Is this now a club in crisis?



Grumpy Old Man said:
I don't for sure, but it's a logical conclusion. What reasons do FPP, a new company with £1 share capital to its name, have to lend a relatively small amount to a L1 club? Except in the context of possible wider involvement in the medium to long term, it makes no sense whatsoever. So far as security is concerned, I have secured owners' loans before now.
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Or how about SD/CM do not want to put in any more money, realise that their attempts to flip the club in one season hasn't worked, and this is a way of coming out the clusterf*ck of a situation they have been solely responsible for with some warped form of self-perceived integrity. They know they have lost what they have already put in, and when Madrox defaults, they will walk away and leave the Americans to pick up the pieces (with their conscience salved), or, to put it bluntly, liquidise the club. How's that for logic.
 
Grumpy Old Man said:
Did I mention the playing side? I think not. However, since you raise it, it's a classic loss of confidence. No-one is performing to their capabilities as a result.

And I've probably been to more games this season than the majority of people on this forum.
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I respect your understanding of finances, however, the club is based on football. If the footballing element of operations continues to fail, so will the remainder of the setup. So I think we have plenty to be concerned about.
 
JERUDONG No.10 said:
I respect your understanding of finances, however, the club is based on football. If the footballing element of operations continues to fail, so will the remainder of the setup. So I think we have plenty to be concerned about.
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That's far from a crisis though.
Ernie said:
Or how about SD/CM do not want to put in any more money, realise that their attempts to flip the club in one season hasn't worked, and this is a way of coming out the clusterf*ck of a situation they have been solely responsible for with some warped form of self-perceived integrity. They know they have lost what they have already put in, and when Madrox defaults, they will walk away and leave the Americans to pick up the pieces (with their conscience salved), or, to put it bluntly, liquidise the club. How's that for logic.
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How have they lost what they put in? They've had two offers - one fell through because the bidder was a Walter Mitty, and the other is still very much alive. In the event of a default, the Americans will either run the club or sell it as a going concern, which always yields more than a liquidation. No-one sane ever liquidates a viable company if it can be sold on.
 
Grumpy Old Man said:
That's far from a crisis though.


How have they lost what they put in? They've had two offers - one fell through because the bidder was a Walter Mitty, and the other is still very much alive. In the event of a default, the Americans will either run the club or sell it as a going concern, which always yields more than a liquidation. No-one sane ever liquidates a viable company if it can be sold on.
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Another leap of faith I'm afraid. Sold as a going concern? Pray tell what is the value of a lower League 1 club with pi**poor players who are worth jack all and real estate assets worth almost the same? £5m? I fear you are putting far too much faith in the owners. And I don't know how much you know about US VCs but it is I'm afraid exceptionally naive to think they would bat an eyelid about liquidating. Believe me, I want to believe it is a down payment but stongly suggest it is the stuff of fairytails.
 
chunkylover53 said:
A crisis at a football club has nothing to do with football?

you know that’s absurd?
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I'd say it's absurd to use the word "crisis" about how good the football is when we're near the top of the table.

Bury were in crisis. Bolton were in crisis.

We're in a slightly disappointing situation on the field with hopeful light at the end of the tunnel behind the scenes. Nowhere near a "crisis".
 
Cheesy Feet said:
They lad seems to know a lot about the finances and dealings at the club.
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He clearly understands finance and is really useful in here and I enjoy what he writes . He doesn’t know what the Americans are thinking of the terms of the loan . We do know that they are secured against though .
 
fyl2u said:
I'd say it's absurd to use the word "crisis" about how good the football is when we're near the top of the table.

Bury were in crisis. Bolton were in crisis.

We're in a slightly disappointing situation on the field with hopeful light at the end of the tunnel behind the scenes. Nowhere near a "crisis".
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We’re in our worst ever position. In a hundred plus years.

that’s a crisis. That’s not slightly disappointing
 
seanwharton said:
He clearly understands finance and is really useful in here and I enjoy what he writes . He doesn’t know what the Americans are thinking of the terms of the loan . We do know that they are secured against though .
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I find his posts quite refreshing after some of the rumour mongering and Chinese whispers that thrive on here.
 
Ernie said:
Another leap of faith I'm afraid. Sold as a going concern? Pray tell what is the value of a lower League 1 club with pi**poor players who are worth jack all and real estate assets worth almost the same? £5m? I fear you are putting far too much faith in the owners. And I don't know how much you know about US VCs but it is I'm afraid exceptionally naive to think they would bat an eyelid about liquidating. Believe me, I want to believe it is a down payment but stongly suggest it is the stuff of fairytails.
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Someone was willing to pay £7m for Bury; Bolton went for more than that. Anyone buying Sunderland is buying potential. Donald paid £15m for the shares. You're grossly undervaluing the club, and making a huge leap yourself in assuming there'll be a default. The loan is a term loan, which means that no repayments are due until the term expires. Furthermore, Donald has already said that he and Sartori can cover the loan, which is to Mardox anyway. FPP's primary line of security is the shares in the club. If the loan was called in, the Americans wouldn't have a say in how the loan is recouped; they'd have to appoint administrators, who would be bound in insolvency law to effect a sale as a going concern if at all possible, even if that resulted in a shortfall. Any administrator attempting to wind up a solvent company (which Sunderland is) would be in deep doo-doo. The only insolvent company would be Madrox.
chunkylover53 said:
We’re in our worst ever position. In a hundred plus years.

that’s a crisis. That’s not slightly disappointing
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It's not. It is, as the late Terry Pratchett might have put it, an embuggerance.
 
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The club is in crisis on the performances and results the supporters are watching. The hierarchy will see it as a crisis when attendances plummet. That time is fast approaching. Coventry and Burton results will hit where it hurts as revenue falls as quick as the cups have.
 

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