Burnley's MSD loan reduction essentially confirmed

[Tricky Trevor]

Sorry can’t find it. Thought it was in this article but wrong.
A very good piece anyway.
https://www.skysports.com/football/news ... ier-league

[jedi_master]

Sorry can’t find it. Thought it was in this article but wrong.
A very good piece anyway.
https://www.skysports.com/football/news ... ier-league

It does actually reference it in your linked article, but sounds more like opinion/guesswork than hard fact:

“ Burnley's owners are seeking more loans to help them service the existing debt.”

[Pearcey]

Thanks CP for all the info. What a great day it has been. New manager, good news on both the finances and the academy! I bloody needed that! UTC.

[Paul Waine]

No proof but I read earlier today that they took out fresh loans to pay off this amount.
The debt will be the same, the interest will be higher.

Hi TT, any borrowing by BFC will be shown by filings at Companies House. The MSD loan is shown by security charges. If this has been repaid the security charge would be updated to record this. If any new loans there will be new security charge(s). I'm not certain of timing for any updates. It will be quick.

[NewClaret]

Thanks CP for all the info. What a great day it has been. New manager, good news on both the finances and the academy! I bloody needed that! UTC.

Brilliant day.

[Newcastleclaret93]

Brilliant day.

Very true, best day in I can’t remember how long

[Thomasyoung]

Debt doesn't disappear I guess congratulations must be in order for less outgoings over a longer term but ultimately paying more interest when the debts eventually settled.

[Top Claret]

Debt doesn't disappear I guess congratulations must be in order for less outgoings over a longer term but ultimately paying more interest when the debts eventually settled.

Debt not disappeared but it gives us a bit more wriggle room and helps the cash flow

[RVclaret]

Kieran Maguire, who many were quoting with all the doomsday headlines the week after relegation, saying he absolutely must be correct as he's a notable football finance analyst, stated on Twitter last night it's 'a lot better than first thought' when he was pointed to this.

[Thomasyoung]

Debt not disappeared but it gives us a bit more wriggle room and helps the cash flow

At a cost.

[RVclaret]

At a cost.

The opportunity cost may work in our favour should it allow us to build a squad capable of a top 2 finish this season.

[Thomasyoung]

The opportunity cost may work in our favour should it allow us to build a squad capable of a top 2 finish this season.

Pie in the sky stuff.

[Penwortham_Claret]

Say what you want about Pace but the one thing we can be sure of is that he won’t be agreeing to any poor financial deals. This is literally his bread and butter. He will get many things wrong over the coming years but I doubt finances will be one of them

[jedi_master]

At a cost.

Have you anything better to do Mr Newcastle Fan than post provocatively on a random clubs forum about their financial situation?

What a hollow existence you must have. Whatever our issues, at least we are not owned by a state that feel it correct and proper to publicly behead people for being homosexual, transsexual or having committed adultery.

If you somehow believe we are jealous of Newcastle United, or your acquisition of (of all people!) Chris Wood, you’re very much mistaken. Yours is but a hollow victory, should you go on to win (buy) success, everyone knows it including yourself. Having supported a club that has achieved essentially **** all in the last 40/50 years, one would have hoped for a degree of humility and modesty, but you have already adorned your ‘Big Club’ mentality and are ready to wear it with pride, clearly. I wish Newcastle fans success as they continue to buy merchandise and tickets that invest in a fascist regime.

[RVclaret]

Pie in the sky stuff.

Sorry what?

[CoolClaret]

Say what you want about Pace but the one thing we can be sure of is that he won’t be agreeing to any poor financial deals. This is literally his bread and butter. He will get many things wrong over the coming years but I doubt finances will be one of them

Aye I’m sure he never made a bad deal when he worked for the Lehman brothers….

[RVclaret]

Aye I’m sure he never made a bad deal when he worked for the Lehman brothers….

Oh dear.

[Thomasyoung]

Sorry what?

Unrealistic prospect of promotion the money won't be committed towards strengthening (you hardly have any) basically what I'm saying is you will be consigned to the championship for the foreseeable & in all honesty the rightful place.

[RVclaret]

Unrealistic prospect of promotion the money won't be committed towards strengthening (you hardly have any) basically what I'm saying is you will be consigned to the championship for the foreseeable & in all honesty the rightful place.

Why don’t you run along to your own clubs messageboard you weirdo. Or have you been banned from that?

[Tall Paul]

It's obviously Jakub's new username.

[claretonthecoast1882]

Weird bunch geordies.

No wonder Greggs outlets and sports direct thrive up there

[Quickenthetempo]

Unrealistic prospect of promotion the money won't be committed towards strengthening (you hardly have any) basically what I'm saying is you will be consigned to the championship for the foreseeable & in all honesty the rightful place.

What are your owners plans to make money Thomas?

Or are Newcastle just lucky and been taken over by the only investment firm in the world that doesn't want to make money?

Just spend it for fans they don't know to enjoy?

[Lancasterclaret]

Newcastle fan eh?

Who cares where the money comes from as long as we can finish 10th eh?

[GodIsADeeJay81]

Unrealistic prospect of promotion the money won't be committed towards strengthening (you hardly have any) basically what I'm saying is you will be consigned to the championship for the foreseeable & in all honesty the rightful place.

Brilliant and expected levels of arrogance shining through there.

[taio]

You'd expect any reasonable Newcastle supporter to be humble given their challenging history at times. Obviously doesn't apply to the clown who has strangely turned up on here talking about 'rightful place' - a term that represents everything that is bad about football and usually from someone with illusions of past grandeur.

[NewClaret]

Kieran Maguire, who many were quoting with all the doomsday headlines the week after relegation, saying he absolutely must be correct as he's a notable football finance analyst, stated on Twitter last night it's 'a lot better than first thought' when he was pointed to this.

The thing that I find frustrating about these ‘financial experts’ is that they paint the bleak picture first, scare the fans, create a media frenzy and then say “oh this looks better than first thought”. Which, as others have said, very little of the media will pick up on.

This is a general statement vs Maguire specifically, but from what CP has posted it’s been clear that the relegation repayment clauses were negotiable between parties for some time yet the worst case scenario has been painted by the experts/media.

[RVclaret]

The thing that I find frustrating about these ‘financial experts’ is that they paint the bleak picture first, scare the fans, create a media frenzy and then say “oh this looks better than first thought”. Which, as others have said, very little of the media will pick up on.

This is a general statement vs Maguire specifically, but from what CP has posted it’s been clear that the relegation repayment clauses were negotiable between parties for some time yet the worst case scenario has been painted.

Oh I completely agree with you. Maguire has been pretty poor in general on us, I’d say. Starting with an article he wrote on the finances of relegated clubs (think it was published in the daily mail) where he forgot to mention (or didn’t research, that’s kinda the job of an ‘analyst’) the fact our wage bill would be chopped in half + all the OOC players.

[Mala591]

I don’t think our players’ salaries will have been halved on relegation. I’d ‘guess’ they’ll have been reduced by a third.

e.g. £60k a week becomes £40k a week.

Does anyone have accurate information?

[NewClaret]

Oh I completely agree with you. Maguire has been pretty poor in general on us, I’d say. Starting with an article he wrote on the finances of relegated clubs (think it was published in the daily mail) where he forgot to mention (or didn’t research, that’s kinda the job of an ‘analyst’) the fact our wage bill would be chopped in half + all the OOC players.

Do recall that one now you mention it and it was in the Mail. As you say, terrible piece that completely failed to acknowledge that 10 of our most expensive players (in a v small squad) were OOC and the rest would see a substantial cut.

The so-called “experts” are often not as well informed as they confidentiality express in their “analysis” or they would lead you to believe.

[Lancasterclaret]

All I would say is that this helps us, but doesn't solve the issue

The longer we are down at this level, the the trickier it will be to compete

[ClaretPete001]

Do recall that one now you mention it and it was in the Mail. As you say, terrible piece that completely failed to acknowledge that 10 of our most expensive players (in a v small squad) were OOC and the rest would see a substantial cut.

The so-called “experts” are often not as well informed as they confidentiality express in their “analysis” or they would lead you to believe.

The thing that I find frustrating about these ‘financial experts’ is that they paint the bleak picture first, scare the fans, create a media frenzy and then say “oh this looks better than first thought”. Which, as others have said, very little of the media will pick up on.

This is a general statement vs Maguire specifically, but from what CP has posted it’s been clear that the relegation repayment clauses were negotiable between parties for some time yet the worst case scenario has been painted by the experts/media.

Fair enough perhaps you could contextualise these figures against those of close rivals Blackburn Rovers and explain how any of this is good news.

Rover's current turnover is £14.5 million - pre-covid it was £17 million. The club's wage bill is largely is funded by the Venky's

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

We are talking here of tens of million disappearing out of the club and outstanding loans of £50 million payable in 3 years time. Not too mention £68 million to the former directors at some point.

Everyone has said we had enough cash reserves, playing assets and the parachute to fund the next couple of years.

[GodIsADeeJay81]

I don’t think our players’ salaries will have been halved on relegation. I’d ‘guess’ they’ll have been reduced by a third.

e.g. £60k a week becomes £40k a week.

Does anyone have accurate information?

Check the wage bills across the years, 2015/16 was our last time in the championship and is reflected in the wages.

Screenshot_20220615-100224.png (501.83 KiB) Viewed 1508 times

20220615_100151.jpg (482.85 KiB) Viewed 1508 times

[Swizzlestick]

Kieran Maguire, who many were quoting with all the doomsday headlines the week after relegation, saying he absolutely must be correct as he's a notable football finance analyst, stated on Twitter last night it's 'a lot better than first thought' when he was pointed to this.

He’s done this before. While some of analysis is good, he’s very sensationalist and a lot of things he posts need to be taken with a hefty pinch of salt.

[RVclaret]

I don’t think our players’ salaries will have been halved on relegation. I’d ‘guess’ they’ll have been reduced by a third.

e.g. £60k a week becomes £40k a week.

Does anyone have accurate information?

Unfortunately not, we'd have to wait for the accounts (not next years either, the one after!) to see it for 100% certainty.

All we can go off is the previous accounts stating there are significant cuts in player wages in the event of relegation, then go off similar clubs to us (West Brom, Bournemouth, Norwich) who's accounts showed 50% wage cuts on relegation.

I'd assume we have been managed similarly by the prudent Garlick.

EDIT: Thanks GIADJ for your post - helpful as it shows the 50% cuts last time we went down.

[NewClaret]

All I would say is that this helps us, but doesn't solve the issue

The longer we are down at this level, the the trickier it will be to compete

Agreed.

But as we’ve seen this week we have a team of good internationals, with the reasonable prospect of adding more (Cullen, etc) - not many have that in the Championship. Even if there’s some adapting to Kompany’s style, quality should win out.

We have a decent chance if we invest wisely (e.g. I’d go for Wallace on a free - proven goalscorer at this level, entering prime) vs. loaning a load of kids. A few, fine, but we need that balance with experience and knowledge of this league.

We have one season where we have the biggest budget and need to make it pay - offer decent wages, that reduce if we’re not promoted and increase if we are.

[claret59]

It may have been posted earlier so apologies for any repeat but there was a recent article in the DM that the sort of finance deal/purchase that Burnley engaged in is to be banned. Nothing though about buy-outs/purchases by regimes with outrageous human rights records. After all if this type of regime is good enough (wealthy enough) for a world cup venue to be staged it must be OK.

[ClaretPete001]

If you look at the accounts above you can see the issue:

In the Championship, 2016 £40 million (including PL parachute payments) whereas 2017 is £121 million

A £50 per cent wage cut simply equates to the loss of the parachute payments in year 1.

You then have Yr 2 and Yr 3 to deal with....

In 2014, turnover was £19 million with £3 million matchday revenue.

That's the problem.

[NewClaret]

Fair enough perhaps you could contextualise these figures against those of close rivals Blackburn Rovers and explain how any of this is good news.

Rover's current turnover is £14.5 million - pre-covid it was £17 million. The club's wage bill is largely is funded by the Venky's

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

We are talking here of tens of million disappearing out of the club and outstanding loans of £50 million payable in 3 years time. Not too mention £68 million to the former directors at some point.

Everyone has said we had enough cash reserves, playing assets and the parachute to fund the next couple of years.

1. I very much doubt £68m will be payable to former directors if we stay down. You & I don’t know, let’s neither of us pretend with any certainty that we do.

2. You fail to mention that the personal wealth of two of our directors (who claim to support the club & have acted in its best interests when doing this deal) now outweighs the debt we hold.

3. The doomsday scenarios are only relevant if we don’t regain promotion. Let’s worry about things when they actually happen rather than before they do or you spend your whole life anxious about possibilities rather than realities. If you listen to Russian state media, Putin will nuke us all before then anyway.

[ClaretPete001]

1. I very much doubt £68m will be payable to former directors if we stay down. You & I don’t know, let’s neither of us pretend with any certainty that we do.

2. You fail to mention that the personal wealth of two of our directors (who claim to support the club & have acted in its best interests when doing this deal) now outweighs the debt we hold.

3. The doomsday scenarios are only relevant if we don’t regain promotion. Let’s worry about things when they actually happen rather than before they do or you spend your whole life anxious about possibilities rather than realities. If you listen to Russian state media, Putin will nuke us all before then anyway.

So, your argument against expertise is - it's promotion or bust unless Putin nukes us in which case promotion seems unlikely?

[RVclaret]

A £50 per cent wage cut simply equates to the loss of the parachute payments in year 1.

That's the problem.

87m wage bill on the recent accounts.

CP thinks around 15m of that is a staying up bonus.

This season just gone there is no staying up bonus.

87-15 = 72m

Top earners off the wage bill: Tark, Mee, Cornet, Weghorst, Pope - 12.5m there

Other OOC’s off the wage bill: 3m let’s say

15.5m saving

72-15 = 56.5

56.5/2 (50% wage cut) = 28.25m

Parachute payment year 1 is around 52/53m

[Mala591]

87m wage bill on the recent accounts.

CP thinks around 15m of that is a staying up bonus.

This season just gone there is no staying up bonus.

87-15 = 72m

Top earners off the wage bill: Tark, Mee, Cornet, Weghorst, Pope - 12.5m there

Other OOC’s off the wage bill: 3m let’s say

15.5m saving

72-15 = 56.5

56.5/2 (50% wage cut) = 28.25m

Parachute payment year 1 is around 52/53m

So, we’ll be much better off in the Championship than if we had stayed in the PL!

[SammyBoy]

Can someone sum up in layman's terms what's happened with the debt? 140 posts is too much for me

[Swizzlestick]

Can someone sum up in layman's terms what's happened with the debt? 140 posts is too much for me

A £65m loan was initially taken out with MSD as per latest accounts. Those same accounts stated that a ‘significant’ chunk of the loan would have to be paid off if the club went down. There were worries this may mean something like £40m or so may need to be found. It APPEARS that £15m is the actual repayment required, which is something of a result considering. There is quite a hefty interest charge on the loan too so not all rosy in the garden but it does mean should be more to play with in terms of investment in the team. For now.

[ClaretPete001]

87m wage bill on the recent accounts.

CP thinks around 15m of that is a staying up bonus.

This season just gone there is no staying up bonus.

87-15 = 72m

Top earners off the wage bill: Tark, Mee, Cornet, Weghorst, Pope - 12.5m there

Other OOC’s off the wage bill: 3m let’s say

15.5m saving

72-15 = 56.5

56.5/2 (50% wage cut) = 28.25m

Parachute payment year 1 is around 52/53m

Both me and you have looked at a number of relegated clubs and I've not seen anyone achieve that level of savings .

The wage bill in the most recent accounts was after a year where there was no money spent on transfers because of Covid. Added to the squad last year was Cornet etc. So, it looks like you are forecasting savings heading towards 70 per cent.

So, let's be real you are suggesting the wage bill will be cut by 70 per cent and at the same time the club still will be able to recruit a squad capable of gaining promotion from the Championship.

And then you have yrs 2 and 3 of losing broadcast revenue.

I am not saying it is not possible; rather, that the financial expertise have not under-estimated the size of the challenge.

[SammyBoy]

A £65m loan was initially taken out with MSD as per latest accounts. Those same accounts stated that a ‘significant’ chunk of the loan would have to be paid off if the club went down. There were worries this may mean something like £40m or so may need to be found. It APPEARS that £15m is the actual repayment required, which is something of a result considering. There is quite a hefty interest charge on the loan too so not all rosy in the garden but it does mean should be more to play with in terms of investment in the team. For now.

Cheers for that, knows his way around a loan application does Pacey.

[RVclaret]

Both me and you have looked at a number of relegated clubs and I've not seen anyone achieve that level of savings .

The wage bill in the most recent accounts was after a year where there was no money spent on transfers because of Covid. Added to the squad last year was Cornet etc. So, it looks like you are forecasting savings heading towards 70 per cent.

So, let's be real you are suggesting the wage bill will be cut by 70 per cent and at the same time the club still will be able to recruit a squad capable of gaining promotion from the Championship.

And then you have yrs 2 and 3 of losing broadcast revenue.

I am not saying it is not possible; rather, that the financial expertise have not under-estimated the size of the challenge.

True - the wage bill may have increased slightly with the additions of Cornet, Roberts and Hennessey. Wood left in Jan and was replaced by WW, probably on similar money. But aside from that, I don't think I'm too far away. Which bits would you disagree with?

Lets call it 30m instead of 28m that I said. Obviously now that figure would increase a fair bit as we'll expect 6 or more new incomings but it'll likely be on Championship wages, with the potential for promotion payouts / no promotion slight reduction - who knows.

Not worrying about 2nd and 3rd years yet as lets focus on the season at hand with promotion the target, and trust Pace and co have got their modelling and forecasting correct for how they will manage the further reduction in parachutes, should we not achieve it (further selling of top earners/sellable assets most likely).

[jojomk1]

1. I very much doubt £68m will be payable to former directors if we stay down. You & I don’t know, let’s neither of us pretend with any certainty that we do.

2. You fail to mention that the personal wealth of two of our directors (who claim to support the club & have acted in its best interests when doing this deal) now outweighs the debt we hold.

Is a deal not a deal ?

If I sell my house to you, and you change jobs resulting in a smaller income, do I agree to give you a reduction on the asking price on my house ?

Why would Garlick and John B accept a lower payout

[andyh]

I know there are a lot of ifs in this but….

If we do manage to get promoted will this all turn out to be a blessing in disguise?
We will have reduced the debt we were planning on living with and be back to where there is huge income.

Of course we do have the small matter of getting promoted first.

[dsr]

I know there are a lot of ifs in this but….

If we do manage to get promoted will this all turn out to be a blessing in disguise?
We will have reduced the debt we were planning on living with and be back to where there is huge income.

Of course we do have the small matter of getting promoted first.

The directors have taken £112m or more out of the club, with no realistic plan to repay it. If we get promotion, we might see some of that money back. If we don't get promotion, it's gone.

We have had to borrow £65m at eye-watering interest rates, just so the directors can borrow that money from the club interest-free. The club is paying £6m a year (now £5m) for no reason other than to feather the directors' nest.

The point of this relatively low repayment, coupled with the appointment of Kompany at high wages and the likely investment in new players, is that the directors have no interest in retrenchment and ensuring a stable club for the future. It's promotion or bust, and "bust" is a literal possibility. All this low repayment means is that the loan will have to be paid off later, out of parachute money year after next, or by player sales later - unless we get promotion.

To quote Churchill, this a blessing in disguise "seems quite effectively disguised."

[FeedTheArf]

I’m probably showing my financial naivety here, but will there come a point in time when ALK will have to pay BFC all of the money and debt back that they’ve saddled the club with?