Old Board vs New Board

[Park Life 70]

Our debt to MA is 111m, it would have been 30m less if he hadn't got us relegated.

[Guest alex]

All sounds so familiar.....

 

Shepherd / Labour throwing good after bad to try and maintain the good times.

 

Ashley / Tories reigning in the spending and paying off the debt.

 

Bizarre fucking world init.

Both are cunts backed by cunts anyway.

Edited September 15, 2010 by alex

[Park Life 70]

All sounds so familiar.....

 

Shepherd / Labour throwing good after bad to try and maintain the good times.

 

Ashley / Tories reigning in the spending and paying off the debt.

 

Bizarre fucking world init.

Both are cunts backed by cunts anyway.

 

[Phil 6]

Our debt to MA is 111m, it would have been 30m less if he hadn't got us relegated.

 

Our debt to our owner ...

 

 

 

Not sure why people are discussing other clubs being run badly. While there are loads of businesses that manage their debt, it's a very bad practise, especially when it costs millions to service.

[Park Life 70]

Our debt to MA is 111m, it would have been 30m less if he hadn't got us relegated.

 

Our debt to our owner ...

 

 

 

Not sure why people are discussing other clubs being run badly. While there are loads of businesses that manage their debt, it's a very bad practise, especially when it costs millions to service.

 

Yeah it's a tax trick. Also makes the club more saleable ie there aren't any future interest paymetns accumulating to a third party. He's doing this bit the right way for himself and the club.

[ChezGiven 0]

I shouldnt join in this debate now but havent people just added paper losses from amortisation to the debt position on the last accounts? The losses we posted last time included 30m of amortisation iirc. Thats not a loss which adds to debt.

[Guest alex]

One point above the relegation zone and if Carroll's injured we've got Shola to come in. You can't pin that on the last regime.

[Park Life 70]

I shouldnt join in this debate now but havent people just added paper losses from amortisation to the debt position on the last accounts? The losses we posted last time included 30m of amortisation iirc. Thats not a loss which adds to debt.

 

He could write the whole lot off.

[ChezGiven 0]

I shouldnt join in this debate now but havent people just added paper losses from amortisation to the debt position on the last accounts? The losses we posted last time included 30m of amortisation iirc. Thats not a loss which adds to debt.

 

He could write the whole lot off.

 

The accounting losses are, aren't they?

[Guest]

All PL clubs are in debt bar one - Stoke, last time I looked. It's the nature of the beast, the PL is highly competitive, expenseive but also with high rewards. Average debt at PL clubs runs between 30-50m with the top end perilously high. It is very difficult to remain competitive/not get relegated and with the other hand not spend money on players either, it is more or less impossible.

 

So far as to say, running PL clubs on profit is practically unheard of bar one or two clubs who have been run mind numnbinlgy well for half a dozen years or more. Still MA would have known all that IF HE HAD DONE DUE DILLIGANCE before he took over and had studied the football business model for even ONE DAY.

 

 

 

Everyone's getting into debt and running at a loss so it's all right?

 

What fantastic logic.

 

What are you laughing at you stupid cunt?

 

Most PL clubs carry massive debt due to the nature of the business model they've all been using and escalating player wages and skyrocketing transfer costs. This upward spiral has occurred cause there is a huge demand and short supply for quality players exacerbated by cut throat competition and PL survival and dispropotionate rewards for the top 4 in the league.

 

Nothing to do with logic, they are just the FACTS.

 

MA wouldn't have bought the club if he had taken a proper look at the outgoing commitments of the venture (debt/intererst/old player transfer costs ongoing).

 

He's been trying to get rid of it the day he reaslised it's burning through money.

 

The old board used THE SAME MODEL as all the clubs we were competing against and also made some huge mistakes, but they really didn't do anything much different to all the other clubs who are carrying debt.

 

 

Apart from spend beyond their means? For example, what other clubs in the premier league that weren't already successful broke the world transfer record? None. We broke the world transfer record trying to be successful. No other club did that. There's a difference between having debt and having uncontrollable debt. If you think it was controllable, ask yourself why we'd started to sign free players and loan players and the end of Freddie's reign of terror.

 

Why don't you go justify a business running at a loss on a Leeds forum, or a portsmouth forum, or a Crystal Palace forum, or a Darlington forum. You stupid cunt.

[Guest]

Manchester United

 

Turnover: £278.5m

 

Operating profit: £91.3m

 

Net debt: £716.6m

 

Interest payment: £68.5m

 

Manchester United's Byzantine finances are essentially a tale of massive profits and massive interest payments. The club's 08-09 accounts showed that the Red Devils paid £42m of interest on their £500m of bank loans. And the interest charge on the "payment-in-kind" loan, secured on the controlling shares in the club of the Glazer family, was £26m. But the PIK loan "rolls up" the interest, so the value of that debt rose to £202m in the year. Last month the Glazer family issued a £500m bond with an interest rate of 9 per cent and maturity date of 2017. The proceeds will be used to pay off the existing bank loans. The bond prospectus also makes provision for up to £70m to be taken out of the club "for general purposes, including repaying existing indebtedness". This is assumed to mean paying off some of the Glazers' PIK debt, on which the interest rate will rise to 16.5 per cent this August. The full PIK debt is repayable in 2017. The recent bond prospectus also revealed that the Glazers lost the club £35m attempting to hedge against a rise in interest rates.

 

Arsenal

 

Turnover: £312.3m

 

Operating profit: £58.8m

 

Net debt: £297.0m

 

Interest payment: £16.6m

 

A pocket of financial sanity. The club's 08-09 accounts show the outstanding value of the bonds issued to finance the building of the Emirates stadium at £244.9m. But this is repayable over a 20 to 22-year term at a fixed interest rate of 5.3 per cent. The club is also paying off some of the principal sum of the bond each year (£5.3m in 08-09), which means that Arsenal, managed by Arsène Wenger, will not be saddled with debt indefinitely. The bank loan taken out by the club with Barclays to finance the Highbury Square apartment complex, on the site of Arsenal's former ground, stood at £137m, with a repayment date of December 2010 and an interest rate of 2-2.5 per cent above the London inter-bank lending rate (Libor). Since then, however, the club has reduced the property bank loan to £47.1m, financed by selling apartments at Highbury Square for a discount. The main financial risk for the club would be a failure to fill the Emirates.

 

Liverpool

 

Turnover: £164.2m

 

Operating profit: £24.9m

 

Net debt: £261.7m

 

Interest payment: £36.5m

 

The clearest possible example of the madness of a leveraged buyout in football. Liverpool's relatively healthy operating profits in 07-08 were wiped out by interest payments on their borrowings from the Royal Bank of Scotland and the US bank Wachovia. Since Liverpool refinanced in the summer, the new managing director of the club, Christian Purslow, has claimed that the club's debt has come down to £237m.

 

West Ham

 

Turnover: £71.6m

 

Operating profit: –£32.8m

 

Net debt: £114.9m

 

Interest payment: £3.0m

 

As the new co-owner David Gold puts it: "a car crash". West Ham's 07-08 accounts showed that they owed £114.9m, more than its annual turnover. The accounts also showed the club had breached covenants on a £35m bank loan. The new repayment date for that loan, from a syndicate of five banks, is August 2011. This is, no doubt, the reason why the Hammers' new owners are urgently seeking to raise £40m from new investors.

 

Fulham

 

Turnover: £53.7m

 

Operating profit: –£2.1m

 

Net debt: £164.0m

 

Interest payment: £1.0m

 

The colossal size of Fulham's net borrowing reflects the debt it owes to Mohamed al-Fayed. The 07-08 accounts show that the club owes the Harrods owner £159m. However, this is said to be unsecured, interest-free and with no fixed repayment timetable. The club also has a £4.5m bank loan from NatWest, secured on Fulham's future broadcasting income and repayable within a year, on which it paid interest of 7.11 per cent.

 

Aston Villa

 

Turnover: £75.6m

 

Operating profit: –£13.1m

 

Net debt: £72.3m

 

Interest payment: £5.7m

 

Aston Villa's 07-08 accounts show the club has a £13m bank loan secured on the club's assets. £2.5m of this is repayable in three instalments each year until 2012. It also has a £10m overdraft. But Villa's biggest debt is to their American owner, Randy Lerner, who has lent the club £49.5m. These loans are repayable in full in December 2016. Villa paid £4.1m in interest in the year on Lerner's loan, on top of £1.37m to service the bank loan.

 

Sunderland

 

Turnover: £63.5m

 

Operating profit: –£2.4m

 

Net debt: £48.8m

 

Interest payment: £0.7m

 

Another club that survives by the grace of wealthy benefactors. The club's 07-08 accounts show that the Black Cats owed £35.2m to their immediate parent company. This was unsecured, interest-free and with no repayment date. The club also had a £13.6m bank overdraft, guaranteed by the owners. Ellis Short, the American businessman who took full control of the club last May, has given conflicting signals over how much he is willing to spend in order to push Sunderland up the table. The latest word is that he wants to reduce the wage bill.

 

Bolton Wanderers

 

Turnover: £52.3m

 

Operating profit: –£5.3m

 

Net debt: £58.4m

 

Interest payment: £3.9m

 

Not a healthy picture. Bolton rely on the backing of their owner Edwin Davies. The latest accounts show that the club owes its parent company £55.9m. Moreover, this borrowing does not come for free: £23m is repayable on demand and has an interest rate of 10 per cent. A further £11.5m is secured on future TV money. The threat of relegation is real – as is the prospect of a financial crunch.

 

Hull City

 

Turnover: £11.2m

 

Operating profit: –£9.2m

 

Net debt: £17.1m

 

Interest payment: £0.4m

 

An accident waiting to happen. The note from the accountants in the club's 07-08 accounts says that if the Tigers are relegated they will need to generate a financial surplus of £23m to avoid meltdown this financial year. And even if Hull survive in the Premier League, they will need to generate a £16m surplus. The accounts also show a £22m bank loan, with £12m repayable within a year.

 

Wigan Athletic

 

Turnover: £46.3m

 

Operating profit: –£17.0m

 

Net debt: £54.0m

 

Interest payment: £1.5m

 

The club's latest accounts make it plain that all that stands between Wigan and oblivion is Dave Whelan. The owner has put £39m into the club in the form of an unsecured, interest-free loan with no fixed repayment date. The club also has an overdraft and bank loan from Barclays of £18.7m, repayable on demand, on which Wigan paid £1.5m in interest in 08-09. The club ran at an operating loss of £17m in that year and the accounts note "further losses are anticipated in 2010 and 2011".

 

Tottenham Hotspur

 

Turnover: £113.0m

 

Operating profit: £18.4m

 

Net debt: £45.9m

 

Interest payment: £8.0m

 

Spurs have gone into debt to build a new training ground in Enfield. The club is paying an annual interest rate of 7.29 per cent on £30m of its borrowings. But it does not have to pay this back until 2024. A planned new 56,000-seat stadium should increase match-day revenues, although it remains to be seen how much the project itself will cost, or the terms of the financing.

 

Stoke City

 

Turnover: £11.2m

 

Operating profit: –£7.8m

 

Net debt: £2.3m

 

Interest payment: £0.5m

 

The Potters' 07-08 accounts showed negligible debt, but do make it clear how dependent the club is on its benefactor, Peter Coates, the owner of the bet365 online betting company. Revenue will have increased thanks to the Premier League TV money. But so will their outgoings. Last summer, the club spent £10m in luring Robert Huth and Tuncay Sanli to the Britannia Stadium.

 

Everton

 

Turnover: £79.7m

 

Operating profit: £6.3m

 

Net debt: £37.9m

 

Interest payment: £4.1m

 

Uncertainty reigns. £27m of the Toffees' borrowings – secured on future ticket sales – are spread over a relatively long period. But the 7.79 per cent interest rate meant that £4.1m of cash left the club in 08-09. The plan to increase match-day revenues by building a new 50,000-seat stadium in Kirkby was thrown into disarray last year when the Government rejected the proposal.

 

Burnley

 

Turnover: £11.2m

 

Operating profit: –£8.9m

 

Net debt: £11.9m

 

Interest payment: £2.7m

 

According to the 08-09 accounts, the Clarets' chairman, Barry Kilby, and seven other directors had the right to claim full repayment of their £6.97m loans out of the club's new Premier League revenues following last summer's promotion. The chairman is aiming for a profit this financial year to improve the club's balance sheet.

 

Portsmouth

 

Turnover: £70.5m

 

Profit: –£17.0m

 

Net debt: £57.7m

 

Interest payment: £6.6m

 

Portsmouth owed £28m to their former owner Alexandre Gaydamak, £18m to their owner, Balram Chainrai, and £5m to agents and other creditors. The club was also being pursued for £7.4m of unpaid taxes by Her Majesty's Revenue and Customs. Administration means a nine-point deduction and just about certain relegation from the Premier League. Now the fight will begin by the club's creditors to get their money back. First in line will be those other clubs still owed money by Pompey.

 

Wolves

 

Turnover: £18.2m

 

Operating profit: –£1.6m

 

Net debt: £13.0m

 

Interest payment: £0m

 

Wolves spent heavily to win promotion in 2007 and the club's 07-08 accounts reflect that. The effort was financed by new owner, Steve Morgan, who is now owed £13m by the club, although this is interest-free. Morgan tried to buy Liverpool in 2004 and says he was prepared to put £70m of cash into the Merseyside club to do so. Looking at Wolves' zero interest bill for 07-08, many Liverpool fans will probably wish he had been successful.

 

Chelsea

 

Turnover: £190.0m

 

Operating profit: –£11.4m

 

Net debt: £511.6m

 

Interest payment: £0.7m

 

Chelsea's 07-08 accounts show the club falling short of its goal of financial sufficiency. The accounts also showed a debt of £488m to its owner, Roman Abramovich. But last December the club released a statement revealing that this had been converted to equity, leaving the club "virtually debt-free". Those same results also featured an exceptional payment of £12.6m to Luiz Felipe Scolari and three coaching staff following the Brazilian's sacking as manager last season.

 

Birmingham City

 

Turnover: £49.8m

 

Operating profit: £13.7m

 

Net debt: £12.0m

 

Interest payment: £0.26m

 

Hope, perhaps, for Hammers fans. Birmingham City's 07-08 accounts reflect the golden legacy of David Gold, David Sullivan and Karren Brady. The accounts are evidence that a middle-ranking club without a ridiculously wealthy sugar daddy can run its finances in a sensible manner. The club's main debt was a £14.7m loan from its parent company, but this appears to be interest-free. Birmingham's new owner, Hong Kong businessman Carson Yeung, has a solid base on which to build.

 

Blackburn Rovers

 

Turnover: £50.9m

 

Operating profit: –£6.8m

 

Net debt: £20.3m

 

Interest payment: £0.8m

 

Precarious. The latest accounts show bank debt, secured on the club's assets, projected to increase to £20m. This loan is repayable by May 2012. The estate of the club's late benefactor, Jack Walker, has lent some £6m interest-free. But there does not appear to be an open-ended commitment to fund the club's losses. As the chairman, John Williams, warns in the accounts: "Without external funding we are inevitably moving from a trading club to a net selling club".

 

Manchester City

 

Turnover: £87.0m

 

Operating profit: –£34.2m

 

Net debt: £194.4m

 

Interest payment: £14.4m

 

The normal rules of business do not apply to Manchester City. The latest accounts show a company with a turnover of £87m running at an operating loss of £34m and with an accumulated debt to Sheikh Mansour bin Zayed Al-Nahyan of Abu Dhabi of £194m. Since then, the club has spent £117m on players, including Emmanuel Adebayor and Carlos Tevez. But last month Sheikh Mansour converted Manchester City's entire £305m debt to him into equity.

 

 

 

 

Now, do you see how the big clubs have a positive 'operating profit', that means they can afford their debt. Surely the way forward is to aim to be like these clubs. Surely the way to be like these clubs is to ensure that the club operates with a profit, not a loss. Surely the way to achieve this is to not get into a position where you need success to achieve an operating profit. Surely if you're low in the table, get into a position of having an operating profit, then you are then in a position to be able to strengthen, with borrowed cash, and the means to pay it back. Surely the dangerous approach is to take on debt, with no profits to cover repayments, meaning that failure to produce on the pitch makes the debt increase.

 

 

Pretty basic stuff when you strip it down.

Edited September 15, 2010 by AshleysSkidMark

[Guest]

One point above the relegation zone and if Carroll's injured we've got Shola to come in. You can't pin that on the last regime.

 

 

He was already part of the furniture when Ashley came in tbf He must be fucking unbelievable in training

[Guest alex]

Now, do you see how the big clubs have a positive 'operating profit', that means they can afford their debt. Surely the way forward is to aim to be like these clubs. Surely the way to be like these clubs is to ensure that the club operates with a profit, not a loss. Surely the way to achieve this is to not get into a position where you need success to achieve an operating profit. Surely if you're low in the table, get into a position of having an operating profit, then you are then in a position to be able to strengthen, with borrowed cash, and the means to pay it back. Surely the dangerous approach is to take on debt, with no profits to cover repayments, meaning that failure to produce on the pitch makes the debt increase.

 

 

Pretty basic stuff when you strip it down.

Sounds like the much vaunted five year plan. Any idea when it's kicking off?

[Guest alex]

One point above the relegation zone and if Carroll's injured we've got Shola to come in. You can't pin that on the last regime.

 

 

He was already part of the furniture when Ashley came in tbf He must be fucking unbelievable in training

He was also a lot further down the pecking order tbef.

[Guest]

Now, do you see how the big clubs have a positive 'operating profit', that means they can afford their debt. Surely the way forward is to aim to be like these clubs. Surely the way to be like these clubs is to ensure that the club operates with a profit, not a loss. Surely the way to achieve this is to not get into a position where you need success to achieve an operating profit. Surely if you're low in the table, get into a position of having an operating profit, then you are then in a position to be able to strengthen, with borrowed cash, and the means to pay it back. Surely the dangerous approach is to take on debt, with no profits to cover repayments, meaning that failure to produce on the pitch makes the debt increase.

 

 

Pretty basic stuff when you strip it down.

Sounds like the much vaunted five year plan. Any idea when it's kicking off?

 

 

Who knows? In theory it's the right way to go though, it's undeniable.

 

Getting the balance between low spending and strengthening key areas of the team is an unenviable task mind, but if we do manage to keep ourselves up I'm sure we'll be in a better position in the future. Whether or not we get to that point and any ambition is shown from there is another debate altogether though.

[Guest]

One point above the relegation zone and if Carroll's injured we've got Shola to come in. You can't pin that on the last regime.

 

 

He was already part of the furniture when Ashley came in tbf He must be fucking unbelievable in training

He was also a lot further down the pecking order tbef.

 

 

When you've got Michael Owen and Mark Viduka in your squad, you're never far away from the first team as a 3rd or 4th striker

[Guest alex]

One point above the relegation zone and if Carroll's injured we've got Shola to come in. You can't pin that on the last regime.

 

 

He was already part of the furniture when Ashley came in tbf He must be fucking unbelievable in training

He was also a lot further down the pecking order tbef.

 

 

When you've got Michael Owen and Mark Viduka in your squad, you're never far away from the first team as a 3rd or 4th striker

Unless, like Shola, you're injured more than they are.

[Guest alex]

Now, do you see how the big clubs have a positive 'operating profit', that means they can afford their debt. Surely the way forward is to aim to be like these clubs. Surely the way to be like these clubs is to ensure that the club operates with a profit, not a loss. Surely the way to achieve this is to not get into a position where you need success to achieve an operating profit. Surely if you're low in the table, get into a position of having an operating profit, then you are then in a position to be able to strengthen, with borrowed cash, and the means to pay it back. Surely the dangerous approach is to take on debt, with no profits to cover repayments, meaning that failure to produce on the pitch makes the debt increase.

 

 

Pretty basic stuff when you strip it down.

Sounds like the much vaunted five year plan. Any idea when it's kicking off?

 

 

Who knows? In theory it's the right way to go though, it's undeniable.

 

Getting the balance between low spending and strengthening key areas of the team is an unenviable task mind, but if we do manage to keep ourselves up I'm sure we'll be in a better position in the future. Whether or not we get to that point and any ambition is shown from there is another debate altogether though.

I think Ashley thought it was that easy too. Can you name any teams who've done it all the way through from where we are now?

[Guest]

Now, do you see how the big clubs have a positive 'operating profit', that means they can afford their debt. Surely the way forward is to aim to be like these clubs. Surely the way to be like these clubs is to ensure that the club operates with a profit, not a loss. Surely the way to achieve this is to not get into a position where you need success to achieve an operating profit. Surely if you're low in the table, get into a position of having an operating profit, then you are then in a position to be able to strengthen, with borrowed cash, and the means to pay it back. Surely the dangerous approach is to take on debt, with no profits to cover repayments, meaning that failure to produce on the pitch makes the debt increase.

 

 

Pretty basic stuff when you strip it down.

Sounds like the much vaunted five year plan. Any idea when it's kicking off?

 

 

Who knows? In theory it's the right way to go though, it's undeniable.

 

Getting the balance between low spending and strengthening key areas of the team is an unenviable task mind, but if we do manage to keep ourselves up I'm sure we'll be in a better position in the future. Whether or not we get to that point and any ambition is shown from there is another debate altogether though.

I think Ashley thought it was that easy too. Can you name any teams who've done it all the way through from where we are now?

 

Where did I suggest it was easy like?

[Guest alex]

Now, do you see how the big clubs have a positive 'operating profit', that means they can afford their debt. Surely the way forward is to aim to be like these clubs. Surely the way to be like these clubs is to ensure that the club operates with a profit, not a loss. Surely the way to achieve this is to not get into a position where you need success to achieve an operating profit. Surely if you're low in the table, get into a position of having an operating profit, then you are then in a position to be able to strengthen, with borrowed cash, and the means to pay it back. Surely the dangerous approach is to take on debt, with no profits to cover repayments, meaning that failure to produce on the pitch makes the debt increase.

 

 

Pretty basic stuff when you strip it down.

Sounds like the much vaunted five year plan. Any idea when it's kicking off?

 

 

Who knows? In theory it's the right way to go though, it's undeniable.

 

Getting the balance between low spending and strengthening key areas of the team is an unenviable task mind, but if we do manage to keep ourselves up I'm sure we'll be in a better position in the future. Whether or not we get to that point and any ambition is shown from there is another debate altogether though.

I think Ashley thought it was that easy too. Can you name any teams who've done it all the way through from where we are now?

 

Where did I suggest it was easy like?

You said it was pretty basic stuff.

Answer my question too if you like.

Edited September 15, 2010 by alex

[Guest]

Now, do you see how the big clubs have a positive 'operating profit', that means they can afford their debt. Surely the way forward is to aim to be like these clubs. Surely the way to be like these clubs is to ensure that the club operates with a profit, not a loss. Surely the way to achieve this is to not get into a position where you need success to achieve an operating profit. Surely if you're low in the table, get into a position of having an operating profit, then you are then in a position to be able to strengthen, with borrowed cash, and the means to pay it back. Surely the dangerous approach is to take on debt, with no profits to cover repayments, meaning that failure to produce on the pitch makes the debt increase.

 

 

Pretty basic stuff when you strip it down.

Sounds like the much vaunted five year plan. Any idea when it's kicking off?

 

 

Who knows? In theory it's the right way to go though, it's undeniable.

 

Getting the balance between low spending and strengthening key areas of the team is an unenviable task mind, but if we do manage to keep ourselves up I'm sure we'll be in a better position in the future. Whether or not we get to that point and any ambition is shown from there is another debate altogether though.

I think Ashley thought it was that easy too. Can you name any teams who've done it all the way through from where we are now?

 

Where did I suggest it was easy like?

You said it was pretty basic stuff.

Answer my question too if you like.

 

The concept of not running a club at a loss is. Putting it into practice from the position Freddie had us in isn't.

[Guest]

I don't really understand what you're asking me..

 

Done what all the way through?

Edited September 15, 2010 by AshleysSkidMark

[Guest alex]

Name one club not not running at a loss or which is currently debt free then.

[Guest]

Name one club not not running at a loss or which is currently debt free then.

 

 

Why? What point would that prove?

[Guest alex]

I don't really understand what you're asking me..

 

Done what all the way through?

I thought you were outlining the way forward. I concede a lot of what you say re: the old regime. I just don't get the love for the new lot when they've made things worse through what was obviously their own doing.