Alan Nixon on ALK, worrying

[Steve-Harpers-perm]

I can confidently assure you that Dyche wasn’t the only one with issues with the chairman

That is not good to hear. Always presumed the board members were pretty united.

[Paul Waine]

While I respect your knowledge and the patient way you engage Paul I find your rationale bizarre to say the least. I also know much of this is speculative but no doubt there is much truth in it as well

Basically you are saying if ALK default it is possible that MG / JB could pay back the 60 million plus presumably an unsubstantiated component of the 42 million (102 million) and, in addition, lose the 68 million that ALK would inexorably not be able to pay.

In other words for MG / JB to get the shares back they would probably have to pay back between 60 and 102 million by which time the club would be in a mess probably back in the Championship because of the lack of investment and MG / JB would likely not see 170 million again for some time.

Of course, ALK won't default because they are using to clubs own money to pay the debt and MG / JB are unlikely to want the club back in exchange for the best part of a 100 million quid.

If ALK doesn't default Burnley FC gets a, relatively speaking, unknown former employee of Citibank who is using the clubs own money to pay back some unsubstantiated amount in excess of 60 million quid up to 102 million at 9 per cent , which could be anything between 5 - 10 million per year with a further liability for 68 million quid down the line.

I'm sure senior Citibank employees get paid handsomely but he is no Kroenke, John Henry or Malcolm Glazer. or even a Venky or Mike Ashley

I'm going to have to lie down in a dark room and ponder the existential meaning of a life where someone uses your own money to run up huge debts to American venture capitalists and somehow find it exciting.

I guess we will just have to agree to disagree and see what happens.

Hi Pete, I'm continuing to be patient, but I don't get why it's not your "rationale" that is "bizarre." I've said MG/JB may (my speculation) have to pay some of the £60m back to MSD, possibly plus outstanding interest. I don't say they will have to pay more than £60m back. I'm at a total loss as to why you bring £42m - the balance to make up £102m - into this. Yes, MG/JB will lose whatever proportion of the 3 instalments of £68m that ALK default on. That is what "default" means. However, it's my guess that the 3 instalments are only payable by ALK if Burnley remain in the Premier League for each of the relevant 3 seasons, 21/22 and the 2 following seasons.

I'm also at a total loss with getting my head around your "if ALK doesn't default..." statement. If you or I bought a business and invested in that business wouldn't you or I also use the cashflow from that business to repay the loans made to that business - and pay dividends/returns to the shareholders? (I think we've all watched Dragons' Den enough to understand this is how business is intended to operate).

I'm puzzled why you say an "unknown former employee of Citibank..." Yes, neither you nor I knew Alan Pace before the takeover talks started, but Alan Pace is known to have had a senior role with Real Salt Lake. The clarets on here that follow US soccer may have heard of him. Does it matter that AP is not a "billionaire?" Neither was MG or JB and I'd estimate both of those ranked ahead of any former BFC directors in terms of net worth.

Hope the lie down in your dark room is good. I'm the one who finds it exciting what Alan Pace and ALK are trying to do with Burnley Football Club - however, I'm just a fan and have never had the opportunity to be a shareholder. It's not, therefore, my money.

UTC

[Newcastleclaret93]

Hi Pete, I'm continuing to be patient, but I don't get why it's not your "rationale" that is "bizarre." I've said MG/JB may (my speculation) have to pay some of the £60m back to MSD, possibly plus outstanding interest. I don't say they will have to pay more than £60m back. I'm at a total loss as to why you bring £42m - the balance to make up £102m - into this. Yes, MG/JB will lose whatever proportion of the 3 instalments of £68m that ALK default on. That is what "default" means. However, it's my guess that the 3 instalments are only payable by ALK if Burnley remain in the Premier League for each of the relevant 3 seasons, 21/22 and the 2 following seasons.

I'm also at a total loss with getting my head around your "if ALK doesn't default..." statement. If you or I bought a business and invested in that business wouldn't you or I also use the cashflow from that business to repay the loans made to that business - and pay dividends/returns to the shareholders? (I think we've all watched Dragons' Den enough to understand this is how business is intended to operate).

I'm puzzled why you say an "unknown former employee of Citibank..." Yes, neither you nor I knew Alan Pace before the takeover talks started, but Alan Pace is known to have had a senior role with Real Salt Lake. The clarets on here that follow US soccer may have heard of him. Does it matter that AP is not a "billionaire?" Neither was MG or JB and I'd estimate both of those ranked ahead of any former BFC directors in terms of net worth.

Hope the lie down in your dark room is good. I'm the one who finds it exciting what Alan Pace and ALK are trying to do with Burnley Football Club - however, I'm just a fan and have never had the opportunity to be a shareholder. It's not, therefore, my money.

UTC

Let’s hope Pace doesn’t leave us in the same spot Salt lake were left.

https://archive.sltrib.com/article.php? ... type=CMSID

[Paul Waine]

That is not good to hear. Always presumed the board members were pretty united.

In my view there's only 3 ways things can go when people are in a business together:

1) they all agree with the largest shareholder and support all decisions made by the largest shareholder;

2) they don't all agree, in which case one party or the other agrees to buy out the other party (or parties);

3) they all sell their shares in the business to a 3rd party.

Given it is financially very demanding to own a football club and Mike Garlick had decided he didn't want to put any more of his money in, I'd guess while others might have been prepared to pay their own share, there was no agreement that would allow MG to exit and his shares bought by one or more of the other directors/shareholders.

Thus, BFC has followed the 3rd option.

[GodIsADeeJay81]

Let’s hope Pace doesn’t leave us in the same spot Salt lake were left.

https://archive.sltrib.com/article.php? ... type=CMSID

Previous owner started it all from scratch, everything.
The team, the stadium, the training ground etc.
In a place with no real history of having a football team.

Then the 2008 recession hit them hard.

Completely different situation to Burnley and I know I've discussed the RSL stuff on here before, probably with you.

[Paul Waine]

Let’s hope Pace doesn’t leave us in the same spot Salt lake were left.

https://archive.sltrib.com/article.php? ... type=CMSID

That was 2013. How are RSL these days?

[Newcastleclaret93]

That was 2013. How are RSL these days?

Not sure how they are these days.

That is the condition Pace and checketts left salt lake in.

[alf_resco]

That was 2013. How are RSL these days?

Obviously know your history. Just like your Dad !

[Bordeauxclaret]

The John B=good/Mike G=evil angle is a little cringy.

I think Mike should have got a couple more rounds in around the pubs.

[Paul Waine]

Obviously know your history. Just like your Dad !

All I did was look at the date on the linked article. Other times I'll use google. I think my Dad would have had some reference books, made a trip to a library or simply quoted facts from his memory.

[alf_resco]

A.G.S. Happy days.
Well, some of 'em.

[GodIsADeeJay81]

Not sure how they are these days.

That is the condition Pace and checketts left salt lake in.

They've just been sold for $400 million.
Apparently the previous owner, who took over from Checketts, failed to splash the cash, instead under funding the team and according to reports had made quite a toxic working environment.

The new owners have purchased RSL, their B team, Monarchs, two stadiums, training facilities etc.

https://www.sltrib.com/sports/rsl/2022/ ... tzer-ryan/

[Newcastleclaret93]

They've just been sold for $400 million.
Apparently the previous owner, who took over from Checketts, failed to splash the cash, instead under funding the team and according to reports had made quite a toxic working environment.

The new owners have purchased RSL, their B team, Monarchs, two stadiums, training facilities etc.

https://www.sltrib.com/sports/rsl/2022/ ... tzer-ryan/

So we are now accrediting there current success to owners that left them in ruins 10 years ago?

[GodIsADeeJay81]

So we are now accrediting there current success to owners that left them in ruins 10 years ago?

How did you reach that opinion from my post???
I merely updated you as to what's happening...

[Paul Waine]

A.G.S. Happy days.
Well, some of 'em.

I went on a AGS trip to Annecy and Paris in July 1964. My Dad was one of the 4 teachers leading the trip and he was allowed to take me and my brother along, though I was still at junior school. My Dad left July 1965 moving to teacher training college.

When were you there?

[Newcastleclaret93]

How did you reach that opinion from my post???
I merely updated you as to what's happening...

Fair enough I misunderstood

[ClaretPete001]

Hi Pete, I'm continuing to be patient, but I don't get why it's not your "rationale" that is "bizarre." I've said MG/JB may (my speculation) have to pay some of the £60m back to MSD, possibly plus outstanding interest. I don't say they will have to pay more than £60m back. I'm at a total loss as to why you bring £42m - the balance to make up £102m - into this. Yes, MG/JB will lose whatever proportion of the 3 instalments of £68m that ALK default on. That is what "default" means. However, it's my guess that the 3 instalments are only payable by ALK if Burnley remain in the Premier League for each of the relevant 3 seasons, 21/22 and the 2 following seasons.

I'm also at a total loss with getting my head around your "if ALK doesn't default..." statement. If you or I bought a business and invested in that business wouldn't you or I also use the cashflow from that business to repay the loans made to that business - and pay dividends/returns to the shareholders? (I think we've all watched Dragons' Den enough to understand this is how business is intended to operate).

I'm puzzled why you say an "unknown former employee of Citibank..." Yes, neither you nor I knew Alan Pace before the takeover talks started, but Alan Pace is known to have had a senior role with Real Salt Lake. The clarets on here that follow US soccer may have heard of him. Does it matter that AP is not a "billionaire?" Neither was MG or JB and I'd estimate both of those ranked ahead of any former BFC directors in terms of net worth.

Hope the lie down in your dark room is good. I'm the one who finds it exciting what Alan Pace and ALK are trying to do with Burnley Football Club - however, I'm just a fan and have never had the opportunity to be a shareholder. It's not, therefore, my money.

UTC

The 42 million is owed to somebody Paul. The more investors are involved the harder it is to unravel. It's not just as simple as giving the shares back

And you seem to be somewhat confused by the concept of the Dragons Den. The Dragons give money to buy into the companies - they do not use the entrepreneurs own money to to fund debt from American Venture Capital companies.

And the reason they give money is because they themselves do not need it (they are all rich albeit poverty stricken compared to Kroenke, John Henry etc.) and they know it does not help a business to take money out of it as opposed to putting money into it. They do not expect the entrepreneurs to squander what little resource they have paying 9 per cent interest fees on tens of millions of pounds.

They know this because they are serious business people. Yes, billionaire businessmen with huge sporting empires can do it because the businesses they are buying, like Manchester United are global brands with no danger of relegation and a huge fanbase.

I don't doubt anyone's sincerity, integrity and belief in themselves but it matters there is no discernible wealth other than being a former head of securities sales because the club is operating in a league with 17 clubs owned by billionaires. The other 3: Burnley, Norwich and Watford are in the bottom 4. There are other clubs in the Championship owned by billionaires.

What you seem to be arguing is that in return for tens of millions of pounds worth of debt, heavy repayment fees and a lack of clarity on how the new owners are going to make up for the lack of investment over the last 3 years the club gets the expertise of a former banking sales executive

We will have to agree to disagree because I have a picture of Peter Jones' face when he is being presented with something absurd in my head and his words are ringing in my ears "I'm out".

[jojomk1]

The 42 million is owed to somebody Paul. The more investors are involved the harder it is to unravel. It's not just as simple as giving the shares back

And you seem to be somewhat confused by the concept of the Dragons Den. The Dragons give money to buy into the companies - they do not use the entrepreneurs own money to to fund debt from American Venture Capital companies.

And the reason they give money is because they themselves do not need it (they are all rich albeit poverty stricken compared to Kroenke, John Henry etc.) and they know it does not help a business to take money out of it as opposed to putting money into it. They do not expect the entrepreneurs to squander what little resource they have paying 9 per cent interest fees on tens of millions of pounds.

You might want to rethink the second paragraph

https://www.dailymail.co.uk/news/articl ... erged.html

[Paul Waine]

The 42 million is owed to somebody Paul. The more investors are involved the harder it is to unravel. It's not just as simple as giving the shares back

I don't doubt anyone's sincerity, integrity and belief in themselves but it matters there is no discernible wealth other than being a former head of securities sales because the club is operating in a league with 17 clubs owned by billionaires. The other 3: Burnley, Norwich and Watford are in the bottom 4. There are other clubs in the Championship owned by billionaires.

We will have to agree to disagree because I have a picture of Peter Jones' face when he is being presented with something absurd in my head and his words are ringing in my ears "I'm out".

Just commenting on these parts of your post.

Am I right in deducing that you get £42m by subtracting the (understood to be) £60m loan from MSD from the reported £102m paid for 84% of the shares (before the 3 instalments)?

If reports are correct that ALK put in £15m, then the remaining £27m may have come from BFC cash in bank. Yes, ALK will owe that money to BFC, because ALK has borrowed it from BFC.

Agree, MG/JB won't just be given the shares back - that's what I've speculated, above.

There's a clue in why ALK have invested in BFC: 17 clubs owned by billionaires, other clubs in Championship owned by billionaires. ALK are aiming to invest in, develop and grow BFC so that when they come to sell they will be selling to a billionaire. They are smart enough, just like Peter Jones, to know that it isn't a short term project, that's why they are in for the long term.

Off to the Emirates in a few minutes.

UTC

[Winstonswhite]

There's a clue in why ALK have invested in BFC: 17 clubs owned by billionaires, other clubs in Championship owned by billionaires. ALK are aiming to invest in, develop and grow BFC so that when they come to sell they will be selling to a billionaire. They are smart enough, just like Peter Jones, to know that it isn't a short term project, that's why they are in for the long term.

Off to the Emirates in a few minutes.

UTC

Surely it’s irrelevant how rich the buyer is? Ashley’s price for the club didn’t alter because he was selling to even Saudi Arabia!

What they sell it for is down to the value of the club. And I’m not being funny, if we lose 120 million a year in tv income then their “shrewd investment” will be with a small percentage of what they paid for…. Sorry I mean what they used someone else’s money to pay for.

[ClaretPete001]

Just commenting on these parts of your post.

Am I right in deducing that you get £42m by subtracting the (understood to be) £60m loan from MSD from the reported £102m paid for 84% of the shares (before the 3 instalments)?

If reports are correct that ALK put in £15m, then the remaining £27m may have come from BFC cash in bank. Yes, ALK will owe that money to BFC, because ALK has borrowed it from BFC.

Agree, MG/JB won't just be given the shares back - that's what I've speculated, above.

There's a clue in why ALK have invested in BFC: 17 clubs owned by billionaires, other clubs in Championship owned by billionaires. ALK are aiming to invest in, develop and grow BFC so that when they come to sell they will be selling to a billionaire. They are smart enough, just like Peter Jones, to know that it isn't a short term project, that's why they are in for the long term.

Off to the Emirates in a few minutes.

UTC

Ok 27 million of the 42 has possibly come from BFC assets or secured by them but it's also perfectly possible that club is paying for the 15 million - it's just not secured against the clubs assets. In the absence of any other discernible income it is a distinct possibility.

As it stand the club has gone from having 50 million in cash to owing 60 million to MSD and potentially paying the interest on another 15 million having used up a substantive proportion of its cash reserves. I mean the cynic might suggest the 22 million spend at the start of the season was what remained of the 50 million albeit that might be too convenient.

And if somehow the club remains in the Premiership it will owe another 68 million.

Let's see how it pans out. It is exciting but not necessarily in a good way.

Enjoy watching the match Paul. I'm a self confessed part-time supporter off for a pub lunch in the Ribble Valley and then back to watch Jay Rod score more goals at the Emirates than he has anywhere in the last two seasons.

UTC

[Paul Waine]

Surely it’s irrelevant how rich the buyer is? Ashley’s price for the club didn’t alter because he was selling to even Saudi Arabia!

What they sell it for is down to the value of the club. And I’m not being funny, if we lose 120 million a year in tv income then their “shrewd investment” will be with a small percentage of what they paid for…. Sorry I mean what they used someone else’s money to pay for.

Hi Ww, it appears we are looking at things in different ways. I agree that Mike Ashley sold NUFC for the best price he could get. I agree that he got this best price by selling to a consortium 80% owned by Saudi Public Investment Fund (or whatever their name is). I agree with you that 17 of the clubs currently in the Premier League and a number of others in the Championship are all owned by billionaires. My view is that Alan Pace and ALK plan to invest in, develop and grow BFC so that BFC will be bought by a billionaire when ALK come to sell. Yes, they've a lot of work to do both on and off the pitch to get the club there. ALK have owned the club for a little over 12 months. I've seen nothing in what they have done that suggests their plan is anything other than as I describe.

Great 0-0 at the Emirates this afternoon. Gives me a lot of confidence this is a club where the players believe in themselves, believe in the manager and believe in Alan Pace.

UTC

[Paul Waine]

Enjoy watching the match Paul. I'm a self confessed part-time supporter off for a pub lunch in the Ribble Valley and then back to watch Jay Rod score more goals at the Emirates than he has anywhere in the last two seasons.

UTC

Hi Pete, hope you had a good lunch. Yes, a great game at the Emirates, 0-0 is a good point. We all missed Jay Rod scoring. Dwight McNeil came closest.

Let's see what the last few days of Jan bring. The Clarets this afternoon did not look like a team who have any thoughts of going down.

UTC

[ClaretPete001]

Hi Pete, hope you had a good lunch. Yes, a great game at the Emirates, 0-0 is a good point. We all missed Jay Rod scoring. Dwight McNeil came closest.

Let's see what the last few days of Jan bring. The Clarets this afternoon did not look like a team who have any thoughts of going down.

UTC

Lunch excellent Aspinall Arms - would recommend it to anyone.

And yes great match. We have a great manager and a very honest squad of players who I have no doubt will give everything for the cause.

And yes let’s hope for some signings in the next week or so.

[BleedingClaret]

I noticed that part of the Derby debt is owed to MSD Holdings, Michael Dell
This is secured against the the stadium.
The similarity to our situation
It worries me
I’m not excited