KRBFC wrote: ↑Wed May 19, 2021 10:33 am
So the plan is likely the debt stays until ALK sell? How does that work in the Championship?
GodIsADeeJay81 wrote: ↑Wed May 19, 2021 10:58 am
If we generate enough revenue, it doesn't matter.
Plus hasn't Chester said the repayment terms alter if we go down?
The terms of the loan ensure that MSD get their interest paid first from the parachute payments, and or player sales accorded to the filed charges - remember there is more than one loan and the terms are 5 and 10 years.
I said at the time of takeover that the new board will be looking to refinance at some point (having proven their worth to the financiers) and a more preferential rate of interest - again that is very much like the Manchester United scenario, but it only really works with regular Premier League involvement, with that the interest is viewed as almost negligible as revenues grow from a business sense it would be viewed as an efficient use of capital.
KRBFC wrote: ↑Wed May 19, 2021 11:09 am
What does alter mean though? Chester said he think we aren't gonna be paying off the debt to MSD gradually, just the yearly interest. I assume the debt to Garlick alters if we are relegated, probably he takes some shares back.
All the reports we have seen on the loans talk about it being interest bearing only, hence my highlighting the distinction, which I think is important for people to recognise. This scenario is not unusual, to my knowledge there are only two clubs in the Premier League actually paying down loans:
Arsenal for the Stadium; and Liverpool for the new stand (that loan was from the owners). Some have taken on massive overdrafts, which while being credit I do not put in the same bracket as a loan, as they they fluctuate with cash. West Ham have taken out a flexible loan/overdraft with MSD, which ebbs and flows with cash flow. It is entirely possible that our loan is on the same basis, though neither the club or ALK/Velocity/Kettering/Calder Vale have stated that, West Ham on the other hand made it very explicit in the notes of their Accounts.
Tottenham and Arsenal will have to pay off their BoE loans - Arsenal are doing that this year, Tottenham have rolled theirs over for another year.
You are right to say that difficulties could arise if we are in the Championship for an extended period, particularly if Parachute Payments expire or are removed as a result of an Government/Independent regulator enforcement on rights distribution. These would be most significant when the loans mature and the club were unable to replace them as no lenders could be found. This is why I do not like the idea of not paying down the debt, though there is no doubt doing so would make us less competitive - just look at Arsenal's experience and how frustrated their fans got with Wenger, who it turns out was right, he was performing minor miracles to finish in the top four every year (though some knew that all along).
What is notable for the time being is that it has never been more likely for a relegated club to get promoted back to the Premier League while still in receipt of Parachute payments, all it takes is a well managed and stable club. Bothe the owners and MSD will be well aware of this.
There are many existential threats to revenues at the moment, even in the Premier League and all Premier League clubs will be wary as to what the outcomes of the governments fan led review and the increasing pressure for an independent regulator will be - as capable as Tracey Crouch is there is no doubt that this review is being driven by a particular mindset and that is fundamentally a bad thing for governance.
As to the issue of the outstanding share payments - we have absolutely no detail on the terms or time frame, they may or may not change on relegation. I have stated previously that I expect some shares to be flipped (at a significant profit) to pay for the outstanding sale monies, the question is what will the excess (if any) be used for, will it line the owners pockets. pay down the MSD loans or even pay the club back it's money loaned to Velocity/Kettering/Calder Vale. I have my opinion on that, but it is not for sharing at this time.
At the end of the day the new owners are looking to substantially grow the equity value of the club, the sale valued it at circa £200m and they will believe that they can take it to at least £500m in a relatively short space of time, Though I suspect they will be looking more in terms of $1 billion+. MLS franchises are already valued at 1.5 times ours and they lose money and have a TV deal smaller than the EFL.
A couple of years back I speculated that for all the talk of a European Super League, it doesn't really need to be created, the Premier League is already the platform for it. If Mike Ashley wins his cases against the Premier League then the Saudi's are in at Newcastle, that will likely see Leeds relationship with Qatar become much more formal and the competitiveness of the league will grow even more, making it a more attractive proposition globally and an even greater geopolitical instrument. Other states and their representatives will want to get involved pushing up values of those already at the table. The other major European Leagues are well aware of this and it is their greatest fear, that they will become inconsequential to global audiences, even domestic ones as experienced by many of the smaller leagues around Europe and the world.
