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New buyers put off by £20 million hole in accounts

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Grumpy Old Man said:
I don't think even he's that stupid. To be honest, I never, ever understood the rush to sale and leaseback in retail (which has now firmly bitten them on the arse with ever increasing rent levels), One of the fundamental rules in corporate finance is that you don't borrow long to finance short term spend. Sale and leaseback means selling off your assets for a cash injection. It's never anything less than idiotic.
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He’s proven himself duplicitous. His idea of a return from this venture is unrealistic. He’s already taken a bath after his shite performance at Eastleigh and is on public record as wanting his safc investment to get him out at least even. When it becomes clear that nobody will pay his ridiculous price for the club due to his failure here - and with financial hardship due to COVID on the horizon - do you really have confidence that he won’t do something that is incredibly harmful to the club in the long term To allow him to make money in the short term? I don’t. We’ve seen he’s happy to plunder the youth team as that vandalism is someone else’s problem. We’re only a hop skip and jump away from some more immediate damage imo.
 

The Cabbage said:
He’s proven himself duplicitous. His idea of a return from this venture is unrealistic. He’s already taken a bath after his shite performance at Eastleigh and is on public record as wanting his safc investment to get him out at least even. When it becomes clear that nobody will pay his ridiculous price for the club due to his failure here - and with financial hardship due to COVID on the horizon - do you really have confidence that he won’t do something that is incredibly harmful to the club in the long term To allow him to make money in the short term? I don’t. We’ve seen he’s happy to plunder the youth team as that vandalism is someone else’s problem. We’re only a hop skip and jump away from some more immediate damage imo.
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But a sale and leaseback could only negatively affect what any buyer would pay. It's totally counterintuitive to do it.
 
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South Banker Wolf said:
You wouldn't mate. Fosun paid Steve Morgan 30 mil for Wolves with no debt and we were in the Championship so we're one step away from the Prem. I'm shocked if your accounts are in that state. WTF has been going on there? Personally I'm hoping that your not in this shape.
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We are - explains a lot. I’m a big fan of GOM, but accountancy is accountancy. This is common sense. Any rich fella would have just sunk a few mill in to blast us out of this league at the first time of asking. It wouldn’t even need to be that much - a net transfer spend of 5-6 mill is a treasure trove in this league, but a pittance to a truly rich guy or gal. Instead we penny pinched, as evidenced by the Maja saga. Donald ain’t got enough dollar in his wallet and Sartori either hasn’t as well or isn’t willing to dig deep. Either way, it’s irrelevant. We’re in this league for the long haul now, sadly. This is SAFC ffs.
 
tunstallhill said:
still dont understand it like

the club was due £25m in parachute payments in the year after donald bought the club. donald was supposed to use this money for players, wages etc.. but used it to pay off the clubs debt, that he was supposed to have already paid off with his own money?
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To be honest they’ve bluffed and blagged so much it’s hard to make sense of any of it. I’ll try an analogy...

Say you buy a drug dealers mercedes for £40k. You put £15k of your own money in and get a loan/finance for the other £25k. A few weeks later you find £25k hidden in the boot. If you use that £25k to pay off the finance you now have a debt free asset worth £40k. So even if you sell it straight away for £35k you’re still £20k better off than when you started. The money in the boot was never yours but you’ve used it to make you better off. The parachute payment is the equivalent of the money in the boot.
 
Sorry I got that wrong. Morgan paid £1 for Wolves from Sir Jack Hayward on the premise that he spent 30 mil. Morgen then most probably made a profit on Wolves and sold us for 45 mil to Fosun. SD is so out of his comfort zone it's unreal. I thought Short wiped the debt?
 
Charmless Man said:
They could simply sell off the club's assets but that would be odd in the extreme.
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my thinking was taking over and running a football club is much more hassle than just selling bits to get your money back.

Bearing In mind I know nothing of business and Ive had many, many alcoholic beverages.
 
Grumpy Old Man said:
But a sale and leaseback could only negatively affect what any buyer would pay. It's totally counterintuitive to do it.
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Oh it’s monumentally stupid. But so is Donald. He might see it as a way to buy the Will Grigg’s we need to guarantee promotion and a higher price on sale of the club.
 
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South Banker Wolf said:
Sorry I got that wrong. Morgan paid £1 for Wolves from Sir Jack Hayward on the premise that he spent 30 mil. Morgen then most probably made a profit on Wolves and sold us for 45 mil to Fosun. SD is so out of his comfort zone it's unreal. I thought Short wiped the debt?
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No. Short moved the last £25m into the previous holding company just before the sale (evidenced by charges in Short-owned companies appearing at that time in favour of SBC). Cosmetically, Sunderland was debt free; the reality was somewhat different,
 
Ashley In!! said:
That would seem to be the suggestion.
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But Donald made the statement at Christmas that he was paying that back didn’t he? Because the investment was in him - a middling businessman, not SAFC, one of the most historic clubs in Great British football?
 
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