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New buyers put off by £20 million hole in accounts

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Zak's Dad said:
This season is not restarting, and you've never replied to my original point.

Why if we're not skint and debt free why did we oversee a transfer window that significantly weakened a team that had failed to get promotion, and then set the manager a 100 point target when the club was potentially owed £20million by Madrox?

If our only goal and the financial imperative was to get promoted this season - because next season there's no parachute payments and we lose half first team squad and we have to rebuild the team when our outgoings immediately exceed income?

Why not move the money needed from Madrox to the club to strengthen - not weaken - the first team if it was available?

It makes absolutely no sense whatsoever to say that a team that absolutely had to get promotion this season chose to oversee a transfer window that significantly reduced its probability of being promoted while having potentially £20 million in the bank owed to the club.
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Nail on head.
 
Church said:
Sorry if this has been answered a thousand times already, but do Madrox actually own Sunderland AFC? If Madrox were to bomb, do SAFC go down with them?

Finally, why when buying a football club, would you set up another company (Madrox) to buy it rather than just buy it directly?
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1 Madrox owns Sunderland Limited (the old plc set up by Bb Murray) which in turn owns The Sunderland Asscociation Football Club Ltd.
2. It depends; there are cross-guarantees in the Madrox/FPP loan agreement which means Sunderland and its subsidiaries could go into administration if Madrox does, or if there's a loan default. However, other clauses in that same agreement would allow FPP to get the shares in Sunderland in lieu of payment. There is no suggestion at this moment that Madrox is insolvent.
3. There are huge tax advantages in owning a company via a corporate structure. Very few clubs of the size of Sunderland are owned directly by individuals.
 
pwsafc said:
They got rid of high earners which is common sense, you can't sustain Cattermole wages in league 1. They signed some decent players for league 1. Willis is probably 1 of the best defenders in the league you don't have to spend to get good players at this level. Plus we might have got promoted, but we will probably never find out
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They did a great job of offloading high earners in fairness, and to be honest I don't think we should write off all the good they have done - but in this instance it's a big error diverting the little money we had into using it to buy the club - that's not on IMO.
Grumpy Old Man said:
1 Madrox owns Sunderland Limited (the old plc set up by Bb Murray) which in turn owns The Sunderland Asscociation Football Club Ltd.
2. It depends; there are cross-guarantees in the Madrox/FPP loan agreement which means Sunderland and its subsidiaries could go into administration if Madrox does, or if there's a loan default. However, other clauses in that same agreement would allow FPP to get the shares in Sunderland in lieu of payment. There is no suggestion at this moment that Madrox is insolvent.
3. There are huge tax advantages in owning a company via a corporate structure. Very few clubs of the size of Sunderland are owned directly by individuals.
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Cheers mate
 
SAFC 83 said:
I think this is a bit of a red herring though. How much do you think SAFC was worth when SD bought it? Surely you think it would be worth more than 12.7m? In real terms the actual price of the club was 37.7m which is what any buyers should have had to put up to purchase the club. Yes, I know that 25m million was external debt but that much was removed from the purchase price of the club. They then made a very dodgy deal to use parachute payments to directly pay off this debt, which was included as part of the purchase of the club. This shouldn't have been allowed to happen but the way Ellis sold the club allowed for it to happen.

Now, after the constant lies and deliberately mis-leading the fans they've totally failed in running the club competently on and off the pitch they are still wanting to sell the club for what it was valued at debt free before they bought it but now it is minus the parachute payments and most of our talented youngsters out of the academy. It's a total piss take and the longer they are here the more damage that will be done to the long term future of the club.
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The deal with Ellis actually demanded that it happened that way.
 
pwsafc said:
They got rid of high earners which is common sense, you can't sustain Cattermole wages in league 1. They signed some decent players for league 1. Willis is probably 1 of the best defenders in the league you don't have to spend to get good players at this level. Plus we might have got promoted, but we will probably never find out
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You're still avoiding the obvious point.
You insist we are "not skint and debt free", yet will not say why if the club was owed £20 million by Madrox and that money was available whenever required - why did we started the league with a significantly weakened team in a must win season with £20 million just sitting there?

That makes absolutely no sense whatsoever.
 
Grumpy Old Man said:
The deal with Ellis actually demanded that it happened that way.
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This is one thing I don't get. Why did he not just demand 40m for the club and take care of the debt himself? We would have been well worth it at the time as we were basically a premier league setup with two years of parachute payments left to receive and no debt?

With what has happened since then our value has only declined and if the current owners still want to turn a decent profit the club won't be sold for the foreseeable future.
 
Gillythedilf said:
We wanted answers and they have answered them,straight to the point.
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:lol:
SAFC 83 said:
This is one thing I don't get. Why did he not just demand 40m for the club and take care of the debt himself? We would have been well worth it at the time as we were basically a premier league setup with two years of parachute payments left to receive and no debt?

With what has happened since then our value has only declined and if the current owners still want to turn a decent profit the club won't be sold for the foreseeable future.
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Not really his problem, for one. But he probably couldn't find a buyer.
 
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SAFC 83 said:
This is one thing I don't get. Why did he not just demand 40m for the club and take care of the debt himself? We would have been well worth it at the time as we were basically a premier league setup with two years of parachute payments left to receive and no debt?

With what has happened since then our value has only declined and if the current owners still want to turn a decent profit the club won't be sold for the foreseeable future.
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Because that would have left him even further out of pocket. As it was he paid off £22m or so of the SBC debt from his own resources (on top of all his other input, a further £23m was paid by cashing in a bond Sunderland had had to lodge with FPP. That left the £25m. That got moved because he was intent on presenting the club as debt free. It wasn't, other than cosmetically. The first draft of the contract (as revealed by CM at a supporters' groups meeting) even had Short being paid that part of the parachute direct, until it was realised that PL rules wouldn't allow it. Short did it because he only ended up a few million extra down (the share price plus the £25m, less the £22m he did pay off) on the amount of internal debt he wrote off. It left him £25m better off. Could other offers have met the £40m price, but were unattractive to him in other way? You have to think either they didn't, or there were other aspects to those bids which he found unacceptable/
 
RedFlag1308 said:
we shouldn’t be planning to sustain in league one in the first place. Herein lies the problem
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They not planning for that, Cattermole was here for 1 season and we failed to get promoted, you can't continue to pay those wages for a 2nd season
Zak's Dad said:
You're still avoiding the obvious point.
You insist we are "not skint and debt free", yet will not say why if the club was owed £20 million by Madrox and that money was available whenever required - why did we started the league with a significantly weakened team in a must win season with £20 million just sitting there?

That makes absolutely no sense whatsoever.
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Ask the owners they have explained it a thousand times, and even if we had 20million to spend yyou can't just go and spend it
 
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pwsafc said:
They not planning for that, Cattermole was here for 1 season and we failed to get promoted, you can't continue to pay those wages for a 2nd season

Ask the owners they have explained it a thousand times, and even if we had 20million to spend yyou can't just go and spend it
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fair enough, I mean they are trying things your way so guess we will just see how it pans out.
 
pwsafc said:
They not planning for that, Cattermole was here for 1 season and we failed to get promoted, you can't continue to pay those wages for a 2nd season

Ask the owners they have explained it a thousand times, and even if we had 20million to spend yyou can't just go and spend it
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Wrong.
You could have, because it was owed to the club from Madrox.
You can't now because the obligation to pay it back has been removed and written off.
 
pwsafc said:
They not planning for that, Cattermole was here for 1 season and we failed to get promoted, you can't continue to pay those wages for a 2nd season

Ask the owners they have explained it a thousand times, and even if we had 20million to spend yyou can't just go and spend it
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Why not?

According to Methven we needed a £10m loan to fix the lift and get a new PA system. :lol:

If they have the £20m why not invest say £5m into the transfer budget? We had 1 scout last season. Why not invest in a decent scouting set up?

None of this makes sense?
Bradford Pete said:
The Daily Mail ran a story on Thursday last week saying that the coronavirus has virtually eliminated dogging in the north east.
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Don't tell him that!
 
pwsafc said:
They not planning for that, Cattermole was here for 1 season and we failed to get promoted, you can't continue to pay those wages for a 2nd season

Ask the owners they have explained it a thousand times, and even if we had 20million to spend yyou can't just go and spend it
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Its widely believed that both cattermole and oviedo did not leave a penny behind.
 
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