Forest still £140m in debt after £18m write off

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 1:51 am

More bonkers finances in football - no wonder the Americans walked away

http://www.dailymail.co.uk/sport/footba ... 17-7m.html" onclick="window.open(this.href);return false;

No one should ever have a go at our board for being careful with the club's finances

HunterST_BFC · Post by **HunterST_BFC** » Thu Feb 16, 2017 1:58 am

WOW!

Hasawi got that bad?

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 2:10 am

Spending £20m more than you earn in a season where you have cut down on your losses is a sure fire way to rack up the debt - over £26m in wages on an income of £18m and then spending on transfers - bonkers

Fawaz has said previously he is chucking £2m a month at it - the write off is so they meet FFP

No wonder the directors were pee-ed off when he stopped Angela's sale to us and increased his contract

cutsy123 · Post by **cutsy123** » Thu Feb 16, 2017 8:10 am

I deal with the owners for their corporate mobiles at forrest. From what i gather they are complete a holes

Sidney1st · Post by **Sidney1st** » Thu Feb 16, 2017 8:31 am

Giving in to ridiculous wage demands, agents & signing on fees plus transfer fees.

Then it's the hiring and firing of managers along with their staff.

At some point clubs have to sit back and really look at if they're getting value for money from their players / managers to justify the money they're paying out.

You'd also hope the FA would look at this and put in some proper enforceable rules in place about debt levels etc.

Operating losses over x amount of years is fine, but when the club is already sat on stupid amounts of debts then wheres the encouragement to get their finances in order?

ClaretTony · Post by **ClaretTony** » Thu Feb 16, 2017 9:15 am

cutsy123 wrote:I deal with the owners for their corporate mobiles at forrest. From what i gather they are complete a holes

And very unpleasant people too I am told by some who have experienced being in the owner's company

ElectroClaret · Post by **ElectroClaret** » Thu Feb 16, 2017 9:59 am

The only thing I'm bothered about is NF slipping down the table and filling
a spot in the bottom three that those dummies down the motorway should occupy.

If there's any justice.

Firthy · Post by **Firthy** » Thu Feb 16, 2017 10:20 am

As much as I feel for the fans, the sooner clubs like this go bankrupt the better. Money is ruining football and instead if being a business run sport, it is becoming 100% business and entirely about money.

Looks like Lansbury has jumped from the frying pan in to the fire with Villa's recent results and amount of money they are spending. Villa could become another Forest.

Quickenthetempo · Post by **Quickenthetempo** » Thu Feb 16, 2017 11:14 am

If we hadn't got the 3 seasons in the premier league we would be in the same mess.

Sidney1st · Post by **Sidney1st** » Thu Feb 16, 2017 11:18 am

Quickenthetempo wrote:If we hadn't got the 3 seasons in the premier league we would be in the same mess.

Not to that amount though would it?

Sleeping Cat · Post by **Sleeping Cat** » Thu Feb 16, 2017 11:22 am

To run a football club successfully you have to run it by making decisions which could be unpopular. What we see with many neuveau owners, particularly when they are not from the area of the club they are buying/have bought, is they are desperate to be popular with their own fans and be adored. To be seen as the saviour of the club, with excellent business acumen and an understanding of the game.

But football business is hard. very hard. Investment in players doesn't always result in success on the pitch. There are no guarantees in football and only 1 club can win the league, only 4 can qualify for the champions league, only 20 can be in the premier league, only 3 teams at a time can win promotion. This all leads to it being a black hole for money invested.

Fawaz didn't want to be unpopular with fans and sell Lansbury to us at the time. Instead, he got a new extended contract. "Look, I've persuaded our captain to stay" he posted on twitter alongside a picture of himself with the player in question, seeking for praise from the fans of his club. He should have sold though, taken the money and got the player off the books.

We had to do this many a time, often selling our best players just to remain a viable championship club, cutting our cloth accordingly. Football club stewardship requires the ability to make decision for the good of the club which may be unpopular with the fans.

Sleeping Cat · Post by **Sleeping Cat** » Thu Feb 16, 2017 11:27 am

"If we hadn't got the 3 seasons in the premier league we would be in the same mess."

The difference is though that we did. We cut our cloth accordingly whilst still trying to be as competitive as we possibly can be within a financial structure that was okay for us. Then we got promoted, and we have built on that sensibly.

Others have not, look at QPR, spent so much that the riches of the promise land didn't even start to fill the hole they had already dug themselves into. Others overspend in the sheer mindedness that they will (eventually) reap the benefits, Derby spring to mind here.

Our hardest job now is remaining sensible in a league where it is very hard to do so.

Quickenthetempo · Post by **Quickenthetempo** » Thu Feb 16, 2017 11:32 am

Sidney1st wrote:Not to that amount though would it?

I reckon so. We were losing between 4 and 7m a season that were met by player sales.

We owed directors money at a 10% interest and that's the downward spiral, benefactors end up writing it off. We were paying extortionate rents for the ground.

Sidney1st · Post by **Sidney1st** » Thu Feb 16, 2017 11:36 am

Quickenthetempo wrote:I reckon so. We were losing between 4 and 7m a season that were met by player sales.

We owed directors money at a 10% interest and that's the downward spiral, benefactors end up writing it off. We were paying extortionate rents for the ground.

Well when you put it like that

claretdom · Post by **claretdom** » Thu Feb 16, 2017 11:41 am

We should have borrowed money from that long line of wealthy people willing to risk their money with no guarantee of it being returned on an interest free deal.

The fact is our board took the decision to sell a player when finance needed it rather than build a bigger debt. To say we were on the same path as Forest is just daft.

Quickenthetempo · Post by **Quickenthetempo** » Thu Feb 16, 2017 11:41 am

The premier league gravy train is just too much of a pull for clubs and they spend far too much trying to get there. And not many do.

Sidney1st · Post by **Sidney1st** » Thu Feb 16, 2017 11:43 am

Quickenthetempo wrote:The premier league gravy train is just too much of a pull for clubs and they spend far too much trying to get there. And not many do.

We all know that.

There are people on FB whining about the cost of away tickets in the championship, but when you try to explain the reasons for it, they can't wrap their heads around.
Many people don't consider the impact of wages and club running costs sometimes need to be reflected in ticket prices.

Quickenthetempo · Post by **Quickenthetempo** » Thu Feb 16, 2017 11:46 am

Sidney1st wrote:We all know that.

There are people on FB whining about the cost of away tickets in the championship, but when you try to explain the reasons for it, they can't wrap their heads around.
Many people don't consider the impact of wages and club running costs sometimes need to be reflected in ticket prices.

The best thing we did was put the bonus system in with contracts heavily success based. It's enabled us to attract decent players that only cost a lot when the club profit.

Royboyclaret · Post by **Royboyclaret** » Thu Feb 16, 2017 11:55 am

"We owed directors money at a 10% interest and that's the downward spiral, benefactors end up writing it off. We were paying extortionate rents for the ground."

That's not correct.

bfcmik · Post by **bfcmik** » Thu Feb 16, 2017 12:13 pm

Quickenthetempo wrote:I reckon so. We were losing between 4 and 7m a season that were met by player sales.

We owed directors money at a 10% interest and that's the downward spiral, benefactors end up writing it off. We were paying extortionate rents for the ground.

We overspent that much because a director promised to back the spending on a chase for promotion - unfortunately the global financial meltdown left him unable to fulfil that promise and needing urgent repayment of the loans. Or at least that is how I have interpreted what I have read.

Otherwise I think we would have continued to spend at a very small loss level and hoping we could keep producing the odd gem to brighten our existence for a while before being sold to pay the losses.

Royboyclaret · Post by **Royboyclaret** » Thu Feb 16, 2017 12:19 pm

Without the vision, determination and investment of that director there would have been no promotion in '08/'09.

bfcmik · Post by **bfcmik** » Thu Feb 16, 2017 12:23 pm

Royboyclaret wrote:Without the vision, determination and investment of that director there would have been no promotion in '08/'09.

I agree!

I tried to write the post to imply that it was a change in external circumstance that forced the need to repay the loans urgently. Didn't an Irish bank collapse and demand immediate repayment of some company loans he had?

Royboyclaret · Post by **Royboyclaret** » Thu Feb 16, 2017 12:36 pm

Complicated and detailed but in summary Modus Properties were forced into administration as a result of the global financial crash. The administrators called in the loan and from that moment Mr. Flood's influence at Burnley quickly diminished.

But we should never forget his contribution at Burnley without which we would not be where we are today.

cutsy123 · Post by **cutsy123** » Thu Feb 16, 2017 2:27 pm

ClaretTony wrote:And very unpleasant people too I am told by some who have experienced being in the owner's company

The main owner is privvy to weapons too having aquired a gun licence for several fire arms. I have it on file as a proof of ID

ClaretTony · Post by **ClaretTony** » Thu Feb 16, 2017 2:31 pm

Royboyclaret wrote:Without the vision, determination and investment of that director there would have been no promotion in '08/'09.

And without the promotion said director would have left us in a terrible mess. We'd already become subject to a transfer embargo brought about by our inability to pay the installments on Martin Paterson & Chris Eagles.

I've seen enough criticism on here for Bournemouth overspending to reach the Premier League, and rightly so, but we did it beyond what we could afford and the consequences could have been devastating. He might have had the vision and determination but we found out it wasn't actually him investing but his company.

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 2:34 pm

Was going to put something similar Tony - but you have covered it for me - far too much risk for a club like us when it wasn't personal spare change

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 2:42 pm

Firthy wrote:As much as I feel for the fans, the sooner clubs like this go bankrupt the better.

I understand the sentiment - but the people who lose out on bankruptcy are the creditors - usually the small local ones who could fold or make local people redundant in managing the impact of the lost money owed. - That is why I don't want clubs to go into administration.

Just look at our directors phoenix like rise from a series of businesses going into administration - his loan structure could have put the club on the same path without the 09 promotion - we have never been so lucky as that - even counting Orient - I feel

Royboyclaret · Post by **Royboyclaret** » Thu Feb 16, 2017 3:05 pm

"Was going to put something similar Tony - but you have covered it for me - far too much risk for a club like us when it wasn't personal spare change"

Why was it too much risk?........Flood's was a loan that required repayment in exactly the same way as the loans from BK, JB and MG. It was his drive and enthusiasm (when others were content to meander along in the Championship) that gave us our first foot on the ladder to where we are today, and for that we should be forever grateful.

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 3:52 pm

Roy see my following post

Royboyclaret · Post by **Royboyclaret** » Thu Feb 16, 2017 4:14 pm

We clearly see things differently. Brendan Flood was the inspiration behind the first promotion and his loan was very necessary at the time. In fact his loan was different to all the subsequent ones in that his was only repayable if the club was promoted to the Premier League.

Then the global banking crisis happened which had a devastating effect on his business and the loan was called in by the administrators. But, no matter, the objective was achieved and BFC were in the big league and we still are.

Also, as regards the loan not being his..........Modus Ventures was his company and therefore HIS loan and it's a bit poor to suggest otherwise. A bit like saying the £4.2 million loan from Freight Investor Services in 2011 was not from John B.

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 4:52 pm

Loans from other companies that are not parent companies - require a commercial level of interest on them by law - they also carry a risk of being called back at any given time should the loaning organisation require. This can - and in this case was - occur for reasons completely outside the scope of influence of the club - therefore carrying a high level of risk when compared to loans from personal liquid holdings of wealthy individuals who have an interest in the long term stability of the club.

The risk is exacerbated when it is for a punt not on a guaranteed return. As Sean Dyche pointed out so clearly in his interview for the job - what legacy did BFC get from that punt and promotion - none other than the cache that we made it to the Premier League and managed to avoid doing a Derby.

Personally given that football clubs are so emotionally tied to lives of so many and their community taking such a gamble is reckless - I have vivid memories of 1987 and the fear of losing the club - loans in my view should only occur when there is a need to manage a desperate situation such as imminent financial collapse.

many will hold a different view, but organic growth and careful stewardship is my preferred approach

Royboyclaret · Post by **Royboyclaret** » Thu Feb 16, 2017 5:04 pm

So how did you view the Board's decision to take a loan of £4.2 million from Freight Investor Services in 2011 ?

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 5:26 pm

refer you to the last 2 paras of the previous post

I have no idea as to what the loan was for - Do you know - would be interested to learn

Royboyclaret · Post by **Royboyclaret** » Thu Feb 16, 2017 5:36 pm

So you seriously believe that structuring the loan from John B in such a way that it was through his company was actually putting the very future of our club in jeopardy ?

I also recall the events of 1987 very well, but also live in the real world.

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 5:40 pm

Not what I said - I said that it forces a commercial level of interest on the loan (i.e. a potentially higher rate than a personal loan from a director) and dependent on the way the loaning company is geared can be an adverse and probably unnecessary risk. Either way I would prefer it if we operated within our means rather than taking on loans.

fyi I take this principle into my own life as well - I have only taken a credit for a mortgage - paying off early, credit cards are cleared every month, occasional 0% finance deals for required items when the money is in the bank and are taken to earn interest and build a credit score (those were the days

)

KRBFC · Post by **KRBFC** » Thu Feb 16, 2017 5:45 pm

The FA need to gain some type of control over the owners, allow the FA the rights to do something about the terrible owners. How that Oyston fella is still at Blackpool I will never know an absolute disgrace, seemingly allowed to do whatever he wants because he owns the place.

IanMcL · Post by **IanMcL** » Thu Feb 16, 2017 5:50 pm

Surely the loan and any interest was ok'd by the whole borad at the time? It was ok'd by this board! (or rather the board we all on at that time!)

Br Flood had mad eit clear he wanted to help, so I assume he would have just gifted the interest back in some way.

Anyway, we survived at the time and had a wonderful experience....and then another and now another.

Erasmus · Post by **Erasmus** » Thu Feb 16, 2017 5:51 pm

I agree with Royboy on this. At the time, virtually no one foresaw the financial crash that was approaching. With the benefit of hindsight it could have been disastrous, but at the time it would have been foolish to refuse to accept the loans from Brendan Flood's company. And, as has been said, we would not be where we are today without them. We did get lucky, but the decisions made were the right ones at the time.

Tall Paul · Post by **Tall Paul** » Thu Feb 16, 2017 5:54 pm

Chester Perry wrote:Loans from other companies that are not parent companies - require a commercial level of interest on them by law

What law is that? Surely a private company can make a loan to another private company on whatever terms they both agree?

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 5:56 pm

As I said

Chester Perry wrote:many will hold a different view, but organic growth and careful stewardship is my preferred approach

doesn't make either of us wrong - just a different approach to a common goal

Chester Perry · Post by **Chester Perry** » Thu Feb 16, 2017 5:58 pm

Tall Paul wrote:What law is that? Surely a private company can make a loan to another private company on whatever terms they both agree?

Can't quote - but I think it has something to do with competition law and possibly money laundering

Tall Paul · Post by **Tall Paul** » Thu Feb 16, 2017 6:07 pm

Chester Perry wrote:Can't quote - but I think it has something to do with competition law and possibly money laundering

I can't find anything to cite that law, googling competition law and loan interest. Surely it'd be easy enough to find a link?