ALK Capital or Farnell/Elkashashy takeover

[arise_sir_charge]

But it’s the same levered buy out as many have seen, it’s not a mortgage on their assets at all , if they can’t pay they will walk with no penalties and clubs left with the debt

Ok, if you say so.

[KRBFC]

So in short, Pace and co don't have any money.

Pace has bought a PL football club for very little of his own money. What an opportunity, nothing to lose for him, he gets a free £200M business. The business itself is buying him for £150M


Garlick wasn't spending in the transfer market for years so he could run off with the pile of cash, true fan

The question I have is, if we're so much in debt and our interest rate is £8-12M a year, how on earth do we spend money on transfers? we'll be budget cutting for years to come just to pay back the loan.

[Jakubclaret]

Simple answer: ALK. They are perfectly entitled, legally, to sell all the assets and shut the club down.

That doesn't mean we have to like it.

It’s extremely precarious if boredom later on develops or if at any point financial difficulties emerge or as a combination, no easy way of saying this & the more financially shrewd posters will be acutely aware that this could potentially represent a massive risk for the club, it’s not a good position to be in.

[GodIsADeeJay81]

Again, isn't the issue here that they've taken the clubs money as their pay out? Rather than a pay out from the new guys?

If that is the case - which although not certain yet, every indication seems to be pointing that way - then questions about why that level of "cash reserve" was built up for so long whilst very little investment was made on the pitch become very relevant.

All valid questions, in my opinion. I'd certainly be interested in the answers if they were ever forthcoming.

So you're saying the former owners purposely ran the club in a financially prudent manner so they could then walk away with those millions when they sold it?

Well that's one way to get yourself into court on libel charges.

[KRBFC]

The thing that sits uneasy for me is the whole leveraged part, these guys don't have the money to buy our club but they are using our clubs money to buy themselves. Once Tarkowski is sold, part of that money will be used to cover the loan, which should never be the case.

ALK should be paying the loan out of their own pockets, it is their loan, this should never be a club loan.

[DomBFC1882]

They've been here for a month, they need time.

Are you this impatient over everything?

Considering the attitude they come with and saying we wouldn't be disappointed then yes. Their words not mine.

So much for making a statement

[tim_noone]

I already thought Pace was talking nonsense when he said it was like getting a mortgage , is it heck. If you don't pay your mortgage the bank will take your house. If these guys don't pay the debt than the bank will seize the clubs assets not theirs . They haven’t got a pot to p In. Where will they get that cash to pay the 65 million back on time ? There is only two ways , the way they did before ,sell all the players or flog the ground .

Come on Pace's net Worth is £500.000 well be r8!

[quoonbeatz]

It means they've been doing the same thing.

[ksrclaret]

So you're saying the former owners purposely ran the club in a financially prudent manner so they could then walk away with those millions when they sold it?

Well that's one way to get yourself into court on libel charges.

If you can find where I've stated that, I'll accept the charges. Plenty of others on here have though.

As it happens, you won't be able to, I simply said questions could/ should be asked. Nothing in the law that prohibits the asking of questions and waiting for answers.

[Socrates]

All this talk of selling Pope, Tarkowski, McNeil to service the debt if we go down ...... do you think they were staying anyway if we go down? So you think they’ll still be with us in 3 years even if we have a great run? Pope .... maybe, but no way will Tarks and McNeil be with us then.

Does this give us a better chance of keeping Dyche? I don’t know. But honestly ..... that’s all I care about. As long as he’s here we’ll stay up and when he goes we’re in bother. That was the case six weeks ago and will be the case in six weeks time.

I don’t like the debt. But I don’t understand it so I’m not going to get too bothered about it. We wanted something different, a chance to kick on .... well here it is.

[Devils_Advocate]

Everyone needs to calm down and not worry about people enjoying, people enjoying discussing a football related topic on a football messageboard.

People seem to be lining up to pile into people who want to discuss the topic of people piling into people, when there's sod all we can do to change what people choose to discuss anyway!

See DA, you're just doing what everyone else is doing even though you seemingly don't realise you're doing it.

As I have said multiple times, discussing is fine and expressing concern is equally fine but folk are casting quick judgements without very limited to no knowledge or understanding of how these things work.

Nope im just mocking your stupid position. To be honest I pretty much agree with your views on it all but im not going to start telling people to calm down and not to bother discussing something cos they have a different outlook than myself

[dsr]

So you're saying the former owners purposely ran the club in a financially prudent manner so they could then walk away with those millions when they sold it?

Well that's one way to get yourself into court on libel charges.

There's no way to know for how long they ran the club with the intention of walking off with the pot of cash. It may be that their intention was always to leave it in the club and leave the club financially sound. But it is certain that in December 2020 they ran the club in such a way that they could walk away with the millions. I wouldn't worry about libel there.

[dsr]

Were we expecting them to give away their shares? Some people have wanted them to ‘step aside’ for some time now, how did they think that was going to happen without them selling their shares?

It's not that they have sold shares that is the issue. It is that they have taken £100m from the club bank and put it in their own.

If they had sold their shares to someone who was willing to pay for them, that would be fine.

[ClaretMov]

Why, what actual difference does it make to you?

Have you honestly ever sat in your seat at the Turf, or more recently on your sofa and thought any of the following:-

"I can't believe he's starting Barnes and Wood but at least the balance sheet is looking healthy".

"VAR is ruining the game......but our tangible assets have increased this financial year"

"This WBA and Brighton game has been poor, I wonder how they are accounting for long term liabilities".

One of the most ridiculous rebuttals I've every seen

[arise_sir_charge]

The thing that sits uneasy for me is the whole leveraged part, these guys don't have the money to buy our club but they are using our clubs money to buy themselves. Once Tarkowski is sold, part of that money will be used to cover the loan, which should never be the case.

ALK should be paying the loan out of their own pockets, it is their loan, this should never be a club loan.

That's not how business works.

How many businesses do you know where the owners are paying loans directly out of their own pockets?

Business works in that people borrow money to buy/set them up and then use the money generated in those businesses to pay the loans back.......in a roundabout way it is their money as they own the business but the reality is that the business is paying the money back. I've done it myself. It's how the vast majority of business sales will happen.

[KRBFC]

All this talk of selling Pope, Tarkowski, McNeil to service the debt if we go down ...... do you think they were staying anyway if we go down? So you think they’ll still be with us in 3 years even if we have a great run? Pope .... maybe, but no way will Tarks and McNeil be with us then.

Does this give us a better chance of keeping Dyche? I don’t know. But honestly ..... that’s all I care about. As long as he’s here we’ll stay up and when he goes we’re in bother. That was the case six weeks ago and will be the case in six weeks time.

I don’t like the debt. But I don’t understand it so I’m not going to get too bothered about it. We wanted something different, a chance to kick on .... well here it is.

But previously we'd have sold those players and the club would've benefitted. It would be a damn shame if fees for Tarkowski Pope and Mcneil go to servicing someone elses debt. Fees received for those players is the clubs money, why should the club be paying ALK debts off?

[DomBFC1882]

One of the most ridiculous rebuttals I've every seen

You have to get used to stupid and ridiculous on here Mov. Why people would think we shouldn't be bothered about the finances of the club after all the thousands of pounds and hours to watch us is beyond me.

[GodIsADeeJay81]

It's not that they have sold shares that is the issue. It is that they have taken £100m from the club bank and put it in their own.

If they had sold their shares to someone who was willing to pay for them, that would be fine.

Wrong.
They haven't taken £100 million out of the club at all.

[DomBFC1882]

Come on Pace's net Worth is £500.000 well be r8!

[Socrates]

But previously we'd have sold those players and the club would've benefitted. It would be a damn shame if fees for Tarkowski Pope and Mcneil go to servicing someone elses debt. Fees received for those players is the clubs money, why should the club be paying ALK debts off?

How would the club have benefited?

[dsr]

That's not how business works.

How many businesses do you know where the owners are paying loans directly out of their own pockets?

Business works in that people borrow money to buy/set them up and then use the money generated in those businesses to pay the loans back.......in a roundabout way it is their money as they own the business but the reality is that the business is paying the money back. I've done it myself. It's how the vast majority of business sales will happen.

You have missed out a step. Business works by
1 - borrowing money
2 - using that money to earn more money
3 - using the extra earned money to repay the loan.

We have done step 1, but not step 2 - the money is not available for the club to earn more money with. Garlick and JohnB have the money, only they can profit with it. That money has left the club.

[Socrates]

Actually .... you know what. I’m not fussed.

[GodIsADeeJay81]

You have to get used to stupid and ridiculous on here Mov. Why people would think we shouldn't be bothered about the finances of the club after all the thousands of pounds and hours to watch us is beyond me.

People generally haven't been arsed about football finances on here for years though, that much is clear.

Now the clubs been sold, suddenly they want to know more..

[dsr]

Wrong.
They haven't taken £100 million out of the club at all.

How do you work that out? Where do you think they have taken the money from? I hope you aren't arguing that just because it went thoough ALK's bank account, it wasn't money from the club?

[ksrclaret]

People generally haven't been arsed about football finances on here for years though, that much is clear.

Now the clubs been sold, suddenly they want to know more..

Well, you could have knocked me down with a feather.

[KRBFC]

That's not how business works.

How many businesses do you know where the owners are paying loans directly out of their own pockets?

Business works in that people borrow money to buy/set them up and then use the money generated in those businesses to pay the loans back.......in a roundabout way it is their money as they own the business but the reality is that the business is paying the money back. I've done it myself. It's how the vast majority of business sales will happen.

A football club can't be compared to a start up. Leveraged buyouts aren't common in football, its a chancers way to gain a senior role. Say whatever you want, Mcneil Pope and Tarkwoski were here before ALK, using funds from those players to pay ALK debts for shares would be an unethical disgrace.

[kentonclaret]

Strange how a thread on the financing and structure of the club manages to get to 162 pages if nobody on here is interested.

[DomBFC1882]

People generally haven't been arsed about football finances on here for years though, that much is clear.

Now the clubs been sold, suddenly they want to know more..

I don't think that's true tbh I think its more of a case that we knew were debt free and in good hands previously. Obviously now we're in the unknown and also in a lot of debt.

People should care if you love the club as this could go dreadfully bad in the next 5 years or so

[Papabendi]

All this talk of selling Pope, Tarkowski, McNeil to service the debt if we go down ...... do you think they were staying anyway if we go down? So you think they’ll still be with us in 3 years even if we have a great run? Pope .... maybe, but no way will Tarks and McNeil be with us then.

Does this give us a better chance of keeping Dyche? I don’t know. But honestly ..... that’s all I care about. As long as he’s here we’ll stay up and when he goes we’re in bother. That was the case six weeks ago and will be the case in six weeks time.

I don’t like the debt. But I don’t understand it so I’m not going to get too bothered about it. We wanted something different, a chance to kick on .... well here it is.

Agree. But my issue here is that ALK has been so open about how central Dyche is to the business plan. This might be obvious, but to say it so openly and regularly seems a little odd and a naive way to do business with an employee. If one man is that central, we are probably in more trouble than we think. Secondly, key to keeping Dyche is to back him. Do we think this is likely to be the case. Perhaps too early to say, but what Pace said at the start of the month and what actually happened is worrying.

[dushanbe]

People generally haven't been arsed about football finances on here for years though, that much is clear.

Now the clubs been sold, suddenly they want to know more..

Thats completely disingenuous. From a BFC point of view, our ownership and financial position was straight forward. Now it isn't. Its not unusual for people to be at the very least curious as to what the actual plan is.

[randomclaret2]

People generally haven't been arsed about football finances on here for years though, that much is clear.

Now the clubs been sold, suddenly they want to know more..

Theres been a thread purely about football finances running on this board for a long time now

[DuckworthsEA]

Imagine if we had signed Kenny from Everton for £10mil, 80% of the posts in this thread wouldn’t exist...

[martin_p]

Its more the outcome, the financial predicament the club now appears to be in, heavily indebted whilst they personally appear to have benefitted enormously, that sits rather uneasily with the " lifelong supporters " tag.

So you were expecting them to give their shares away then. Ok.

[TheFamilyCat]

No social distancing on Harry Potts Way today.

20210202_073339.jpg (82.42 KiB) Viewed 2239 times

[martin_p]

Again, isn't the issue here that they've taken the clubs money as their pay out? Rather than a pay out from the new guys?

If that is the case - which although not certain yet, every indication seems to be pointing that way - then questions about why that level of "cash reserve" was built up for so long whilst very little investment was made on the pitch become very relevant.

All valid questions, in my opinion. I'd certainly be interested in the answers if they were ever forthcoming.

No. ALK (or whatever company they’ve created) bought the shares so it’s them that have taken the money from the club’s coffers.

[kentonclaret]

A little bit worrying that somebody thinks that 80% of the posts on this thread were made after the transfer window closed

[dsr]

So you were expecting them to give their shares away then. Ok.

You still don't understand the point.

If they had made big profits by taking the club to a higher level and received vast profits from a third party, fair enough.

But they have made big profits by taking money out of the club. Few of us care about how much profit they have made. What we care about is that they have taken money out of the club.

[martin_p]

It's not that they have sold shares that is the issue. It is that they have taken £100m from the club bank and put it in their own.

If they had sold their shares to someone who was willing to pay for them, that would be fine.

No, they haven’t taken it from the club. It was ALK’s decision on where they get the money from to pay for the shares not Garlick’s.

[ksrclaret]

No. ALK (or whatever company they’ve created) bought the shares so it’s them that have taken the money from the club’s coffers.

Garlick and the other directors would have known how the takeover was being put together, and how they were being paid.

It was then up to them to approve the transaction, or decline it.

[dsr]

No. ALK (or whatever company they’ve created) bought the shares so it’s them that have taken the money from the club’s coffers.

Quite apart from the immense degree of nitpicking that that argument involves, Mike Garlick is a director so in his fiduciary capacity to act in the best interest of the shareholders, he has removed that money from the club coffers.

[martin_p]

You still don't understand the point.

If they had made big profits by taking the club to a higher level and received vast profits from a third party, fair enough.

But they have made big profits by taking money out of the club. Few of us care about how much profit they have made. What we care about is that they have taken money out of the club.

I think it’s you not understanding.

[northeastclaret]

We certainly are no further forward and it is clear from following the analysis about the takeover and actions speak louder than words regarding the transfer window , we taken taken a massive step backwards as a club.

Once Dyche leaves if will be an absolute disaster for everyone, let’s just hope the miracle man stays for may more years

[dandeclaret]

Agree. But my issue here is that ALK has been so open about how central Dyche is to the business plan. This might be obvious, but to say it so openly and regularly seems a little odd and a naive way to do business with an employee. If one man is that central, we are probably in more trouble than we think. Secondly, key to keeping Dyche is to back him. Do we think this is likely to be the case. Perhaps too early to say, but what Pace said at the start of the month and what actually happened is worrying.

The talk in the last interview of wanting him to be here for the next 20 to 30 years was one quote that raised my eyebrows a but. It may have been well meaning, but it also smacked of Pardew 8 year contract at Newcastle naivety.

[arise_sir_charge]

You have missed out a step. Business works by
1 - borrowing money
2 - using that money to earn more money
3 - using the extra earned money to repay the loan.

We have done step 1, but not step 2 - the money is not available for the club to earn more money with. Garlick and JohnB have the money, only they can profit with it. That money has left the club.

No, I've not missed it out.

When someone borrows money to buy a business from somebody else, that money goes to the previous owner of the business. It does not go into the business.

[dsr]

I think it’s you not understanding.

In a sense you are right. I don't understand whether you are on a wind-up or whether you are serious.

Burnley FC are £100m poorer. The money has gone, ultimately, to Garlick. That makes me unhappy.

That is the point, the whole point, and nothing but the point. You can go into all the detail you want about whose bank accounts it went through, but it doesn't make me any happier that BFC are £100m poorer and that money can be clearly traced to the bank account of the BFC directors.

[claretonthecoast1882]

Were we expecting them to give away their shares? Some people have wanted them to ‘step aside’ for some time now, how did they think that was going to happen without them selling their shares?

Seems it was expected for them to give the club away and the new owners could use the saving on the asking price for transfers. The new owners are no different to transfers on here.

We have many comments regarding sign someone then any name linked is normally met with negative comments.

We need new owners so we can go to the next level - now it is not these owners.

Wish Garlick would just sell and go - Don't sell like that give them away, can't believe a Burnley fan wouldn't just give away the business he has run for years and built up.

From day 1 of this I felt some fans would be seduced by the money and start dreaming Championship manager style about what we would be doing inj the near future and now the reality is a bit clearer they don't like it. Give it a few months you will hear people asking Garlick to take over again.

[arise_sir_charge]

A football club can't be compared to a start up. Leveraged buyouts aren't common in football, its a chancers way to gain a senior role. Say whatever you want, Mcneil Pope and Tarkwoski were here before ALK, using funds from those players to pay ALK debts for shares would be an unethical disgrace.

I'll accept that a start up isn't a great analogy but the rest of the point stands in that businesses are more often than not bought using their own money.

[dsr]

No, I've not missed it out.

When someone borrows money to buy a business from somebody else, that money goes to the previous owner of the business. It does not go into the business.

Three parties - BFC, ALK, Garlick.

There are two normal ways this loan would work.

1. BFC borrow money, BFC use the money in their business, BFC pay it back.
2. ALK borrow money, ALK use the money to buy shares, ALK pay it back.

Where this goes wrong is that while we don't know who has borrowed the money, we do know that ALK is using the money to buy shares and BFC is paying it back. Normally with loans, the person who gets the benefit has to repay the loan. In this case, that isn't happening.

[arise_sir_charge]

One of the most ridiculous rebuttals I've every seen

No more ridiculous than your original point.

[GodIsADeeJay81]

How do you work that out? Where do you think they have taken the money from? I hope you aren't arguing that just because it went thoough ALK's bank account, it wasn't money from the club?

ALK borrowed a chunk from the club, the rest is loans.

Our former owners haven't taken any out.