RAWA RAWA/Club Official Minutes/Newsletter

[KittenMittens]

I don't doubt he's put a lot of effort in.

I'm (politely!) questioning the financing of his deal and what he's put into SAFC in new money, plus the competence of his financial administration of the club when £9m debts appear as if by magic and require advances on parachute payments to see us through the first season he has run the club.

Those payments run out this year. Food for thought, if he gets his sums wrong again in 2019/20.

 

[seanwharton]

Whether you like him or not, one thing he has clearly put 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.

But you can understand that KM and GOM see this differently and therefore people won’t all just say we are in a much better place and GOM is generally satisfied .

The issue that still remains is transparency. They clearly allowed the narrative and supported the narrative that they or at least SD had given ES 40m . People will have concerns when there have been inconsistencies such as that

 

[NYMackem]

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'm not sure where the Sartori investment went to, whether it was into the club as cash or as a payment to Donald for Sartori's shares.

That aside your calculations are focused on the income statement, with little consideration to the balance sheet and the timing of payments. If some of the old transfer fees that were paid in instalments fell due in June but the last PP payment doesn't arrive until August, that would be a cash outflow that needed to be financed but wouldn't impact the income statement. All of Charlie's talk on income and expenditure seems to be based on run rates from the most recent month as well, which I assume won't include one-off non-recurring costs - I doubt Cattermole just walked away from his contract for the crack.

 

[Grumpy Old Man]

I'm not sure where the Sartori investment went to, whether it was into the club as cash or as a payment to Donald for Sartori's shares.

That aside your calculations are focused on the income statement, with little consideration to the balance sheet and the timing of payments. If some of the old transfer fees that were paid in instalments fell due in June but the last PP payment doesn't arrive until August, that would be a cash outflow that needed to be financed but wouldn't impact the income statement. All of Charlie's talk on income and expenditure seems to be based on run rates from the most recent month as well, which I assume won't include one-off non-recurring costs - I doubt Cattermole just walked away from his contract for the crack.

Whatever he put in, part would be paying Donald for some of his shares in Madrox, and the rest would have gone into Madrox for onward transmission to Drumaville. That initial cost to him would be his share of the purchase price paid to Short (£12m) for the shares. If that happened after Short had already been by in full, then the money would be payable to Donald (as he would be out of pocket vis-a-vis the share cost) . Anything Sartori may or not put into Sunderland will be additional to that initial cost.

 

[KittenMittens]

I'm not sure where the Sartori investment went to, whether it was into the club as cash or as a payment to Donald for Sartori's shares.

That aside your calculations are focused on the income statement, with little consideration to the balance sheet and the timing of payments. If some of the old transfer fees that were paid in instalments fell due in June but the last PP payment doesn't arrive until August, that would be a cash outflow that needed to be financed but wouldn't impact the income statement. All of Charlie's talk on income and expenditure seems to be based on run rates from the most recent month as well, which I assume won't include one-off non-recurring costs - I doubt Cattermole just walked away from his contract for the crack.

I know everything forecast for my business for the next 3 years. In detail, I could tell you every payment we need to make, every sum we're due, and every month's cash flow. Why can't Methven and Donald pay someone to do this?

Don't get me wrong, unforeseen costs are naturally not something they can be blamed for, but a schedule of transfer payments is not a secret, or something they would or should have been unaware of. Most importantly, again we have to ask what happens this time next year if they are wrong about the burn rate? We will run out of creative financing options at some point, so figuring out what the hell happened here is a fair question in my view.

 

[oddbod]

I know everything forecast for my business for the next 3 years. In detail, I could tell you every payment we need to make, every sum we're due, and every month's cash flow. Why can't Methven and Donald pay someone to do this?

Don't get me wrong, unforeseen costs are naturally not something they can be blamed for, but a schedule of transfer payments is not a secret, or something they would or should have been unaware of. Most importantly, again we have to ask what happens this time next year if they are wrong about the burn rate? We will run out of creative financing options at some point, so figuring out what the hell happened here is a fair question in my view.

Do your company make mittens for kittens?

 

[NYMackem]

I know everything forecast for my business for the next 3 years. In detail, I could tell you every payment we need to make, every sum we're due, and every month's cash flow. Why can't Methven and Donald pay someone to do this?

Don't get me wrong, unforeseen costs are naturally not something they can be blamed for, but a schedule of transfer payments is not a secret, or something they would or should have been unaware of. Most importantly, again we have to ask what happens this time next year if they are wrong about the burn rate? We will run out of creative financing options at some point, so figuring out what the hell happened here is a fair question in my view.

Maybe the FD is the last of the "rotten core"?