New buyers put off by £20 million hole in accounts

[Grumpy Old Man]

i know CH and yes he is a stanch mag. It’s completely bonkers however to think he’s going to fabricate a story due to who he supports. Why would he or anybody put their reputation on the line ? Secondly, newspaper sports editors need to sign off on a story. He can’t just make something up and print it, it needs approval and can only be approved by his superior who will be satisfied there’s enough in it to run. It doesn’t have to be 100% on all the detail but from a legal perspective there has to be something in it.

I don't think he's fabricate a story. However, I don't think he would ever tell the story in a way that painted us in anything other than the worst possible light.

 

[Red and white TID]

The way it had to be done created a balance between SAFC and Madrox because Madrox were the signatories for the deal. If the deal had gone as originally planned, the parachute would have gone straight to Drumaville. That's actually against PL rules, so it had to come to Sunderland first. There are two factors causing discontent here. Firstly, the mixed messages coming from the owners about whether that money would be put back into the club. As you say, the money went on discharging a club debt, but there is one moral argument saying that the club has been deprived of the benefit of the parachute. It really is arguable either way. Secondly, that after writing off this balance, Donald's asking price is too high. Totting things up, they've spent £12.7m on the shares, put around £7.5m of their own cash back in, plus the £9m FPP loan (which hit the club as share capital). That leaves them needing about £30m to break even.

What you don’t know is whether leaving the debt in as it seems has happened, whether this also had to paid off in the same way by any other possible investors at the time of SD buying and I was told that wasn’t the case by someone in the know it was always going to be left debt free by ES

 

[Deleted member 41188]

i know CH and yes he is a stanch mag. It’s completely bonkers however to think he’s going to fabricate a story due to who he supports. Why would he or anybody put their reputation on the line ? Secondly, newspaper sports editors need to sign off on a story. He can’t just make something up and print it, it needs approval and can only be approved by his superior who will be satisfied there’s enough in it to run. It doesn’t have to be 100% on all the detail but from a legal perspective there has to be something in it.

I have never claimed anything marra.

Ive always got on well with him and he is massive Newcastle supporter. He’s done well since moving from the club to report for the Mail.

He’s certainly making a name for himself.

 

[Mattyrobinson]

Don't bank on it. No fan protest has ever caused a sale. Not Blackpool (Oyston only sold because he lost a court case), not Charlton (where the owner sold them at a time of his choosing, and appears to have dropped them knee deep in the brown and smelly by the way he did it), and certainly not Newcastle.

But in this case the owners are overly reliant on gate money to sustain the business. And any loss that they make will result in a material reduction to the amount that they can expect to receive in a sale.

 

[JamesTu]

I don't think he's fabricate a story. However, I don't think he would ever tell the story in a way that painted us in anything other than the worst possible light.

So, are you implying that he was made out this story to be a lot worse than it actually is?

 

[Grumpy Old Man]

What you don’t know is whether leaving the debt in as it seems has happened, whether this also had to paid off in the same way by any other possible investors at the time of SD buying and I was told that wasn’t the case by someone in the know it was always going to be left debt free by ES

The debt was shunted into a kind of half way house. In a dry, legalese sense of the word, the club was indeed free of both owner debt and bank debt. Also, what you seem to have heard doesn't tally with the claim that other buyers wanted the internal debt ported across, ie the club would only be free of external debt.

 

[Barney Rubble]

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[Grumpy Old Man]

So, are you implying that he was made out this story to be a lot worse than it actually is?

I don't honestly know. I'd say that I doubt he tried very hard to find a more positive interpretation.

But in this case the owners are overly reliant on gate money to sustain the business. And any loss that they make will result in a material reduction to the amount that they can expect to receive in a sale.

So were Charlton and Blackpool.

 

[wigwams]

So this 20 million hole, are prospective buyers put off because theres a debt of 20 million missing in the running costs of the club, or are they put off because SD has slapped 20 million quid more on the asking price?

Last I seen something, it was up for between 35/40 million. Surely the land and the stadium/facilites are worth that alone?

This is the part I’m not getting.

 

[Father Jack Hackett]

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They'll be in for a canny wait

 

[flusheding]

And ellis "deserved" 500m from his sale. It doesnt work like that.

You've been quite haughty in defence of those opinions you agree with on this thread. They're not fact, just one persons take.

Imagine if Ellis wanted his 250million back

The only fact I've been haughty about is the way the parachute payments were used to pay off a club debt. Whatever moral way people want to interpret that fact is up to them (and they can be judged on it). Especially when it turns into a little witch hunt screaming about chancers, charlatans and clowns.

 

[sksk3021]

I agree, but I don't think there's an alternative. The current attitude to balancing the budget as "a League one club" will serve only to ensure that we remain as that.

And that's making no comment on the "jobs for the boys" culture.

It shouldn’t really, we should have a financial advantage over other clubs in this league even within our revenue. It’s how football should work tbh.
My bigger problem is that I don’t think the current owners have the strategy or ability to make it happen rather than the money.

 

[Mattyrobinson]

I don't honestly know. I'd say that I doubt he tried very hard to find a more positive interpretation.


So were Charlton and Blackpool.

With respect, the average Blackpool attendance over the last few years has been 4k while Charlton have have about 12k.

It's a different scale, with an entirely different cost basis given the playing staff wages and academy.

 

[Redby-lad]

How could Ellis Short have legally dictated what should happen to money coming into a business (SAFC) he had since sold? That seems very murky. He stays in charge he gets the parachute payment and can do what he wants with it. He doesn't stay in charge because he can't be arsed anymore then what money comes into the club afterwards has f@ck all to do with him surely?

 

[riffraff]

would Micky Gray pull £25m out his back pocket to finance a debt ran up by Ellis Short like?

Errrrh THATS EXACTLY what I said.
Read it again. Stewart/Methven/Sartori didn’t pull £25m out of their back pockets either yet still ended up with SAFC in their portfolio. By using money owed to the club by the PL as part of the deal and telling everyone they’d put it back. Now they aren’t gonna put it back.

 

[Grumpy Old Man]

So this 20 million hole, are prospective buyers put off because theres a debt of 20 million missing in the running costs of the club, or are they put off because SD has slapped 20 million quid more on the asking price?

Last I seen something, it was up for between 35/40 million. Surely the land and the stadium/facilites are worth that alone?

This is the part I’m not getting.

Those assets are offset by other balance sheet items, and the price will also have to take consideration of trading performance. Share valuations are not a precise science, but the two starting points will normally be net assets and setting a price/earnings ratio (a multiple of profits if any). Another factor in this case is that Donald will want to recover his costs. It looks like they paid £12.7m for the shares, have put about £7.5m back in as cash, and need to repay the FPP loan. That comes to just under £30m.

 

[Mboma]

This is the part I’m not getting.

I'm glad I'm not the only one.

Just my opinion but it doesnt look to me like Hope has all the facts.....if any, going by his history.

 

[Grumpy Old Man]

How could Ellis Short have legally dictated what should happen to money coming into a business (SAFC) he had since sold? That seems very murky. He stays in charge he gets the parachute payment and can do what he wants with it. He doesn't stay in charge because he can't be arsed anymore then what money comes into the club afterwards has f@ck all to do with him surely?

Because it was part of the deal to sell the club, He couldn't do what he liked with it, because the loan was now in Drumaville, and SBC had charges over his assets (including the Hilton). The only use he could put that money to was in repaying SBC.

 

[riffraff]

That's not the only problem though. If there is a salary cap across the board, we have an issue because we still have high earners like McGeady and Grigg. If it includes players who we are still paying for but who have left (Cattermole, Oviedo, etc) we are in all sorts of trouble.

We’ve still not bottomed out marra.

 

[Grumpy Old Man]

With respect, the average Blackpool attendance over the last few years has been 4k while Charlton have have about 12k.

It's a different scale, with an entirely different cost basis given the playing staff wages and academy.

Which is why costs and wages have been slashed; to balance recurring costs with recurring income.