Looks like SBC have been paid off

[Wakey ftm in Sussex]

With a charge there's no change of ownership involved. It's essentially the same as a domestic mortgage, giving the lender the right to acquire those assets in the event of default. Short still has charges over the SoL, AoL, Black Cat House and the parachute payments (bit of overkill there) as security for the amounts the owners still owe him for the purchase.

The intercompany debt between Sunderland and Drumaville will have been capitalised as part of the share issue that took place in May, the same way as other elements of money put in by Short had been capitalised previously.

I'm confident that the club is, as Short intimated, currently debt free. Of course, there may be, probably will be, a need for internal, external or both forms of borrowing in future.

I understood this better on Satda in The Ram whilst slurping good cider & overhearing ( with my partial deafness) you discussing this with @wakeytom

I understood this better on Satda in The Ram whilst slurping good cider & overhearing ( with my partial deafness) you discussing this with @wakeytom

Edit

Didn’t see Tom’s post

 

[Rizla]

Hopefully, funding the push for promotion to the PL next year.

That would certainly be my hope, that the parachute payments can effectively be invested to fund a push over the next 2-3 years.

 

[bernardbresslaw]

With a charge there's no change of ownership involved. It's essentially the same as a domestic mortgage, giving the lender the right to acquire those assets in the event of default. Short still has charges over the SoL, AoL, Black Cat House and the parachute payments (bit of overkill there) as security for the amounts the owners still owe him for the purchase.

The intercompany debt between Sunderland and Drumaville will have been capitalised as part of the share issue that took place in May, the same way as other elements of money put in by Short had been capitalised previously.

I'm confident that the club is, as Short intimated, currently debt free. Of course, there may be, probably will be, a need for internal, external or both forms of borrowing in future.

Black Cat House to be closed though to save money?

 

[beezer]

Black Cat House to be closed though to save money?

I’m sure SD or CM mentioned in one of the podcasts that they weren’t keen on BCH. They said it felt like the admin staff had been shoved out the way and should be based with everyone else in either the SOL or AOL.

 

[Grumpy Old Man]

Black Cat House to be closed though to save money?

More likely to be rented out than sold, I'd have thought.

 

[bernardbresslaw]

I’m sure SD or CM mentioned in one of the podcasts that they weren’t keen on BCH. They said it felt like the admin staff had been shoved out the way and should be based with everyone else in either the SOL or AOL.

Ticket office will be part of the shop.

 

[kildaremackem]

Obviously very happy to defer to @Grumpy Old Man on this but I thought it was not the case we were running to make a loss of £5million excluding the parachute money-I thought it was more like this: Bain told Donald that the club was losing £30 million a year, but with £34 million of parachute money it was profitable. Donald said fine, but then you have to consider the £20 million owed in transfer fees on players already here, and with other expenses, this took the loss to at least £16 million, Stewart and Charlie believe with player sales, cost cuts and growing revenue they can get the loss to £5 million, not £16 million, and Stewat and Juan can cover a £5 million loss. The revnue side of that should be higher with Tony in place and Stewart or Charlie said he has already brought in more than his salary in new sponsorship deals, while I can't imagine they were optimistic enough to budget for quite the amount of season tickets that have been sold.

 

[kildaremackem]

but yes an element of it is planning for what the business could look like when parachute stops...

 

[Grumpy Old Man]

Obviously very happy to defer to @Grumpy Old Man on this but I thought it was not the case we were running to make a loss of £5million excluding the parachute money-I thought it was more like this: Bain told Donald that the club was losing £30 million a year, but with £34 million of parachute money it was profitable. Donald said fine, but then you have to consider the £20 million owed in transfer fees on players already here, and with other expenses, this took the loss to at least £16 million, Stewart and Charlie believe with player sales, cost cuts and growing revenue they can get the loss to £5 million, not £16 million, and Stewat and Juan can cover a £5 million loss. The revnue side of that should be higher with Tony in place and Stewart or Charlie said he has already brought in more than his salary in new sponsorship deals, while I can't imagine they were optimistic enough to budget for quite the amount of season tickets that have been sold.

Close, but that's closer to the cash flow effect than accounting profit. Transfer fees are accounted for as intangible assets, so the initial cost is capitalised and then amortised over the contract length. The player trading number in the accounts is amortisation plus or minus profit or loss on sales (the difference between fee received and the unamortised contract value at the time of sale). The £20m amount owing is just a balance sheet movement between cash and creditors.

The £5m, as I understand it, is the underlying trading position ignoring parachute payments entirely - in other words, the ongoing position if we remain outside the PL for over two years more. As a strategic exercise, this is absolutely the right thing to do.

 

[kildaremackem]

so the £20m is a cash cost to be paid-but on the P&l its not £20m its different numbers depending on how it has been amortised? Have I got that right?

 

[Grumpy Old Man]

so the £20m is a cash cost to be paid-but on the P&l its not £20m its different numbers depending on how it has been amortised? Have I got that right?

Yep. That's how you end up with some losses on sale (looking at the simple fee out vs fee in) showing as a profit when the player leaves. It's because most of the value in the contract will have been shown as an amortisation cost in previous years. In terms of understanding what's going on at any club, it's probably best to start by looking at the cash flow statement. You can do a certain amount with the profit number, but cash doesn't lie.

 

[Secret Visage]

Ticket office will be part of the shop.

They are not keen on where the club shop is sited, so expect to see a change in that.

 

[wakeytom]

Yep. That's how you end up with some losses on sale (looking at the simple fee out vs fee in) showing as a profit when the player leaves. It's because most of the value in the contract will have been shown as an amortisation cost in previous years. In terms of understanding what's going on at any club, it's probably best to start by looking at the cash flow statement. You can do a certain amount with the profit number, but cash doesn't lie.

Turnover vanity
Profit sanity
and overall........
Cash is King

 

[Jme]

More likely to be rented out than sold, I'd have thought.

should swap the shop with the ticket office , can use upstairs for stock .

 

[kildaremackem]

@Grumpy Old Man does that mean if they hit budget the loss of £5m and with the para payments the accounts would show a profit of circa £27m in League One? That would be staggering....esp[ecially if we get promoted while doing it..or would the cash sit on the balance sheet and not touch the P&L?

 

[soapster]

I’m sure SD or CM mentioned in one of the podcasts that they weren’t keen on BCH. They said it felt like the admin staff had been shoved out the way and should be based with everyone else in either the SOL or AOL.

said they were all boxed in, so no interaction between the staff or words to that effect.

 

[wakeytom]

@Grumpy Old Man does that mean if they hit budget the loss of £5m and with the para payments the accounts would show a profit of circa £27m in League One? That would be staggering....esp[ecially if we get promoted while doing it..or would the cash sit on the balance sheet and not touch the P&L?

I would need @Grumpy Old Man to confirm this however does the parachute money go in within the P&L or is a debtor by virtue of it owing as we were relegated however would be cash positive when paid

 

[JimmyQuinn]

I would need @Grumpy Old Man to confirm this however does the parachute money go in within the P&L or is a debtor by virtue of it owing as we were relegated however would be cash positive when paid

The parachute money goes into the P&L in the year it relates to - ie. we get c. £33m of 'revenue' from parachute payments this year because the parachute payments are designated for the 2018/19 season.

At the financial year end there shouldn't be a debtor balance relating to these payments as they'll all have been received in cash by that point (I think, depends on the exact dates of payment but I believe they're all due in pre-August).

 

[Grumpy Old Man]

@Grumpy Old Man does that mean if they hit budget the loss of £5m and with the para payments the accounts would show a profit of circa £27m in League One? That would be staggering....esp[ecially if we get promoted while doing it..or would the cash sit on the balance sheet and not touch the P&L?

The parachute money goes into the P&L in the year it relates to - ie. we get c. £33m of 'revenue' from parachute payments this year because the parachute payments are designated for the 2018/19 season.

At the financial year end there shouldn't be a debtor balance relating to these payments as they'll all have been received in cash by that point (I think, depends on the exact dates of payment but I believe they're all due in pre-August).

The parachute money goes into the P&L in the year it relates to - ie. we get c. £33m of 'revenue' from parachute payments this year because the parachute payments are designated for the 2018/19 season.

At the financial year end there shouldn't be a debtor balance relating to these payments as they'll all have been received in cash by that point (I think, depends on the exact dates of payment but I believe they're all due in pre-August).

They parachute payments pass through the P & L. The only time any element of it appears on the balance sheet is if some is received before the year end. This will be held as a credit balance on the balance sheet as "accrued income". This happened during our final season in the PL, when they released a tranche of money a month earlier than usual. Accrued income also picks up season ticket money and sponsorship paid in advance, by the way. It's more likely to happen with us, as our 31 July year end is a month later than most clubs. I'd actually recommend to the new owners that they change the year end to avoid some of these complications, and to bring us into line with industry norms. It wold also align our year end with transfer windows better; at present most of the summer window happens before the year end which, for the most part, covers the previous season.

 

[stephen cartwright]

For the Stadium at least.

You must be logged on to see external links

Is this significant ? @Grumpy Old Man

Charge code 0318 9630 0005
Created 27 August 2014
Delivered 2 September 2014
Status Satisfied on 28 August 2018
Transaction Filed
Registration of a charge (MR01)
Persons entitled

• Security Benefit Corporation

Brief description

F/H property being the stadium of light sunderland t/no. TY340536.
Contains fixed charge.
Contains floating charge.
Contains negative pledge.

Excellent. No idea what it means