Burnley FC Accounts 2022/23

[123EasyasBFC]

He is American. New York/New Jersey area.

Noticeable that JJ Watt is not listed as a director. He is routinely described as 'co-owner' or 'minority owner' or 'minority investor'. It will be interesting to see which of the various companies he has invested in - and for how much.

You’d imagine JJ Watt has invested in ALK along with Malcolm Jenkins and Dude Perfect which is why they say they are part of the ‘ownership group’

[forzagranata]

You’d imagine JJ Watt has invested in ALK along with Malcolm Jenkins and Dude Perfect which is why they say they are part of the ‘ownership group’

I don't imagine that Dude Perfect has invested in anything to be honest!

I've presumed that was a kind of influencer contract.

[CrosspoolClarets]

I’m saying they are both “bad guys” !!
I also agree that the ownership now puts us in a worse and far more precarious position than previously.

I think a few people have mentioned and been critical of the current owners and taking money out of the club. It was pretty inevitable they would do that. But my point is so did Garlick - the cash reserves we built up were as you say as a result of the way Garlick ran the club and the profits we made. And Garlick needs a lot of credit for appointing Dyche.

But he effectively took those profits for himself through the deal to sell the club. He’s entitled to do this of course but deliberately denying the club of transfer funds we needed (Dyche on record saying he needed them) to bolster the price he received for the club in my eyes at least makes Garlick the same as many owners of football clubs….and not too dissimilar as the current owners (as in their main motivation in owning the club is to make money)

I would be interested in who made a better return on their investment relative to what they risked - Garlick from Burnley or the much maligned Owen Oysten from Blackpool. I would guess the former. All above board I am sure.

But if the sum total of a fan’s interest (the “we” that gets referred to) is what is on the pitch I think the new owners have offered us more. They clearly want to be in the top league, want flair players and a positive playing style that attracts new fans. Neither party has spent much of infrastructure for normal fans. There is no indication the new owners will sell all the good players and bank the parachutes prior to selling up.

So we can rattle on about future risk, and ownership groups, and who has paid what, until the cows come home, but at this precise moment it remains a great time to be a Claret and the owners deserve their bit of the credit. I’m never sure they get it.

[ClaretPete001]

I would be interested in who made a better return on their investment relative to what they risked - Garlick from Burnley or the much maligned Owen Oysten from Blackpool. I would guess the former. All above board I am sure.

But if the sum total of a fan’s interest (the “we” that gets referred to) is what is on the pitch I think the new owners have offered us more. They clearly want to be in the top league, want flair players and a positive playing style that attracts new fans. Neither party has spent much of infrastructure for normal fans. There is no indication the new owners will sell all the good players and bank the parachutes prior to selling up.

So we can rattle on about future risk, and ownership groups, and who has paid what, until the cows come home, but at this precise moment it remains a great time to be a Claret and the owners deserve their bit of the credit. I’m never sure they get it.

I'm sure you exist in a parallel universe Crosspool. The club has spent the best part of the last decade in the PL and even had a season in Europe playing the likes of Olympiakos in Athens. Ok the football is more exciting if you enjoy watching a team lose virtually every week or the Championship.

With regard to the comment 'there is no indication the new owners will sell all the good players and bank the parachutes prior to selling up' I wonder whether you really grasp any of this....

The warning in the account is precisely because the new owners plan to sell players to cover the £60 million fall in revenue (if we are relegated) and we've just lost nearly £30 million quid with the parachute money.

And given there were only two interested parties last time (if you believe the previous owners) when the club were debt free and had a PL squad then who is going to buy it now?

[Big Vinny K]

I would be interested in who made a better return on their investment relative to what they risked - Garlick from Burnley or the much maligned Owen Oysten from Blackpool. I would guess the former. All above board I am sure.

But if the sum total of a fan’s interest (the “we” that gets referred to) is what is on the pitch I think the new owners have offered us more. They clearly want to be in the top league, want flair players and a positive playing style that attracts new fans. Neither party has spent much of infrastructure for normal fans. There is no indication the new owners will sell all the good players and bank the parachutes prior to selling up.

So we can rattle on about future risk, and ownership groups, and who has paid what, until the cows come home, but at this precise moment it remains a great time to be a Claret and the owners deserve their bit of the credit. I’m never sure they get it.

I would not go anywhere near as far as comparing Garlick to the crooked deviant Oyston. And what they did to their respective clubs when they got promoted to the EPL is absolutely night and day. Just listen to some of things that Holloway said around the way they paid players wages etc and it’s frightening. Oyston gave virtually no money to Holloway for transfer fees or for wages and took out a massive dividend immediately - effectively guaranteeing they would be relegated. Garlick invested in the training ground (at Dyche’s request) and they built a long term plan together in investing in the team and also gradually building up our wage bill. Between them as pointed out by Riley above they delivered one of the most successful periods in our history - and it was a sustained period too. The only bit I am critical of is the last couple of years and people criticising just ALK about the structure and nature of the takeover when very clearly Garlick was a big part of this.

As for this being a great time to be a Claret again I’m not sure about that. I loved last season like most fans. But we have got this season very badly wrong and looking at those accounts I think that’s off the pitch as well as on it. I don’t like the direction of travel in our financial model. Unfortunately for me I understand a lot of the nuances in the accounts and the underlying risk in a lot of areas.

I’ve not been one to be too critical of the owners up to now and generally tried to defend them. But quickly changing my mind based on what I have seen on the last few months.

On top of the above I do not like the way they are treating the supporters of the club. It’s consistent poor communication and I believe their priorities lie in a different place to where they should be and they are increasingly getting the balance wrong.

[Paul Waine]

So are you saying directors/shareholders are sucking out funds, or 'improvements'/operating costs of the admin side?

Hi Ian, I don't think anyone has answered your question.

The latest set of accounts very clearly state that none of the directors received any remuneration for their services.

Equally, no dividends are being paid, so shareholders aren't taking any money out of the club.

The accounts indicate that there was an increase in the amount borrowed by Calder Vale from the club. As the accounts cover the period from 1st August 2022 to 31st July 2023 this additional borrowing could be the final payment to the previous shareholders/directors of the club. I expect CP can provide more details - the £9.3 million he mentions in a post above..

[boyyanno]

I would be interested in who made a better return on their investment relative to what they risked - Garlick from Burnley or the much maligned Owen Oysten from Blackpool. I would guess the former. All above board I am sure.

But if the sum total of a fan’s interest (the “we” that gets referred to) is what is on the pitch I think the new owners have offered us more. They clearly want to be in the top league, want flair players and a positive playing style that attracts new fans. Neither party has spent much of infrastructure for normal fans. There is no indication the new owners will sell all the good players and bank the parachutes prior to selling up.

So we can rattle on about future risk, and ownership groups, and who has paid what, until the cows come home, but at this precise moment it remains a great time to be a Claret and the owners deserve their bit of the credit. I’m never sure they get it.

Anyone who has to reinvent history to try and back a position should really consider wether its a position worth backing.

That is unless ALK have built brand new state of the art training facilities and improved the youth academy to boot?

What's that I hear you say...No they haven't? And actually they've seen it go backwards?

Figures.

[Big Vinny K]

Hi Ian, I don't think anyone has answered your question.

The latest set of accounts very clearly state that none of the directors received any remuneration for their services.

Equally, no dividends are being paid, so shareholders aren't taking any money out of the club.

The accounts indicate that there was an increase in the amount borrowed by Calder Vale from the club. As the accounts cover the period from 1st August 2022 to 31st July 2023 this additional borrowing could be the final payment to the previous shareholders/directors of the club. I expect CP can provide more details - the £9.3 million he mentions in a post above..

Hi Paul

As you know different ways to skin a cat !!

Last page of the accounts references the management fee paid by the Group of £2.5m to an “affiliated entity”. It was £1.5m in 2022.

Completely separate issue but not really been referenced much on the threads on our accounts but the number of employees (including directors) does seem to have increased significantly under the new owners. Excluding the players, managerial and training staff it’s 409 staff now - an increase of 33% on the previous year. Can’t remember exactly what these numbers were under the previous owners but don’t think they were anywhere near as big. It’s hard to see on the face of it where the club has benefited from such a big increase in employees. The new owners did also get rid of a large number of the staff at the club when they first took over - at the time I thought this was quite a positive thing as the staffing numbers had grown quite significantly under Garlick in his last couple of years.

[Rileybobs]

Hi Ian, I don't think anyone has answered your question.

The latest set of accounts very clearly state that none of the directors received any remuneration for their services.

Equally, no dividends are being paid, so shareholders aren't taking any money out of the club.

Who do you think BFC paid a £2.5m management fee to? I’m not suggesting that the directors shouldn’t be paid for the work that they do, but I don’t think you’re naive enough to claim that the accounts clearly state the directors haven’t been remunerated.

[Chester Perry]

Hi Paul

As you know different ways to skin a cat !!

Last page of the accounts references the management fee paid by the Group of £2.5m to an “affiliated entity”. It was £1.5m in 2022.

Completely separate issue but not really been referenced much on the threads on our accounts but the number of employees (including directors) does seem to have increased significantly under the new owners. Excluding the players, managerial and training staff it’s 409 staff now - an increase of 33% on the previous year. Can’t remember exactly what these numbers were under the previous owners but don’t think they were anywhere near as big. It’s hard to see on the face of it where the club has benefited from such a big increase in employees. The new owners did also get rid of a large number of the staff at the club when they first took over - at the time I thought this was quite a positive thing as the staffing numbers had grown quite significantly under Garlick in his last couple of years.

there appears to be a lot of matchday and event staff in those figures - it hides all the full time numbers on the administration and commercial activities

previously we would not have have mentioned the matchday event numbers

the football side has grown marginally, and is now a handful above the year we got Cat 1 Status - I am assuming most of this is down to the sheer volume of new signings and the lack of sales, meaning we have a very large squad compared to what we have been used to

[Paul Waine]

Who do you think BFC paid a £2.5m management fee to? I’m not suggesting that the directors shouldn’t be paid for the work that they do, but I don’t think you’re naive enough to claim that the accounts clearly state the directors haven’t been remunerated.

Note 6: The Company had no employees, other than the directors, who received no remuneration during the year.

The directors of Burnley FC Holdings Limited are considered to be the key management personnel of the Group. None of the directors received remuneration from the Group during the current or previous year.

I've underlined and highlighted bold the statement made in the accounts.

Why do you suggest that the related party transaction re £2.5 million management fee paid to an affiliate entity was paid to the directors? Don't you think that UK reporting rules would have closed any "silly little dodge" to avoid correctly reporting directors' remuneration a long time ago?

[Paul Waine]

there appears to be a lot of matchday and event staff in those figures - it hides all the full time numbers on the administration and commercial activities

previously we would not have have mentioned the matchday event numbers

the football side has grown marginally, and is now a handful above the year we got Cat 1 Status - I am assuming most of this is down to the sheer volume of new signings and the lack of sales, meaning we have a very large squad compared to what we have been used to

It's possible that Sean Dyche and the other ex-coaches are included in the "sales and admin staff" for the period up until Sean Dyche joined Everton. There's no mention of a "pay off" when Sean Dyche stepped down as Manager in April 2022. I don't think they would have continued to be listed as "players and coaching" once they'd stopped being employed in this category. Of course, I could be mistaken about this...

[Rileybobs]

Note 6: The Company had no employees, other than the directors, who received no remuneration during the year.

The directors of Burnley FC Holdings Limited are considered to be the key management personnel of the Group. None of the directors received remuneration from the Group during the current or previous year.

I've underlined and highlighted bold the statement made in the accounts.

Why do you suggest that the related party transaction re £2.5 million management fee paid to an affiliate entity was paid to the directors? Don't you think that UK reporting rules would have closed any "silly little dodge" to avoid correctly reporting directors' remuneration a long time ago?

Is it not possible that the £2.5m management fee was paid to another company of which Alan Pace and co are directors?

[aggi]

Hi Paul

As you know different ways to skin a cat !!

Last page of the accounts references the management fee paid by the Group of £2.5m to an “affiliated entity”. It was £1.5m in 2022.

Completely separate issue but not really been referenced much on the threads on our accounts but the number of employees (including directors) does seem to have increased significantly under the new owners. Excluding the players, managerial and training staff it’s 409 staff now - an increase of 33% on the previous year. Can’t remember exactly what these numbers were under the previous owners but don’t think they were anywhere near as big. It’s hard to see on the face of it where the club has benefited from such a big increase in employees. The new owners did also get rid of a large number of the staff at the club when they first took over - at the time I thought this was quite a positive thing as the staffing numbers had grown quite significantly under Garlick in his last couple of years.

My guess is that we may have brought some contracted stuff back in house (we may see a fall again depending how the catering staff are employed under the new contract).

The standard states that it is all staff, not full time equivalent, so within those numbers will be a lot of people who actually work very few hours. The 22/23 championship season started in July whereas the Premier League season for 21/22 started in August. If staff are on contracts for the season then they would be employed for 11 months in this accounting period as opposed to 10 in the prior which would knock onto the averages.

[Big Vinny K]

My guess is that we may have brought some contracted stuff back in house (we may see a fall again depending how the catering staff are employed under the new contract).

The standard states that it is all staff, not full time equivalent, so within those numbers will be a lot of people who actually work very few hours. The 22/23 championship season started in July whereas the Premier League season for 21/22 started in August. If staff are on contracts for the season then they would be employed for 11 months in this accounting period as opposed to 10 in the prior which would knock onto the averages.

Yep I thought that myself that there maybe some anomalies in there.
I’ve not had a look at our previous accounts but I have a figure in my head that the staffing numbers went up to 250 under Garlick and at the time I thought these were high (did they not double over 2 or 3 years).
I believe we increased the marketing staff pretty significantly back then.
Maybe a case of comparing apples and pears between the old and new owners…..but I do know there was some pretty big restructuring when ALK came in. It’s not particularly clear to me 2 plus years in how or whether this has improved the club in any way.

I’m sure I read or heard somewhere when we were having ticketing issues that there was one technical person in the ticket office so we can be pretty confident that there’s been no real change in that department !!

[ClaretPete001]

Is it not possible that the £2.5m management fee was paid to another company of which Alan Pace and co are directors?

Of course, it is.

[Paul Waine]

Is it not possible that the £2.5m management fee was paid to another company of which Alan Pace and co are directors?

It's not only possible, it's certain. The accounts say it was paid to an affiliate.

But, just because Alan Pace is a director of the company providing management services doesn't mean that the fee was paid to Alan Pace or any other directors. Maybe it's, in part, pays for JJ Watt and Kealia Watt (and others) to provide promotional services. Maybe it's paying for fund raising activities for new investors or other funding activities such as bank loans and transfer advances. Maybe there are other management services.

[Rileybobs]

It's not only possible, it's certain. The accounts say it was paid to an affiliate.

But, just because Alan Pace is a director of the company providing management services doesn't mean that the fee was paid to Alan Pace or any other directors. Maybe it's, in part, pays for JJ Watt and Kealia Watt (and others) to provide promotional services. Maybe it's paying for fund raising activities for new investors or other funding activities such as bank loans and transfer advances. Maybe there are other management services.

But you claimed that none of the directors received any remuneration and no shareholders have taken money out of the club. So, which is it?

[randomclaret2]

It's not only possible, it's certain. The accounts say it was paid to an affiliate.

But, just because Alan Pace is a director of the company providing management services doesn't mean that the fee was paid to Alan Pace or any other directors. Maybe it's, in part, pays for JJ Watt and Kealia Watt (and others) to provide promotional services. Maybe it's paying for fund raising activities for new investors or other funding activities such as bank loans and transfer advances. Maybe there are other management services.

We might be paying JJ Watt ?

[Paul Waine]

But you claimed that none of the directors received any remuneration and no shareholders have taken money out of the club. So, which is it?

I didn't claim, I quoted the accounts that state it.

I also said a management fee paid to an affiliate doesn't indicate that Alan Pace and other directors were paid that management fee.

[Paul Waine]

We might be paying JJ Watt ?

Just saying there is no information on what the management fee was paid for or which affiliate it was paid to.

[Rileybobs]

I didn't claim, I quoted the accounts that state it.

I also said a management fee paid to an affiliate doesn't indicate that Alan Pace and other directors were paid that management fee.

But it seems to me you’ve insinuated that Pace and co haven’t taken any remuneration, unless I’ve misunderstood your position?

It would seem to me highly likely to me that the management fee was paid to a company of which Pace and co are directors that have or will pay Pace and co by way of dividends or salaries. Do you not agree?

[ClaretPete001]

It's not only possible, it's certain. The accounts say it was paid to an affiliate.

But, just because Alan Pace is a director of the company providing management services doesn't mean that the fee was paid to Alan Pace or any other directors. Maybe it's, in part, pays for JJ Watt and Kealia Watt (and others) to provide promotional services. Maybe it's paying for fund raising activities for new investors or other funding activities such as bank loans and transfer advances. Maybe there are other management services.

It's pretty standard to use Inter-Company management fees to get cash out of a business to pay senior figures.

In fact, I recall predicting this would be ramped up on the ALK thread ages ago.

[ClaretPete001]

What would the balance sheet look like without that £124 million inter company debt...!

[Paul Waine]

But it seems to me you’ve insinuated that Pace and co haven’t taken any remuneration, unless I’ve misunderstood your position?

It would seem to me highly likely to me that the management fee was paid to a company of which Pace and co are directors that have or will pay Pace and co by way of dividends or salaries. Do you not agree?

Rileybobs, please read my two posts, above.

It is possible that a management fee paid to an affiliate entity would be paid to the directors of the affiliate entity. But, if those directors of the affiliate entity are also directors of the reporting entity any such payment would need to be included in the directors remuneration report. As the directors of BFCHL are reported as having received no remuneration we can be confident that they have received no remuneration.

For avoidance of doubt: no I do not agree with you. That's what I've now said in 3 posts.

[Paul Waine]

What would the balance sheet look like without that £124 million inter company debt...!

In what way, Pete? That Calder Vale had repaid the debt, or that BFCHL had cancelled the debt, or that Calder Vale had never borrowed the £124 million in the first place?

[Rileybobs]

Rileybobs, please read my two posts, above.

It is possible that a management fee paid to an affiliate entity would be paid to the directors of the affiliate entity. But, if those directors of the affiliate entity are also directors of the reporting entity any such payment would need to be included in the directors remuneration report. As the directors of BFCHL are reported as having received no remuneration we can be confident that they have received no remuneration.

For avoidance of doubt: no I do not agree with you. That's what I've now said in 3 posts.

I’ve read your posts but I find your answers are a little ambiguous. Are you saying that there is absolutely no way that Pace and co can’t personally gain from the management fees paid to the affiliate company? I find this hard to believe but will happily defer to people with more knowledge.

Could a dividend be paid from the affiliate company after the BFC accounts are published for example? Or would an affiliate company registered overseas require the same level of transparency?

[Paul Waine]

Thanks to Mods for merging these 2 threads on the club's accounts.

The most interesting thing about the accounts for the accounting period ending 31st July 2023 is that they were signed off by both Alan Pace - and no director would sign off the accounts until they have been approved by the board of directors - and the auditors on 23rd December 2023. This is more than 4 months earlier than the accounts for 31st July 2022 were signed off on 28th April 2023.

What does earlier sign off mean:

1) The "events after the reporting period" - note 32 - are limited to events up to the date of sign off;
2) There is no mention of any transfer window activity that took place in January 2024;
3) There is no mention of the new Facility Agreement with MGG Lux SV S.A R.L created on 5th January 2024 and the charge registered at Companies House on 15th January 2024;
4) The "next 12 months" Going Concern matters, as described in the accounts - note 2.4 - and, as commented on by the auditors commenced on 23rd December 2023 - and the club is now, already, more than 3 months through this 12 months period.

We don't know, so far as I'm aware, whether the Facility Agreement provided funds to repay the bank loan(s) included in the club's accounts as at 31st July 2023.

[boyyanno]

Rileybobs, please read my two posts, above.

It is possible that a management fee paid to an affiliate entity would be paid to the directors of the affiliate entity. But, if those directors of the affiliate entity are also directors of the reporting entity any such payment would need to be included in the directors remuneration report. As the directors of BFCHL are reported as having received no remuneration we can be confident that they have received no remuneration.

For avoidance of doubt: no I do not agree with you. That's what I've now said in 3 posts.

Hi Paul,

You've been very deliberate with your wording in these posts but I think you do understand what is being asked.

It may be correct to say that no payment has been made to the directors, but I believe the general sentiment is that they have taken money out of the club and they will benefit from it. Taking away the word "remuneration"- it would seem likely that this payment has been made to give benefit to those individuals. I assume you would agree with that?

If so wether it's a direct payment to them now or just allows them to keep drawing salaries/dividends or even have more cash for other investments etc I think the sentiment is still the same.

[Paul Waine]

I’ve read your posts but I find your answers are a little ambiguous. Are you saying that there is absolutely no way that Pace and co can’t personally gain from the management fees paid to the affiliate company? I find this hard to believe but will happily defer to people with more knowledge.

Could a dividend be paid from the affiliate company after the BFC accounts are published for example? Or would an affiliate company registered overseas require the same level of transparency?

I'm saying that if Alan Pace had received remuneration from the affiliate entity my understanding is that BFCHL would have to report that in the directors' remuneration statement. (It's the easiest thing in the world for the auditors to ask what the management fee was paid for and make sure that it was genuine).

If the affiliate entity receiving the management fee had sufficient profit to be able to pay a dividend it would be paid to the shareholders of that company. The management fee would have to reflect the market value of any services provided to BFCHL, otherwise they would fall foul of transfer pricing regulations - companies aren't allowed to transfer money between affiliates to move them out of one tax jurisdiction to another jurisdiction and avoid tax by inflating the value of the services.

USA companies are just as "hot" on auditing as are UK auditors. The ALK Capital/Velocity Sports Partnership set up will ensure that all the transactions are properly accounted for on behalf of the investors in Velocity Sports Partnership, as well as ALK Capital. The investors in Velocity Sports Partnership will ensure their interests are properly looked after. Just because USA doesn't require public disclosure of everything in the USA private companies, doesn't mean that the investors in those entities, including all the intermediate entities, don't get all the transparency that they require.

[Paul Waine]

Hi Paul,

You've been very deliberate with your wording in these posts but I think you do understand what is being asked.

It may be correct to say that no payment has been made to the directors, but I believe the general sentiment is that they have taken money out of the club and they will benefit from it. Taking away the word "remuneration"- it would seem likely that this payment has been made to give benefit to those individuals. I assume you would agree with that?

If so wether it's a direct payment to them now or just allows them to keep drawing salaries/dividends or even have more cash for other investments etc I think the sentiment is still the same.

Yes, I've been very deliberate with my wording because I'm being very clear with my answers.

However, I don't understand what you are suggesting. Are you suggesting that the accounts are dishonest? Are you suggesting that the directors have received remuneration? Are you suggesting that the auditors have signed off the accounts with a clean audit opinion when the accounts aren't honest?

[boyyanno]

Yes, I've been very deliberate with my wording because I'm being very clear with my answers.

However, I don't understand what you are suggesting. Are you suggesting that the accounts are dishonest? Are you suggesting that the directors have received remuneration? Are you suggesting that the auditors have signed off the accounts with a clean audit opinion when the accounts aren't honest?

That's obviously not what I'm saying no.

I think it's perfectly reasonable to suggest that the accounts are honest but also that Alan Pace and the directors can benefit from the payment that was made.

No one is suggesting dodgy dealings- you are purposely using the word renumeration despite that not being what I said, but if you want to pretend that no one benefits from the payment then the glaring question would be why it was made?

[OrientMascot]

Consequence is the biggest issue I have. What is the consequence for Pace & Co if it goes tits up. Kilby and then Garlick had financial & personal interests and risks when they had the club. As fans they would remember the financial ruin the club was in, in the 80’s…and as a consequence ran the club prudently.
Pace & Co have neither the financial or emotional consequences if it goes wrong. That’s not to say they are doing a bad job - last season was one of the best seasons I’ve ever seen as a Burnley fan. Despite the euphoria after last season, it is clear that our owners are willing to take risks because they have minimal financial and emotional consequences should it go wrong.

[dsr]

I'm saying that if Alan Pace had received remuneration from the affiliate entity my understanding is that BFCHL would have to report that in the directors' remuneration statement. (It's the easiest thing in the world for the auditors to ask what the management fee was paid for and make sure that it was genuine).

UK disclosure rules do not say that directors need to disclose remuneration that they have received from an affiliate company. The remuneration that directors disclose is only for remuneration from the company and its other group companies.

What does have to be disclosed is monies paid by BFC to an affiliate in respect of key management personnel services provided by that affiliate. Obviously it's possible that Alan Pace and friends have set up a company that pays Vincent Kompany and his team, and the directors aren't benefitting from it at all. But it's hardly likely. An affiliate company is only too likely to be a way of taking directors' fees out of the the company without having to disclose them, and possibly transferring the tax liability and NIC liability to a different country.

As for not taking money out of the company, of course they are. Last year, BFC owed Alan Pace's companies £114m. This year they owe £124m. This is because Alan Pace's companies have taken £10m out of BFC.

[Wile E Coyote]

however bleak the profit /loss columns look, there will hopefully come a day when we don't have to pretend to like dude perfect. Tis a cultural chasm that is to wide to accept, albeit it a panto we are expected to belly laugh at. publicity via hideous OTT stag do humour for darts fans is a step to far.

[Big Vinny K]

Yes, I've been very deliberate with my wording because I'm being very clear with my answers.

However, I don't understand what you are suggesting. Are you suggesting that the accounts are dishonest? Are you suggesting that the directors have received remuneration? Are you suggesting that the auditors have signed off the accounts with a clean audit opinion when the accounts aren't honest?

Hi Paul

Putting aside accounting procedures etc what do you really think the management fee relates to ?

It does not sound like a normal consultancy fee for a piece of work undertaken for business purposes. I say that because :
1. It’s gone to an affiliate company
2. It was paid in the previous year too
3. There is a material note in the account referencing the payments

Of course technically it’s not directors remuneration and the auditors have confirmed this so I understand your point here. But in the absence of any detail about the nature of the payments the fact that it’s gone to an affiliate company in the first 2 years accounts of the new owners suggests to me that it is a way of the owners taking money of the club and benefiting from this in some form,

[Rileybobs]

UK disclosure rules do not say that directors need to disclose remuneration that they have received from an affiliate company. The remuneration that directors disclose is only for remuneration from the company and its other group companies.

What does have to be disclosed is monies paid by BFC to an affiliate in respect of key management personnel services provided by that affiliate. Obviously it's possible that Alan Pace and friends have set up a company that pays Vincent Kompany and his team, and the directors aren't benefitting from it at all. But it's hardly likely. An affiliate company is only too likely to be a way of taking directors' fees out of the the company without having to disclose them, and possibly transferring the tax liability and NIC liability to a different country.

As for not taking money out of the company, of course they are. Last year, BFC owed Alan Pace's companies £114m. This year they owe £124m. This is because Alan Pace's companies have taken £10m out of BFC.

Thanks for clarifying. I’m not sure why Paul was being so ambiguous whilst suggesting others may be claiming nefarious actions by the directors. I gave up on that conversation as it was like trying to get straight answers out of a politician.

So if you are correct it is perfectly possible (and probably likely) that Pace and co have been remunerated by an affiliate company which has been paid a fee by BFC? Meanwhile the accounts state that the directors haven’t been remunerated (directly) by BFC or the group, which is also true.

[Chester Perry]

It's possible that Sean Dyche and the other ex-coaches are included in the "sales and admin staff" for the period up until Sean Dyche joined Everton. There's no mention of a "pay off" when Sean Dyche stepped down as Manager in April 2022. I don't think they would have continued to be listed as "players and coaching" once they'd stopped being employed in this category. Of course, I could be mistaken about this...

Only until early Feb 2023 when it appears Everton took over his and their Burnley contracts - given reported wage terms and contract length

[Chester Perry]

I would be interested in who made a better return on their investment relative to what they risked - Garlick from Burnley or the much maligned Owen Oysten from Blackpool. I would guess the former. All above board I am sure.

from what I see Garlick holds the record in terms of multiple of investment around 12 times from what I have been able to discern, though it would have been more but for the deal I mentioned to Pete up the thread - he will eventually be overtaken by the Glazer family

[Chester Perry]

We might be paying JJ Watt ?

I am aware of journalists whose inquires have led them to believe that - though his payment may be a minor holding in the ownership group - possibly Incentive shares in Velocity Sports Limited (Jersey)

[Big Vinny K]

from what I see Garlick holds the record in terms of multiple of investment around 12 times from what I have been able to discern, though it would have been more but for the deal I mentioned to Pete up the thread - he will eventually be overtaken by the Glazer family

Never seen such a list published tbh CP but personally I would be very surprised if Garlick held the record here !
The likes of David Dean at Arsenal will surely have made a lot more than Garlick did (in multiples of investment or any other way either)
I would think there will be a number of other owners down the years too who would have made a lot more than Garlick (the old Liverpool owners, Edwards at United and many more)

As said I may be wrong but in my response to the original comparison between Garlick and Oyston the point I made was not regarding absolute or multiple returns but in the way the owners acted. One of them totally destroying the club.

[Burnley1989]

I understand why fans don’t like it, but why are some people so surprised that investors/owners take money out of a club. It’s not as though they’re taking huge amounts.
Why else would they invest?

[Big Vinny K]

I understand why fans don’t like it, but why are some people so surprised that investors/owners take money out of a club. It’s not as though they’re taking huge amounts.
Why else would they invest?

Not sure anyone is saying that regarding the £2.5m.

[Chester Perry]

In what way, Pete? That Calder Vale had repaid the debt, or that BFCHL had cancelled the debt, or that Calder Vale had never borrowed the £124 million in the first place?

It is fair to say that a debt few ever expect to see repaid in any meaningful way to the club has a somewhat distorting impact on it, the net impact of Debtors £124.1m and Creditors £71m) is £53.1m, though there is no bragging about this like the previous accounts when the above calculation yielded nearly £75m net impact

Burnley FC Holdings Limited Annual Report and Financial Statements Year Ended 31 July 2022:
Group Strategic Report For the Year Ended 31 July 2022
Fair review of the business
Paragraph 2 “…Our Statement of Financial Position reflects net assets of £104.9m, among the
highest levels in Group history.”

[daveisaclaret]

I understand why fans don’t like it, but why are some people so surprised that investors/owners take money out of a club. It’s not as though they’re taking huge amounts.
Why else would they invest?

Other than the one weird bloke pretending it isn't happening I don't think anyone is bothered

[ClaretPete001]

In what way, Pete? That Calder Vale had repaid the debt, or that BFCHL had cancelled the debt, or that Calder Vale had never borrowed the £124 million in the first place?

I think inter company loans should be treated differently. In effect, the balance sheet is propped up by the inter company debt and the fact that a lot of the players are new to the club.

The layman does not see the true impact of what ALK has done to the business. And the material qualification by the auditors is because the whole thing hangs on profits made from player trading in the summer in the event we are relegated.

[Chester Perry]

Never seen such a list published tbh CP but personally I would be very surprised if Garlick held the record here !
The likes of David Dean at Arsenal will surely have made a lot more than Garlick did (in multiples of investment or any other way either)
I would think there will be a number of other owners down the years too who would have made a lot more than Garlick (the old Liverpool owners, Edwards at United and many more)

As said I may be wrong but in my response to the original comparison between Garlick and Oyston the point I made was not regarding absolute or multiple returns but in the way the owners acted. One of them totally destroying the club.

Technically the Edwards family saw a return over 120 times the investment, but that was over a very long timespan (and multiple generations) - Dein possibly but again at an established big club, buying in at the right time. Garlick did it at a did it at a small club and in quite a short period of time, in that context there is possibly only the chap at Luton who could go on to beat him

[Chester Perry]

Consequence is the biggest issue I have. What is the consequence for Pace & Co if it goes tits up. Kilby and then Garlick had financial & personal interests and risks when they had the club. As fans they would remember the financial ruin the club was in, in the 80’s…and as a consequence ran the club prudently.
Pace & Co have neither the financial or emotional consequences if it goes wrong. That’s not to say they are doing a bad job - last season was one of the best seasons I’ve ever seen as a Burnley fan. Despite the euphoria after last season, it is clear that our owners are willing to take risks because they have minimal financial and emotional consequences should it go wrong.

It depends on how the monies paid by new investors to join the ownership group is used, but it is entirely possible that that the original group who led the takeover of our club in December 2020 have already received a positive (possibly significant) cash return on their original investment (potentially up to £15m depending on the reports you believe, £10m on shares and the rest on fees and commissions to the numerous advisors they involved (including BDO who are now the auditors), given the amount that swilled around Kettering Capital, Calder Vale Holdings and Velocity Capital (UK) Holdings in September and October last year.

So in those terms the impact would be minor on that group, apart from bruised pride and reputation,

[Big Vinny K]

Technically the Edwards family saw a return over 120 times the investment, but that was over a very long timespan (and multiple generations) - Dein possibly but again at an established big club, buying in at the right time. Garlick did it at a did it at a small club and in quite a short period of time, in that context there is possibly only the chap at Luton who could go on to beat him

That was 2 examples I thought of within seconds without really thinking about it !!
If I gave some proper thought and research to it (which I’m not going to btw) I could come up with a long list.
I personally know of owners who made a lot more money than Garlick in terms of multiple returns on investment from back in the 1990s when the PL was launched.

Going off at a tangent here - it was a daft question by the original poster and a silly and meaningless comparison Garlick to the deviant crook Oyston.

[matucana]

Accounting and reporting guidelines have been observed via the non remuneration declaration although in my experience man or woman has never lived on fresh air alone.
Given the Board's strong connection to the Mormon movement, Salt Lake City do sometimes require a percentage of annual remuneration to be made available to them. Should remuneration be zero then attention can turn to a percentage of the turnover of the business.
Therein may lie another possible explanation to the management fee declaration. We are all speculating. The only ones who know and need to know are the owners, accountants and the newly appointed auditors.
As owners, they are free to utilise resources as they see fit and appropriate as long as such use is in accordance with codified accountability regulations.
On whether the fee involved JJ Watt is unlikely as his involvement with the club was announced on 1st May 2023 which was after the period of the Accounts under current debate.