Some views expressed at the time of the takeover

Stakeholder. He gets his slice of Oakwell, should it come to that. If he's even still a stakeholder as the shareholder setup is well shrouded from public gaze.

 

However, we do tend to bend the truth occasionally.

 

The BBS views at the time of the takeover...

http://barnsleyfc.org.uk/threads/chinese-takeover.258625/

 

I think many people asked "why?" at the time.

What is more relevant is whether they still see the prospect of profit in the club, because it looks at present as though their strategy is leading to us heading back to League One. It may be that they have concluded that their project cannot work with a club the size of Barnsley, and that the silence from them denotes that they are now reconsidering their options. Speculation, but in the absence of public comment what else have we got?

Your analysis suggests little is possible beyond our being, at best a yo-yo club. Some may feel that if that is all we can expect - even with allegedly wealthy owners - then the time has come to look for other interests.

 

Obviously I have no proof but I come to one or both of these thoughts as to why.
1) Their connections with media etc, saw/see an opportunity for an explosion of coverage of Western football in both the Chinese and Indian markets, which are both currently relatively untapped and having feet in both camps puts them in a good position to benefit from both. The money they could make from TV in these markets far outweigh anything they would ever make from owning a football club and could explain their desire to own club(s).
2) They saw the huge return from NICE and naively thought could be repeated if they got the ground etc. Personally think given their background this unlikely but is possible.

Both of these options with you’re point of largely little to do in terms of running club day to day budget wise could stack up.

Ultimately I think the profit from the club day to day as suggested by some is a nice bonus but irrelevant in the grand scheme of things as you have highlighted above.

 

You do know that if they had decided to spend £10m of the transfer money on the East Stand, there would have nothing at all left for inward transfers don't you.

I'm sure antagonising the fan base was purely unintentional.

 

Im sure it was RR but im not advocating a £10million spend or anything of the sort just a bit of sprucing up would be nice.
On a positive note, the fan zone is very good. I do find it (or would find it) confusing that they say things but have little substance behind their words.
They do need to kiss and make good their bullish attitude to the fans. The idea that the loyal fan base will simply turn up and they can do what they like with no explanation is just simply not acceptable at any level of business.

 

Its funny that you mention those things because all of them were the subject of a future Minority Report, one that I have already written. You may have stolen my thunder now.

That MR kind of leads readers to the same conclusions that you have drawn, namely that none of those things will ever happen.

On a different subject

The latest Financial Statement of Oakwell Holding Ltd, the company that used to own Barnsley Football Club (2002) ltd during Patrick Cryne's time have been published. The top figure is an investment of £2m. Note 4 says that, "Unlisted Investments relate to the nominal value of shares received as part of the consideration received from the disposal of current asset investments". That seem to be written like that in order to cloud the issue, but in my opinion, it is the value of the 20% stake in Barnsley Football Club (2002) ltd that is now invested via BFC Investment Company Ltd, the Hong Kong company that now owns our club and through which, all our owners own the club. That would suggest that Barnsley Football Club (2002) ltd was valued at £10m when it was sold and our 3rd party owners' share was £8m. There are two more numbers in the Financial Statements of Oakwell Holdings Ltd that are interesting. They are the figure for debtors receivable within 1 year (£1m) and the figure for debtors receivable after 1 year (£3m). I could be wrong, but this suggests to me that the £8m payable for Barnsley Football Club (2002) Ltd shares was paid as a deposit of 50% (£4m) with £1m payable each year for the following 4 years.

Please let me know your thoughts.

 

My analysis certainly suggests that conclusion in the short term. However, the longer term may be less depressing. The cats cradle that is the Championship cannot go on like that for ever. At some point it is going to collapse. Whilst there is no point in throwing away your money now, but there will come a time when it makes more sense. That is partly why I call for patience.

 

I think that SKY own those rights.

 

What could they say at the moment that would not be thrown straight back in their faces?

 

I've just had a look at the accounts to 30/11/18.

I can see the listing of the £2m asset... which I can only think is the holding of the 20%, so yes, £10m overall valuation of the Club asset would make sense.

What I have found interesting is considering the profit for the year. Profit reserves were a retained loss of £500k covered by share capital. at the end of the period the P&L is £6.538m. So essentially £7m of revenue items hitting the P&L, after a modest CTax of £4k. (I don't understand why £7m has hit the P&L but the CTax is so low, if someone can explain that, that would be great).

That could be a flat £4m up front with the other income aspects due over a period of time.​

There is also a creditor of nearly £6.3m. As well. I'd hazard a guess that those monies are due to the Directors or estate to pay off loans or clearing residual balances from Barnsley 2002?

If the club was valued at £10m, and they have an 80% stake, and they've to date only paid £4m plus £1m due in the 2019 records... we could find they sell the club before they even complete that payment cycle to own the 80% outright.

An £8m investment even without ground for a then championship club is cheap as chips, especially without debt, or any debt willing to be written off.

Bring the ground back into the company (or at least the 50% from the council), use some transfer funds to build an academy (or try and get some investment or grants from other sources) and without much or any use of the owners funds, you have a very attractive asset if they keep it at championship level.

Spin for the realms of £30-£35m after a few years so your outlay in real cash is say £6m, and it starts to look more attractive investment. The shorter the holding period, the less cash invested and the more the sales value and the more appealing it becomes.

Would be useful if one of the current Accountants could have a look over that and just clarify thinking is right.

 

I had trouble putting the rest of the numbers together for Oakwell Holdings Ltd, which is why I phrased my original remarks the way I did, particularly the amount of cash in the company.

I do not think the Creditor is a loan, otherwise it would have been in the previous Balance Sheet. Here is a wild thought. Patrick Cryne's personal loan to Barnsley Football Club (2002) Ltd was turned into a Share Premium Account at the time of the sale (effectively making it permanent Share Capital (£6,288,071). That is not too dissimilar to the Creditor figure in Oakwell Holdings (£6,383,240), but I am struggling to make a connection other than that very tenuous one.

 

Without seeing individual transactions, the only thing I think it can be is some way of covering Patricks personal investments into 2002 over the years and some part of repayment of those. They could be cash payments by the new owners for notional cash amounts or paying off of loans/ subsidy of shoring up the equity in 2002 Ltd... its a huge one of boost and in the mind of the owners is a net effect of just buying cash in the bank account.

There seems little other possible revenue items other than acquisition of the club and paying Patricks estate form writing off losses or equivalent. What I don't know is the tax treatment and why the Corp Tax is so low on a £7m "profit"

 

Me either

 

Don’t believe anyone owns rights to broadcast to India, could be wrong though

 

Could the low CT liability not be due to carried forward losses?

 

If you look at the 2 columns to the right on the Balance Sheet, it shows the figures for last year. The Cumulative Loss to date was £499,986. The Cumulative Profit is now £6,538,751. That suggests a profit for the year of £7,038,737. It is usual to provide for the Corporation Tax on profits as a Creditor. Note 7 tells us that Corporation Tax is just £4,072. Having said that, Corporation Tax on Capital Gains would allow the company to offset all costs associated with buying the asset that was sold, and as we know, Patrick Cryne personally advanced a loan of £6,383,240 to Barnsley Football Club (2002) Ltd. It may be possible that this was offset against the gain, even though it was a personal loan. I also know that Patrick Cryne made a series of donations to the football club amounting to almost £1.5m. That would bring the total cost of the club to almost £8m. Strictly speaking, he sold just 80% of the club for a selling price of £8m, so perhaps it does make sense. Who knows?

 

Effectively bringing him to a tiny smidge above break even (ignoring cost of money etc) over his tenure?

 

Do not forget the 20% still owned by Oakwell Holdings/James Cryne.