ALK Capital or Farnell/Elkashashy takeover

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aggi
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Tue Jan 05, 2021 6:57 pm

Father Jack wrote:
Sun Jan 03, 2021 10:07 am
From Jack Gaughan - Daily Mirror ref today’s interview:

Pace quote that didn’t get in: “They (MSD Holdings) have no equity and no decision-making power. If you’re going to buy a house, would you not use a mortgage? It’s about choosing the right building society. It’s how we operate. It makes sense to do it in a sound, sensible way.”
People tend to use a mortgage because they can't afford an outright purchase and for many it works, some it doesn't.

An interesting line from today's press conference

"The loans for this transaction are absolutely reasonable and in line with what can be supported by this club and will not take away from the club's ability to operate on a daily basis.

It does sound like some burden of interest will be falling on the club.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Tue Jan 05, 2021 7:11 pm

aggi wrote:
Tue Jan 05, 2021 6:57 pm
People tend to use a mortgage because they can't afford an outright purchase and for many it works, some it doesn't.

An interesting line from today's press conference

"The loans for this transaction are absolutely reasonable and in line with what can be supported by this club and will not take away from the club's ability to operate on a daily basis.

It does sound like some burden of interest will be falling on the club.
there will be a number of boardroom salaries to pay as well, this when we can reasonably expect a £25m+ shortfall on income this season following a £15m+ shortfall last season - the accounts are likely to benefit from an 11 month wages (should they return to a 30 June close for the current season) and much improve amortisation figures following the number of contract extensions, both last season and this.

given that we were on target last year to make a significant operating profit (pre-covid) you have to say that to fund all this plus transfers, would require a huge uplift in commercial and operational income (player transfers, matchday) - in commercial terms that would have to put us into the top 10 which is more than double what we earned in a economically bouyant 2018/19 season

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Father Jack » Wed Jan 06, 2021 7:10 pm

Don’t know whether your post has been lost Chester because it’s on this thread and the take over has now been completed?
But surprised nobody has taken you up on this -

Your saying that our level of turnover growth required to pay for the additional costs (both those out of our control eg Covid rebates & those that our new owners are actively going to incur including debt financing) is completely unrealistic for us?

So the logic would be that the shortfall will have to be made up from private equity (capital from ALK and its investors) or from further commercial loans, or from player trading?

And at this stage we have no idea which or the combination of which?
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Thu Jan 07, 2021 12:59 am

Father Jack wrote:
Wed Jan 06, 2021 7:10 pm
Don’t know whether your post has been lost Chester because it’s on this thread and the take over has now been completed?
But surprised nobody has taken you up on this -

Your saying that our level of turnover growth required to pay for the additional costs (both those out of our control eg Covid rebates & those that our new owners are actively going to incur including debt financing) is completely unrealistic for us?

So the logic would be that the shortfall will have to be made up from private equity (capital from ALK and its investors) or from further commercial loans, or from player trading?

And at this stage we have no idea which or the combination of which?
I was surprised too

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by blake's wand » Thu Jan 07, 2021 8:52 am

The financing arrangement will have been one of the things most under scrutiny - if the existing board OK'd in, then we have to put trust in them. It's in nobody's best interest to take out an unnecessary expensive loan. ALK don't want us to fail, so I very much doubt they'd be putting us under financial pressure in this current situation from Day 1

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Thu Jan 07, 2021 9:48 am

Father Jack wrote:
Wed Jan 06, 2021 7:10 pm
Don’t know whether your post has been lost Chester because it’s on this thread and the take over has now been completed?
But surprised nobody has taken you up on this -

Your saying that our level of turnover growth required to pay for the additional costs (both those out of our control eg Covid rebates & those that our new owners are actively going to incur including debt financing) is completely unrealistic for us?

So the logic would be that the shortfall will have to be made up from private equity (capital from ALK and its investors) or from further commercial loans, or from player trading?

And at this stage we have no idea which or the combination of which?
I don't think Chester would be offended if I said that he tends to take a fairly conservative view in these areas.

Personally, I don't think it's quite as bad as he's predicting. Throughout the takeover the situation has been known, I suspect they're not going to launch straight in and pay millions of pounds of directors' salaries and interest charges on the back of our current position. I'd expect more of a building on the status quo with those things potentially being phased in over a number of seasons to reflect a growth in revenue.

In the short term we're maybe looking at one or two signings on longish contracts so that shouldn't impact hugely on the profit and loss, particularly with a chunk of players coming out of contract.

Rightly or wrongly I think we already did quite a bit of rationalisation to cut costs for this difficult period. The wage bill took a trim with a number of experienced pros leaving and not being replaced and transfer dealings were minimal and low cost.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Thu Jan 07, 2021 2:57 pm

aggi wrote:
Thu Jan 07, 2021 9:48 am
I don't think Chester would be offended if I said that he tends to take a fairly conservative view in these areas.

Personally, I don't think it's quite as bad as he's predicting. Throughout the takeover the situation has been known, I suspect they're not going to launch straight in and pay millions of pounds of directors' salaries and interest charges on the back of our current position. I'd expect more of a building on the status quo with those things potentially being phased in over a number of seasons to reflect a growth in revenue.

In the short term we're maybe looking at one or two signings on longish contracts so that shouldn't impact hugely on the profit and loss, particularly with a chunk of players coming out of contract.

Rightly or wrongly I think we already did quite a bit of rationalisation to cut costs for this difficult period. The wage bill took a trim with a number of experienced pros leaving and not being replaced and transfer dealings were minimal and low cost.
not offended at all, as you would expect aggi, I have even said as much about myself

I will say that any revenue uplift that ALK can generate will is operational profit on the existing cost model so it could cover servicing of loans and additional salaries for directors - whether it covers salaries and transfer costs of new players is a different thing altogether and I stand firm in my belief that borrowing money to fund transfers is just a very poor way to operate, factoring (effectively advancing cashflow) is bad enough for this activity, it is just an endless spiral thereafter, clubs struggle desperately to keep up with it never mind get out of it.

The finances of the game are in real turmoil, fans are not coming back this season across Europe in economically viable numbers, there is the likelihood that could run into next season also. In the summer transfer window the Premier League accounted for something like 70% of net spend in Europe on transfers, clubs are getting poorer and we are not far away from football creditors failing to make payments on time as cash just disappears. that could really tip the whole shebang into serious freefall, Our club stood above all that, thanks to the rationalisation aggi mentions - no Football creditors, a small amount of football debt, that is effectively cleared if Norwich win promotion and a operational model that balances cashflows and should leave us with our reserves relatively intact and ready to face any new obstacle thrown at us.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Thu Jan 07, 2021 5:40 pm

Chester Perry wrote:
Thu Jan 07, 2021 2:57 pm
...
I stand firm in my belief that borrowing money to fund transfers is just a very poor way to operate,
...
I'm a little less decided on this.

Without the Bosman ruling I'd say it definitely made sense to fund transfers through loans, as it stands now it is difficult to call.

In theory it shouldn't be an ongoing commitment, you need the loan for the seed capital but in a year or two it becomes a conveyor belt of selling players.

Obviously the issue is if there are a couple of dry years and what to do then and you also have to maintain wages (although if your more experienced players are leaving then that may not be as big an issue).

It's also difficult to do in the Premier League when every year is a battle to stay up (which may be prompting the talk of an overseas alliance).

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Thu Jan 07, 2021 5:50 pm

aggi wrote:
Thu Jan 07, 2021 5:40 pm
I'm a little less decided on this.

Without the Bosman ruling I'd say it definitely made sense to fund transfers through loans, as it stands now it is difficult to call.

In theory it shouldn't be an ongoing commitment, you need the loan for the seed capital but in a year or two it becomes a conveyor belt of selling players.

Obviously the issue is if there are a couple of dry years and what to do then and you also have to maintain wages (although if your more experienced players are leaving then that may not be as big an issue).

It's also difficult to do in the Premier League when every year is a battle to stay up (which may be prompting the talk of an overseas alliance).
I will acknowledge that paying for transfers in staged payments is effectively borrowing with the interest built in, I am not overly keen on this either, our club have tended to manage this by having funds in reserve, or balancing with sales and using the footballer creditor rule as effectively having money in the bank - the fact they did not want to use it much in the way of staged payments on sales in the summer spoke volumes on what the board thought of the way football finances were going

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by claretandy » Fri Jan 08, 2021 7:19 am


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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Father Jack » Fri Jan 08, 2021 7:39 am

Again taken from the Athletic:
£10m p/year interest doesn’t feel good, particularly if the article is correct and we’ve lost all of our cash reserves aswell in the payments to the former owners.
Let’s hope they’ve got this speculation on the loan & level of funding from ALK wrong.
Well placed sources or well placed speculators?
- - - - - -

New Burnley owner ALK Capital borrowed a sum in the region of £80 million from American technology billionaire Michael Dell’s investment firm to complete its takeover of the Premier League club, The Athletic understands.

According to several well-placed sources, ALK paid about £150 million for 84 per cent of Burnley’s shares but has put in only around £15 million of its own money up front. The rest has come from MSD Capital, the private equity firm set up in 1998 to manage the Dell family fortune — and approximately £55 million from Burnley’s own bank account.

Under their previous ownership, a group of local businessmen led by outgoing chairman Mike Garlick, Burnley have made almost £110 million in profits since 2015 and had £42 million in the bank as of June 30, 2019, the last set of club accounts that are publicly available.

Since then, the club have spent almost nothing on transfers, so their cash reserves have grown, despite the impact of the pandemic over the last 12 months. That cash is among the assets ALK has bought and will be used to finance the takeover and invest in players.

MSD’s loan is secured against the club’s assets and was registered at Companies House on December 31, a day after the takeover was announced. MSD has also lent money to Derby County, Southampton and Sunderland, and typically charges borrowers 9.5 per cent annual interest, although that can rise to 12 per cent if various fees are included.

ALK’s managing partner and new Burnley chairman Alan Pace was asked about the loan during a video conference call with the media on Tuesday. He refused to disclose the amount or the terms of the loan but said they are “are absolutely reasonable and in-line with what can be supported by this club and will not take away from the ability to operate on a daily basis”.

When asked if Burnley fans should be concerned that a previously debt-free club now owes money to a private equity firm, Pace said: “Fans should think about it in the same way they would have chosen their mortgage lender. It is about finding the right building society or bank… and making sure it is a reasonable relationship. We think we have found a brilliant partner and we are so happy with them.

“Fans, as they get to know and understand how we’ve done things, will think of it no differently than they look at their own personal lives. We are going to be very responsible for what happens here. We are not going to do things that are silly, that are going to cause problems. We would be silly to repeat the mistakes of others.”

Following that call, The Athletic asked ALK to confirm it had paid £150 million and put in £10-15 million of its own money, with the rest being the cash in the bank and around £80 million from MSD Capital. A spokesperson said: “This information — about both the terms of the loan and structure of the acquisition — is factually incorrect and untrue. ALK Capital will therefore not be commenting further.”

That, however, is not what multiple sources with knowledge of such deals have told The Athletic.

It is highly leveraged — £80 million in debt believes one source, who is clear the MSD debt will be at 12 per cent once the various fees are included.

“American hedge funds are very aggressive when things go wrong — forced sale of players and so on. It won’t end well. They will get relegated in the next few years and the loan will be called, much like Sunderland and (that club’s former owner) Ellis Short. And the problem is Burnley are a relatively small club, historically.”

Another source said: “Manchester United was bought entirely on debt, so it’s not illegal. If (Pace) buys it on debt, can finance that debt, invest in the team, get into Europe and increase the revenues by £50 million a year, then that’s not a bad plan. But it means they have to increase their revenues by £50 million a year, and that isn’t easy.

“In this league, you cannot increase your revenues from the already high revenues we get unless you are in Europe. Anyone who thinks Burnley will be regularly in Europe is insane. I see Burnley crashing badly.”

Three other sources who looked at Burnley’s sale prospectus in the last six months said they had also heard similar numbers for the ALK/MSD deal. One suggested the Lancashire club would be paying more than £10 million in interest every year and would need to sell “two or three players a season” to break even.

MSD Capital has not responded to a request for comment.

Pace, however, is adamant he and his ALK partners can grow the club’s international brand, marketing Burnley as “Britain’s favourite underdog”, and increase commercial income. Only five top-flight clubs made less than Burnley’s £16 million in commercial revenue in 2018-19, with 83.5 per cent of the club’s total income of £138 million coming from the Premier League’s central broadcast deals.

But Burnley’s reliance on media income, which has remained stable apart from the league-wide rebate for finishing last season late after the three months of lockdown, means they have weathered the crisis caused by the pandemic better than most. Their wage-to-turnover ratio of 63 per cent has also contributed to what remains a healthy balance sheet.

Keeping it that way, however, depends on Burnley retaining Premier League status, which had looked under threat when Manchester City thrashed them 5-0 at the end of November. Results have improved since then, though, and Burnley are 16th in the table, on 16 points, five clear of the relegation zone.

Much, as ever, will hinge on manager Sean Dyche’s ability to get the most out of a group of players that is relatively short on quality but scores highly on cohesion, experience and work-rate. That said, Dyche and Burnley’s fanbase will be expecting ALK to invest in the transfer window this month.

When asked about new arrivals on Tuesday, Pace said: “Short term, we need to stay in the Premier League and do a really good job in this window… I hope (Dyche) will be pleased with the way we can support him.”

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by NottsClaret » Fri Jan 08, 2021 7:40 am

I read that. Probably how business works and we’ll be assured it’s all normal.

The loan company must believe they know what they’re doing to lend them £80m because I doubt they’ll see that again if we go down.

Anyway, being debt free was very unambitious. Feels like we’re one of the big boys now with our huge interest repayments.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Father Jack » Fri Jan 08, 2021 7:51 am

Questions for me which we won’t know the answer to:
1. How much powder have ALK got dry? IF the above is correct they are only in for £15m so far.
2. Where will the shortfall be covered IF the revenues cannot be grown to the levels both outlined above and afew posts higher up this thread by Chester Perry?
3. Are we all still feeling confident in the takeover and our new found leveraged position, beyond Alan Pace appearing to be a good guy and saying the right words to start with?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by arise_sir_charge » Fri Jan 08, 2021 7:58 am

A poor article that by the standards of The Athletic.

A flat denial from ALK followed by an unnamed source saying “well this is what I reckon” and essentially saying “it will fail”.

It has a definite feel of playing on the concerns that some fans have raised; just for clicks.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by RVclaret » Fri Jan 08, 2021 8:05 am

Echo the above poster in that it’s a poor article by The Athletic who I thought were better than that.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by claretonthecoast1882 » Fri Jan 08, 2021 8:05 am

Well we had enough people wanting Garlick no longer in charge and also the club going to the next level, the only way someone outside buying the club was this method. Despite talk of powerhouses and huge potential around the milltown nobody was ever going to dig into their own pocket and splash £150 - £200 million on buying it then funding the signings and dreams seeking that next level.

We often had posters mocking the board for not increasing season tickets, if those figures in the report are true and we now need to find 8 - 10 million a year just to meet interest repayments without touching the loan debt then frozen ticket prices are a thing of the past.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by NottsClaret » Fri Jan 08, 2021 8:07 am

Is it a poor article or just saying what we don’t want to hear?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Winstonswhite » Fri Jan 08, 2021 8:18 am

arise_sir_charge wrote:
Fri Jan 08, 2021 7:58 am
A poor article that by the standards of The Athletic.

A flat denial from ALK followed by an unnamed source saying “well this is what I reckon” and essentially saying “it will fail”.

It has a definite feel of playing on the concerns that some fans have raised; just for clicks.
Head and Sand springs to mind.

That’s it. Burnley FC that we’ve known is over. We’ve sold ourselves out and become one of “them”. It had to happen eventually and was inevitable. :(

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Grumps » Fri Jan 08, 2021 8:18 am

I don't like the tweets, from the athletic, or the article. No facts at all, yet reported like its 100% correct. They might be right, or it could be completely false, or somewhere in the middle, but the article is certainly not based on facts.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Father Jack » Fri Jan 08, 2021 8:24 am

Grumps. There is some subtlety in the article:
Believes one source.
Another source said.
Three other sources said they’d heard the same rumours.

But no doubt people will read the article and tweets and jump to their own conclusions.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by DCWat » Fri Jan 08, 2021 8:27 am

It’s certainly the sort of report that sets alarm bells ringing. I just hope that the assurances we’ve had, from Pace and indeed from on this board, prove to be justified.

So far, there has been no substance, just talk of ideas and plans but no detail. I await further information with bated breath.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Grumps » Fri Jan 08, 2021 8:32 am

Father Jack wrote:
Fri Jan 08, 2021 8:24 am
Grumps. There is some subtlety in the article:
Believes one source.
Another source said.
Three other sources said they’d heard the same rumours.

But no doubt people will read the article and tweets and jump to their own conclusions.
Like you say... Rumours... Sources..... Yet reported as fact, that's my concern. I know its how they get followers or people to subscribe.
I repeat, it might be true, but it might not be.. But not reported in that way.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by walter the softy » Fri Jan 08, 2021 8:38 am

That Pace bloke talks a good game but I am not convinced. It seems to me that people are so keen on a few signings in the short term that they will overlook the implications of being saddled with debt by a company that is seeking to maximise its profits. The more I think about this, the more I am sure this is going to end badly. The best possible outcome I can see happening is treading water in the lower reaches of the premier league for the next few years (no bad thing but that is what we already have so why bother selling out?) whilst ALK siphon off a percentage. All other scenarios I can think of being likely are much, much worse. Be careful what you wish for.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by jedi_master » Fri Jan 08, 2021 8:40 am

Ask yourself this, if the terms of the loan, the actual investment from ALK and the inherent risk within were favorable to the club, would Alan Pace have been slightly more transparent about the realities and terms of those during the press conference? Yes, he would.

There is absolute undoubted risk in this deal as far as I can see - but - that was an inevitability in my eyes if we were to ever get someone in who had ambition and wanted to grow the club. This deal seems to be reliant upon us staying in the Premier League. So long as we are at the top table, that loan is irrelevant. I personally do not believe we will go down so long as Sean Dyche is our manager, so the question you have to ask yourselves is, how long does he remain our manager?

I would hope that we get into a strategy where we aim to get the £80m paid off as quickly as possible, and if that means a player sale a year to pay towards it (on top of the interest) then so be it, we do not want that weight upon us when we do go eventually go down. If we are selling a Tarkowski, a McNeil etc once a season to pay £25-30m of that whilst buying numerous young stars to progress and increase the value of, that seems a very ambitious (albeit risky) strategy that may well work so long as we have Dyche orchestrating things.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Quickenthetempo » Fri Jan 08, 2021 8:46 am

If it's true then we're doomed.

Only 15m up front? 80m loan at 12% interest just to start.
Match day revenue won't even cover the cost of interest payments.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 1HappyClaret » Fri Jan 08, 2021 8:53 am

PriceOfFootball

@KieranMaguire

This is intersting from Kevin Maguire.

Replying to
@SimonBaldwin89
and
@mjshrimper
If Burnley stay up then I don’t see an issue. If they go down then will have to use parachute payments to fund annual interest payments which could be as high as £10m a year. According to Bloomberg the shares return to Garlick if instalments for his shares aren’t made

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by RVclaret » Fri Jan 08, 2021 8:55 am

Perhaps ALK have plans to find the extra £10m per year for interest through different revenue sources e.g. renaming stadium - Kentucky Fried Turf has a ring to it.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Stevie Morgan » Fri Jan 08, 2021 8:55 am

Well Garlick signed up to this didn't he... We all know he has the best interests of the club at heart...... :shock:
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Barry_Chuckle » Fri Jan 08, 2021 8:59 am

I don't like the "mortgage" analogy, if I have a house which is mortgage free, I most definitely wouldn't raise another mortgage on the property if I'm going to stay living in it 🤷‍♂️
It appears to me that MG found a way to scoot off with the club's cash by selling his shares (which he has a right to do) and ALK will be seen as the bad guys when/if it goes pear shaped.
if the above is to be believed, we had £40m ish in the bank, now we haven't but MG has.
I'm hoping Mr Dell is one of the interested parties other than as a lender to ALK, and wants this to be a great success.
Having said the above, I'm still optimistic for the future.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Winstonswhite » Fri Jan 08, 2021 9:01 am

When Alan Pace said “if you’re going to buy a house, would you not use a mortgage”, I don’t think anyone realised he’d be putting down 10%, using Help to Buy, a lender equivalent of Wonga and Garlick was leaving 55 million in the loft, were they?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by jedi_master » Fri Jan 08, 2021 9:02 am

The one unknown in this is, we previously repeatedly informed on here that Alan Pace (and, indeed, ALK Capital) were a front for a group of investors who would put money into the club.

Perhaps the money for signing fees is coming from sources other than the loan, and the TV money itself is going to (over time) service the debt and interest exclusively (as well as our wage bill).

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Foshiznik » Fri Jan 08, 2021 9:04 am

If everything is true about what that Athletic article has said, it might be worth us lot creating a community fund in readiness to take over the club when we are in League Two...
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Sheedyclaret » Fri Jan 08, 2021 9:12 am

Exciting times eh?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by fatboy47 » Fri Jan 08, 2021 9:14 am

Foshiznik wrote:
Fri Jan 08, 2021 9:04 am
If everything is true about what that Athletic article has said, it might be worth us lot creating a community fund in readiness to take over the club when we are in League Two...

Exciting times.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by gandhisflipflop » Fri Jan 08, 2021 9:15 am

It's amazing how people are quick to believe everything negative about the club as fact and dismiss anything positive about the club as too good to be true. It's not just BFC but life for a lot of people living here in Burnley i have found. It could go bad and it could go really well, lets just wait and see eh?
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by DCWat » Fri Jan 08, 2021 9:18 am

I’m blatantly not a finance person but how does a purchase take into account £50 million (or whatever the figure) of money that the seller has?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by NewClaret » Fri Jan 08, 2021 9:26 am

DCWat wrote:
Fri Jan 08, 2021 9:18 am
I’m blatantly not a finance person but how does a purchase take into account £50 million (or whatever the figure) of money that the seller has?
It's very unclear. It suggests, without actually saying it, that MG/JB are walking away with £50-odd million that were otherwise cash in the bank, thus "owned" by BFC.

I very much doubt that is true. But if it were, would reflect worse on MG/JB than the current owners, IMO.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Local cricketer » Fri Jan 08, 2021 9:28 am

Wouldn’t of had these problems with Farnell 😉
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by gandhisflipflop » Fri Jan 08, 2021 9:28 am

And just to add. ALK have flat out denied this to be true and by the looks of things refused to give them time of day and why would you when you are naturally going to be busy anyway?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by NewClaret » Fri Jan 08, 2021 9:34 am

Barry_Chuckle wrote:
Fri Jan 08, 2021 8:59 am
I don't like the "mortgage" analogy, if I have a house which is mortgage free, I most definitely wouldn't raise another mortgage on the property if I'm going to stay living in it 🤷‍♂️
It appears to me that MG found a way to scoot off with the club's cash by selling his shares (which he has a right to do) and ALK will be seen as the bad guys when/if it goes pear shaped.
if the above is to be believed, we had £40m ish in the bank, now we haven't but MG has.
I'm hoping Mr Dell is one of the interested parties other than as a lender to ALK, and wants this to be a great success.
Having said the above, I'm still optimistic for the future.
Totally agree with this. If it's true, which ALK deny so lets not get too carried away, it basically means that our lack of investment in the transfer market for the last two/three seasons has been because MG/JB have been growing a cash pile to use to effectively buy themselves out. I think that reflects worse on them than ALK.

I argued vehemently in summer that we'd have sufficient funds to buy players, but everyone said that wasn't true, the £42m would have since been spent or significantly reduced on other commitments/Covid. This is actually suggesting that the cash pile grew and we had £50m+, so given you buy players over many years, plenty of money to buy 1 or 2 £20m players. Lets see what happens now in January.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Hapag Lloyd » Fri Jan 08, 2021 9:37 am

Worrying times.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dandeclaret » Fri Jan 08, 2021 9:37 am

jedi_master wrote:
Fri Jan 08, 2021 9:02 am
The one unknown in this is, we previously repeatedly informed on here that Alan Pace (and, indeed, ALK Capital) were a front for a group of investors who would put money into the club.

Perhaps the money for signing fees is coming from sources other than the loan, and the TV money itself is going to (over time) service the debt and interest exclusively (as well as our wage bill).
Alan Dell has invested in the club..... at a rate, it the article is correct of between 9.5% and 12%, his terms of that investment are in the form of a loan, with interest between 9.5 and 12%. Others may invest in different ways, risking that their capital may go up, or down - more as shareholders.
Last edited by dandeclaret on Fri Jan 08, 2021 9:41 am, edited 1 time in total.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by DCWat » Fri Jan 08, 2021 9:39 am

NewClaret wrote:
Fri Jan 08, 2021 9:34 am
Totally agree with this. If it's true, which ALK deny so lets not get too carried away, it basically means that our lack of investment in the transfer market for the last two/three seasons has been because MG/JB have been growing a cash pile to use to effectively buy themselves out. I think that reflects worse on them than ALK.

I argued vehemently in summer that we'd have sufficient funds to buy players, but everyone said that wasn't true, the £42m would have since been spent or significantly reduced on other commitments/Covid. This is actually suggesting that the cash pile grew and we had £50m+, so given you buy players over many years, plenty of money to buy 1 or 2 £20m players. Lets see what happens now in January.
And presumably, if true, from there grew Dyche’s frustrations.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Wilson » Fri Jan 08, 2021 9:40 am

Barry_Chuckle wrote:
Fri Jan 08, 2021 8:59 am
I don't like the "mortgage" analogy, if I have a house which is mortgage free, I most definitely wouldn't raise another mortgage on the property if I'm going to stay living in it 🤷‍♂️
It appears to me that MG found a way to scoot off with the club's cash by selling his shares (which he has a right to do) and ALK will be seen as the bad guys when/if it goes pear shaped.
if the above is to be believed, we had £40m ish in the bank, now we haven't but MG has.
I'm hoping Mr Dell is one of the interested parties other than as a lender to ALK, and wants this to be a great success.
Having said the above, I'm still optimistic for the future.
But you might take a new mortgage out if you wanted to grow said house by adding an extension. That’s fine as long as you don’t lose your job. It’s a risk, but a calculated risk.

It’s actually quite a good analogy.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by FactualFrank » Fri Jan 08, 2021 9:50 am

I remember reading several weeks ago and commented on the board a few times, that if true, we wouldn't be in any better shape with regards to buying players than we were under Garlick, with little to no money to spend on players.

Garlick could have borrowed the money to allow us to buy players, just as ALK will be doing.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by NewClaret » Fri Jan 08, 2021 9:50 am

jedi_master wrote:
Fri Jan 08, 2021 9:02 am
The one unknown in this is, we previously repeatedly informed on here that Alan Pace (and, indeed, ALK Capital) were a front for a group of investors who would put money into the club.
I still think that will be true. The assumption that MSD loan will remain in place for eternity is not necessarily correct. At Salt Lake, I read that Checketts gradually sold out his share to another investor. Perhaps AP and others are thinking the same - bringing on board more investors in the short to medium term.

Either way, Michael Dell will want BFC to be a success therefore MSD will be supportive of helping grow the club/revenues. These PE houses will play a far greater role than lending some money and sending a statement/invoice once a year - they'll be very active, hence why AP says he's "very happy with them", because they'll effectively become a partner. There's also always the possibility they swap debt for equity at some point, but I'd consider that more likely if they weren't invested elsewhere in football.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by SGr » Fri Jan 08, 2021 9:51 am

Balance sheet for this year should give us a much clearer view on the club’s debt position. Until then, it’s all conjecture.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by blake's wand » Fri Jan 08, 2021 9:52 am

NewClaret wrote:
Fri Jan 08, 2021 9:34 am
Totally agree with this. If it's true, which ALK deny so lets not get too carried away, it basically means that our lack of investment in the transfer market for the last two/three seasons has been because MG/JB have been growing a cash pile to use to effectively buy themselves out. I think that reflects worse on them than ALK.
That's definitely possible, but you could also argue if we invested £50m in new players, those new players could be worth £100m by now? I don't know how the players would be valued in any sort of takeover, and there would almost certainly be complex calculation based on the market/contract length etc, but if they really were running the club just to increase the valuation - just sitting on a pile of cash isn't necessarily the best way to go.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by SGr » Fri Jan 08, 2021 9:54 am

One thing I will say, we’re a small club in an “unattractive” town. We’re not exactly sitting on prime assets here. It’s in the interests of all parties that the football club is successful.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by NewClaret » Fri Jan 08, 2021 9:56 am

DCWat wrote:
Fri Jan 08, 2021 9:39 am
And presumably, if true, from there grew Dyche’s frustrations.
Exactly, FF.

I swore blind in summer that some/all of the £42m would still exist and could possibly have grown. I also argued that there would be institutions willing to lend if we felt that necessary short-term. Got shot to pieces by some.

Turns out, if this story is to be believed, that not only had our £42m grown, not reduced, that the club was capable of securing £80m in financing, which would mean that SD was absolutely correct when he said that the club is in a very health position financially and you could completely understand his frustrations at not being given any cash to spend on strengthening the squad.

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