Various people for making libellous accusations about both the club's owners and GOM. Stick to the known facts and there won't be any problems.
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Various people for making libellous accusations about both the club's owners and GOM. Stick to the known facts and there won't be any problems.
KittenMittens
Midfield
I agree... but remember that GOM's opinion, as he has said himself, is only one interpretation of those facts. As long as people are grounding their opinion in reason and things we know (and showing their working out), that shouldn't be a problem for anyone who supports SAFC.
Obviously withholding any judgement on the specific case you're talking about though, assume they just went a bit far.
samaistonsrightfoot
Striker
Tbf the lad who got banned went beyond a bit far.
KittenMittens
Midfield
Sorry, I know people want to forget this, but it occurred to me while driving this afternoon that it's the following sequence of events that massively concern me and I think need to be put to the owners at some point, by someone. Just need to write this down while I have time:
(all of the below is confirmed by Donald and Methven, including the contradictions, with the exception of the final payment to Short, demonstrated by the lifting of charges by Short)
I am passing no judgement at this stage because we don't have the full facts, merely pointing out the sequence of events and a clear inconsistency in what has been said by Donald/Methven and what has happened.
(all of the below is confirmed by Donald and Methven, including the contradictions, with the exception of the final payment to Short, demonstrated by the lifting of charges by Short)
- June 2018: Short/Donald agree a £14.6m purchase price for Short's shares in SAFC (£15m minus a £400k payment to an outgoing member of staff)
- June 2018: Donald makes a payment of £5m in regard to the above. The rest is secured against parachute payments, so if Donald cannot pay, Short can take parachute payment money.
- September 2018: Donald claims in the May 2019 podcast that he settled his balance with Short in September (a balance of £9.6m)
- Unspecified time (possibly before, during or after the above): Short agrees to write off '2-3m' of the £9.6m Donald owed for his shares, leaving the maximum outstanding balance at £6.6-7.6m
- April 2019: Donald takes out a loan of £11.9m from Close Brothers as an advance on next season's £15m parachute payments
- April 2019: Donald pays off his balance to Short for the shares in SAFC
- May 2019: Donald publicly acknowledges that he is in negotiations to sell the majority of his shares in SAFC
- May 2019: Donald claims he will be able to pay off the loan from Close Brothers early (by August) as those funds weren't entirely needed.
- June 2019: Methven claims '£10m' of the parachute payments remain (of £15m).
- Why is there a discrepancy between Donald's claim that he paid off his balance to Short in September and the lifting of charges in April?
- How did a '£9m black hole' (CM's words in the OP) appear in SAFC's finances in April 2019 and what exactly did it consist of?
- What part of the £11.9m loan from Close Brothers passed through Madrox before landing at it's eventual destination, and why?
- Was any part of the £11.9m loan from Close Brothers paid to Ellis Short by either SAFC or Madrox?
- How much exactly (not rounded) is left of the £15m final parachute payment in 2019/20, once the loan advance is settled?
I am passing no judgement at this stage because we don't have the full facts, merely pointing out the sequence of events and a clear inconsistency in what has been said by Donald/Methven and what has happened.
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chunksafc
Striker
Interesting post and well done for collating all the dates etc.
Serious question, would you expect any club owner to answer those type of questions?
The reason I ask is maybe the owners have misjudged the being open and honest line and now we expect to much information
samaistonsrightfoot
Striker
Think it was a naive phrase to use tbh and are probably regretting it now. I also think lot of what they say is deliberately misleading or ambiguous. I don't think they've done owt wrong (in terms of sinister goings on) though.
chunksafc
Striker
I dont think it's deliberately misleading, its more talking off script and getting mixed up.
At least I hope it is
samaistonsrightfoot
Striker
No I think they are misleading. In a way they focus on s a detail and ignore the wider aspect. They do this quite often using the 37m/40m issue with the DM article. Also when asked on the podcast about the academy losing cat 1 they focused on now and ignored anything in the future.
But, like I say, I don't think there's anything malicious or sinister and I don't expect them to be honest and open. I wouldn't be, although tbf I wouldn't be telling everyone I was at the same time.
KittenMittens
Midfield
Agree with both of you. Not implying they did anything they weren't legally entitled to do. For example, the parachute payments being tied to Donald's share purchase makes it entirely viable to take out the loan, pay it via Madrox to Short etc. I think fans should know if that's the case, though.
I don't think they would answer those questions clearly whether they have anything to hide or not, but it's like CSI: Wearside here. You learn something new every time they say something and it helps us piece the story together.
I also agree with the characterisation of them as knowing what they are doing by deliberately adding needless detail to small elements of a narrative that make it harder to glean the exact answers to questions.
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samaistonsrightfoot
Striker
Yeah, tbh I'm not really that arsed about the parachute payment. More bothered about whether we've already hit our ceiling with them.
Although, it does get on my nerves when they make these promises or conflicting statements etc. Promises are always subject to change for a start so it's pointless bar the short term appeasement of some.
Grumpy Old Man
Striker
I can answer questions 3 and 4 pretty quickly. (3)The loan from Close Brothers will be to SAFC. Madrox is essentially a dormant investment company (or will be). Any cash "passing" through" it is effectively a paper transaction to a reflect a corporate chain. This is particularly so with the balance between SAFC and Madrox. (4) It looks as though the loan was taken out after the final payment was made to Short. There's no good reason why any of it should have gone to Short.In answer to (2), Methven's answer in the minutes refers to several black holes. Whilst these could be new, the cash requirement could equally be down to the resolution of items previously identified. (5) I'd guess around £5m.
On you point 8. August was the original planned final repayment date; if that has been advanced, I'd expect it to be cleared by July. The need for it will have been reduced by the additional income from the play-offs, as in April promotion was still in our own hands.
Not saying this is what's happened; just playing devil's advocate.
KittenMittens
Midfield
Yeah, one way or another we'll find out one day. I think GOM might have summed it up quite well at the start of this thread. They have needlessly tried to complicate this (probably to conceal some of the devices to buy the club) and in doing so, they're prolonging the potential fallout.
Most likely they figured they'll be out before the facts come to light. It could be a year or two before we know, long enough to have made some money and left in theory.
I understand. Do we have dates on the Short final payment and the loan from Close Bros?
The DM (not proven as a great source which is why I omitted them from my summary) said that the money from the Close Bros loan went via Madrox. What is the advantage to the club in this mechanism?
Most likely they figured they'll be out before the facts come to light. It could be a year or two before we know, long enough to have made some money and left in theory.
I understand. Do we have dates on the Short final payment and the loan from Close Bros?
The DM (not proven as a great source which is why I omitted them from my summary) said that the money from the Close Bros loan went via Madrox. What is the advantage to the club in this mechanism?
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Grumpy Old Man
Striker
The Companies House notice was filed on 25 April, so all you can say is sometime before that. There's normally some delay between the final payment and the filing, so ti's impossible to be precise. As for the loan, if routed through Madrox, it could give an initial impression of the intercompany balance coming down, but that would be reversed the minute the minute a repayment was made, so that's pretty pointless, particularly as it's stated that Madrox doesn't have a bank account. There's no real reason or sense to have it arranged through anything other than SAFC. There are certainly no advantages to be gained, particularly as the loan was only going to be in place for three or four months.
Deleted User 11453
Striker
#2 was the £9M for Alvarez?
KittenMittens
Midfield
Based on what we know as a fact, I think there's clearly scope for the loan to have come in before the money was paid. Do we have a date for the loan? If not, we cannot say either way, hence the original question for the board.
As for Madrox... thanks for the answer. I worry that they are a mechanism to obfuscate the specifics of where money from SAFC ltd is going and for what purpose, which is why I was asking whether there was any benefit. If there isn't, it seems needless that SAFC debts are being paid via them (as the DM reported so withholding judgement), especially if ultimately, Madrox publishes accounts that offer us far less detail than SAFC.
No, that was not unknown. The way that Charlie described it (as GOM pointed out earlier) was that it was a combination of things. In the end it wasn't; £9m either, as they also were apparently receiving money in June that they didn't know about which made the total 'loan' about £5m. Again, I don't like how close that figure is generally hovering around the general amount that would have been Donald's obligation to Short.
Regardless of that, there's absolutely no excuse for a company of Sunderland's size to not know about millions in debtors/creditors, not given the amount of due diligence conducted over the last 14 months, and apparently those issues not being raised in September(ish) time when others were raised. At best, it is a sign of incompetence.
As for Madrox... thanks for the answer. I worry that they are a mechanism to obfuscate the specifics of where money from SAFC ltd is going and for what purpose, which is why I was asking whether there was any benefit. If there isn't, it seems needless that SAFC debts are being paid via them (as the DM reported so withholding judgement), especially if ultimately, Madrox publishes accounts that offer us far less detail than SAFC.
No, that was not unknown. The way that Charlie described it (as GOM pointed out earlier) was that it was a combination of things. In the end it wasn't; £9m either, as they also were apparently receiving money in June that they didn't know about which made the total 'loan' about £5m. Again, I don't like how close that figure is generally hovering around the general amount that would have been Donald's obligation to Short.
Regardless of that, there's absolutely no excuse for a company of Sunderland's size to not know about millions in debtors/creditors, not given the amount of due diligence conducted over the last 14 months, and apparently those issues not being raised in September(ish) time when others were raised. At best, it is a sign of incompetence.
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NYMackem
Striker
I remain on the fence about the owners, but they have been consistent in saying that we have brought revenue up to £19m a year and operating costs down to £30m a year. Whether this reflects the past year's results or the current run rate remains to be seen, but either way there is at least a £10m hole in this year's income statement that needs to be financed from parachute payments (taking their statements at face value). As such, I understood the Close Brothers loan to be a debt of the club, used to manage cash flow while waiting for the final PP.
The use of Madrox as a conduit for the SBC loan repayment was explained in the minutes to be a consequence of the way the deal was structured (SBC not wanting it's debt secured on a loss-making football club with a pretty weak balance sheet, and Ellis wanting his own security on the loan he took on, presumably on Madrox's investment in the club). While the Madrox accounts are limited in their disclosure, if you wanted to obfuscate transactions in a holding company, you'd register it somewhere like Jersey with no ownership or financial reporting requirements at all.
Grumpy Old Man
Striker
Which, indeed, Drumaville is, and was set up as such by the Quinn consortium.
KittenMittens
Midfield
I understand all of that. Which leads us back to the apparent reason that Donald did not pay up front for the club, which was to finance our operating costs in the short term.
I think there's still a hole in what we've brought in, what's gone out and where it has gone. We got £34m in parachute payments last year. 25m to SBC, where did the rest go? Operating costs? If so, I think we likely had combined income of around £25-28m (16-19m rev + 9m pp) and an operating expenditure of £32m (CM).
Add in £3m from Sartori and that's £28m-£31m coming in, and then income from Close Bros loan of £5m means £33m-£36m has been used this year running the club, not a penny of which was Stewart Donald's. In fact, £1.5m also came in from Josh Maja's sale, and even if we say that went towards Grigg, it's not Donald putting substantial cash in, certainly not enough to justify his cash flow reason for not paying up front.
I'm at a loss to understand what Donald has put in this season and again, how any competent administrators of a football club can overlook a £5m potential black hole. To be honest, there are so many questions that like almost everyone who has tried to decipher this, it's tough not to get frustrated with the convoluted and (imo) extremely creative ways that Donald and Methven have run this, in conjunction with Short as a willing component of the whole shoddy affair.
I think there's still a hole in what we've brought in, what's gone out and where it has gone. We got £34m in parachute payments last year. 25m to SBC, where did the rest go? Operating costs? If so, I think we likely had combined income of around £25-28m (16-19m rev + 9m pp) and an operating expenditure of £32m (CM).
Add in £3m from Sartori and that's £28m-£31m coming in, and then income from Close Bros loan of £5m means £33m-£36m has been used this year running the club, not a penny of which was Stewart Donald's. In fact, £1.5m also came in from Josh Maja's sale, and even if we say that went towards Grigg, it's not Donald putting substantial cash in, certainly not enough to justify his cash flow reason for not paying up front.
I'm at a loss to understand what Donald has put in this season and again, how any competent administrators of a football club can overlook a £5m potential black hole. To be honest, there are so many questions that like almost everyone who has tried to decipher this, it's tough not to get frustrated with the convoluted and (imo) extremely creative ways that Donald and Methven have run this, in conjunction with Short as a willing component of the whole shoddy affair.
Whether you like him or not, one thing he has clearly put in is a hell of a lot of hard graft and made a lot of tough and sometimes unpopular decisions.
I don't pretend to understand all of the finances, I'll leave that to @Grumpy Old Man. He is an expert and I get the impression that whilst its not perfect, he is generally satisfied with things.
I am fairly surely financially anyway the club is in a much better place than it was a year ago. I'm not so sure about the football side and that's ultimately what I really care about.
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