It would almost come as a relief if someone else read my piece and reach a different and more optimistic set of conclusions about our future, conclusions that were just as logical, but which I had failed to see. That is why I shall be raising the subject again at a later date. The hope that I am wrong, because just as you point out, I can see no point to their involvement if I am right.
I began a thread a while back about what a waste of money the north stand was, how it was almost empty for most games, how we had spent a fortune on it and had wasted our money and how it had caused our brush with Administration. My argument was defeated when it was pointed out that there are unused turnstiles accessible only to home fans that are never used, and that the north stand could be segregated in the usual way. I offer their argument to you by way of countering your own.
Difference being the owner pumped millions into that club, but they probably are the example to try to emulate. https://www.mylondon.news/sport/football/football-news/matthew-benham-breaks-through-100m-14494181
