To fans sceptical of those of us whom distrust the 80% owners

Thank you for the contribution here, especially to @Sheriff @Archerfield and @Red Rain . I was hoping the thread would draw observations from those who know what they're talking about.

Like many, I'm also in way over my head when it comes to the minutiae of business and financial management. But my reading of it is this.

It can't be said that anything illegal has occured, from the information publically available. The liability of the withheld £2.75m payment to the Crynes is under dispute, pending a court case.

The Pacific Media Group, 80% owners have acted immorally in using club revenue to pay their debts, hindering the successful operation of the club as a business and putting staff in difficult positions. More, they have been disingenuous in their communications to fans stating they 'have not withdrawn £1 from the club', whereas in reality, they have benefitted by using operating funds to meet payments for a deal to acquire control that was brokered before they had a stake.

 

I'm glad you've mentioned this. I've been banging this drum for a little while.

Cash is king in business. You can make losses and survive. You run out of cash and you're at the mercy of whoever is willing to offer you a funding stream to continue, together with some decisions and choices that may be unpalatable.

I can't recall the exact figure, but in the last accounts, I vaguely recall the reserves to be pretty much gone, around £3.5m drained over their tenure so far.

The owners won't be able to pay dividends when the accounts show as an insolvent shell. The last accounts don't account for the main covid period when the ground wasn't accessible to fans and an alleged £500k "cost" for reaching the playoffs.

With so few transfer receipts in, with those losses and the £1m+ compensation to Hull for MacDonald, those next accounts could show a significant loss. Let alone what we next see for 2021/22 which won't be available for a very long time.

My biggest concern has always been if/when these owners have let the cash dwindle. How we operate on a daily basis and how it is funded. By sales (we've several months before we can use that avenue, and if we're struggling and if the championship market is still in a state of collapse, theres minimal chance of getting good return on investments there), by injection of capital from the owners (I think we can all suggest thats extremely unlikely given the efforts to reduce and renege on past agreements) or through lending.

The beginning of the end at Nice came from taking a very strange loan that then became public. It was at circa 9% if I remember right, and had a clause that it would be fully paid if the club fell below a certain position in the league. The immediate risk was something like £20m being instantly repayable which would have sent them out of business. Hence the fan uprising and the ex CEO getting Jim Ratcliffe on board.

I very much don't want these owners seeking funding streams for my club. Nor should anyone else.

 

Thanks for taking the time to try to explain to us, I think I’ve got my head round what the three of you have been saying between you but have a specific question out of this.
If I’ve understood it right, the owners are using monies generated by the business to pay the purchase price?
If I’ve understood that right are we saying that is wrong? If so on moral or legal grounds?

 

Nothing illegal about using operating cash from a portfolio company to meet debt. It would have been illegal to borrow against the club to raise money to fund the purchase (Craig White/Rangers being an example of this with his deal with ticketus).

I believe the issue is more around communication, the owners have regularly stated that they will not take money out of the club but, in the last accounts, have clearly used £750k of cash generated by the football club.

When the Glaziers bought Man U, they used their own money but on completion returned their capital by putting debt in to the club enabling to return their capital. Contrary to our board they never claimed they wouldn’t take cash out of the club.

 

Thank you.
I was asking over a personal query.

 

I think anyone with lets say a slight interest in business and our club has found this whole post very educational.
In layman's terms most of us have our doubts about our majority owners.
For some of us it began early enough, with the sound bites and then the false comments. Football supporters are far more intelligent these days and due to the internet the dealings are in black and white if we can actually find it!
Transparency and honesty therefore become the backbone of leadership. This bunch of 80% have done some good things in their tenure however they have constantly alienated themselves from the fan base with worse decisions .....and that is inforgivable.

 

I'd add two other points.

The owners have repeatedly claimed every penny would be going back into transfers. Obviously when you drain £750k, thats not the case. Especially how they have treated it and how its hit the P&L (which I hadn't considered at the time).

I'd also comment on the timing. At a time when cash reserves are dwindling and a club is openly saying they are struggling to compete with the resources they have while other clubs use debt and equity injections from wealthy owners, it seems a very selfish thing to use the club to reduce what you owe to another party, and thereby hamstringing the football club.

The directors have a responsibility. My personal view is they are serving their own means by paying £750k through the club and not their own vehicles, rather than serving in the best interest of Barnsley Football Club as directors and major shareholders.

 

Hi sorry to bother you

The Cryne's released a statement saying
"they cannot pay the debt payments using the clubs money"
what are there grounds for this statement and the court case.
they must and have presumably taken legal advice from multiple legal beagles before preceding with the case

As 20 % shareholders on the face of it they cannot stop them doing whatever they want to do once they have taken control of the club can they.
if it was written in the sale contract that they cannot do this
we can only presume it was hence the Cryne's saying this.

are they trying to circumnavigate that by using unorthodox workarounds for methods of payment

i know your not privy to the court documents
but what would be your best guess
Thanks

 

I guess the whole thing might get even murkier when we have vision of monies received for 5 of our young players moving to Esbjerg for example. Shuffling money around between a harem of clubs isn't going to get any more trnsparent.

 

Sterling work Curt.

 

@Deputy Dawg - This is all supposition but I would think the sale agreement was based on protecting the cash in the club. There was around £5m on balance sheet and the follow up payments were also around £5m. The intention was probably to protect the cash and make the new owners put in their own capital.

If that was the case the action shown in the last accounts has got around that restriction.

 

Would it be in the realms of conspiracy theories or not
to believe the multiple clubs angle is nothing to do with possible upcoming T.V money deals in the future as some have thought
but to have a guaranteed income stream to another club in the portfolio of clubs if there is none available or to boost it when more is needed
as in someone buying your player/s so you can make a yearly payment on the clubs debt which you have negotiated when you have a shortfall
In theory you could literally make up the price of that player

Sell X player/s to Y club for said amount/s to raise funds to make that payment
There whole strategy is to end up owning the club/s without it costing them anything
giving them a asset to sell that has cost them nothing.

 

Given their ongoing acquisition of any club they can buy, no, I wouldn't see it as conspiracy, more and more reality. Especially if they can take funds out of a club to pay for a purchase of a club.

I've very much been in the same camp as red rain. In that they haven't done much to concern me personally. But this 750k revelation is very much a concern.

 

My personal view is that they are acquiring inexpensive clubs with some form of distress (in our case an owner with a terminal illness) are acquired with the aim of leveraging the cost down post sale and offsetting their purchase price. Their aim is to flip in moderately short time (within 5 years) by riding an early wave before they are seen through, or, creating friction with the 20% faction to try and prompt a buy back or new consortium, obviously at a higher price than what they paid for it (i suspect there is some form of fund, similar to redball corp in the caymans, so I personally don't believe it is their money acquiring club stakes, but just an investment fund they are managing or acting on behalf of). There's no proof of this, given how opaque corporate records are in the caymans and HK, but given Billy Beanes involvement with us and with RedBall, theres certainly enough link there to consider this is a possibility without knowing for sure.

 

I think "spreading the risk" across a business portfolio is commonplace as is moving assets around in them to the mutual benefits of both businesses. It's just harder to see whether one or another club is actually being run sustainably.

 

I agree this whole noise they falsely and purposely created was to induce conflict to prepare the ground for there way out.
we are leaving selling up because we are not welcome here anymore as Conway alluded to in that official BFC interview on the Barnsley FC site they would do
We were just a investment , zero interest in football ,the area, the people as they proclaimed
Total lies
we were just a distressed asset, the club was desperate and had no choice but to be sold at whatever price we could achieve for obvious reasons in a very short space of time available
there was never anything coming as in sponsors ,hotels ,stands ,grounds ,streaming ,worldwide connections deals etc
what's happened here is literally the exact same thing that happened at Nice.
just rode us along for a far as they could get away with until even the most kind heartened soul turned on them


And as you say hoping for a buyback with outside help or new owner group to sell to.

 

In another recent thread, I recently defended Markus Schopp. I made the point that I believed that he had not been given a reasonable transfer budget, or at least, not an amount sufficient to replace adequately the players that had left. Of course, COVID would have had a huge impact upon transfer budgets, but we do not know if any further payments have been made out of club funds in addition to the £750k recorded in the 2020 Accounts. Those accounts will make very interesting reading, but unfortunately, we will have to wait until March next year to do so.

With regards to whether the 80%ers have done anything illegal. Minority Shareholders rights are protected under Company Law. There could not really be any objection to the way that Pacific Media have gone about things if they owned 100% of Barnsley FC. They have made the company fund is own purchase, but in doing so, they have reduced the value of their acquisition. However, in the case of Barnsley FC Ltd, they have also reduced the value of the Crynes stake in the company. The Crynes have effectively paid 20% towards that installment of the purchase price. That is a second reason why the Crynes have grounds for pursuing the 80%ers through the courts.

 

Curtis/Archerfield/Red Rain
With my half a brain cell I've followed your logic, but I have a couple of questions; and on the basis that there's no such thing as a daft question.......
.......do we know whether the purchase of the Club by the 80%ers was made on the basis of an agreement through which an initial deposit was paid to the Crynes ?? (following which, as we know, the rest of the purchase price being paid by installments)
...and if the above was the basis for the deal, how much do we think they paid by way of initial deposit and where did that money come from?
Apologies if asked previously.
Thank you.

 

If they'd have borrowed the money it would have been paid back over time through profits

If they'd used their own cash, it would have been retuned to them (plus interest) when they sold the club

That bit isn't worth getting wound up about.

How a football club came to be separated from its assets which has led to this farce however is worthy of debate imho.

Also they've appointed 2 duds and 2 decent managers - a 50% success rate. That's also a debate on how successful that aspect has been.

And why Chris Sedgwick left, amongst others.

 

Right now, it's the safety net put in place by Patrick Cryne that's doing the job it was intended to do. Without it, the bad faith actors who own the majority of the club could have inflicted far worse damage on the long-term future of the club.

Every excuse and objection they've raised with regard to the purchase of the club would have been negated by a vaguely competent due diligence exercise at purchase, which they either didn't do or didn't take sufficient notice of. They've subsequently used this to create a smokescreen of excuses of why they can't sufficiently develop their investment in the club, while simultaneously taking funds out of the football club's day to day operations to their own benefit, which contradicts their own previously stated position in this regard.

It's exactly the scenario that Patrick Cryne envisaged, and I feel eternally grateful right now that he had the foresight to put a safeguard in place.