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New buyers put off by £20 million hole in accounts

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Grumpy Old Man said:
Not really.
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This means that nothing can move without FPP's permission in any case. And I doubt that SD can find the £100m or so that would be needed for a transfer at fair value anyway.
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Do you see an inevitability about FPP involvement in the future? or do you think that ship has sailed?
 

Grumpy Old Man said:
Not really.
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This means that nothing can move without FPP's permission in any case. And I doubt that SD can find the £100m or so that would be needed for a transfer at fair value anyway.
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So if he pays back the FPP loan in advance of selling to someone else? He can’t then decide to sell off the club but retain the rights to the the stadium?
 
The Cabbage said:
So if he pays back the FPP loan in advance of selling to someone else? He can’t then decide to sell off the club but retain the rights to the the stadium?
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No. That would have to involve Madrox buying the stadium from Sunderland. Remember, legally, Madrox, Sunderland and Donald are all separate person. Sunderland own the SoL, simple as that, and EFL regulations (not to mention HMRC) require that transfers between related parties (ie any companies with common management or ownership) is at fair value. The SoL was last valued at £93m.
 
Grumpy Old Man said:
Which is true, But his implication is that Madrox would still have the ground after any sale. That is very much not the case, and, in the current atmosphere, a stupidly dangerous allegation to make.
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Yes I see what you mean

however

no one in their right mind buys the club without the stadium (so the poster you commented is stupid)

but

I'm afraid as things stand in the current format/ownership it is indeed true to say Donald's tinpot firm "100 % owns Sunderland Ltd" which owns the stadium and property which comes with it, like you said.

I've actually just learned this now from yea - don't have any previous on it.
 
Coeus said:
I think Barac. I found it odd as value usually comes from lesser known players in my opinion.

Bournemouth are a funny one, I think their wage is out of control isn't it?
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I think you are probably right about their wage bill and they are about to lose one of their most sellable asserts in Fraser for nothing. God knows what Solanke's on and he's shocking. We will soon know if they are in trouble if they sell King or Wilson. I know a few Bournmouth fans and they don't mind Southampton which I can't get my head round. Would love them to go down.
I think Neves may well end up a replacement for Matic. And Troure Barce.
 
rapscallion said:
Yes I see what you mean

however

no one in their right mind buys the club without the stadium (so the poster you commented is stupid)

but

I'm afraid as things stand in the current format/ownership it is indeed true to say Donald's tinpot firm "100 % owns Sunderland Ltd" which owns the stadium and property which comes with it, like you said.

I've actually just learned this now from yea - don't have any previous on it.
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I read him as actually saying that Madrox owned the stadium itself (ie ownership had moved to them from Sunderland). That's dangerously wrong. As the stadium is on the books of Sunderland, then if Sunderland is sold, the SoL goes with it.
 
Grumpy Old Man said:
If anyone purchased Sunderland, the balance, if in place, would have had to be dealt with in the purchase price, so Donald would actually require a larger sum to cover that repayment on top of his asking price. In other words, any new owner would have to commit to an immediate cash injection into Sunderland on top of what they paid for the shares, in a way that they'd be entirely unable to recover. However, I'm far from convinced that it's actually legally enforceable because of the nature of the transaction; equally, I'm far from convinced that it isn't. It's got expensive law suit written all over it.

Let's try an put this into numbers. Looking at the amount that Donald has put in pre-write off and pre-FPP loan, comes to about 18m (covering the shares and £5m of the parachute put back in). So that's his baseline for the shares. Add on to that the £20m he needs to repay the debt, and you get £38m. For that, the buyer actually gets shares valued at £18m, and a club not owed money with, effectively, his cash in there in a way that can't be recouped from a future sale. That, to me, is deeply unattractive.

With the debt removed (and again, ignoring post write-off movements), Donald could break even on an £18m sale, and the new owners could put capital in as and when if a way they could get back in future. Far more attractive to the buyer. Subsequent movements of £2.5m more coming in as loan, and the FPP loan coming in as share capital have now moved Donald's break even number up to around £30m, but the principle still holds.

Now, it's indisputable that the first scenario is better from the fan's perspective. The club gets all the cash. But the owner is left having paid around £40m for a club worth half the amount. It's not so good for the club, but it could improve the chances of the club being moved on.
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Of course that 20 million pounds, if invested wisely in the club, could have a significant impact on the value of the club (in a positive way).

This is money owed to the club and the current owners have written it off for personal gain and to the detriment of the club. I dont think this point needs to be over complicated tbh.
 
Grumpy Old Man said:
What? The stadium of light is owned by the club. There are two companies. The first, Sunderland Ltd, owns the stadium and other properties, and this is the company 100% owned by Madrox. Sunderland Ltd is the old Sunderland plc, set up by Bob Murray in the 1990's when many fans bought shares in it. Sunderland Ltd owns 100% of The Sunderland Association Football Club Limited, which runs the trading operations and owns the AoL. Madrox's only asset is the shares in Sunderland. Your post contains a ttruly frightening level of misinformation.
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My post does not contain any misinformation as it is a question as to what and who owns the stadium. Now if what your saying is correct then my question and fears are answered as it means the club does not own the stadium and therefore is not owned by Madrox. Please read the original post as there is no information in the actual wording just highlighting what could have been a major issue if the stadium had been part of the deal.
 
Mayflower said:
My post does not contain any misinformation as it is a question as to what and who owns the stadium. Now if what your saying is correct then my question and fears are answered as it means the club does not own the stadium and therefore is not owned by Madrox. Please read the original post as there is no information in the actual wording just highlighting what could have been a major issue if the stadium had been part of the deal.
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The freehold of the Stadium of Light is owned by Sunderland Limited. In what way does that mean the club does not own the SoL? in what way is Sunderland Limited, a company set up by Bob Murray 25 years ago, not the club?
 
Grumpy Old Man said:
I read him as actually saying that Madrox owned the stadium itself (ie ownership had moved to them from Sunderland). That's dangerously wrong. As the stadium is on the books of Sunderland, then if Sunderland is sold, the SoL goes with it.
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What do you mean by dangerously wrong ?
 
SVU said:
FPP have played a magnificent long game which will hopefully be coming to fruition soon.

They saw the issues during due diligence so stepped back but never went away.

They’ve let SD and CM back themselves into a corner like little trapped mice and will eventually pounce like the intelligent fat cats they are.

Not sure I agree, just thing rationally about the economic landscape and consider if FPP really are going to ride in as White Knights?

It has been an incredible chain of events, some unfortunate and some absolutely reckless that have led to this.

The Global pandemic (very unfortunate event) is going to sink many failing institutions with weak balance sheets.

Given all the uncertainty in the world, the economy and especially the leisure industry who in their right mind is going to make an investment to take on the liabilities of a business that haemorrhages cash as Sunderland A.F.C. does?

I get the “potential” of the club argument but as was demonstrated in the last decade (when underwritten by a wealthy benefactor prepared to make substantial losses) that potential barely scrapes a place in the Premier League. There are so many biggish clubs with similar aspirations in the Championship and there will be some with parachute money ran far more prudently.

The TV revenue gravy train in the Premier League is destabilised and in all likelihood will be less lucrative in future years.

What serious “investor” things they can play the long game to realise a profit with those risks being so high?

Would FPP not find better places to allocate their cash during a global depression? If Madrox defaults on the loan to FPP would the tangible worth of property (Stadium and training complex) not be a safer guarantee on their funds?

I only ask the questions but I honestly believe people do not realise how far down the “road to perdition” the club has gone and, therefore, how unattractive a purchase proposition it is.

Supporters of course voice opinions led by emotions. Investors
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SVU said:
FPP have played a magnificent long game which will hopefully be coming to fruition soon.

They saw the issues during due diligence so stepped back but never went away.

They’ve let SD and CM back themselves into a corner like little trapped mice and will eventually pounce like the intelligent fat cats they are.
Click to expand...


Not sure I agree, just thing rationally about the economic landscape and consider if FPP really are going to ride in as White Knights?

It has been an incredible chain of events, some unfortunate and some absolutely reckless that have led to this.

The Global pandemic (very unfortunate event) is going to sink many failing institutions with weak balance sheets.

Given all the uncertainty in the world, the economy and especially the leisure industry who in their right mind is going to make an investment to take on the liabilities of a business that haemorrhages cash as Sunderland A.F.C. does?

I get the “potential” of the club argument but as was demonstrated in the last decade (when underwritten by a wealthy benefactor prepared to make substantial losses) that potential barely scrapes a place in the Premier League. There are so many biggish clubs with similar aspirations in the Championship and there will be some with parachute money ran far more prudently.

The TV revenue gravy train in the Premier League is destabilised and in all likelihood will be less lucrative in future years.

What serious “investor” things they can play the long game to realise a profit with those risks being so high?

Would FPP not find better places to allocate their cash during a global depression? If Madrox defaults on the loan to FPP would the tangible worth of property (Stadium and training complex) not be a safer guarantee on their funds?

I only ask the questions but I honestly believe people do not realise how far down the “road to perdition” the club has gone and, therefore, how unattractive a purchase proposition it is.

Supporters, like you, of course voice opinions led by emotions. Investors on the other hand do not.
 
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South Banker Wolf said:
I think you are probably right about their wage bill and they are about to lose one of their most sellable asserts in Fraser for nothing. God knows what Solanke's on and he's shocking. We will soon know if they are in trouble if they sell King or Wilson. I know a few Bournmouth fans and they don't mind Southampton which I can't get my head round. Would love them to go down.
I think Neves may well end up a replacement for Matic. And Troure Barce.
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Hadn't thought Toure was that good, to be honest, but I've hardly seen him play other than against us.

Yours is a very interesting club. Having grown up nearby I won't lie and say I'm delighted you're doing so well but its good to see a team that has struggled do it.
 
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