Good news—bad news??

This Forum is the main messageboard to discuss all things Claret and Blue and beyond
minnieclaret
Posts: 6843
Joined: Thu Jan 21, 2016 9:05 am
Been Liked: 2011 times
Has Liked: 2287 times
Location: lismore co. waterford

Good news—bad news??

Post by minnieclaret » Fri Jan 14, 2022 11:01 pm

This should get a few necks throbbing.
9611671A-7A9A-44B4-8569-9EE505C17BDE.jpeg
9611671A-7A9A-44B4-8569-9EE505C17BDE.jpeg (98.39 KiB) Viewed 5243 times

yTib
Posts: 2008
Joined: Sat Jan 23, 2016 6:39 pm
Been Liked: 540 times
Has Liked: 464 times
Location: Château d'If

Re: Good news—bad news??

Post by yTib » Fri Jan 14, 2022 11:03 pm

source?

AfloatinClaret
Posts: 966
Joined: Sat May 26, 2018 7:16 pm
Been Liked: 301 times
Has Liked: 679 times

Re: Good news—bad news??

Post by AfloatinClaret » Fri Jan 14, 2022 11:06 pm

yTib wrote:
Fri Jan 14, 2022 11:03 pm
source?
Daily mail for one

gandhisflipflop
Posts: 3859
Joined: Thu Jan 21, 2016 8:05 pm
Been Liked: 1557 times
Has Liked: 1026 times
Location: Costa del Padihamos beach.

Re: Good news—bad news??

Post by gandhisflipflop » Fri Jan 14, 2022 11:06 pm

It’s in the daily mail and it wouldn’t be good news

yTib
Posts: 2008
Joined: Sat Jan 23, 2016 6:39 pm
Been Liked: 540 times
Has Liked: 464 times
Location: Château d'If

Re: Good news—bad news??

Post by yTib » Fri Jan 14, 2022 11:09 pm

that seems like a very odd clause and i imagine one that would be difficult to realise.

basil6345789
Posts: 2019
Joined: Fri Jan 22, 2016 10:22 pm
Been Liked: 368 times
Has Liked: 1770 times

Re: Good news—bad news??

Post by basil6345789 » Fri Jan 14, 2022 11:09 pm

La source HP

dsr
Posts: 13064
Joined: Thu Jan 21, 2016 12:47 pm
Been Liked: 3867 times
Has Liked: 1677 times

Re: Good news—bad news??

Post by dsr » Fri Jan 14, 2022 11:10 pm

What it means is that if ALK don't pay the balance of their instalments on their purchase of Garlick's shares, then the shares go back to Garlick. This would possibly happen with relegation if ALK decide they have wasted their £15m and the club is worth less than nothing, financially.

BurnleyFC
Posts: 3131
Joined: Thu Jan 21, 2016 11:51 am
Been Liked: 1031 times
Has Liked: 691 times

Re: Good news—bad news??

Post by BurnleyFC » Fri Jan 14, 2022 11:33 pm

Belting news.

It’s a shame Gaddafi is no longer alive.

Somethingfishy
Posts: 1841
Joined: Sat Jan 23, 2016 8:03 pm
Been Liked: 551 times
Has Liked: 419 times
Location: Padiham

Re: Good news—bad news??

Post by Somethingfishy » Fri Jan 14, 2022 11:42 pm

We can prepare for any playing assets to be sold and disappear into Garlicks dry powder store if Pace does a runner. Anybody still think we'd walk the Championship? :D

ClaretTony
Posts: 55920
Joined: Thu Dec 24, 2015 3:07 pm
Been Liked: 25131 times
Has Liked: 4625 times
Location: Burnley
Contact:

Re: Good news—bad news??

Post by ClaretTony » Fri Jan 14, 2022 11:53 pm

Not sure this is true.

I think it was common knowledge that the club would return to the previous ownership should ALK not meet the payments. I had been told they’ve had to renegotiate the deal which has given them an extension way beyond this season or even next.
This user liked this post: Vegas Claret

bfcjg
Posts: 9555
Joined: Fri Jan 22, 2016 8:17 pm
Been Liked: 3574 times
Has Liked: 4102 times

Re: Good news—bad news??

Post by bfcjg » Fri Jan 14, 2022 11:57 pm

Our beloved Burnley Football Club traded like a bit of tat on Ebay. How the F did this happen ? How the F was this allowed to happen ?

brexit
Posts: 985
Joined: Tue Sep 27, 2016 12:20 am
Been Liked: 178 times
Has Liked: 44 times
Location: on the gravy train in strasbourg

Re: Good news—bad news??

Post by brexit » Sat Jan 15, 2022 12:15 am

bfcjg wrote:
Fri Jan 14, 2022 11:57 pm
Our beloved Burnley Football Club traded like a bit of tat on Ebay. How the F did this happen ? How the F was this allowed to happen ?
Erm the club was bought some American Boys because it is a commercial entity. The thing at turf moor is not a football club it a vessel to part you from your hard-earned by leveraging fake nostalgia.
Look on the bright side rovers will be in Premiership next year and we won't be:
:idea:

Wile E Coyote
Posts: 8065
Joined: Thu Jan 21, 2016 5:22 pm
Been Liked: 2743 times
Has Liked: 1656 times

Re: Good news—bad news??

Post by Wile E Coyote » Sat Jan 15, 2022 12:25 am

sometimes I feel like a dopey Lancastrian in a rain soaked flat cap, and a woodbine dangling from my lips, as all around me corporate and smiling people, with NO grasp of what my world is about, do their poxy accounts in league with faceless money lenders. I love Burnley, and football, but this is ****.
These 5 users liked this post: RammyClaret61 AotearoaClaret cockneyclaret longsidepies MT03ALG

AotearoaClaret
Posts: 147
Joined: Mon Jan 25, 2016 8:56 am
Been Liked: 212 times
Has Liked: 245 times

Re: Good news—bad news??

Post by AotearoaClaret » Sat Jan 15, 2022 1:21 am

Wile E Coyote wrote:
Sat Jan 15, 2022 12:25 am
sometimes I feel like a dopey Lancastrian in a rain soaked flat cap, and a woodbine dangling from my lips, as all around me corporate and smiling people, with NO grasp of what my world is about, do their poxy accounts in league with faceless money lenders. I love Burnley, and football, but this is ****.
Logged in just to like this. I’m getting to the point where I only love Burnley though. Football at the top table isn’t all it’s cracked up to be for me.
These 3 users liked this post: SussexDon1inIreland MT03ALG ClaretTony

FeedTheArf
Posts: 400
Joined: Sat Jan 23, 2016 11:15 am
Been Liked: 128 times
Has Liked: 51 times

Re: Good news—bad news??

Post by FeedTheArf » Sat Jan 15, 2022 7:15 am

minnieclaret wrote:
Fri Jan 14, 2022 11:01 pm
This should get a few necks throbbing.
9611671A-7A9A-44B4-8569-9EE505C17BDE.jpeg
Mike Garlick: King of the Clause!

minnieclaret
Posts: 6843
Joined: Thu Jan 21, 2016 9:05 am
Been Liked: 2011 times
Has Liked: 2287 times
Location: lismore co. waterford

Re: Good news—bad news??

Post by minnieclaret » Sat Jan 15, 2022 8:15 am

FeedTheArf wrote:
Sat Jan 15, 2022 7:15 am
Mike Garlick: King of the Clause!
Marx brothers called it the sanity clause but in this instance it’s the insanity clause.

gawthorpe_view
Posts: 3937
Joined: Thu Jan 21, 2016 7:19 am
Been Liked: 1043 times
Has Liked: 2181 times
Location: 'Turf

Re: Good news—bad news??

Post by gawthorpe_view » Sat Jan 15, 2022 9:53 am

Bad news if Pace etc walk with their debts transferred to the club.
Bad news if we're relegated and don't bounce straight back.
Bad news if it's true Garlick and Dyche can't work together.
Bad news we won't / don't have a pot to pi$$ in.
Good news, there ain't any.

Newcastleclaret93
Posts: 5696
Joined: Thu Jan 21, 2016 12:29 pm
Been Liked: 886 times
Has Liked: 166 times

Re: Good news—bad news??

Post by Newcastleclaret93 » Sat Jan 15, 2022 9:59 am

ClaretTony wrote:
Fri Jan 14, 2022 11:53 pm
Not sure this is true.

I think it was common knowledge that the club would return to the previous ownership should ALK not meet the payments. I had been told they’ve had to renegotiate the deal which has given them an extension way beyond this season or even next.
Tony, given how close you are to the club does this concern you?
Everything about this takeover just looks awful for everyone apart from Pace and Garlick.

Boss Hogg
Posts: 1899
Joined: Sun Jul 26, 2020 10:34 am
Been Liked: 429 times
Has Liked: 649 times

Re: Good news—bad news??

Post by Boss Hogg » Sat Jan 15, 2022 10:03 am

When Pace and Co realise how hard it will be to get out of The Champ it will give them a get out clause. The extension may help as the parachute payments are about to stop.

Quickenthetempo
Posts: 14373
Joined: Thu Jan 21, 2016 10:35 am
Been Liked: 3118 times
Has Liked: 1695 times

Re: Good news—bad news??

Post by Quickenthetempo » Sat Jan 15, 2022 10:09 am

I'm far from a financial expert but the debt the club has is for Pace and Co to have the club from Garlick.

If they give the club back because they haven't paid up then Garlick won't be owed anything in cash. He just gets the club (asset).
Unless they have loans out or debts to outsiders then we should have a clean slate.

Or am I completely wrong?

arise_sir_charge
Posts: 1971
Joined: Thu Jan 21, 2016 9:36 am
Been Liked: 1022 times
Has Liked: 18 times

Re: Good news—bad news??

Post by arise_sir_charge » Sat Jan 15, 2022 10:16 am

And seeing as Mike is an such an upstanding bloke, local lad and Uber fan of the club he will use the supposed £50m he took from cash reserves and the other money received from the Dell money to pay Dell back and still be up on his original investment.

Why is anybody worried?

dsr
Posts: 13064
Joined: Thu Jan 21, 2016 12:47 pm
Been Liked: 3867 times
Has Liked: 1677 times

Re: Good news—bad news??

Post by dsr » Sat Jan 15, 2022 10:35 am

Quickenthetempo wrote:
Sat Jan 15, 2022 10:09 am
I'm far from a financial expert but the debt the club has is for Pace and Co to have the club from Garlick.

If they give the club back because they haven't paid up then Garlick won't be owed anything in cash. He just gets the club (asset).
Unless they have loans out or debts to outsiders then we should have a clean slate.

Or am I completely wrong?
I'm afraid you're wrong. Burnley have borrowed or guaranteed umpty millions and lent that money to Pace/ALK. If ALK can't repay Burnley, then Burnley still have to repay the loan to the bank.

BurnleyFC
Posts: 3131
Joined: Thu Jan 21, 2016 11:51 am
Been Liked: 1031 times
Has Liked: 691 times

Re: Good news—bad news??

Post by BurnleyFC » Sat Jan 15, 2022 10:46 am

We’ll be alright as long as magic Mike and John B are waiting in the wings.

dougcollins
Posts: 3649
Joined: Sat Jan 23, 2016 12:23 am
Been Liked: 1020 times
Has Liked: 958 times
Location: Yarkshire

Re: Good news—bad news??

Post by dougcollins » Sat Jan 15, 2022 11:00 am

So do these Americans who 'bought' the club actually have any money of their own?

Nonayforever
Posts: 2321
Joined: Fri Jan 22, 2016 8:15 pm
Been Liked: 460 times
Has Liked: 121 times

Re: Good news—bad news??

Post by Nonayforever » Sat Jan 15, 2022 11:01 am

Good news ( for A Pace ) he's still laughing at getting £25 million for Wood.

Bad news - Pace has said to Dyche, now Wood has gone you will have to use plan B.

Stockbrokerbelt
Posts: 376
Joined: Thu Jan 21, 2016 10:43 am
Been Liked: 155 times
Has Liked: 68 times

Re: Good news—bad news??

Post by Stockbrokerbelt » Sat Jan 15, 2022 11:10 am

Yet again part of a story, it also says the Yanks have had no problem with the payments.

Paul Waine
Posts: 8351
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 1934 times
Has Liked: 2518 times

Re: Good news—bad news??

Post by Paul Waine » Sat Jan 15, 2022 11:13 am

Let's not get too worked up about what the DM is reporting - they don't have all their "facts" right.

The deal, as reported at the time, was £170 million for 84% of the club: £102 million paid at the time, and 3 instalments to be paid later totally £68 million. It was also reported that MG (and possibly JB) would take back control of the club if ALK didn't pay the 3 instalments. I don't know if we've seen any of the media, including the football finance specialists, go any further than this. I don't think the media has tried to explain why £170m and £102m - or when the 3 instalments would be due.

My guess, as I posted on the Takeover thread Jan last year, is that MG wanted £170m for a club in the Premier League, but ALK wouldn't agree that price because Burnley could be relegated before they'd been able to "put their own stamp" on the club. ALK valued Burnley at £102m taking into account the risk of relegation. So, the real deal is £102m payable immediately by ALK, plus £68m vendor financing, payable by ALK later. (Vendor financing, i.e. the seller lends the buyer the money to buy the asset is very common). It's my guess - I have no "inside information - that the 3 instalments are due at the end of 3 seasons and are only due if BFC retains Premier League status at the end of each of those seasons. I don't know whether the first of those seasons was 2020/21, or if this season 2021/22 is the first of those seasons. (What would happen to an instalment if BFC was relegated and bounced back the following season we can only guess. My guess is that season's instalment would be cancelled, and help mitigate reduced funding in the Championship).

So, nothing new in the DM report - and a few inaccuracies. MG (and JB) still holds 4,000 shares and is still a director of the club.

We cannot separate the club's finances from the club's success as a football team. Alan Pace and ALK struck deal with MG that gives them the chance to continue the club's success - but we can see that this isn't without its challenges.

Exciting times.

UTC

Paul Waine
Posts: 8351
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 1934 times
Has Liked: 2518 times

Re: Good news—bad news??

Post by Paul Waine » Sat Jan 15, 2022 11:20 am

dsr wrote:
Sat Jan 15, 2022 10:35 am
I'm afraid you're wrong. Burnley have borrowed or guaranteed umpty millions and lent that money to Pace/ALK. If ALK can't repay Burnley, then Burnley still have to repay the loan to the bank.
We can assume that MSD have all the facts about the club and the structure of the deal between ALK and MG. Yes, the MSD loan of £60 million is secured by club assets. That's all in the public domain - Companies House filings.

But, you don't lend someone £60 million and take the chance that a few footballers can be sold for £25m and more to repay it. Tarks running down his contract is one very good reason why not.

Newcastleclaret93
Posts: 5696
Joined: Thu Jan 21, 2016 12:29 pm
Been Liked: 886 times
Has Liked: 166 times

Re: Good news—bad news??

Post by Newcastleclaret93 » Sat Jan 15, 2022 11:31 am

Paul Waine wrote:
Sat Jan 15, 2022 11:13 am
Let's not get too worked up about what the DM is reporting - they don't have all their "facts" right.

The deal, as reported at the time, was £170 million for 84% of the club: £102 million paid at the time, and 3 instalments to be paid later totally £68 million. It was also reported that MG (and possibly JB) would take back control of the club if ALK didn't pay the 3 instalments. I don't know if we've seen any of the media, including the football finance specialists, go any further than this. I don't think the media has tried to explain why £170m and £102m - or when the 3 instalments would be due.

My guess, as I posted on the Takeover thread Jan last year, is that MG wanted £170m for a club in the Premier League, but ALK wouldn't agree that price because Burnley could be relegated before they'd been able to "put their own stamp" on the club. ALK valued Burnley at £102m taking into account the risk of relegation. So, the real deal is £102m payable immediately by ALK, plus £68m vendor financing, payable by ALK later. (Vendor financing, i.e. the seller lends the buyer the money to buy the asset is very common). It's my guess - I have no "inside information - that the 3 instalments are due at the end of 3 seasons and are only due if BFC retains Premier League status at the end of each of those seasons. I don't know whether the first of those seasons was 2020/21, or if this season 2021/22 is the first of those seasons. (What would happen to an instalment if BFC was relegated and bounced back the following season we can only guess. My guess is that season's instalment would be cancelled, and help mitigate reduced funding in the Championship).

So, nothing new in the DM report - and a few inaccuracies. MG (and JB) still holds 4,000 shares and is still a director of the club.

We cannot separate the club's finances from the club's success as a football team. Alan Pace and ALK struck deal with MG that gives them the chance to continue the club's success - but we can see that this isn't without its challenges.

Exciting times.

UTC
The article does pose some new questions though, it suggests there are two clauses in the contract. 1 - that if the club are relegated Garlick can purchase the club back at a set price. 2 - if the instalments are not paid it defaults back to Garlick.

Item 1 is new in my opinion, I have never seen that reported any where else.
This user liked this post: HandforthClaret

Billy Balfour
Posts: 3152
Joined: Mon May 28, 2018 3:00 pm
Been Liked: 1259 times
Has Liked: 504 times

Re: Good news—bad news??

Post by Billy Balfour » Sat Jan 15, 2022 12:01 pm

The more I read about the takeover, the more I understand why an uncle of ours has become a supporter of a club in the North West Counties.
These 3 users liked this post: Steve1956 Rumpelstiltskin MT03ALG

Steve1956
Posts: 14664
Joined: Fri Dec 30, 2016 1:57 pm
Been Liked: 5705 times
Has Liked: 2518 times
Location: Fife

Re: Good news—bad news??

Post by Steve1956 » Sat Jan 15, 2022 12:03 pm

Billy Balfour wrote:
Sat Jan 15, 2022 12:01 pm
The more I read about the takeover, the more I understand why an uncle of ours has become a supporter of a club in the North West Counties.
A wise man is your uncle.
This user liked this post: Billy Balfour

Elizabeth
Posts: 3199
Joined: Fri Jan 22, 2016 12:13 am
Been Liked: 911 times
Has Liked: 1139 times

Re: Good news—bad news??

Post by Elizabeth » Sat Jan 15, 2022 12:06 pm

Whatever the situation let’s hope relegation , if it happens, doesn’t affect the club’s ability to provide the necessary funds to make the big changes on the field that will be necessary if we are to do well in the Championship

RingoMcCartney
Posts: 10318
Joined: Sat Apr 02, 2016 4:45 pm
Been Liked: 2635 times
Has Liked: 2798 times

Re: Good news—bad news??

Post by RingoMcCartney » Sat Jan 15, 2022 12:07 pm

Billy Balfour wrote:
Sat Jan 15, 2022 12:01 pm
The more I read about the takeover, the more I understand why an uncle of ours has become a supporter of a club in the North West Counties.
Maybe if he waits a bit longer, he could do that supporting our lot !


🤪
This user liked this post: Billy Balfour

jtv
Posts: 821
Joined: Thu Jan 14, 2016 2:59 pm
Been Liked: 264 times
Has Liked: 350 times

Re: Good news—bad news??

Post by jtv » Sat Jan 15, 2022 12:18 pm

Billy Balfour wrote:
Sat Jan 15, 2022 12:01 pm
The more I read about the takeover, the more I understand why an uncle of ours has become a supporter of a club in the North West Counties.
Billy, by any chance is that Uncle Mike? What club does he now support?
This user liked this post: Billy Balfour

boatshed bill
Posts: 11072
Joined: Thu Jan 21, 2016 10:47 am
Been Liked: 2300 times
Has Liked: 4609 times

Re: Good news—bad news??

Post by boatshed bill » Sat Jan 15, 2022 12:28 pm

I never really understand the world of football finance, but how this deal was ever allowed to go through has amazed me from the start.

Culmclaret
Posts: 998
Joined: Tue Jan 26, 2016 1:12 pm
Been Liked: 298 times
Has Liked: 17 times

Re: Good news—bad news??

Post by Culmclaret » Sat Jan 15, 2022 1:55 pm

I’ve always said it was relatively low risk for ALK. They get the cheapest PL club possible and have a shot at making a bit of cash but with their liability limited to a manageable amount. BFC takes all the collateral damage. The whole think stank from the start and all the warm words from Pace are simply window dressing.

Spijed
Posts: 15212
Joined: Mon Jan 18, 2016 12:33 pm
Been Liked: 2593 times
Has Liked: 1119 times

Re: Good news—bad news??

Post by Spijed » Sat Jan 15, 2022 2:49 pm

Culmclaret wrote:
Sat Jan 15, 2022 1:55 pm
I’ve always said it was relatively low risk for ALK. They get the cheapest PL club possible and have a shot at making a bit of cash but with their liability limited to a manageable amount. BFC takes all the collateral damage. The whole think stank from the start and all the warm words from Pace are simply window dressing.
What proof would ALK have needed to show they could make this work, in comparison to any old football supporter who wanted to make money the same way?

Jakubclaret
Posts: 6785
Joined: Sun Oct 16, 2016 10:47 pm
Been Liked: 860 times
Has Liked: 604 times

Re: Good news—bad news??

Post by Jakubclaret » Sat Jan 15, 2022 2:56 pm

Culmclaret wrote:
Sat Jan 15, 2022 1:55 pm
I’ve always said it was relatively low risk for ALK. They get the cheapest PL club possible and have a shot at making a bit of cash but with their liability limited to a manageable amount. BFC takes all the collateral damage. The whole think stank from the start and all the warm words from Pace are simply window dressing.
Just think how much more you could possibly make by selling all the high value players & reinvesting lowly & then staying put whilst taking the parachute payments & then defaulting when nothing of value is left, I’m not suggesting or saying that will happen.

fatboy47
Posts: 2705
Joined: Thu Jan 21, 2016 8:58 am
Been Liked: 1561 times
Has Liked: 1961 times
Location: Isles of Scilly

Re: Good news—bad news??

Post by fatboy47 » Sat Jan 15, 2022 3:30 pm

Culmclaret wrote:
Sat Jan 15, 2022 1:55 pm
They get the cheapest PL club possible and have a shot at making a bit of cash but with their liability limited to a manageable amount. BFC takes all the collateral damage.

That looks about the strength of it on current evidence.

bfcjg
Posts: 9555
Joined: Fri Jan 22, 2016 8:17 pm
Been Liked: 3574 times
Has Liked: 4102 times

Re: Good news—bad news??

Post by bfcjg » Sat Jan 15, 2022 4:22 pm

The relationship between Dyche and Garlic was strained at best, if he got control again Dyche would quit I reckon.

Spijed
Posts: 15212
Joined: Mon Jan 18, 2016 12:33 pm
Been Liked: 2593 times
Has Liked: 1119 times

Re: Good news—bad news??

Post by Spijed » Sat Jan 15, 2022 4:24 pm

bfcjg wrote:
Sat Jan 15, 2022 4:22 pm
The relationship between Dyche and Garlic was strained at best, if he got control again Dyche would quit I reckon.
Would anyone give up the contract that SD is on?

Paul Waine
Posts: 8351
Joined: Fri Jan 22, 2016 2:28 pm
Been Liked: 1934 times
Has Liked: 2518 times

Re: Good news—bad news??

Post by Paul Waine » Sat Jan 15, 2022 4:25 pm

Newcastleclaret93 wrote:
Sat Jan 15, 2022 11:31 am
The article does pose some new questions though, it suggests there are two clauses in the contract. 1 - that if the club are relegated Garlick can purchase the club back at a set price. 2 - if the instalments are not paid it defaults back to Garlick.

Item 1 is new in my opinion, I have never seen that reported any where else.
I can't work out why any agreement between a seller and a buyer would include a clause that gives the seller the option to buy back the asset the seller has sold if a pre-defined event occurs. I can understand an agreement that gives the seller the obligation to buy back the asset, but only to the extent that the seller can influence and control relevant actions by the buyer that would led up to the seller having the obligation to buy back the asset.

The second clause you describe, MG gets the club back (without any payments to ALK) if the instalments aren't paid makes sense.

I can't see any sense if the first clause.

My conclusion is that the first clause does not exist and is only the result of the DM journalist misunderstanding the nature (and logic) of the 2nd clause.

PS: I'll be happy and I'll learn something if anyone can explain the logic that would result in any seller and any buyer agreeing to the first clause, whether this relates to BFC or any other asset whatever the nature of the asset.

ClaretPete001
Posts: 599
Joined: Wed Jan 12, 2022 11:39 am
Been Liked: 94 times
Has Liked: 104 times

Re: Good news—bad news??

Post by ClaretPete001 » Sun Jan 16, 2022 10:31 am

Paul Waine wrote:
Sat Jan 15, 2022 11:13 am
Let's not get too worked up about what the DM is reporting - they don't have all their "facts" right.

The deal, as reported at the time, was £170 million for 84% of the club: £102 million paid at the time, and 3 instalments to be paid later totally £68 million. It was also reported that MG (and possibly JB) would take back control of the club if ALK didn't pay the 3 instalments. I don't know if we've seen any of the media, including the football finance specialists, go any further than this. I don't think the media has tried to explain why £170m and £102m - or when the 3 instalments would be due.

My guess, as I posted on the Takeover thread Jan last year, is that MG wanted £170m for a club in the Premier League, but ALK wouldn't agree that price because Burnley could be relegated before they'd been able to "put their own stamp" on the club. ALK valued Burnley at £102m taking into account the risk of relegation. So, the real deal is £102m payable immediately by ALK, plus £68m vendor financing, payable by ALK later. (Vendor financing, i.e. the seller lends the buyer the money to buy the asset is very common). It's my guess - I have no "inside information - that the 3 instalments are due at the end of 3 seasons and are only due if BFC retains Premier League status at the end of each of those seasons. I don't know whether the first of those seasons was 2020/21, or if this season 2021/22 is the first of those seasons. (What would happen to an instalment if BFC was relegated and bounced back the following season we can only guess. My guess is that season's instalment would be cancelled, and help mitigate reduced funding in the Championship).

So, nothing new in the DM report - and a few inaccuracies. MG (and JB) still holds 4,000 shares and is still a director of the club.

We cannot separate the club's finances from the club's success as a football team. Alan Pace and ALK struck deal with MG that gives them the chance to continue the club's success - but we can see that this isn't without its challenges.

Exciting times.

UTC
The irony of this is that the lack of investment in the squad, which presumably facilitated the vendor financing makes the possibility of relegation even more likely. So, ALK has to invest heavily to rectify the lack of spending prior to their takeover and if they are successful will have to pay another 68 million to the former owners.

I understand a Premiership club could fit into the portfolio of a sports-tech investment vehicle but the risk is huge and it's hard to see the club ever being worth more than the premium price ALK will have to pay should they succeed in keeping the club in the Premiership.

This is the net expenditure over the last 3 years of all Premier league clubs.


Expenditure Arrivals Income Departures Balance

1 Manchester City £413.39m 76 £217.31m 65 £-196.08m
2 Manchester United £412.74m 38 £118.24m 34 £-294.50m
3 Chelsea FC £370.98m 75 £302.95m 76 £-68.03m
4 Arsenal FC £370.80m 51 £93.78m 50 £-277.02m
5 Aston Villa £351.60m 54 £119.49m 55 £-232.11m
6 Tottenham Hotspur £293.31m 38 £99.45m 40 £-193.86m
7 West Ham United £224.10m 35 £93.28m 42 £-130.82m
8 Everton FC £211.83m 55 £124.40m 56 £-87.43m
9 Wolverhampton Wanderers £210.96m 68 £121.32m 61 £-89.64m
10 Leicester City £207.36m 37 £131.65m 37 £-75.71m
11 Newcastle United £167.67m 33 £32.32m 34 £-135.35m
12 Leeds United £149.13m 53 £27.36m 56 £-121.77m
13 Brighton & Hove Albion £144.13m 83 £83.34m 77 £-60.79m
14 Southampton FC £127.71m 47 £102.57m 49 £-25.14m
15 Sheffield United £119.88m 52 £25.52m 54 £-94.37m
16 Liverpool FC £119.75m 42 £80.28m 38 £-39.47m
17 Crystal Palace £93.09m 35 £67.84m 36 £-25.25m
18 Fulham FC £86.63m 53 £29.97m 48 £-56.66m
19 Norwich City £79.43m 83 £76.14m 82 £-3.29m
20 Watford FC £75.60m 81 £79.97m 73 £4.37m
21 Brentford FC £70.79m 50 £93.53m 45 £22.74m
22 West Bromwich Albion £65.05m 50 £59.80m 53 £-5.25m
23 AFC Bournemouth £54.64m 43 £139.57m 48 £84.93m
24 Burnley FC £51.17m 24 £49.64m 25 £-1.53m

Nonayforever
Posts: 2321
Joined: Fri Jan 22, 2016 8:15 pm
Been Liked: 460 times
Has Liked: 121 times

Re: Good news—bad news??

Post by Nonayforever » Sun Jan 16, 2022 10:44 am

By far the most interesting stat within the above table is Brentfords 50 players in / 45 players out with a net profit of £22m.
We can never compete to win trophies or the league but we try to emulate the selling club / make a profit whilst maintaining PL status.

elwaclaret
Posts: 6855
Joined: Thu Jan 21, 2016 9:57 am
Been Liked: 1480 times
Has Liked: 2254 times

Re: Good news—bad news??

Post by elwaclaret » Sun Jan 16, 2022 12:16 pm

Nonayforever wrote:
Sun Jan 16, 2022 10:44 am
By far the most interesting stat within the above table is Brentfords 50 players in / 45 players out with a net profit of £22m.
We can never compete to win trophies or the league but we try to emulate the selling club / make a profit whilst maintaining PL status.
While I agree, let’s not forget Brentford have had the first season bounce, similar to Sheffield United the proof of how Premier League ready they are in the second half of the season, and especially next season. Owen Coyle got it that first season… we looked a good bet for at least Europe until Christmas…

ClaretPete001
Posts: 599
Joined: Wed Jan 12, 2022 11:39 am
Been Liked: 94 times
Has Liked: 104 times

Re: Good news—bad news??

Post by ClaretPete001 » Sun Jan 16, 2022 1:57 pm

[/quote]

While I agree, let’s not forget Brentford have had the first season bounce, similar to Sheffield United the proof of how Premier League ready they are in the second half of the season, and especially next season. Owen Coyle got it that first season… we looked a good bet for at least Europe until Christmas…
[/quote]

Indeed. Of the clubs that have not significantly invested in the squad Burnley, Norwich and Watford are bottom 4 Bournemouth and WBA are already down and Brentford have no track record in the Premiership

Only Fulham have really got it wrong. All the others arguably have reaped what they have sown.

texasbrit
Posts: 310
Joined: Mon Jan 25, 2016 8:42 pm
Been Liked: 65 times
Has Liked: 3 times

Re: Good news—bad news??

Post by texasbrit » Sun Jan 16, 2022 4:24 pm

Pace may even take the 15m out of the sale of wood and let the shares default back to Garlick, how much did Pace and Co invest in the club, not including the share purchases from Garlick and others during the acquisition of the club

dsr
Posts: 13064
Joined: Thu Jan 21, 2016 12:47 pm
Been Liked: 3867 times
Has Liked: 1677 times

Re: Good news—bad news??

Post by dsr » Sun Jan 16, 2022 4:47 pm

Paul Waine wrote:
Sat Jan 15, 2022 11:13 am
Let's not get too worked up about what the DM is reporting - they don't have all their "facts" right.

The deal, as reported at the time, was £170 million for 84% of the club: £102 million paid at the time, and 3 instalments to be paid later totally £68 million. It was also reported that MG (and possibly JB) would take back control of the club if ALK didn't pay the 3 instalments. I don't know if we've seen any of the media, including the football finance specialists, go any further than this. I don't think the media has tried to explain why £170m and £102m - or when the 3 instalments would be due.

My guess, as I posted on the Takeover thread Jan last year, is that MG wanted £170m for a club in the Premier League, but ALK wouldn't agree that price because Burnley could be relegated before they'd been able to "put their own stamp" on the club. ALK valued Burnley at £102m taking into account the risk of relegation. So, the real deal is £102m payable immediately by ALK, plus £68m vendor financing, payable by ALK later. (Vendor financing, i.e. the seller lends the buyer the money to buy the asset is very common). It's my guess - I have no "inside information - that the 3 instalments are due at the end of 3 seasons and are only due if BFC retains Premier League status at the end of each of those seasons. I don't know whether the first of those seasons was 2020/21, or if this season 2021/22 is the first of those seasons. (What would happen to an instalment if BFC was relegated and bounced back the following season we can only guess. My guess is that season's instalment would be cancelled, and help mitigate reduced funding in the Championship).

So, nothing new in the DM report - and a few inaccuracies. MG (and JB) still holds 4,000 shares and is still a director of the club.

We cannot separate the club's finances from the club's success as a football team. Alan Pace and ALK struck deal with MG that gives them the chance to continue the club's success - but we can see that this isn't without its challenges.

Exciting times.

UTC
Apart from the "exciting times" nonsense at the end, that makes sense. If your understanding of the deal is correct, then ALK could only get £100m out of Burnley FC at purchase date (£50m cash and £50m guarantee of loan, say) and would need to wait for later years' TV money to come in before they can take that from the club. Doing it this way perhaps meant they didn't have to put in any of their own money at all?

dsr
Posts: 13064
Joined: Thu Jan 21, 2016 12:47 pm
Been Liked: 3867 times
Has Liked: 1677 times

Re: Good news—bad news??

Post by dsr » Sun Jan 16, 2022 4:54 pm

Paul Waine wrote:
Sat Jan 15, 2022 11:20 am
We can assume that MSD have all the facts about the club and the structure of the deal between ALK and MG. Yes, the MSD loan of £60 million is secured by club assets. That's all in the public domain - Companies House filings.

But, you don't lend someone £60 million and take the chance that a few footballers can be sold for £25m and more to repay it. Tarks running down his contract is one very good reason why not.
Yes, of course MSD have all the facts. Talk about stating the bleeding obvious!

Organisations do lend money on speculation that the assets are going to be worthwhile. Remember this lot make their living out of lending money to football clubs at high rates of interest. (9% I believe has been suggested.) With 9% interest, first call on all the club assets including Gawthorpe and Turf Moor as well as all the player values, the risk of losing out is presumably a risk they are willing to take compared with the risk of winning big.

Remember that to receive 9% on lending money, you have to take a risk. Try lending some of yours at 9% return. Not easy. So they lend it to football clubs safe in the knowledge that they can order the sale of all Burnley players if need be, to get their money back, and if there still isn't enough after the players have all gone and the TV money spent and the ground built over, then that's the business risk. This is how speculative lenders like that, do business.

BurnleyFC
Posts: 3131
Joined: Thu Jan 21, 2016 11:51 am
Been Liked: 1031 times
Has Liked: 691 times

Re: Good news—bad news??

Post by BurnleyFC » Sun Jan 16, 2022 5:04 pm

Paul Waine wrote:
Sat Jan 15, 2022 11:13 am

Exciting times.

UTC
It’s about as exciting as having piles and only sand paper to wipe your arse with.
This user liked this post: boatshed bill

Post Reply