Alan Pace

[dsr]

Not sure I get the criticism about Pace only being here to make money. Isn't that the case with pretty much every owner of a club in the top tiers of football? They're a business, and businesses need to make money in order to survive. It's a good thing.

What I will say is that the bloke has moved his entire family to the region, his daughter has married a local lad and Pace himself is at almost every home game (and some aways) with his missus. He does a lot of stuff in the community too. To me he seems as emotionally invested in the club as he is financially. That's far better to me than absent owners of many other clubs who don't give a monkeys about what happens at the game - could name you dozens of those.

There's a bit of confusion between the club making profits to reinvest in the club, and the club making profits to pay to the owner.

Some owners of football clubs will put money into the club regularly to boost the club - Bloom at Brighton, for example. Some will not have the money to put in but will also not be taking vast sums out - our own Barry Kilby, for example.

But others, like the Glazers at an U and our own Alan Pace, are in the club because they want to take profit out of the club. Pace is taking over £10m per year out of Burnley FC, either directly as director fees, or indirectly as the interest BFC have to pay to service the loans on the money given to Pace. (Money which he used to pay his own personal debts and on which he pays no interest to the club.)

Pace wants Burnley to make a profit, certainly - but the evidence suggests it's because he wants the profit for himself rather than that he wants the club to get rich.

[Paul Waine]

He may well pay himself a salary - but, as has always been the case at our club, no director is directly paid a salary by the club.

We do know that the ownership group, is paid a management fee, but not if that fee is then paid to Pace (or indeed Smith and Hunt) in the form of a salary

Hi CP, a couple of observations on your post:

1) the management fee is most likely paid to the guy who has advised on the various loan deals;

2) I'm pretty sure the law requires any money paid to company directors to be disclosed, including if it is paid via a management fee paid to a related company.

[Cooclaret]

Not sure I get the criticism about Pace only being here to make money. Isn't that the case with pretty much every owner of a club in the top tiers of football? They're a business, and businesses need to make money in order to survive. It's a good thing.

What I will say is that the bloke has moved his entire family to the region, his daughter has married a local lad and Pace himself is at almost every home game (and some aways) with his missus. He does a lot of stuff in the community too. To me he seems as emotionally invested in the club as he is financially. That's far better to me than absent owners of many other clubs who don't give a monkeys about what happens at the game - could name you dozens of those.

Pace moved to join a community that was already here in North Lancashire.

[Paul Waine]

There's a bit of confusion between the club making profits to reinvest in the club, and the club making profits to pay to the owner.

Some owners of football clubs will put money into the club regularly to boost the club - Bloom at Brighton, for example. Some will not have the money to put in but will also not be taking vast sums out - our own Barry Kilby, for example.

But others, like the Glazers at an U and our own Alan Pace, are in the club because they want to take profit out of the club. Pace is taking over £10m per year out of Burnley FC, either directly as director fees, or indirectly as the interest BFC have to pay to service the loans on the money given to Pace. (Money which he used to pay his own personal debts and on which he pays no interest to the club.)

Pace wants Burnley to make a profit, certainly - but the evidence suggests it's because he wants the profit for himself rather than that he wants the club to get rich.

Hi dsr, don't forget the ownership group is very broad, Alan Pace is just the one person that represents the many members of the ownership group. Some are in ALK , some have bought shares directly in BFCHL and others are invested through VSP US. So, whatever happens to the profits made by the club - after the largest amount of money goes to the footballers who contracted to the club - it is shared between many, many owners and not just Alan Pace. Always assuming, of course, that they are successful in making a profit for the investors/shareholders.

[Devils_Advocate]

Im a big fan of Mr Pace but imagine if we'd have been taken over by one of the great world entrepreneurs like George Soros or Bill Gates. You wouldnt catch them having a betting firm sponsoring us with their close links to the WWF

[ClaretPete001]

Hi CP, a couple of observations on your post:

1) the management fee is most likely paid to the guy who has advised on the various loan deals;

2) I'm pretty sure the law requires any money paid to company directors to be disclosed, including if it is paid via a management fee paid to a related company.

I don't see how management fees paid by a subsidiary to a holding company can be equated to salaries taken by Directors from the holding company.

Can you point to anything that would give us more info on that Paul?

[dsr]

Hi dsr, don't forget the ownership group is very broad, Alan Pace is just the one person that represents the many members of the ownership group. Some are in ALK , some have bought shares directly in BFCHL and others are invested through VSP US. So, whatever happens to the profits made by the club - after the largest amount of money goes to the footballers who contracted to the club - it is shared between many, many owners and not just Alan Pace. Always assuming, of course, that they are successful in making a profit for the investors/shareholders.

Yes, Pace is only one of many getting their dibs. None of them have put money into the club, but they are happy to take it out.

[HunterST_BFC]

Don't expect Our club to be better off to buy Top Players or improve Infra' - without further "Investment / = Debt".

Only top flight Football will increase £$£$... as ever was

Problem being staying in the top flight while paying out £$£$ in interest and Divs'

No top flight - we are a bit feked for years

[CharlieinNewMexico]

Yes, Pace is only one of many getting their dibs. None of them have put money into the club, but they are happy to take it out.

I haven’t put money into my employer either, but I’m happy to take it out

[Bfc]

If profits made by the club are being shared out among various groups, can anyone give me an idea why shareholders like myself don’t get a return/dividend?.

[Big Vinny K]

If profits made by the club are being shared out among various groups, can anyone give me an idea why shareholders like myself don’t get a return/dividend?.

Profits ? Mmm think you could be in for a bit of a shock.

Plus being a shareholder of a company does not automatically mean you are entitled to dividends. There are various classifications of shares.

[dsr]

If profits made by the club are being shared out among various groups, can anyone give me an idea why shareholders like myself don’t get a return/dividend?.

The funds paid out to the owners are by way of (1) directors' fees or similar, and (2) indirect benefits to the owners by way of interest free loans. Neither of which accrues to non-ownership group shareholders, and both of which are paid whether the club makes profits or not.

[jojomk1]

The funds paid out to the owners are by way of (1) directors' fees or similar, and (2) indirect benefits to the owners by way of interest free loans. Neither of which accrues to non-ownership group shareholders, and both of which are paid whether the club makes profits or not.

So
Is it possible that Alan is being paid a salary through directors fees or similar
Is it possible that his house is being bought through an interest free loan (indirect benefits)

Just asking

[Chester Perry]

Profits ? Mmm think you could be in for a bit of a shock.

Plus being a shareholder of a company does not automatically mean you are entitled to dividends. There are various classifications of shares.

All true in general practice, though at Burnley FC Holdings there is only 1 class of share so dividends would have to be paid to all shareholders

In truth it is decades since the club have paid out dividends and Burnley FC Holdings Limited has only been around since January 2013 and has never paid a dividend.

Interestingly, the reasons for the creation of this entity appear to be so the club (reunited with it's land assets at Turf Moor and Gawthorpe) could be sold by 2016 - something that failed to materialise but there is an interesting article about it in the forthcoming issue of "Something to write home about" the London Clarets magazine written by John Sullivan who tried to generate Russian interest. From the sales brochures, it is reasonably clear that this was the intention, It is also clear that this intention was not the brainchild of or solely driven by Mike Garlick, Sullivan maintains it was a board plan, though there appears to be a very strong guiding hand of Brendan Flood in the proceedings.

[fatboy47]

The bloke's still here.

We're still here.

Ground's full every game.

Team's up in automatic places and looks happy.

That'll do me.

[Chester Perry]

So
Is it possible that Alan is being paid a salary through directors fees or similar
Is it possible that his house is being bought through an interest free loan (indirect benefits)

Just asking

Non of the directors have been paid a salary directly by any club entity according to published accounts

While it may theoretically be possible that the club is paying the rent on the homes Pace and Hunt are living in - I would have though that that would fall under director renumeration.

A personal loan would have to be declared under related party activities.

It would make more sense for such payments (if they are any) to come from another ALK/VSL entity and as we know they don't produce detailed documents, if any in regard to financial statements

[Big Vinny K]

When you have a complex corporate and ownership structure like we do it increases significantly the opportunities you have to pay remuneration to directors or investors in some form or other.
Trying to find the details of this within our accounts across all the various holding, subsidiary and associated companies is no easy task.

But look at this logically. Why do we have such a complex company structure ? And why did AP and the others take ownership of the club ? It’s not because they wanted to live in the Ribble Valley…living here simply helps their one objective - to make money out of the club.

[Bfc]

Chester, re the last time a dividend was paid?. I think it was at the shareholders meeting I attended, around 1980, when Bob Lord stepped down as Chairman. It was his parting shot of getting something back from the Club.

[dsr]

So
Is it possible that Alan is being paid a salary through directors fees or similar
Is it possible that his house is being bought through an interest free loan (indirect benefits)

Just asking

It's certain that most or all of the £124m interest free loan was used to purchase the football club. I doubt that any of it could be allocated specifically to buying a house - why do you think it might be?

It is almost certain that he is getting a salary from somewhere in the group, funded via the annual (£2.5m in 2022-23) management fee paid via the group of holding companies.

[NewClaret]

When you have a complex corporate and ownership structure like we do it increases significantly the opportunities you have to pay remuneration to directors or investors in some form or other.
Trying to find the details of this within our accounts across all the various holding, subsidiary and associated companies is no easy task.

But look at this logically. Why do we have such a complex company structure ? And why did AP and the others take ownership of the club ? It’s not because they wanted to live in the Ribble Valley…living here simply helps their one objective - to make money out of the club.

They may well end up making money in the end, but for a man of his CV there are far, far easier ways for him to make money than running a football club.

[Big Vinny K]

They may well end up making money in the end, but for a man of his CV there are far, far easier ways for him to make money than running a football club.

Go on then enlighten us.
How else could he buy a business “worth” £200m without putting in any of his own money ?

It’s not the first time you have mentioned his background. He’s worked in senior positions at 2 big financial institutions for virtually all of his career. Don’t be fooled by the grandiose titles they give out in American companies - they will have hundreds if not thousands of vice presidents, head of global, directors etc. It’s what the yanks do.

American companies like to appoint the Global Chief President World leader of the Universe despite the fact there company doesn’t operate outside of the one state !

As far as I can see this is the first time he has owned and ran his own business and not worked for somebody else.

As I said he is here for one reason and one reason only….as are some of the cronies he’s brought along and given them made up roles that they have zero previous experience in. Russell Ball has an equivalent amount of customer experience as Gerald Ratner.

[NewClaret]

We'll have to agree to disagree but to be honest you make good points about the cost of playing in the PL.

We spent a significant amount in the season prior based upon some of the PL funds, which Ipswich didn't so we started with a much stronger base. Even so I see Ipswich getting over 30 points.

We had a net spend of around Eur108 million. Saints had a net spend of around Eur76 million but their manager got sacked. And Leicester around Eur45 million.

In terms of the finances, I just go on the evidence. Clearly, ALK may have funds we know nothing about or things may have improved dramatically since the last set of accounts or the accounts posted.

My opinion is that VK put his own football philosophy ahead of what was best for the club. An accusation also aimed at Saints manager before he left.

As you say above, we have a new manager, a fantastic defence and perhaps some of the money you keep seeing in the ether will buy us a striker and we can achieve promotion this season. It's looking good so far and with our defensive record I think we would have a better shot at the PL.

As I say above, the generously proportioned lady is far from singing.

Did you just say I made some good points Pete? Are you feeling okay!?

Fair points re: net spend, I didn’t look in to that.

On the VK philosophy point, I tend to agree with three caveats:

1. I think he altered his system to some extent, particularly the defensive line, but it wasn’t enough (and by then he’d probably bought the wrong players to do something dramatically different), and 2. I think he did learn a bit on what was required in the premier league and January’s signings of Esteve and Assignon particularly were marked improvements, and 3. Maybe linked to 2, our results second half of the season proved it was possible to play that style in the premier league and pick up points - I’ve always said I think if we’d been given a free second season pass we’d have been fine, but obviously it was his job was to earn a second season.

I think he believed in himself so much that he thought he could do it when most knew he couldn’t. You could see it in MtB2 where they kept wanting people to believe in the miracle internally. But it was delusion.

I don’t think it was malicious or intentional;I think he was young, inexperienced and naive. But it’s not like other managers haven’t taken us up and down and up again and been all the better for it. He would have too and, as much as I am delighted we have Parker, I expect we’d be in a higher league position now with that continuity.

Overall though, I just wish we’d stop discussing him. It’s like we have an unhealthy obsession with him, which would be less tedious if we didn’t have another young manager smashing it out of the park at the moment.

If Parker does manage to take us up, and assuming no magic pot of money, I’d love to see us go five at the back, buy a massive unit of a CDM to play alongside Cullen, prioritise 8/11 players to defending and try to become brilliant at set pieces and counters again to nick games. It’ll be an unpleasant watch but the only way I can see us picking up the points required to get a chance at a second season without the aforementioned massive investment/perceived risk.

[NewClaret]

Go on then enlighten us.
How else could he buy a business “worth” £200m without putting in any of his own money ?

It’s not the first time you have mentioned his background. He’s worked in senior positions at 2 big financial institutions for virtually all of his career. Don’t be fooled by the grandiose titles they give out in American companies - they will have hundreds if not thousands of vice presidents, head of global, directors etc. It’s what the yanks do.

American companies like to appoint the Global Chief President World leader of the Universe despite the fact there company doesn’t operate outside of the one state !

As far as I can see this is the first time he has owned and ran his own business and not worked for somebody else.

As I said he is here for one reason and one reason only….as are some of the cronies he’s brought along and given them made up roles that they have zero previous experience in. Russell Ball has an equivalent amount of customer experience as Gerald Ratner.

In regards to your initial question, I’m not sure how that’s relevant to my post, but he will have put some of his own money in (I think CP has said that ALK’s combined investment was £15m previously) and the rest will have been raised by debt/other investors.

My point was entirely separate. Which was that in banking, and the roles he held, the salaries but particularly the bonuses (for dealing with multi-billion portfolio’s) are huge. Beyond our comprehension. So if his sole motivation was to make money he’d most likely have stayed in that game because year on year his income will be lower now than it was then.

The only way he will make money on any investment in BFC is if the value of the club appreciates. I’d say he’s probably lost a lot of money today. He would not be able to sell what he bought for £170m in my opinion. If he gets back to being a sustainable premier league team he may turn a profit in a decades time. But will he double it? I doubt it.

But let’s say that whole £15m was his and he did double it. He makes £15m. Could he have earned more than £15m in banking over a decade? Definitely. And without risking his own money for that time in the process too.

He could also probably have invested that money in a good fund and doubled it with his contacts/knowledge too.

In summary: there’s a lots of easier ways for rich people, and bankers particularly, to earn money than running football clubs. In fact many would argue they’re the best possible way to lose money!

[Big Vinny K]

In regards to your initial question, I’m not sure how that’s relevant to my post, but he will have put some of his own money in (I think CP has said that ALK’s combined investment was £15m previously) and the rest will have been raised by debt/other investors.

My point was entirely separate. Which was that in banking, and the roles he held, the salaries but particularly the bonuses (for dealing with multi-billion portfolio’s) are huge. Beyond our comprehension. So if his sole motivation was to make money he’d most likely have stayed in that game because year on year his income will be lower now than it was then.

The only way he will make money on any investment in BFC is if the value of the club appreciates. I’d say he’s probably lost a lot of money today. He would not be able to sell what he bought for £170m in my opinion. If he gets back to being a sustainable premier league team he may turn a profit in a decades time. But will he double it? I doubt it.

But let’s say that whole £15m was his and he did double it. He makes £15m. Could he have earned more than £15m in banking over a decade? Definitely. And without risking his own money for that time in the process too.

He could also probably have invested that money in a good fund and doubled it with his contacts/knowledge too.

In summary: there’s a lots of easier ways for rich people, and bankers particularly, to earn money than running football clubs. In fact many would argue they’re the best possible way to lose money!

Oh where to start with a post like that…..you know I don’t think I’ll bother.
Best to just agree to disagree on some things and we will see who is proved correct soon enough I’m sure.

[dsr]

In regards to your initial question, I’m not sure how that’s relevant to my post, but he will have put some of his own money in (I think CP has said that ALK’s combined investment was £15m previously) and the rest will have been raised by debt/other investors.

My point was entirely separate. Which was that in banking, and the roles he held, the salaries but particularly the bonuses (for dealing with multi-billion portfolio’s) are huge. Beyond our comprehension. So if his sole motivation was to make money he’d most likely have stayed in that game because year on year his income will be lower now than it was then.

The only way he will make money on any investment in BFC is if the value of the club appreciates. I’d say he’s probably lost a lot of money today. He would not be able to sell what he bought for £170m in my opinion. If he gets back to being a sustainable premier league team he may turn a profit in a decades time. But will he double it? I doubt it.

But let’s say that whole £15m was his and he did double it. He makes £15m. Could he have earned more than £15m in banking over a decade? Definitely. And without risking his own money for that time in the process too.

He could also probably have invested that money in a good fund and doubled it with his contacts/knowledge too.

In summary: there’s a lots of easier ways for rich people, and bankers particularly, to earn money than running football clubs. In fact many would argue they’re the best possible way to lose money!

The initial question about the £15m was no doubt rhetorical, because most people know by now where the money came from. It came from Burnley FC's bank account. Pace and his fellow owners have taken out £124m as at July 2023, it may be more now, to help them buy the shares; and they aren't paying interest on it.

And the point of such a highly leveraged asset is that the potential gains are a lot bigger than the investment. The investment is £180m and if he doubles it, that's £180m profit. That's what venture capitalists do - they buy business, often several of them, at low capital cost, and if just one of them is a big success they can write off the losses on the others.

The equivalent in fund investment would be to invest £15m of your own and £125m borrowed, buy £140m of funds, and if they double then sell for £280, repay the £125m borrowed, and pocket the profit of £140m. The difference is, that's a much more high risk policy because you have to pay back the £125m borrowings even if you make a loss. If Pace and friends make a loss on the investment in BFC, they don't have to pay back the debt. They can write it off and watch Burnley go bust.

[NewClaret]

The initial question about the £15m was no doubt rhetorical, because most people know by now where the money came from. It came from Burnley FC's bank account. Pace and his fellow owners have taken out £124m as at July 2023, it may be more now, to help them buy the shares; and they aren't paying interest on it.

And the point of such a highly leveraged asset is that the potential gains are a lot bigger than the investment. The investment is £180m and if he doubles it, that's £180m profit. That's what venture capitalists do - they buy business, often several of them, at low capital cost, and if just one of them is a big success they can write off the losses on the others.

The equivalent in fund investment would be to invest £15m of your own and £125m borrowed, buy £140m of funds, and if they double then sell for £280, repay the £125m borrowed, and pocket the profit of £140m. The difference is, that's a much more high risk policy because you have to pay back the £125m borrowings even if you make a loss. If Pace and friends make a loss on the investment in BFC, they don't have to pay back the debt. They can write it off and watch Burnley go bust.

It wasn’t intended to be rhetorical. My memory was that CP had stated previously that ALK invested £15m of their own money in the takeover. I may have been mistaken on that.

Either way, they have to be able to sell the club to make money. I don’t think there’s much chance of them turning a profit on the club in the near future or even being able to sell it at all to be honest - which was sort of my point. I can’t see a route to them making money any time soon and on that basis, I think the collective Directors with their CV’s and expertise, could be earning more money in much easier ways than running a football club.

[Chester Perry]

It wasn’t intended to be rhetorical. My memory was that CP had stated previously that ALK invested £15m of their own money in the takeover. I may have been mistaken on that.

Either way, they have to be able to sell the club to make money. I don’t think there’s much chance of them turning a profit on the club in the near future or even being able to sell it at all to be honest - which was sort of my point. I can’t see a route to them making money any time soon and on that basis, I think the collective Directors with their CV’s and expertise, could be earning more money in much easier ways than running a football club.

£15m was a popular figure in the media

I have never been able to find evidence of more than £10m in the initial investment though I have previously acknowledged that there must have been fees to the numerous advisors on the deal - but only £10m spent on shares upfront and £62m-£63m from the ALK/VSL group since - is any of that from the original crew or new 'partners'? we have no way of telling

[NewClaret]

£15m was a popular figure in the media

I have never been able to find evidence of more than £10m in the initial investment though I have previously acknowledged that there must have been fees to the numerous advisors on the deal - but only £10m spent on shares upfront and £62m-£63m from the ALK/VSL group since - is any of that from the original crew or new 'partners'? we have no way of telling

Thanks CP.

Was sure I wasn’t imagining things.

[Big Vinny K]

In the words of the great Mr Vic Reeves
‘He wouldn’t let it lie”

[dsr]

It wasn’t intended to be rhetorical. My memory was that CP had stated previously that ALK invested £15m of their own money in the takeover. I may have been mistaken on that.

Either way, they have to be able to sell the club to make money. I don’t think there’s much chance of them turning a profit on the club in the near future or even being able to sell it at all to be honest - which was sort of my point. I can’t see a route to them making money any time soon and on that basis, I think the collective Directors with their CV’s and expertise, could be earning more money in much easier ways than running a football club.

Collectively, the owners have paid about £180m to buy Burnley FC but have borrowed at least £125m from Burnley FC, interest free, so they didn't have to use their own money. (The origin of the odd £40m is uncertain, but possibly later investors in the holding company.)

Burnley FC as it stands is worth nothing to them because they need to sell it for £180m+ to be in profit. We need to get back into the PL for them to make a profit. The point of the purchase is not to make a couple of million a year, it's to make serious big bucks by selling at a big profit. And if they can reduce the risk by using club money, not their own, then so much the better (for them).

[NewClaret]

Collectively, the owners have paid about £180m to buy Burnley FC but have borrowed at least £125m from Burnley FC, interest free, so they didn't have to use their own money. (The origin of the odd £40m is uncertain, but possibly later investors in the holding company.)

Burnley FC as it stands is worth nothing to them because they need to sell it for £180m+ to be in profit. We need to get back into the PL for them to make a profit. The point of the purchase is not to make a couple of million a year, it's to make serious big bucks by selling at a big profit. And if they can reduce the risk by using club money, not their own, then so much the better (for them).

I don’t understand the maths in that post vs CP’s.

I understood his post to mean, in round numbers: £10m from ALK directors, a further ~£60m from ALK (probably new investors, not ALK themselves), £110m from club monies. That makes sense to me if that’s what you mean.

Your other paragraph I agree with completely. It’s going to be some serious hard yards to turn a substantial profit on the £180m, which is why I think they’ve chosen a very difficult path to make money given their backgrounds and earning potential.

I dare say they will in the end if they stick at it and deliver success on the pitch, which is what it all hinges around really, but it’s a long-term project from where we are now.

[Chester Perry]

the minimum sale price for the takeover of December 30 2020 was £1652.86 for each of the 102,852 shares acquired or £169,999,956.72 as it transpired the full performance bonus was earned and a fraction over £20m was added to the final figure for these shares to bring the final figure to £190m

The ringfence deal for the outstanding shareholding of the 7 sellers worth a further £20m never materialised though both Mike Garlick and John Banaszkiewicz disposed of their shares to ALK/VSL/Vlad Torgovnik in November 2022 - my sources suggest that was for a total nominal fee of £1 to each seller. the ringfence deal had them valued at over £17m

There is also the shares sold by the small share holders - 3,255 shares with a transaction value of £5,330,245.00, half of which was via club credit

so we have at least £195.3m spent on shares and £124.076m borrowed from the club as an enabler of that

[NewClaret]

the minimum sale price for the takeover of December 30 2020 was £1652.86 for each of the 102,852 shares acquired or £169,999,956.72 as it transpired the full performance bonus was earned and a fraction over £20m was added to the final figure for these shares to bring the final figure to £190m

The ringfence deal for the outstanding shareholding of the 7 sellers worth a further £20m never materialised though both Mike Garlick and John Banaszkiewicz disposed of their shares to ALK/VSL/Vlad Torgovnik in November 2022 - my sources suggest that was for a total nominal fee of £1 to each seller. the ringfence deal had them valued at over £17m

There is also the shares sold by the small share holders - 3,255 shares with a transaction value of £5,330,245.00, half of which was via club credit

so we have at least £195.3m spent on shares and £124.076m borrowed from the club as an enabler of that

Got you. £195m in total, £125m from the club and therefore presumably £70m from ALK, divided roughly by £10m from the directors and £60m from new investors (assumed)?

[gtclaret]

I find this thread interesting,I don't understand a bloody word you're saying but it's interesting