Alan Nixon on ALK, worrying

[joey13]

Let’s not rewrite history and pretend everyone was demanding we spend ridiculous amounts of money under Garlick.

There was a huge middle ground between taking that approach and the approach we actually did that the vast majority were in.

Turns out the money in the bank didn’t belong to the club in the first place , Garlick was never going to spend ridiculous amounts of his own money.

[Papabendi]

I think Garlick saw some poor recruitment and lost full trust in Dyche to spend, wasn't long after CT was claiming Garlick was trying to sign Harry Wilson and Dyche didn't want him. I don't know the exact figures but I'd guess Gibson, Vydra and Hart cost the club a pretty penny and we got barely any return out of them.

It would be fascinating to read a book by Garlick where he doesn't hold back and spills the tea, there must have been some trigger for him to suddenly freeze all support of Dyche.

Not sure Vydra was Dyche's choice. And Gibson certainly wasnt our first choice. Hart did seem a strange one.

[Lancasterclaret]

I know but you seem to be arguing against your own point. Let's put aside the idea that the Venky's are fools VH Holdings is a massive well established company with deep pockets and a successful track record of running business across South Asia. However, they stepped outside of their geographical location and business model and it has required those deep pockets to keep things afloat.

You can conjecture on the assets available to ALK but there seems to be little evidence of any.

Well, No

I'd argue that the lack of assets compared to Venkys mean that Pace and ALK have to be even more careful about what they get involved in

They are here to make money absolutely no doubt, and relegation will (if it happens) put a huge pressure on that, but I don't think they wouldn't have factored relegation into their calculations

I'll just qualify this as my opinion mate!

I have no idea if they did or not, but it seems very unlikely

[ClaretPete001]

I think Garlick saw some poor recruitment and lost full trust in Dyche to spend, wasn't long after CT was claiming Garlick was trying to sign Harry Wilson and Dyche didn't want him. I don't know the exact figures but I'd guess Gibson, Vydra and Hart cost the club a pretty penny and we got barely any return out of them.

It would be fascinating to read a book by Garlick where he doesn't hold back and spills the tea, there must have been some trigger for him to suddenly freeze all support of Dyche.

Again you can conjecture on the minutiae of transfers but you would guess that MG had half a mind on selling the club and figured out the best way to do it.

From him risking big losses when we were promoted to the Premiership to the sale to American investors MG has shown has shown himself to be a very astute operator and anything but safe and boring.

[taio]

Those who wish to bury their head in the sand would be best avoiding this thread if they also can't cope with the view of those rightly concerned about the financial sustainabliy of our club.

The concerns are without the full facts but it's remarkable that some people suggest they shouldn't be expressed without knowing all the ins and outs when the subject is about the very fabric and fundamentals of the club.

Let's all just hope we defy the odds and stay up this season.

[Lancasterclaret]

I think Garlick saw some poor recruitment and lost full trust in Dyche to spend, wasn't long after CT was claiming Garlick was trying to sign Harry Wilson and Dyche didn't want him. I don't know the exact figures but I'd guess Gibson, Vydra and Hart cost the club a pretty penny and we got barely any return out of them.

It would be fascinating to read a book by Garlick where he doesn't hold back and spills the tea, there must have been some trigger for him to suddenly freeze all support of Dyche.

This is what I believe as well, but again, its just mine and KRBFC opinion

I

[Burnley1989]

.....

He’s a right baby isn’t he

2nd only to Piers Morgan for blocking anybody who disagrees with him or shows him up! The old tart

[KRBFC]

And?

Venkys famously didn't realise you could get relegated when they took over (to all accounts)

They are doing an excellent job these days with Rovers, but its costing them a small fortune, and fair play to them for not pulling out when they could have and completely finishing them

My point is that Pace must have known the relegation consequences, and I'm 100% sure that he and Garlick must have talked about it during the protracted selling process

But that's the worry aint it?

It's costing the Venkys a small fortune but they have the fortune to pay the bills, Do ALK have the finance if the bailiffs come knocking?

[Lancasterclaret]

But that's the worry aint it?

It's costing the Venkys a small fortune but they have the fortune to pay the bills, Do ALK have the finance if the bailiffs come knocking?

I doubt it

Will ALK put us into the position where we end up owing them the top end of £300 million?

I doubt that as well

Look at us more like Swansea rather than Derby or Blackburn*

*Not saying Swansea are being run ideally, but they are clearly been run to a budget based on their income, which is a way I'd much prefer than risking the future of the club**

**and even then I'm not sure how a team our size with no benefactor can compete at championship level

[ClaretPete001]

Well, No

I'd argue that the lack of assets compared to Venkys mean that Pace and ALK have to be even more careful about what they get involved in

They are here to make money absolutely no doubt, and relegation will (if it happens) put a huge pressure on that, but I don't think they wouldn't have factored relegation into their calculations

I'll just qualify this as my opinion mate!

I have no idea if they did or not, but it seems very unlikely

The risk was mitigated by the clash built up by MG. It was a smart move all round but I think it's going to back fire because the impact of the under investment in the squad came a year earlier than anyone would have expected.

And such are the details that fortunes are won and lost.

[JohnMcGreal]

It will be a financial disaster whenever it happens John

The imbalance is huge, and there is very little you can do to counter balance that while remaining competitive in the premier league

Dyche and the players have managed a minor miracle keeping us up with the investment we've allowed (and I fully appreciate that might well have been the maximum we could afford, though I think there was scope for more)

It will be now, yes.

It wouldn't have been pre-takeover.

The stakes are astronomically high for us now, as a result of the sale of the club.

So you can't blame people for not feeling too positive. There's very little to be positive about right now. That's just the reality of the situation.

We basically have to stay up to avoid financial ruin and we've won one game all season.

[Lancasterclaret]

The risk was mitigated by the clash built up by MG. It was a smart move all round but I think it's going to back fire because the impact of the under investment in the squad came a year earlier than anyone would have expected.

And such are the details that fortunes are won and lost.

Yup

Hey ho, what will be will be

[jedi_master]

Those who wish to bury their head in the sand would be best avoiding this thread if they also can't cope with the view of those rightly concerned about the financial sustainabliy of our club.

The concerns are without the full facts but it's remarkable that some people suggest they shouldn't be expressed without knowing all the ins and outs when the subject is about the very fabric and fundamentals of the club.

Let's all just hope we defy the odds and stay up this season.

In one there Taio, and your final line is the biggest and most important thing which makes this all go away.

Come on Burnley.

[Lancasterclaret]

It will be now, yes.

It wouldn't have been pre-takeover.

The stakes are astronomically high for us now, as a result of the sale of the club.

So you can't blame people for not feeling too positive. There's very little to be positive about right now. That's just the reality of the situation.

We basically have to stay up to avoid financial ruin and we've won one game all season.

Yes, it would have been regardless of the takeover

You lose most of your income, the saved money might have mitigated it, but that was 18 months ago now and though it would have been helpful, we'd still have to cost cut massively I feel

And I'm blaming people for not feeling too positive, I'm blaming people for taking the worse case scenario as a guarantee

I expect us to go down every season, and we don't. I expect us to go down this season, and we haven't yet.

[KRBFC]

Not sure Vydra was Dyche's choice. And Gibson certainly wasnt our first choice. Hart did seem a strange one.

I just don't get what changed, from

Keane and Gray sold to Tarkowski (pre bought) and Wood in. To a lesser extent, Heaton out and Pope (pre bought) in, Ward out, Taylor in.

Slowly upgrading and evolving the team to remain competitive while keeping the age down, suddenly we're replacing an ageing Sam Vokes with 29 year old Jay Rodriguez on £50k a week, £7m Vydra on £35k a week. Then Stephens, Joe Hart and Aaron Lennon are through the door on ridiculous money. Huge fee on Gibson, why? he was never gonna be happy being 3rd choice, I know Mee hadn't resigned but surely you figure out Mee's contract first?

Like what changed? Who on earth was signing these players and why? we were heavily in for Che Adams, I don't think he's brilliant but he'd be a far better option now than Rodriguez/Vydra. Harry Wilson would've been a great signing, we ended up with nothing instead?

Did Garlick lose trust in Dyche's recruitment seeing Hendrick walk for free, Brady offer nothing, Vydra not get a sniff and Gibson training at Boro?

[JohnMcGreal]

Yes, it would have been regardless of the takeover

You lose most of your income, the saved money might have mitigated it, but that was 18 months ago now and though it would have been helpful, we'd still have to cost cut massively I feel

And I'm blaming people for not feeling too positive, I'm blaming people for taking the worse case scenario as a guarantee

I expect us to go down every season, and we don't. I expect us to go down this season, and we haven't yet.

I can't agree with that. Relegation 2 years ago would have been disappointing but by no means disastrous. The club was in good health financially. No debts, significant cash reserves and a younger squad. The club's future was secure.

Compare that to our situation now and there's just no comparison. It's a completely different ball game now and really we have to stay up. We can't afford to get relegated.

[KRBFC]

I can't even blame Rigg because I've no idea what he was given to work with or what role he was supposed to fill. Was he simply hired so Garlick didn't have to speak to Dyche directly? was he the scapegoat for Garlick? was he primarily focused on recruitment at youth team levels?

Did Garlick really not invest in the team so he could cunningly run away with the clubs cash reserves with the sale?

I don't know what to think, incredibly weird how we were pursuing Harry Wilson for £10m+ and ended up with nothing, was that a smoke screen (look we're trying but not really) ?

[Lancasterclaret]

I can't agree with that. Relegation 2 years ago would have been disappointing but by no means disastrous. The club was in good health financially. No debts, significant cash reserves and a younger squad. The club's future was secure.

Compare that to our situation now and there's just no comparison. It's a completely different ball game now and really we have to stay up. We can't afford to get relegated.

Then we can never afford to be relegated

I think we could defo do with another season at this level to complete the squad rebuild, but having so many out of contract isn't the worst thing in the world if we go down

Must stress, I'm not saying its good under any circumstances, its just not as doom laden as has been portrayed*

*Course, if there is no investment by Feb 1st, then clearly we are in trouble both on and off the pitch

[JohnMcGreal]

Then we can never afford to be relegated

I think we could defo do with another season at this level to complete the squad rebuild, but having so many out of contract isn't the worst thing in the world if we go down

Must stress, I'm not saying its good under any circumstances, its just not as doom laden as has been portrayed*

*Course, if there is no investment by Feb 1st, then clearly we are in trouble both on and off the pitch

But surely you can see the difference between being relegated with no debt and cash in the bank, and being relegated with no money and significant debt?

Agree on the squad side of things. Losing players who are out of contract isn't a major concern, not compared to the financial situation we'll be facing.

[Raconteur]

What puzzles me is why are the national press lining up to destabilise Burnley at this time?

Do people really think the press are on the fans side?

This is a hatchet job to help stabilise new darlings Newcastle.

This is probably not the case but it would not surprise me.
Newcastle seem to have become the media darlings. Even Sky Sports News love them. When they were talking about the Wood signing, they seemed more happy that they had weakened a relegation rival and were even smiling about it

[ClaretTony]

Not sure Vydra was Dyche's choice. And Gibson certainly wasnt our first choice. Hart did seem a strange one.

Gibson came into the reckoning after we'd missed out on Mawson. I think Hart was a panic in that they thought Tom's injury might be more serious and we'd already lost Nick for a few months.

[Lancasterclaret]

But surely you can see the difference between being relegated with no debt and cash in the bank, and being relegated with no money and significant debt?

Agree on the squad side of things. Losing players who are out of contract isn't a major concern, not compared to the financial situation we'll be facing.

Course, and I've said so

But my argument is that Pace and ALK must have known it was a danger, and must have a plan in place

[Spijed]

What puzzles me is why are the national press lining up to destabilise Burnley at this time?

Do people really think the press are on the fans side?

This is a hatchet job to help stabilise new darlings Newcastle?

Whilst buying Wood was partly to try and destabilise us Watford are more than capable of finishing above Newcastle if they got a run together so I'm surprised Newcastle haven't tried to target them as well.

[Lowbankclaret]

Then we can never afford to be relegated

I think we could defo do with another season at this level to complete the squad rebuild, but having so many out of contract isn't the worst thing in the world if we go down

Must stress, I'm not saying its good under any circumstances, its just not as doom laden as has been portrayed*

*Course, if there is no investment by Feb 1st, then clearly we are in trouble both on and off the pitch

It’s a very worrying time, I don’t get good info any more as most people I know left the club.

But last week I was told the rumour that things are not good in the camp. Tarks wants to leave this window but the club will not allow it. Which goes against the article, but all the OOC players are leaving no matter the league we are in. We will have to wait 6 months to know if it’s got any substance to it.

What it did was mean I thought we are not getting out of this because the previous desire in the squad is no longer there.

[Vegas Claret]

love an article that is based on the word "could"

[gtclaret]

A painful lesson for the sizable, vocal group who were ungrateful for what they had when the club was well run.

It was not well run, it's the very reason we are in this position. Garlicky withheld funds for Dyche to recruit players. It's the on field activity that created the wealth, not Garlick, he didn't invest and that's why we are bottom of the league

[Newcastleclaret93]

It was not well run, it's the very reason we are in this position. Garlicky withheld funds for Dyche to recruit players. It's the on field activity that created the wealth, not Garlick, he didn't invest and that's why we are bottom of the league

To be fair Dyche has also ****** away a lot of finance that Garlick provided. It works both ways, would we be in this position if Gibson, Vydra etc… we’re actually used/effective.

[KateR]

another storm in a teacup, better to look at thing you actually know:

yes we were taken over in a leveraged buy out, would not be most people's choice on here but that's irrelevant, MG & Co thought it was a good enough deal to accept and stay with the club.

Deferred payments were the issue the other day but those owed the money very quickly pointed out it was an agreed decision for what ever reason

year after year of complaining every transfer period, very few names linked, got worse and worse up to the sale

a year ago we did nothing in the transfer window, but there was a summer of much improved activity and player links, very promising results at the end

this window we are being linked with may players that we would never have been linked with, some to me very promising, not easy but I'll wait & see

AP was very clear in the buy out, their model would work even in the Championship, not ideal or the plan

that article shed no new light other than the bit around being for sale, virtually everything is for sale and players and club if the price is right

10 days to go, which will show the real intent, I can give them 10 days.

if they spend 10 - 25 - 40 million this window and more than one player comes in, I'm not going to believe we are a club in crisis financially but that's just my opinion and not a fact

[cblantfanclub]

This may have been covered but I thought ALK could walk out anytime and the club reverts to the previous owners. I've read this several times.
So they would only be trying to get investment if they wanted to remain in charge and if they have had enough just default and leave. Simples.

[ClaretPete001]

To be fair Dyche has also ****** away a lot of finance that Garlick provided. It works both ways, would we be in this position if Gibson, Vydra etc… we’re actually used/effective.

I think that is really harsh most of the players Dyche have bought have been very effective.

For a club the size of Burnley there is no reason or excuse to build up 50 million quid in the bank and not to invest in an ageing squad other than to facilitate a leveraged buyout.

Or at least not one that I can think of.

[ClaretPete001]

This may have been covered but I thought ALK could walk out anytime and the club reverts to the previous owners. I've read this several times.
So they would only be trying to get investment if they wanted to remain in charge and if they have had enough just default and leave. Simples.

I'd be surprised if the American financiers who stumped up the 100 million quid would agree to that....!

[FCBurnley]

Does anybody on here know the actual terms of the purchase by ALK ?
Until we know the full terms for certain then everything is pure speculation
Having said that I have been uneasy since the talk over as I am fully aware how leveraged purchases work and they rarely end well.

[Paul Waine]

This may have been covered but I thought ALK could walk out anytime and the club reverts to the previous owners. I've read this several times.
So they would only be trying to get investment if they wanted to remain in charge and if they have had enough just default and leave. Simples.

ALK owe 3 instalments to MG and JB (and not the other former directors). Based on reports at the time of the deal, these three instalments total £68 million. No schedule has been provided of when these 3 instalments are due, however, based on AP/MG/JB these 3 instalments remain due and no payments have been missed. MG and JB have remained directors of the club. They also have the right to reclaim all shares in the club if ALK default on the 3 instalments due to them. This right to reclaim the club is their security for providing "vendor finance" to ALK when they acquired the club. Vendor finance is very common in corporate deals. Nothing unusual in MG/JB providing this financing to ALK to complete the deal at the price agreed between the sellers and the buyer.

It is purely my speculation - I've no inside knowledge. MG valued 84% of Burnley Football Club at £170 million. ALK were happy to pay £102 million - which would have been paid upfront - with the rest of the price made up of 3 instalments. A Premier League football club (84%) can be said to be worth £170m. A club that has a risk of relegation from the PL has a lower value - and £102m is the lower value agreed by MG/JB and ALK. As the first instalment wasn't paid at the end of last season, my guess is that the 3 instalments are due at the end of this season and each of the next 2 seasons (and, maybe not equal splits of £68m). If my guess has any truth, maybe part of the mitigation against relegation is that the money due from ALK to MG/JB is reduced. Maybe there's extra complexity with the amounts adjusting in the event of relegation and immediate return to the Premier League. Similarly, maybe relegation at the end of this season and not returning in any of the next 3 seasons means that the 3 instalments are all cancelled. If that was the case MG/JB would have only realised £102m for the sale of 84% of the club - and their right to step back into club ownership will also have ended.

I'm sure Alan Pace and ALK want to remain in charge through the medium term and beyond. Theirs is a multi-year plan. They will be aiming to sell BFC as a Premier League club in a number of years time making a lot of money from their ownership and capturing the returns on an asset that will continue to rise in value along with the increasing popularity and value of the best football league in the world. That's the goal that they will be selling to US investors, people who will happily stake $5m or $10m of their own money, but don't have the wealth to buy and finance a club outright in their own name.

[bfcjg]

206_550x550_Front_Color-NA.jpg (40.2 KiB) Viewed 1714 times

Hopefully it's not as bad as some commentators are hoping for and we are worried about. I'm sure the tele money is our paddle.

[ClaretPete001]

ALK owe 3 instalments to MG and JB (and not the other former directors). Based on reports at the time of the deal, these three instalments total £68 million. No schedule has been provided of when these 3 instalments are due, however, based on AP/MG/JB these 3 instalments remain due and no payments have been missed. MG and JB have remained directors of the club. They also have the right to reclaim all shares in the club if ALK default on the 3 instalments due to them. This right to reclaim the club is their security for providing "vendor finance" to ALK when they acquired the club. Vendor finance is very common in corporate deals. Nothing unusual in MG/JB providing this financing to ALK to complete the deal at the price agreed between the sellers and the buyer.

It is purely my speculation - I've no inside knowledge. MG valued 84% of Burnley Football Club at £170 million. ALK were happy to pay £102 million - which would have been paid upfront - with the rest of the price made up of 3 instalments. A Premier League football club (84%) can be said to be worth £170m. A club that has a risk of relegation from the PL has a lower value - and £102m is the lower value agreed by MG/JB and ALK. As the first instalment wasn't paid at the end of last season, my guess is that the 3 instalments are due at the end of this season and each of the next 2 seasons (and, maybe not equal splits of £68m). If my guess has any truth, maybe part of the mitigation against relegation is that the money due from ALK to MG/JB is reduced. Maybe there's extra complexity with the amounts adjusting in the event of relegation and immediate return to the Premier League. Similarly, maybe relegation at the end of this season and not returning in any of the next 3 seasons means that the 3 instalments are all cancelled. If that was the case MG/JB would have only realised £102m for the sale of 84% of the club - and their right to step back into club ownership will also have ended.

I'm sure Alan Pace and ALK want to remain in charge through the medium term and beyond. Theirs is a multi-year plan. They will be aiming to sell BFC as a Premier League club in a number of years time making a lot of money from their ownership and capturing the returns on an asset that will continue to rise in value along with the increasing popularity and value of the best football league in the world. That's the goal that they will be selling to US investors, people who will happily stake $5m or $10m of their own money, but don't have the wealth to buy and finance a club outright in their own name.

This doesn't make sense to me Paul but I may have mis-read. You seem to be suggesting that if ALK default on the 68 million the shares will revert to the former owners but what about the financiers who lent the 102 million quid? Are you saying that they do not have any hold on the assets of the club they simply lent Pace the money and that is that...!

Or are you suggesting that Pace and co could be liable for the 102 million quid should the shares revert to MG and co.

Or are you saying that MG and co are going to pay back the 102 million quid.

Are you suggesting that the financiers of the 102 million quid allowed MG and co place contractual obligations on ALK based on the "vendor finance"?

[ChorltonCharlie]

I still find the idea that Garlick did NOT do a great job of running Burnley FC bizarre. Under his stewardship we achieved things most people would have thought a pipe dream. We were competitive whilst having money in the bank which made us financially secure. You can question his motives of building up those reserves, but the day before he left the club, we were on our 5th consecutive season in the Premier League with fortunes in the bank. No club of our size achieved as much with no financial backing as we did during his tenure. Dyche played a major part in that, but Garlick interviewed and appointed Dyche when most of our expert fans wouldn’t have touched him with a bargepole. Garlick gave him a huge new contract to put off potential suitors. These were great decisions, and he deserves credit for them.

I’d love to know what Garlick thinks about his time, and why he decided to sell up. It’s not beyond the realms of imagination that the noise that got louder and louder from ‘know-it-all’ fans can’t have helped, and of course he became a very rich man through selling the club. How many Burnley fans wouldn’t do the same? There certainly seems to be double standards when you see the same people whinging about Garlick getting rich, but then desperately trying to claw back money from the club at any opportunity. Not having a go at people for taking money back, just pointing out the hypocrisy of the situation.

Back to the noise; a lot of the vocal fans see life through a perfect world. They wanted us closer to a break even model with profits reinvested in the team. The money invested would bring in players that would improve the team, we’d finish higher up the league and receive more money to reinvest and keep improving. It sounds great, but there’s a glass ceiling. Those fans want improvement every season. When signings don’t work out they blame the manager, the scouts, etc. Yet sometimes these things run their course. It’s hard to keep improving even with investment. Stoke have been a great example of this. One bad season and you’re done for. There’s no money in the bank, and the drop in income ends up with a firesale. The perfect world fans don’t care about the bad season, because in their head it’s speculate to accumulate. They don’t think about injuries or surprising loss of form. They don’t consider what we’ve seen with us lately where circumstance seems to be against us. How about a relegation rival who are dire becoming the richest club in the world just before the transfer window opens? Not everything is in our control.

Which brings me back to ALK. It’s definitely a case for some of be careful what you wish for. New owners are seen to be like a fairy godmother, but anyone who takes a keen interest in football will know that many bring a fair share of baggage. There are over 20 clubs now with billionaire owners, they can’t all be successful and for the ones that aren’t sooner or later you’re going to see the crazy stuff happening. We didn’t even get billionaires. So if you know your football and you wanted Garlick out you must have realised what a gamble it was. We’re not really in much of a different position to where we were under Garlick if he’d spent the money many of you wanted him to. If we go down it will be a firesale to keep the lights on next season. Pope, McNeil and Cornet will be put up for sale and assuming they go, we’ll need a minor miracle to bounce back next season. People wanted new owners that would invest and that’s exactly what they got. I have no sympathy for those who hounded Garlick out. You should just think yourself lucky that ALK and Pace have some pretty innovative ideas that may allow us to be competitive in the future on a shoestring.

[ClaretTony]

Garlick interviewed and appointed Dyche when most of our expert fans wouldn’t have touched him with a bargepole

He was a member of the interview panel but wrong to say he appointed him - and why wouldn't we have touched him? He rightly got an interview based on his work at Watford and then hugely impressed on interview.

[Paul Waine]

This doesn't make sense to me Paul but I may have mis-read. You seem to be suggesting that if ALK default on the 68 million the shares will revert to the former owners but what about the financiers who lent the 102 million quid? Are you saying that they do not have any hold on the assets of the club they simply lent Pace the money and that is that...!

Or are you suggesting that Pace and co could be liable for the 102 million quid should the shares revert to MG and co.

Or are you saying that MG and co are going to pay back the 102 million quid.

Are you suggesting that the financiers of the 102 million quid allowed MG and co place contractual obligations on ALK based on the "vendor finance"?

Hi Pete, first thing, based on reports at the time of takeover, the term loan from MSD is £60 million (£102m was the reported amount paid by ALK to directors at the time). We've all guessed that the interest rate is 9% - this is based on the information disclosed by Southampton who also have MSD financing, but we don't know how similar the terms are. 9% interest equates to £5.4m per annum. I think it's been suggested that it may be a "pay-in-kind" (aka PIK) loan, so the interest isn't paid in cash, but is added to the loan each year and only paid of when the loan matures. (I don't know if there's any public domain confirmation of this arrangement). Good news for the club's cash flow, if the loan is PIK, though it does mean the loan will grow every year until maturity.

Based on the charges filed at Companies House - I posted some details about these a few days back, not just in respect BFC entities, but also Calder Vale (the direct shareholder of the club) and Kettering Capital - MSD has extensive security and these includes the shareholdings that Calder Vale holds in BFC. These charges refer to a Term Loan Agreement, however, the TLA is not in the public domain and it's not possible to guess at the details. However, the financing arrangements at the time of an acquisition will have full knowledge of all other terms relating to the acquisition. MSD will have full knowledge of the arrangements entered into between ALK and MG/JB. They will have full knowledge of the vendor financing, the 3 instalments and the terms that relate to the payment or non-payment of those 3 instalments. I would expect that MSD ranks before MG/JB in any amounts due from ALK and that this will include the provisions should any of the 3 instalments not be paid by ALK to MG/JB according to their terms. I'd expect that there will be default clauses in the MSD TLA that will be triggered if ALK default to MG/JB such that MSD's position is protected. On the other hand, MSD may not wish to - and as a lender to a number of football clubs, may not be able to - step in and hold the BFC shares themselves. It may be that MG/JB recovering the shares in the club is the best way of MSD securing their own loan - and that MSD has recourse to both ALK directors and BFC for the recovery of any amounts outstanding on their loan.

As always, I have no inside knowledge. My comments are based on media reports at the time of the takeover, documents that are in the public domain through Companies House filings and a little personal knowledge of how some corporate finance deals have worked.

[GodIsADeeJay81]

The number of televised games didn’t reduce?
In fact they increased significantly?

They were moved around and didn't suit the schedules for other countries.

[Paul Waine]

He was a member of the interview panel but wrong to say he appointed him - and why wouldn't we have touched him? He rightly got an interview based on his work at Watford and then hugely impressed on interview.

Hi CT, I know you will know better than I do, however, weren't Mike Garlick and John B the joint chairmen when Sean Dyche was appointed? I'd have expected the two chairmen, representing a sizable majority of the club's shares, to be the two making the appointment. I'd have also expected MG, who has made his money running a recruitment business, have a big say in the appointment - not, that I'd expect that there were many, if any, other candidates who could have come anywhere close to being a better appointment than Sean Dyche was - and still is, in my view.

UTC

[Paul Waine]

I still find the idea that Garlick did NOT do a great job of running Burnley FC bizarre. Under his stewardship we achieved things most people would have thought a pipe dream. We were competitive whilst having money in the bank which made us financially secure. You can question his motives of building up those reserves, but the day before he left the club, we were on our 5th consecutive season in the Premier League with fortunes in the bank. No club of our size achieved as much with no financial backing as we did during his tenure. Dyche played a major part in that, but Garlick interviewed and appointed Dyche when most of our expert fans wouldn’t have touched him with a bargepole. Garlick gave him a huge new contract to put off potential suitors. These were great decisions, and he deserves credit for them.

I’d love to know what Garlick thinks about his time, and why he decided to sell up. It’s not beyond the realms of imagination that the noise that got louder and louder from ‘know-it-all’ fans can’t have helped, and of course he became a very rich man through selling the club. How many Burnley fans wouldn’t do the same? There certainly seems to be double standards when you see the same people whinging about Garlick getting rich, but then desperately trying to claw back money from the club at any opportunity. Not having a go at people for taking money back, just pointing out the hypocrisy of the situation.

Back to the noise; a lot of the vocal fans see life through a perfect world. They wanted us closer to a break even model with profits reinvested in the team. The money invested would bring in players that would improve the team, we’d finish higher up the league and receive more money to reinvest and keep improving. It sounds great, but there’s a glass ceiling. Those fans want improvement every season. When signings don’t work out they blame the manager, the scouts, etc. Yet sometimes these things run their course. It’s hard to keep improving even with investment. Stoke have been a great example of this. One bad season and you’re done for. There’s no money in the bank, and the drop in income ends up with a firesale. The perfect world fans don’t care about the bad season, because in their head it’s speculate to accumulate. They don’t think about injuries or surprising loss of form. They don’t consider what we’ve seen with us lately where circumstance seems to be against us. How about a relegation rival who are dire becoming the richest club in the world just before the transfer window opens? Not everything is in our control.

Which brings me back to ALK. It’s definitely a case for some of be careful what you wish for. New owners are seen to be like a fairy godmother, but anyone who takes a keen interest in football will know that many bring a fair share of baggage. There are over 20 clubs now with billionaire owners, they can’t all be successful and for the ones that aren’t sooner or later you’re going to see the crazy stuff happening. We didn’t even get billionaires. So if you know your football and you wanted Garlick out you must have realised what a gamble it was. We’re not really in much of a different position to where we were under Garlick if he’d spent the money many of you wanted him to. If we go down it will be a firesale to keep the lights on next season. Pope, McNeil and Cornet will be put up for sale and assuming they go, we’ll need a minor miracle to bounce back next season. People wanted new owners that would invest and that’s exactly what they got. I have no sympathy for those who hounded Garlick out. You should just think yourself lucky that ALK and Pace have some pretty innovative ideas that may allow us to be competitive in the future on a shoestring.

Great post, CC. A lot more thoughtful than many of the posts today, particularly on this thread.

UTC

[ClaretTony]

Hi CT, I know you will know better than I do, however, weren't Mike Garlick and John B the joint chairmen when Sean Dyche was appointed? I'd have expected the two chairmen, representing a sizable majority of the club's shares, to be the two making the appointment. I'd have also expected MG, who has made his money running a recruitment business, have a big say in the appointment - not, that I'd expect that there were many, if any, other candidates who could have come anywhere close to being a better appointment than Sean Dyche was - and still is, in my view.

UTC

They interviewed a big number of candidates, around twenty if I recall, then a short list and a shorter list of three which included Dyche and two others (Pressley & Lomas I think). Lee Hoos played a significant role in the process and other directors were involved.

[Lowbankclaret]

Hi Pete, first thing, based on reports at the time of takeover, the term loan from MSD is £60 million (£102m was the reported amount paid by ALK to directors at the time). We've all guessed that the interest rate is 9% - this is based on the information disclosed by Southampton who also have MSD financing, but we don't know how similar the terms are. 9% interest equates to £5.4m per annum. I think it's been suggested that it may be a "pay-in-kind" (aka PIK) loan, so the interest isn't paid in cash, but is added to the loan each year and only paid of when the loan matures. (I don't know if there's any public domain confirmation of this arrangement). Good news for the club's cash flow, if the loan is PIK, though it does mean the loan will grow every year until maturity.

Based on the charges filed at Companies House - I posted some details about these a few days back, not just in respect BFC entities, but also Calder Vale (the direct shareholder of the club) and Kettering Capital - MSD has extensive security and these includes the shareholdings that Calder Vale holds in BFC. These charges refer to a Term Loan Agreement, however, the TLA is not in the public domain and it's not possible to guess at the details. However, the financing arrangements at the time of an acquisition will have full knowledge of all other terms relating to the acquisition. MSD will have full knowledge of the arrangements entered into between ALK and MG/JB. They will have full knowledge of the vendor financing, the 3 instalments and the terms that relate to the payment or non-payment of those 3 instalments. I would expect that MSD ranks before MG/JB in any amounts due from ALK and that this will include the provisions should any of the 3 instalments not be paid by ALK to MG/JB according to their terms. I'd expect that there will be default clauses in the MSD TLA that will be triggered if ALK default to MG/JB such that MSD's position is protected. On the other hand, MSD may not wish to - and as a lender to a number of football clubs, may not be able to - step in and hold the BFC shares themselves. It may be that MG/JB recovering the shares in the club is the best way of MSD securing their own loan - and that MSD has recourse to both ALK directors and BFC for the recovery of any amounts outstanding on their loan.

As always, I have no inside knowledge. My comments are based on media reports at the time of the takeover, documents that are in the public domain through Companies House filings and a little personal knowledge of how some corporate finance deals have worked.

Having read the thread, there is a lot of talk about the finances. Please could you clarify if my simo,i fixation is about right.
Pace and Co put in 15 million
Borrowed 60 million
Used money in the bank to fund the balance of the 102 million, paid out.

Does that mean in theory, HG could buy it back for 15 million. Pace an co walk with no loss. The club is then 60 million in debt but HG and his chums are 87 million richer.

[Lowbankclaret]

I also just read Andy Carroll has rejected our offer, whilst I don’t really want him. This just adds to our woes when a crock like him rejects us.

[superdimitri]

Just another recycled news story yet an entire new topic discussing the same things over and over.

[taio]

I still find the idea that Garlick did NOT do a great job of running Burnley FC bizarre. Under his stewardship we achieved things most people would have thought a pipe dream. We were competitive whilst having money in the bank which made us financially secure. You can question his motives of building up those reserves, but the day before he left the club, we were on our 5th consecutive season in the Premier League with fortunes in the bank. No club of our size achieved as much with no financial backing as we did during his tenure. Dyche played a major part in that, but Garlick interviewed and appointed Dyche when most of our expert fans wouldn’t have touched him with a bargepole. Garlick gave him a huge new contract to put off potential suitors. These were great decisions, and he deserves credit for them.

I’d love to know what Garlick thinks about his time, and why he decided to sell up. It’s not beyond the realms of imagination that the noise that got louder and louder from ‘know-it-all’ fans can’t have helped, and of course he became a very rich man through selling the club. How many Burnley fans wouldn’t do the same? There certainly seems to be double standards when you see the same people whinging about Garlick getting rich, but then desperately trying to claw back money from the club at any opportunity. Not having a go at people for taking money back, just pointing out the hypocrisy of the situation.

Back to the noise; a lot of the vocal fans see life through a perfect world. They wanted us closer to a break even model with profits reinvested in the team. The money invested would bring in players that would improve the team, we’d finish higher up the league and receive more money to reinvest and keep improving. It sounds great, but there’s a glass ceiling. Those fans want improvement every season. When signings don’t work out they blame the manager, the scouts, etc. Yet sometimes these things run their course. It’s hard to keep improving even with investment. Stoke have been a great example of this. One bad season and you’re done for. There’s no money in the bank, and the drop in income ends up with a firesale. The perfect world fans don’t care about the bad season, because in their head it’s speculate to accumulate. They don’t think about injuries or surprising loss of form. They don’t consider what we’ve seen with us lately where circumstance seems to be against us. How about a relegation rival who are dire becoming the richest club in the world just before the transfer window opens? Not everything is in our control.

Which brings me back to ALK. It’s definitely a case for some of be careful what you wish for. New owners are seen to be like a fairy godmother, but anyone who takes a keen interest in football will know that many bring a fair share of baggage. There are over 20 clubs now with billionaire owners, they can’t all be successful and for the ones that aren’t sooner or later you’re going to see the crazy stuff happening. We didn’t even get billionaires. So if you know your football and you wanted Garlick out you must have realised what a gamble it was. We’re not really in much of a different position to where we were under Garlick if he’d spent the money many of you wanted him to. If we go down it will be a firesale to keep the lights on next season. Pope, McNeil and Cornet will be put up for sale and assuming they go, we’ll need a minor miracle to bounce back next season. People wanted new owners that would invest and that’s exactly what they got. I have no sympathy for those who hounded Garlick out. You should just think yourself lucky that ALK and Pace have some pretty innovative ideas that may allow us to be competitive in the future on a shoestring.

A stunningly good post to the extent that it's one of the best posts for a long, long time.

[paulatky]

I also just read Andy Carroll has rejected our offer, whilst I don’t really want him. This just adds to our woes when a crock like him rejects us.

Turned down 1st offer
Still negotiating

[Paul Waine]

Having read the thread, there is a lot of talk about the finances. Please could you clarify if my simo,i fixation is about right.
Pace and Co put in 15 million
Borrowed 60 million
Used money in the bank to fund the balance of the 102 million, paid out.

Does that mean in theory, HG could buy it back for 15 million. Pace an co walk with no loss. The club is then 60 million in debt but HG and his chums are 87 million richer.

Hi Lowbank, who's "HG" - I assume you mean Mike Garlick?

Based on what was reported in the media at the time: ALK had £15m capital; MSD lent ALK £60m; BFC had cash in bank - a lot of it being required to pay players wages and run the club - but we've only seen the accounts at 31st July 2020, not the club's accounts at 31-Dec-2020. A combination of these funds was used to pay £102m for 84% of the shares, with a reported additional £68m to be paid in 3 instalments.

It was also reported at the time that MG (and, I think, JB) would get the club back if ALK defaulted on the £68m, or I assume any part of the 3 instalments. However, what this didn't take into account is the security that MSD hold, which, from public domain documents we know includes Calder Vales shares in BFC.

MG won't need to pay any money to get the club back - though he will have lost his share of the £68m, about half, if this happens.

ALK will continue to have obligations to MSD for the full amount of the loan (plus interest) from MSD - though, as the Term Loan Agreement is not in the public domain we don't know the details.

BFC will continue as security for MSD loan - and will continue to be the lender of whatever monies ALK have borrowed from BFC, which probably includes the reported £50m ALK borrowed from BFC to pay part of the £102m to the former directors.

If MSD are unable to recover any money from ALK, then, logic says that they will exercise their security over BFC assets and see how much they can recover via BFC. Similarly, if MSD can't recover any money from ALK there's no chance of BFC recovering any of their loan to ALK.

End result, if all these things come to pass: BFC is back where it was before Mike Garlick and John B arrived as shareholders - but we've had 7 seasons in the Premier League under their leadership.

I want the ride to continue, but I've enjoyed it all so far.

UTC

[Lowbankclaret]

Turned down 1st offer
Still negotiating

Let’s agree he is not the future of the club, he is a 6 month stop gap who might play 6 games if he can stay injury free. If we want him it should be an easy negotiation. I dont get this public rejection crap.
It should easy, we tell him how we will pay, he asks for more. If we really want him. Negotiate to an agreement or agree it’s not happening and move on.
We need players now, not in two weeks time.

[Burnley1989]

Hi Lowbank, who's "HG" - I assume you mean Mike Garlick?

Based on what was reported in the media at the time: ALK had £15m capital; MSD lent ALK £60m; BFC had cash in bank - a lot of it being required to pay players wages and run the club - but we've only seen the accounts at 31st July 2020, not the club's accounts at 31-Dec-2020. A combination of these funds was used to pay £102m for 84% of the shares, with a reported additional £68m to be paid in 3 instalments.

It was also reported at the time that MG (and, I think, JB) would get the club back if ALK defaulted on the £68m, or I assume any part of the 3 instalments. However, what this didn't take into account is the security that MSD hold, which, from public domain documents we know includes Calder Vales shares in BFC.

MG won't need to pay any money to get the club back - though he will have lost his share of the £68m, about half, if this happens.

ALK will continue to have obligations to MSD for the full amount of the loan (plus interest) from MSD - though, as the Term Loan Agreement is not in the public domain we don't know the details.

BFC will continue as security for MSD loan - and will continue to be the lender of whatever monies ALK have borrowed from BFC, which probably includes the reported £50m ALK borrowed from BFC to pay part of the £102m to the former directors.

If MSD are unable to recover any money from ALK, then, logic says that they will exercise their security over BFC assets and see how much they can recover via BFC. Similarly, if MSD can't recover any money from ALK there's no chance of BFC recovering any of their loan to ALK.

End result, if all these things come to pass: BFC is back where it was before Mike Garlick and John B arrived as shareholders - but we've had 7 seasons in the Premier League under their leadership.

I want the ride to continue, but I've enjoyed it all so far.

UTC

It’s either Hugh Grant or Harry Garlick