Burnley Football Club - first accounts under ALK

[GodIsADeeJay81]

You seem to be assuming that if you don't strip out every penny from the club like Pace, then you must be hoarding every penny like Garlick. You could perhaps step back a bit, look at the broader view, and look at the middle way.

Some clubs' approach is to spend what they have, sign some players, try not to be too heavily overdrawn so they can recover if they go down. You needn't assume that everyone who disapproves of the Pace way is a fully-fledged supporter of Garlick. As they say in the adverts, other investment policies are available.

Garlick didn't hoard every penny though, that's just a narrative built up in the last few years.

Wanting the club to be sold to another Garlick defeats the object of wanting Garlick gone.

[dsr]

Garlick didn't hoard every penny though, that's just a narrative built up in the last few years.

Wanting the club to be sold to another Garlick defeats the object of wanting Garlick gone.

Nobody wanted the club to be sold to another Garlick. You're getting obsessed with the idea that Garlick and Pace are the only two models for football chairman and anyone who doesn't want one, must want the other. Other football chairmen are available.

Garlick hoarded lots of pennies. Whether he did it because he knew it would be easier for him to get his hands on those pennies later, or whether that was a sale-time decision and he had other reasons for hoarding, there is no doubt that he was hoarding. By "every penny" I didn't mean literally every penny and he spent nothing; it;s a figure of speech for miserly behaviour.

[Billy Balfour]

It doesn't matter which way people cut it, or the whys and hows. Thing is, the debt is a massive albatross around our neck. Like someone said upthread - it feels like a sword of Damocles.

[GodIsADeeJay81]

Nobody wanted the club to be sold to another Garlick. You're getting obsessed with the idea that Garlick and Pace are the only two models for football chairman and anyone who doesn't want one, must want the other. Other football chairmen are available.

Garlick hoarded lots of pennies. Whether he did it because he knew it would be easier for him to get his hands on those pennies later, or whether that was a sale-time decision and he had other reasons for hoarding, there is no doubt that he was hoarding. By "every penny" I didn't mean literally every penny and he spent nothing; it;s a figure of speech for miserly behaviour.

So when someone says they would've preferred the club to have been sold to someone who could run it in a sustainable manner, who does that remind you of?
I'll give you a little hint to help you along, Garlick

People sling around this claim he didn't spend much when the accounts show that yes actually he did, what the people are doing is changing the narrative about a man who did a lot of good for this club by running it in a sustainable manner.
He didn't horde much of anything, he made sure the club didn't have the need for a bank overdraft, loans etc.

The money in the bank at the time of sale was just that.
We were in the midst of a pandemic at the time and fans hadn't been allowed into stadiums for the best part of an entire season, we knew there would be TV rebates etc.

I'm well aware there are lots of different types of people who own football clubs but they do tend to fall into two categories.

1- run the club within its means
2- run the club beyond its means/at a loss and keep pumping money into the club to keep it afloat, either borrowed or their own until such time as they sell it and then they either recoup what they put in or write it off.

There isn't really a middle ground unless you can show me it

[summitclaret]

Surely it was bleeding obvious that we needed better than DS for centre midfield and just a bit more risk taking was necessary. Ideally given JBG's injury record (now proved) another wide player was needed. Fairplay to Lennon he has done ok, but younger, fitter and more creative was needed. That's the more middle ground and should have been taken.

If we go down, that's why

[Swizzlestick]

Interesting new charge filed on Companies House

[gawthorpe_view]

Interesting new charge filed on Companies House

Do tell.

[Swizzlestick]

Do tell.

Sorry, was struggling with the link!

http://tiny.cc/vwaruz

If that still hasn't worked, via here - https://find-and-update.company-informa ... ng-history

[gandhisflipflop]

So there’s a 12.5m instalment due on 1st feb 2023?

[NewClaret]

It refers to the “Buyer” as Newcastle United Football Limited. Is this some debt raised against the Wood sale?

[OffTheBar]

It refers to the “Buyer” as Newcastle United Football Limited. Is this some debt raised against the Wood sale?

Looks to me like Newcastle are due to pay 12.5mm in a year for Wood, but we have got the money (well, it will be less) upfront from Macquarie, who will then get the money from NUFC in a year.

[Lancasterclaret]

Looks to me like Newcastle are due to pay 12.5mm in a year for Wood, but we have got the money (well, it will be less) upfront from Maquarie, who will then get the money from NUFC in a year.

Hard not to read that as an attempt to get as much money into the club as possible if we get relegated so we can repay the loan isn't it?

[NewClaret]

Looks to me like Newcastle are due to pay 12.5mm in a year for Wood, but we have got the money (well, it will be less) upfront from Maquarie, who will then get the money from NUFC in a year.

That is my reading also. I’d love to know what we’ve done with the £12.5m though? Hopefully that’s gone to pay off some of the £65m!

[JohnMcGreal]

Cash flow issue?

[OffTheBar]

It could be for any number of reasons really. Perhaps an issue around timing of TV money coming in, perhaps the Orsic money was all to be upfront. Who knows - we likely never will. This kind of accounts receivable funding thing is not unusual; not sure what the cost of doing it would be, given NUFC are now extremely unlikely to default!

[NewClaret]

Cash flow issue?

Very much doubt it with our cash levels.

I reckon some/all of this has gone to MSD debt reduction, or banked for the event of (otherwise the £12.5m would come too late).

[ClaretPete001]

It refers to the “Buyer” as Newcastle United Football Limited. Is this some debt raised against the Wood sale?

It looks like a debt secured against future payments for Chris Wood.

[ClaretPete001]

Very much doubt it with our cash levels.

I reckon some/all of this has gone to MSD debt reduction, or banked for the event of (otherwise the £12.5m would come too late).

It could be cash flow issues but I would guess that is this summers transfer funds.

Probably wildly wrong but that is my guess.

[aggi]

Interesting. As others have said it looks like we've taken an advance on the second Wood instalment. There will obviously be a cost associated with this, in commercial factoring deals it would often be around the 10% mark, although I suspect this would probably be lower given the low risk nature.

What we need the money for is obviously the interesting question, cue up some speculation.

[RVclaret]

It could be cash flow issues but I would guess that is this summers transfer funds.

Probably wildly wrong but that is my guess.

If the payment isn’t until 2023 then why would it be this summers transfer funds? Would be 6 months too late!

[Chester Perry]

not looked but sounds like we have factored the Wood transfer monies - meaning that Chris Wood Transfer was very much not all cash up front - this will cost us in interest but will have been done for cash flow reasons - are the stage payments taking their toll with no new investors coming in?

surprising move given the MSD charge - they would need MSD permission I think

yes just checked factored the transfer

[dsr]

I'm well aware there are lots of different types of people who own football clubs but they do tend to fall into two categories.

1- run the club within its means
2- run the club beyond its means/at a loss and keep pumping money into the club to keep it afloat, either borrowed or their own until such time as they sell it and then they either recoup what they put in or write it off.

There isn't really a middle ground unless you can show me it

Garlick ran the club within its means with the intention of removing large sums from the club when he left. (For the record, I don't know when he developed that intention, just that that was his intention on 30th December 2020. It may have been his purpose for years, it may have been a decision of his last few months.) But that was, at the last, his intention. What we wanted instead was someone who would have run the club like Garlick EXCEPT he would have spent more on players and wouldn't have stored up the funds for a remunerative exit.

[NewClaret]

If the payment isn’t until 2023 then why would it be this summers transfer funds? Would be 6 months too late!

Because we’ve received it now (before summer) vs it being due to us in February 2023 under the original terms of the Wood sale.

[ClaretPete001]

If the payment isn’t until 2023 then why would it be this summers transfer funds? Would be 6 months too late!

I haven't read it properly but the 2023 date looked to be referring to Chris Wood's transfer?

[Oshkoshclaret]

Just a thought: we might have needed this 12.5 million advance to cover Dyche’s pay off.

[Lancasterclaret]

Garlick ran the club within its means with the intention of removing large sums from the club when he left. (For the record, I don't know when he developed that intention, just that that was his intention on 30th December 2020. It may have been his purpose for years, it may have been a decision of his last few months.) But that was, at the last, his intention. What we wanted instead was someone who would have run the club like Garlick EXCEPT he would have spent more on players and wouldn't have stored up the funds for a remunerative exit.

But no one came forward who fitted that category

I mean, I'm all for dream scenarios and all that, but reality really is reality, and pretending something that wasn't going to happen could have happened is fairly pointless

IMHO of course!

[Chester Perry]

not looked but sounds like we have factored the Wood transfer monies - meaning that Chris Wood Transfer was very much not all cash up front - this will cost us in interest but will have been done for cash flow reasons - are the stage payments taking their toll with no new investors coming in?

surprising move given the MSD charge - they would need MSD permission I think

yes just checked factored the transfer

Interest on these deals are 7.5% and upwards could be a bit higher given the cost of borrowing is increasing may even be a fixed rate plus Libor/SONIA

[FeedTheArf]

I'm sure I'm not alone in finding all of this accounts stuff incredible confusing.

I wonder if Chester and Aggi would collaborate on a summary and do an article for the site?

[ClaretPete001]

But no one came forward who fitted that category

I mean, I'm all for dream scenarios and all that, but reality really is reality, and pretending something that wasn't going to happen could have happened is fairly pointless

IMHO of course!

I think dsr's point is that the the club was run in order to facilitate a leveraged buy-out, which elevated the price to a point no one who could afford a football club would want to buy it.

And the evidence certainly points that way. There were no other buyers because the sellers had a particular type of buyer in mind.

[Lancasterclaret]

I think dsr's point is that the the club was run in order to facilitate a leveraged buy-out, which elevated the price to a point no one who could afford a football club would want to buy it.

And the evidence certainly points that way. There were no other buyers because the sellers had a particular buyer in mind.

Yes, I know that but the idea that we could be bought by someone who saved money like MG did and spent money so we can compete is cloud cuckoo land, and I thought he was veering that way

Apologies if incorrect btw

[Chester Perry]

Interest on these deals are 7.5% and upwards could be a bit higher given the cost of borrowing is increasing may even be a fixed rate plus Libor/SONIA

There is a fixed rate of interest on the deal - makes sense as it will be deducted at the point of payment to the club - you would imagine the interest will be a 7 figure number

first time we have factored in a while, it will be interesting if we do it against parachute payments if we go down

[GodIsADeeJay81]

Garlick ran the club within its means with the intention of removing large sums from the club when he left. (For the record, I don't know when he developed that intention, just that that was his intention on 30th December 2020. It may have been his purpose for years, it may have been a decision of his last few months.) But that was, at the last, his intention. What we wanted instead was someone who would have run the club like Garlick EXCEPT he would have spent more on players and wouldn't have stored up the funds for a remunerative exit.

That's a new allegation...
You're saying that from the day he assumed majority ownership he kept the club on an even keel, running within its means, so he could take money directly from the clubs accounts?

That's bold, but also shaky ground legally

[dsr]

Yes, I know that but the idea that we could be bought by someone who saved money like MG did and spent money so we can compete is cloud cuckoo land, and I thought he was veering that way

Apologies if incorrect btw

I wasn't suggesting both spending and saving at the same time, if that's what you're wondering. I was suggesting that we should get an owner who wants to run the club sensibly but doesn't want to take £100m+ out of the club. Many PL clubs have them.

[RVclaret]

I wasn't suggesting both spending and saving at the same time, if that's what you're wondering. I was suggesting that we should get an owner who wants to run the club sensibly but doesn't want to take £100m+ out of the club. Many PL clubs have them.

It’s a fair point. I know Garlick doesn’t have the wealth that Bloom at Brighton / Benham at Brentford have (as examples), but both are fans of the clubs they own (as Garlick is meant to be). The latter two, though, have ensured money is going into their clubs from their own fortunes rather than taking £100m out.

[Chester Perry]

an extend report on the accounts from the Athletic

https://archive.ph/NiII3

[dsr]

That's a new allegation...
You're saying that from the day he assumed majority ownership he kept the club on an even keel, running within its means, so he could take money directly from the clubs accounts?

That's bold, but also shaky ground legally

I don't wish to be rude, but you're either making things up or else you just aren't reading my posts.

I said "Garlick ran the club within its means with the intention of removing large sums from the club when he left. (For the record, I don't know when he developed that intention, just that that was his intention on 30th December 2020. It may have been his purpose for years, it may have been a decision of his last few months.)"

There is no sensible way to take that to mean "from the day he assumed majority ownership". It's clear, beyond the point where it could be misinterpreted (except deliberately), that what I am saying is that by 30th December 2020 his intention was to take large sums out of the club, and that I don't know how long before that date he developed that intention.

And I didn't say he took money directly from the club's accounts. That is your allegation and yours alone. Not that it makes much difference whether he took the funds directly or indirectly, except that it's just another way in which you are inventing stuff that I haven't said to try and make a point.

[dsr]

I think dsr's point is that the the club was run in order to facilitate a leveraged buy-out, which elevated the price to a point no one who could afford a football club would want to buy it.

And the evidence certainly points that way. There were no other buyers because the sellers had a particular type of buyer in mind.

I wasn't going quite that far down the line. It may be that it was quite late on in the process that he decided he could get the spare cash for himself, or he may have run it that way for years. I doubt we will ever know.

It's even possible that he ran it that way because he was trying to make it more attractive for a "hobby" buyer. I doubt it, but it's not impossible. All that is certain is that ultimately, he decided that the right thing to do was to get the money out of the club.

[tiger76]

I'm sure I'm not alone in finding all of this accounts stuff incredible confusing.

I wonder if Chester and Aggi would collaborate on a summary and do an article for the site?

Glad it's not just me who's bamboozled, as a layman I can only see dire consequences in the event of relegation, and any money raised from player sales going towards funding our debt repayments, in which case our chances of an immediate PL return are even slimmer than previously thought.

This may go some way to explaining why we've resigned Jay Rod for one, and anyone who expects us to splash the cash in the next window is living in cloud cuckoo land I'm afraid, especially if we're competing in the Championship with all the associated financial implications.

[BurnleyFC]

That's a new allegation...
You're saying that from the day he assumed majority ownership he kept the club on an even keel, running within its means, so he could take money directly from the clubs accounts?

That's bold, but also shaky ground legally

He’s not saying that. He’s saying that was his intention when he sold the club, knowing large amounts of the club’s own money would be used to fund the takeover.

Which it was.

[Paul Waine]

not looked but sounds like we have factored the Wood transfer monies - meaning that Chris Wood Transfer was very much not all cash up front - this will cost us in interest but will have been done for cash flow reasons - are the stage payments taking their toll with no new investors coming in?

surprising move given the MSD charge - they would need MSD permission I think

yes just checked factored the transfer

Charge created 3rd May 2022. Only a couple of days after the accounts were signed (28 April) which show that there is "significant" amount of MSD loan repayable in the event of relegation. Sensible risk reduction move by the club to "sell on" the receivable due on Wood's transfer and convert it into ready cash which can be put towards any money due to MSD.

Of course, if we get the points needed to stay up the £12.5 million (less charges) will be available for other purposes.

UTC

[Chester Perry]

The accounts for the Burnley Football and Athletic Company Limited are now available

https://find-and-update.company-informa ... ng-history

[CrosspoolClarets]

Getting the Wood cash upfront is not a bad idea.

But for me the most interesting thing I’ve read in the accounts today (which we knew, but it is nice to see) is how we have swapped Wood for Cornet, Weghorst, Hennessy, Roberts and Lennon for the princely net cost of £1m.

That is a blinding piece of business. Add the Collins one from earlier to that and the profits may pay off a good chunk of that loan in themselves, compared to what we had before which was Wood upfront and Bardsley, Long, and Gudmundssson as backups elsewhere.

What it shows me is a wheeler dealer mentality that may well pay off - but we need to survive first.

[fatboy47]

Garlick ran the club within its means with the intention of removing large sums from the club when he left. (For the record, I don't know when he developed that intention, just that that was his intention on 30th December 2020. It may have been his purpose for years, it may have been a decision of his last few months.) But that was, at the last, his intention. What we wanted instead was someone who would have run the club like Garlick EXCEPT he would have spent more on players and wouldn't have stored up the funds for a remunerative exit.

Don't come on here with your realism.

[ClaretPete001]

an extend report on the accounts from the Athletic

https://archive.ph/NiII3

Again this reflects either (1) how accurate the commentary has been on here or (2) the authors read this site.

No one has yet mentioned the £10 million inter-company load that went out after the year end. I wonder if those are the management re-charges.

[Paul Waine]

Interest on these deals are 7.5% and upwards could be a bit higher given the cost of borrowing is increasing may even be a fixed rate plus Libor/SONIA

Hi CP, it's either a fixed rate - in which you don't need Libor/SONIA - or it's a floating rate. Floating rates are usually used for longer term loans. I've not read the charge document, I don't know if the rate is mentioned there (I don't think it needs to be). The "advance" is only for 9 months, May'22 thru Jan'23 so I'd be surprised if it isn't fixed, depending on the credit risk of the entity that the advance is related to, Newcastle United in this case.

[Quickenthetempo]

Why would a transfer fee be included in the accounts from over a year ago?

[boyyanno]

not looked but sounds like we have factored the Wood transfer monies - meaning that Chris Wood Transfer was very much not all cash up front - this will cost us in interest but will have been done for cash flow reasons - are the stage payments taking their toll with no new investors coming in?

surprising move given the MSD charge - they would need MSD permission I think

yes just checked factored the transfer

Does this then suggest that no release clause was met?

[Paul Waine]

There is a fixed rate of interest on the deal - makes sense as it will be deducted at the point of payment to the club - you would imagine the interest will be a 7 figure number

first time we have factored in a while, it will be interesting if we do it against parachute payments if we go down

"7 figures" may be a little high. It's only an advance for 9 months, so £12.5m x 75% x let's say 10% will be a little over £900k. It could easily be lower.

[aggi]

I wasn't suggesting both spending and saving at the same time, if that's what you're wondering. I was suggesting that we should get an owner who wants to run the club sensibly but doesn't want to take £100m+ out of the club. Many PL clubs have them.

Do they? There aren't many clubs in the PL that aren't being subsidised by their owners, making profits, etc

[ClaretPete001]

Getting the Wood cash upfront is not a bad idea.

But for me the most interesting thing I’ve read in the accounts today (which we knew, but it is nice to see) is how we have swapped Wood for Cornet, Weghorst, Hennessy, Roberts and Lennon for the princely net cost of £1m.

That is a blinding piece of business. Add the Collins one from earlier to that and the profits may pay off a good chunk of that loan in themselves, compared to what we had before which was Wood upfront and Bardsley, Long, and Gudmundssson as backups elsewhere.

What it shows me is a wheeler dealer mentality that may well pay off - but we need to survive first.

Come on Crosspool.....! The Wood deal was not wheeler dealing.

Everyone knows it was unexpected and unplanned and came after the arrivals of Hennessey and Roberts etc.

It wasn't a blinding piece of business - it was a one off bit of fortune no one could have predicted.