Football Finances

This is what I can't get past, because if they own the club, then the club's money is their money isn't it? I mean, it's not like it's some sort of charitable trust or mutual organisation?

 

Companies acquired the Limited part of their title because the liability of their owners is limited to the amount that they have already invested as share capital i.e the owners cannot lose any more than they have invested. The Limited part of the title means that when you trade with a company, you should be aware that you are trading with an entity that is entirely separate from the people who own it (the shareholders). A company can fail, but the shareholders have lost only what they have invested. They never become liable for the debts of the company. Because they are separate in law, if the shareholder wants to take money out of the company, he must do it through dividend or through Directors Remuneration. Because of their Limited Liability status, companies must file their Financial Accounts with the Registrar of Companies annually. Dividends and Directors Remuneration must be stated separately within those accounts, so that anyone having a trading relationship with that company can see what they have been doing. There are benefits from limiting liability, but there is a price to pay.

 

Are you arguing then that what has been done is unlawful?

 

In my reply to Archerfield, I am asking for his opinion. In my reply to you, I am answering your query.

 

Yes, but I am asking what is your opinion?

 

My opinion is that the Inland Revenue would not allow the payment as a deduction from any profit that Barnsley FC might make, because it is not their debt. That is of limited interest because Barnsley FC is never likely to make a profit. The next question is this. Has the payment been made like that in order to avoid personal tax, either on the dividend or on income from working as a director of the company. I would rather not state that as an accusation at this point, which is why I phrased it as a question.

 

I think caution there is well-advised. I'm not seeing that anything unlawful has been done, whatever people might think about the ethics of this transaction.

 

Well Thankyou to all for explaining this but it’s still gone over my head.As long as I’ve got ten bob in me pocket I’m reight

 

Criminal illegality no from how I understand it.

But as we know there's a Civil case brought by the Crynes who believe the 80% ownership group have reneged on their agreement by;

A) Not paying installments due.

B) Paying installments with club cash which the Crynes are adamant was due from BFC Investments (80% group) not the club which of course the Crynes have a minority stake in.

 

I would have thought with all these "undisclosed" transfer fees in football there'd be plenty of opportunity for creative accounting to ensure investors got their due reward. Not that I'm suggesting that's happening at our club.

 

Such as movements of players of undisclosed values between a network of football clubs in different jurisdictions but under the same ownership.

 

Still has to be shown in their books when published though.
People on here have been able to accurately work out transfer fees for some players by looking at books.

 

And even more annoying given that idiots like me helped to fund the payment with our season ticket money. I will not be helping to fund future payments.

 

If anyone is in any doubt that football is a financial basket case, just spend a couple of minutes reading the attached.

A few at the top are doing ok, the lesser clubs set to struggle.

 

Thanks for that. Those graphs represent a hell of a lot of work for someone. I know that for sure as I did something similar for the Championship one season and found myself musing upon the time it had taken.

What most fans want is that Barnsley are taken over by someone with buckets of money to waste, whereas what they should be calling for is a level financial playing field, and you will only get that if owner loans to clubs are banned.

 

100%

 

Bang on.

It’s then not about who owns the club - just about how properly it is run.

It wouldn’t have allowed clubs like Wigan to propelled up the leagues by DW’s money.

 

All the clubs in England would say, but we will not be able to attract the best players, because the foreign clubs supported by their owners, will be able to fund themselves to pay the players more than we can. They are right, and therefore FIFA would have to administer the arrangements. Do we trust FIFA to do the job properly?

 

They never have before, so not sure why they would start to now.

 

Historically it would have been an issue - but out of Italy, Spain and Germany the big clubs have been more cautious these days.

If the FA took us down this path, there’s not mega bucks in Europe these days. Only in China perhaps.

No, I don’t trust FIFA. But I think it might actually self-police to an extent, and others might follow suit.