Burnley Football Club - first accounts under ALK

[dandeclaret]

Totally agree with this, however for this strategy to be a success and not weaken the side, there needs to be a replacement either already in the ranks or identified to recruit at a lower fee than the outgoing player. If you think back to the start of last season when Tarky's stock was probably at its highest, (couple of caps for England, 2 years left on his contract) we lined up at Leicester with Jimmy Dunne and Kevin Long as our first choice centre backs. In fact if you take away players playing out of position or untried youth players, they were our only choice centre backs. And there lies the flaw in that strategy, failing to recruit for the future and preferring journeymen who will sit on the bench 11 months out of 12 and provide cover when needed or ageing "good pros" who offer nothing in resale value, do not improve the starting 11 but provide a body on the pitch/bench and are good for morale in the dressing room.

Wasn’t the lad who went to Norwich the missing piece?

[Paul Waine]

So really.... Nobody knows what it was for?

Put it down as good risk management to have £12.5 million cash (less costs) rather than a £12.5m debt to be paid by NUFC next 31st Jan.

If we don't get the points required from our 4 games, we will be in a good place to discuss "significant repayment" with MSD.

If we are rebuilding for Premier League again next season, there's more cash immediately available to support the rebuilding plans.

UTC

[Herts Clarets]

Wasn’t the lad who went to Norwich the missing piece?

Left sided CB so he appeared to be cover/replacement for Ben Mee, who at the time it was rumoured to be stalling on extending his contract.

[dsr]

Totally agree with this, however for this strategy to be a success and not weaken the side, there needs to be a replacement either already in the ranks or identified to recruit at a lower fee than the outgoing player. If you think back to the start of last season when Tarky's stock was probably at its highest, (couple of caps for England, 2 years left on his contract) we lined up at Leicester with Jimmy Dunne and Kevin Long as our first choice centre backs. In fact if you take away players playing out of position or untried youth players, they were our only choice centre backs. And there lies the flaw in that strategy, failing to recruit for the future and preferring journeymen who will sit on the bench 11 months out of 12 and provide cover when needed or ageing "good pros" who offer nothing in resale value, do not improve the starting 11 but provide a body on the pitch/bench and are good for morale in the dressing room.

True to an extent, but centre back is the area where we have been recruiting in advance as you suggest. When we had Keane we signed Tarkowski who waited his turn, when we had Tarkowski we signed Gibson (went a bit wrong there, but Gibson should have been playing ahead of Long or Dunne), when we still had Tarkowski we signed Collins. Mee being the common factor all through, of course.

[dsr]

Put it down as good risk management to have £12.5 million cash (less costs) rather than a £12.5m debt to be paid by NUFC next 31st Jan.

If we don't get the points required from our 4 games, we will be in a good place to discuss "significant repayment" with MSD.

If we are rebuilding for Premier League again next season, there's more cash immediately available to support the rebuilding plans.

UTC

These deals can be negotiated in advance (with zero or negligible fee) and then activated quickly if needed. It's not good management to borrow £millions, at a fee presumably close to £1m, for cash that isn't needed. It isn't necessary to get it "just in case".

[dsr]

Left sided CB so he appeared to be cover/replacement for Ben Mee, who at the time it was rumoured to be stalling on extending his contract.

They can play either side. Tarkowski is supposedly a right sided centre back, but has he looked out of place since Mee got injured?

[Nori1958]

These deals can be negotiated in advance (with zero or negligible fee) and then activated quickly if needed. It's not good management to borrow £millions, at a fee presumably close to £1m, for cash that isn't needed. It isn't necessary to get it "just in case".

Similar to not spending the 80 mill for years..... Just in case...

[Newcastleclaret93]

Put it down as good risk management to have £12.5 million cash (less costs) rather than a £12.5m debt to be paid by NUFC next 31st Jan.

If we don't get the points required from our 4 games, we will be in a good place to discuss "significant repayment" with MSD.

If we are rebuilding for Premier League again next season, there's more cash immediately available to support the rebuilding plans.

UTC

Got to love how you can turn any Situation into a positive.

Clearly just trying to cover your back after your exciting times quip.

[ClaretPete001]

Totally agree with this, however for this strategy to be a success and not weaken the side, there needs to be a replacement either already in the ranks or identified to recruit at a lower fee than the outgoing player. If you think back to the start of last season when Tarky's stock was probably at its highest, (couple of caps for England, 2 years left on his contract) we lined up at Leicester with Jimmy Dunne and Kevin Long as our first choice centre backs. In fact if you take away players playing out of position or untried youth players, they were our only choice centre backs. And there lies the flaw in that strategy, failing to recruit for the future and preferring journeymen who will sit on the bench 11 months out of 12 and provide cover when needed or ageing "good pros" who offer nothing in resale value, do not improve the starting 11 but provide a body on the pitch/bench and are good for morale in the dressing room.

Selling proven Premiership player like Tarko and replacing them with young talent is a risk. The fans won't like it and it puts pressure on the manager who is likely to get fired if the results are poor as a consequence of it. It also reduces the experience in the squad to manage a game plan.

Brentford is an interesting model and one that gives a potential direction for a future strategy. However, the club has been funded by a rich backer and the accounts are quite something with a turnover of £15 million and overheads of over £70 million in the accounts Y/E 2021 all funded by players sales of £44 milliom.

The club runs a a wage bill well over £200 per cent of turnover and presumable is why they can compete for under valued young talent in the Championship.

Brentford accounts: https://find-and-update.company-informa ... ng-history

Fundamentally, if you want to fun a model like this at a club the size of Brentford you have to be able to cope with relegation because it is going to happen eventually.

[Long Time Lurker]

Put it down as good risk management to have £12.5 million cash (less costs) rather than a £12.5m debt to be paid by NUFC next 31st Jan.

If we don't get the points required from our 4 games, we will be in a good place to discuss "significant repayment" with MSD.

If we are rebuilding for Premier League again next season, there's more cash immediately available to support the rebuilding plans.

UTC

25 Events after the reporting date

Following the period end the club acquired the player registrations of Wayne Hennessey, Maxwell Cornet, Connor Roberts, Aaron Lennon and Wout Weghorst on permanent playing contracts.

The player registration of Chris Wood has been disposed of after the year end.

The net expenditure arising from these transfers is £1,300,000

Following the year end £10,000,000 was advanced to a fellow group company.

Note 25 indicates that the money from the sale of Chris Wood has already been spent. The cost of the players we bought was almost covered by the sale of Chris Wood. We needed to find and chip in another £1.3m on top of what we got from Wood.

[jedi_master]

25 Events after the reporting date

Following the period end the club acquired the player registrations of Wayne Hennessey, Maxwell Cornet, Connor Roberts, Aaron Lennon and Wout Weghorst on permanent playing contracts.

The player registration of Chris Wood has been disposed of after the year end.

The net expenditure arising from these transfers is £1,300,000

Following the year end £10,000,000 was advanced to a fellow group company.

Note 25 indicates that the money from the sale of Chris Wood has already been spent. The cost of the players we bought was almost covered by the sale of Chris Wood. We needed to find and chip in another £1.3m on top of what we got from Wood.

Considering we signed all of them before we sold Wood (except Weghorst), how did we sign them all?

[ClaretPete001]

Similar to not spending the 80 mill for years..... Just in case...

It is similar, and in both cases it's poor management of resources whether it's done to facilitate a leveraged buyout or because the wheels are coming off the leveraged buyout.

[Nori1958]

Having read a few articles, apparently getting loans against upcoming transfer fees is not uncommon, and lots of clubs do it... The bank we borrowed from have the same arrangement with several clubs

[Paul Waine]

Our real problem is that the club hasn't made any real money since we've been in the Premier League, our stock price rose with promotion and then froze.

Arguably, the only viable way for a smaller club like ours to make money from football is to bounce between the PL and the Championship at regular intervals. The club wins promotion, the coffers are filled by the broadcast revenue, all of the players get promotion wage increases ( that still place them at the bottom of the PL pay scale ), a bit of money is spent signing new players, new multi-year sponsorship deals are signed, the club is relegated, the coffers are filled again with parachute payments, a player sale or two are sold and the wages return to Championship levels.

The simple financial truth is that we don't have and we never have had the revenue streams that could support the massive borrowing that underpinned the leveraged buyout by ALK. Everything hangs on them finding investors to pump money into the club in exchange for equity, which they have so far failed to do in their 14 months at the club. It is somewhat hypocritical that they fired Dyche for his poor results on the pitch when the financial development results off the pitch have been far worse.

Hi LongTime, firstly, edited a lot of your post to save space for everyone.

Your first statement, including "our stock price rose with promotion and then froze" is so wrong, on many many levels. Of course, the first thing is there is no "BFC stock price." The club's shares aren't publicly traded and aren't quoted on any stock exchange. However, we can determine that the value of BFC has increased with the number of seasons the club has been in the Premier League. Any club that is expected to be in the Premier League for one season and then be relegated will always be worth less than a team that is judged to have a good prospect to become established in the Premier League. Then, in the time since BFC was first promoted under Mike Garlick and John B (they were co-chairmen at the time) with Sean Dyche as manager, the Premier League tv income has grown and grown again. It's the growth in value of the Premier League that attracts the owners and especially US owners who compare Premier League club values with the values of US sports teams. So, although there are challenges for BFC as a small town club, we can be very confident the value of the club has risen - as the tide of growing Premier League values has raised the values of all boats, so to speak.

I left your second paragraph in. A yo-yo club isn't going to be able to sign "multi-year sponsorship deals" of any significance if the club's plans are to be relegated at the end of their Premier League season. So, there is only tv money, including parachute payments, to boost club funds.

I'm surprised you think it's hypocritical to fire a manager who is only bringing poor results on the field. Surely, a Premier League club is a lot more attractive investment proposition than one that has been relegated. It's necessary to have the required football success to be able to achieve the new investor successes.

UTC

[Paul Waine]

These deals can be negotiated in advance (with zero or negligible fee) and then activated quickly if needed. It's not good management to borrow £millions, at a fee presumably close to £1m, for cash that isn't needed. It isn't necessary to get it "just in case".

Don't you think doing the deal on 3rd May and the season coming to an end on 22nd May is "activating the deal quickly..."

There's always going to be a fee to bring forward cashflows by 9 months. Whether it is done less than 3 weeks before the end of the season or not is neither here nor there.

Good to hear that you think it's for cash "that isn't needed." I thought you were in the "glass half empty" camp.

UTC

[bfcjg]

Cutting through all the accountancy talk and miniscule detail, I reckon if MJ keeps us up it will be almost if not equivalent to what Barry Kilby did to support the club when ITV digital went tits up.

[Paul Waine]

25 Events after the reporting date

Following the period end the club acquired the player registrations of Wayne Hennessey, Maxwell Cornet, Connor Roberts, Aaron Lennon and Wout Weghorst on permanent playing contracts.

The player registration of Chris Wood has been disposed of after the year end.

The net expenditure arising from these transfers is £1,300,000

Following the year end £10,000,000 was advanced to a fellow group company.

Note 25 indicates that the money from the sale of Chris Wood has already been spent. The cost of the players we bought was almost covered by the sale of Chris Wood. We needed to find and chip in another £1.3m on top of what we got from Wood.

But, we hadn't received £12.5 million for Chris Wood. If we had there'd be nothing to cover the advance from Macquarie.

I've not tried to do the maths, but I think "net expenditure" is all the transfer fees toted up, as pluses and minuses, without regard to when the cash comes into or leaves the club. It's possible that the "net expenditure" also includes agents' fees as they are also part of the cost of doing these deals.

Of course, it doesn't include add-ons. The add-ons are reported elsewhere in the accounts, though, I think only for the players already signed at the 31st July. Note that Nathan Collins, for example, isn't included in the "Events after the reporting date."

[ClaretPete001]

Considering we signed all of them before we sold Wood (except Weghorst), how did we sign them all?

It is a quote from note 25 of the accounts saying the player registrations are accounted for after the year end.

The accounting year referred to is the one where we made a slight surplus from player sales.

In effect, by not investing in playing staff the wage bill was reduced from £100 million to £86 million.

I think long time lurker is assuming that the money from Chris Wood is the £10 million transferred out of the club mentioned in Note: 25.

[ClaretPete001]

But, we hadn't received £12.5 million for Chris Wood. If we had there'd be nothing to cover the advance from Macquarie.

I've not tried to do the maths, but I think "net expenditure" is all the transfer fees toted up, as pluses and minuses, without regard to when the cash comes into or leaves the club. It's possible that the "net expenditure" also includes agents' fees as they are also part of the cost of doing these deals.

Of course, it doesn't include add-ons. The add-ons are reported elsewhere in the accounts, though, I think only for the players already signed at the 31st July. Note that Nathan Collins, for example, isn't included in the "Events after the reporting date."

Indeed but does it not explain why the accounts look relatively positive? We presumably sold Gibson and one or two others in the accounting period, which is why we made a profit on player sales.

The complete lack of investment in that season and relatively poor performance also meant players wages dropped £14 million, which almost entirely covered the cost of the loss of broadcast revenue and match day income.

It also explains the high cash balance because the costs of signing came in after the year end meaning that wages will more than likely be back up to around the figure they were at in the previous year.

And as I predicted large cash movements occurred after the year end to other companies in the group.

[Mala591]

Why not merge all these rather ‘shady’ (tax avoiding?) Burnley FC companies into one easily understood (and with much clearer accounting) company. It could be called:

‘Burnley Football Club Ltd.’

[gawthorpe_view]

Don't worry i was only being facetious (i hope!)

I know!

[dsr]

Don't you think doing the deal on 3rd May and the season coming to an end on 22nd May is "activating the deal quickly..."

There's always going to be a fee to bring forward cashflows by 9 months. Whether it is done less than 3 weeks before the end of the season or not is neither here nor there.

Good to hear that you think it's for cash "that isn't needed." I thought you were in the "glass half empty" camp.

UTC

The point was that IF we needs the funds only if we get relegated, they would not need to borrow them now. The loan could be agreed and the terms agreed, but the button not pushed unless and until relegation was confirmed. It's the negotiation of a loan that takes the time, not the transfer of funds.

They have borrowed this money because they do need it, not because they might need it. I have not said that the money isn't needed, you have misunderstood what I was trying to say.

[FeedTheArf]

Put it down as good risk management to have £12.5 million cash (less costs) rather than a £12.5m debt to be paid by NUFC next 31st Jan.

If we don't get the points required from our 4 games, we will be in a good place to discuss "significant repayment" with MSD.

If we are rebuilding for Premier League again next season, there's more cash immediately available to support the rebuilding plans.

UTC

I still can't accept that the Premier League allowed a takeover to happen that put significant debt on to a club. I must admit, I've been a bit naive to the United protests of the Glazers. Aside from Burnley I don't really follow other clubs, or even football generally, that closely. From afar I found it hard to work out what they were protesting for. They were still spending 100s of millions each year on players, but it's the principle of the thing. In fact, our situation is much worse as United can well afford to make loan and debt repayments due to the sheer size of the club and income. The only way we make those repayments is to sell players and fleece the club. It stinks, and I still find it hard to believe that our fanbase haven't been more vocal about it (aside from bits on this messageboard and social media).

As far as I can see the club have been saddled with 100m+ of debt, just so we could get rid of Garlick and sign players from abroad? Oh, and keep the manager happy, who has since been sacked with a multi-million pound payout no doubt. The only people this deal benefits is Garlick & co and Pace & co.

I'm struggling to think of such a dramatic turnaround of another clubs fortunes in the space of 18 months.

The mantra for the club used to be 'built, not bought'. Should it now be 'borrowed, not bought'?!?

[GodIsADeeJay81]

The PL allow clubs to be placed under debt by their owners, not sure why anyone thinks they'd be against our takeover...

[Chester Perry]

The point was that IF we needs the funds only if we get relegated, they would not need to borrow them now. The loan could be agreed and the terms agreed, but the button not pushed unless and until relegation was confirmed. It's the negotiation of a loan that takes the time, not the transfer of funds.

They have borrowed this money because they do need it, not because they might need it. I have not said that the money isn't needed, you have misunderstood what I was trying to say.

quoting you as you are the latest post in the siscussion no the point you are making

The real point is why did we not get the fee in full which is what a lot of the media were suggesting - it is all well and good saying a net expenditure pf £1.3m was made on the transfers - I question that when agents fees are thrown into the mix - but then to trade away profit for cash on top

[Paul Waine]

Indeed but does it not explain why the accounts look relatively positive? We presumably sold Gibson and one or two others in the accounting period, which is why we made a profit on player sales.

The complete lack of investment in that season and relatively poor performance also meant players wages dropped £14 million, which almost entirely covered the cost of the loss of broadcast revenue and match day income.

It also explains the high cash balance because the costs of signing came in after the year end meaning that wages will more than likely be back up to around the figure they were at in the previous year.

And as I predicted large cash movements occurred after the year end to other companies in the group.

Hi Pete, all the player contract activity that took place in the accounting period to 31st July 2021 is included in the accounts, including Joe Hart, not having his contract renewed. Take out some high wages and, naturally, the total wage cost falls. However, the fall is not quite as big as you mention, because the previous accounting period covered 13 months, in response to covid-19 delaying the completion of the 2019/20 season.

Remember the cash balance includes the tv money received in July as first instalment for the upcoming season.

The "large cash movements" including £65 million MSD loan - though that originally went from MSD to Calder Vale - and the £37 million from the club's bank account took place during the accounting period. Yes, there's a further £10 million advanced after the balance sheet date. As we know that the small shareholders were paid out earlier this calendar year my speculation is that the £10 million covers these payments to small shareholders.

[Paul Waine]

Got to love how you can turn any Situation into a positive.

Clearly just trying to cover your back after your exciting times quip.

Hi Newcastle, just sharing my understanding of these things.

UTC

[Chester Perry]

I still can't accept that the Premier League allowed a takeover to happen that put significant debt on to a club. I must admit, I've been a bit naive to the United protests of the Glazers. Aside from Burnley I don't really follow other clubs, or even football generally, that closely. From afar I found it hard to work out what they were protesting for. They were still spending 100s of millions each year on players, but it's the principle of the thing. In fact, our situation is much worse as United can well afford to make loan and debt repayments due to the sheer size of the club and income. The only way we make those repayments is to sell players and fleece the club. It stinks, and I still find it hard to believe that our fanbase haven't been more vocal about it (aside from bits on this messageboard and social media).

As far as I can see the club have been saddled with 100m+ of debt, just so we could get rid of Garlick and sign players from abroad? Oh, and keep the manager happy, who has since been sacked with a multi-million pound payout no doubt. The only people this deal benefits is Garlick & co and Pace & co.

I'm struggling to think of such a dramatic turnaround of another clubs fortunes in the space of 18 months.

The mantra for the club used to be 'built, not bought'. Should it now be 'borrowed, not bought'?!?

to be clear the club have £65m of debt to MSD and £12.5m to Macquarie Bank

[Chester Perry]

Hi Pete, all the player contract activity that took place in the accounting period to 31st July 2021 is included in the accounts, including Joe Hart, not having his contract renewed. Take out some high wages and, naturally, the total wage cost falls. However, the fall is not quite as big as you mention, because the previous accounting period covered 13 months, in response to covid-19 delaying the completion of the 2019/20 season.

Remember the cash balance includes the tv money received in July as first instalment for the upcoming season.

The "large cash movements" including £65 million MSD loan - though that originally went from MSD to Calder Vale - and the £37 million from the club's bank account took place during the accounting period. Yes, there's a further £10 million advanced after the balance sheet date. As we know that the small shareholders were paid out earlier this calendar year my speculation is that the £10 million covers these payments to small shareholders.

and the maximum cash liability there was around £6.5m the rest is club credit - there is still no indication of how many of those shares were eventually sold - either on the club's company details web page or at Companies House

[Chester Perry]

Interesting if possibly flawed analysis in the Telegraph today around spending wages and fees - comes out in big favour for Brentford

https://12ft.io/proxy?q=https%3A%2F%2Fw ... erguson%2F

two sets of tables
https://cf-particle-html.eip.telegraph. ... 72d1b.html

https://cf-particle-html.eip.telegraph. ... c698f.html

[Paul Waine]

I still can't accept that the Premier League allowed a takeover to happen that put significant debt on to a club. I must admit, I've been a bit naive to the United protests of the Glazers. Aside from Burnley I don't really follow other clubs, or even football generally, that closely. From afar I found it hard to work out what they were protesting for. They were still spending 100s of millions each year on players, but it's the principle of the thing. In fact, our situation is much worse as United can well afford to make loan and debt repayments due to the sheer size of the club and income. The only way we make those repayments is to sell players and fleece the club. It stinks, and I still find it hard to believe that our fanbase haven't been more vocal about it (aside from bits on this messageboard and social media).

As far as I can see the club have been saddled with 100m+ of debt, just so we could get rid of Garlick and sign players from abroad? Oh, and keep the manager happy, who has since been sacked with a multi-million pound payout no doubt. The only people this deal benefits is Garlick & co and Pace & co.

I'm struggling to think of such a dramatic turnaround of another clubs fortunes in the space of 18 months.

The mantra for the club used to be 'built, not bought'. Should it now be 'borrowed, not bought'?!?

I guess you weren't supporting Burnley in the 60s. In 1968 the youth (u18s) team won the FA Youth Cup. Those youngsters were fantastic. We beat Leeds 5 - 1 shortly afterwards. Someone anointed the team as the "team of the 70s." Then we sold Ralph Coates, Martin Dobson, Dave Thomas... The club, ever since the maximum wage was abolished in early 60s, has been a "selling club" - and, it was always the star player that had to be sold.

You ask why did the Premier League allow a takeover that put significant debt on the club? Well, yes, it's ManU's model. We've learnt with the proposed sale of Chelsea that that club carries £1.6 billion debt. And, there are many, many clubs that carry debt. It doesn't matter to the Premier League (or EFL or FA) if the debt arises because the club has paid out too much on player wages and transfer fees. Or, is in debt because ITV Digital has defaulted, but player contracts still had to be honoured. Yes, there are "financial fair play" rules - but, they aren't really that serious about those rules. Big club, yes, give us a share of your wealth and we'll help you do whatever you want to do. Smaller club, well.... let's see how you get on, but I guess you aren't putting a lot in the pot for the Premier league bosses...

Yes, it's the smell of football liniment or whatever they rub on their bumps and bruises these days. That's football.

UTC

[OffTheBar]

to be clear the club have £65m of debt to MSD and £12.5m to Macquarie Bank

And the 12.5mm is in an entirely different bracket to the 65!

[Paul Waine]

and the maximum cash liability there was around £6.5m the rest is club credit - there is still no indication of how many of those shares were eventually sold - either on the club's company details web page or at Companies House

I think the safe assumption may be that the club credit is also part of the £10 million advance.

BFC Holdings next Confirmation Statement is due by 14th October. We should be able to work out the delta on shares owned when that is filed.

UTC

[Paul Waine]

And the 12.5mm is in an entirely different bracket to the 65!

Agree. £12.5 million covered by debt owed to BFC by Newcastle United.

[jedi_master]

It just seems very much like we’re now built on top of a house of cards that has been placed in the middle of a particularly windy valley.

Even the decision to offer ‘club credit’ to minor shareholders (thereby removing future income from season ticket and shirt sales from these people - no reflection on them taking the club up on this intended there may I add, I’d have taken it too) rather than, you know, paying for them struck me as perplexing at the time. Is that a regular practise in these sorts of shareholding acquisitions?

[Blakesboots]

Got to love how you can turn any Situation into a positive.

Clearly just trying to cover your back after your exciting times quip.

These are exciting times.

[Paul Waine]

Why not merge all these rather ‘shady’ (tax avoiding?) Burnley FC companies into one easily understood (and with much clearer accounting) company. It could be called:

‘Burnley Football Club Ltd.’

A few years back Longside Properties was set up. Someone will recall the details better than I do. It was when the club need to sell the ground to raise finance. Part of the recovery from ITV Digital going bust, I understand. Then "Longside" was bought back. Then there new shareholders came into the club and Burnley Football Club Holdings was created.

More recently, Calder Vale, Kettering Capital and Velocity Sports (Jersey) were set up by ALK as part of their acquisition of the club. Before that ALK Capital has been formed in the US and Velocity Sports Partners (US) alongside it. Given that the club's owners are US individuals and they are seeking (and we know of some of them) US (and other non-UK) investors, all the other new corporate entities are required to enable this to happen. There's nothing "shady" about it. Yes, it manages the tax situation in both the UK and in the US and maybe in other countries, too. That's what happens when any entity extends beyond any national boundaries.

Yes, we only see what is required to be reported by the UK companies. The Burnley FC Holdings group accounts do, effectively, give us the clear accounting information of the football club for the accounting period and at the balance sheet date - plus all the related party and post-accounting period date additional information. Unfortunately, we are all curious and would all like to know the full details of what's happened up to yesterday evening - plus, of course, the plans through to the end of the season and the plans for the summer transfer window. We've got to look elsewhere for those things.

UTC

[ClaretPete001]

Hi Pete, all the player contract activity that took place in the accounting period to 31st July 2021 is included in the accounts, including Joe Hart, not having his contract renewed. Take out some high wages and, naturally, the total wage cost falls. However, the fall is not quite as big as you mention, because the previous accounting period covered 13 months, in response to covid-19 delaying the completion of the 2019/20 season.

Remember the cash balance includes the tv money received in July as first instalment for the upcoming season.

The "large cash movements" including £65 million MSD loan - though that originally went from MSD to Calder Vale - and the £37 million from the club's bank account took place during the accounting period. Yes, there's a further £10 million advanced after the balance sheet date. As we know that the small shareholders were paid out earlier this calendar year my speculation is that the £10 million covers these payments to small shareholders.

Hi Paul,

Take your point about the 13 month period but the point is still that the loss in 21/22 is mitigated by the lack of signings in that year and the sale of players like Gibson etc., which generated around £10 million and will not be replicated this year.

The £10 million transferred after the accounting date is substantive and we can conjecture what it was for but none of us know. It depends upon how close to the end of the 31st of July deadline it occurred to warrant a mention in the accounts. I would presume it happened close enough to the July y/e to suggest it wasn't for the small shareholders but you could be right.

But again it is not £10 million being spent to improve playing assets. Clubs the size of Burnley can hardly afford to be doing that...!

The cash balance does include the TV money and as you have said before that will be used to pay wages etc; however, as described above, another £10 million went out of cash not to mention funds associated with the initial payments to sign players including agents fees.

I don't know what proportion of the TV money is paid in July - do you (or anyone else know?).

I think the point is that the good performance in the accounts is almost entirely due to the decision not to invest in players in that season as opposed to any structural changes in revenue streams (not possible because of Covid) or reduced costs.

[FeedTheArf]

I guess you weren't supporting Burnley in the 60s. In 1968 the youth (u18s) team won the FA Youth Cup. Those youngsters were fantastic. We beat Leeds 5 - 1 shortly afterwards. Someone anointed the team as the "team of the 70s." Then we sold Ralph Coates, Martin Dobson, Dave Thomas... The club, ever since the maximum wage was abolished in early 60s, has been a "selling club" - and, it was always the star player that had to be sold.

You ask why did the Premier League allow a takeover that put significant debt on the club? Well, yes, it's ManU's model. We've learnt with the proposed sale of Chelsea that that club carries £1.6 billion debt. And, there are many, many clubs that carry debt. It doesn't matter to the Premier League (or EFL or FA) if the debt arises because the club has paid out too much on player wages and transfer fees. Or, is in debt because ITV Digital has defaulted, but player contracts still had to be honoured. Yes, there are "financial fair play" rules - but, they aren't really that serious about those rules. Big club, yes, give us a share of your wealth and we'll help you do whatever you want to do. Smaller club, well.... let's see how you get on, but I guess you aren't putting a lot in the pot for the Premier league bosses...

Yes, it's the smell of football liniment or whatever they rub on their bumps and bruises these days. That's football.

UTC

No I wasn't around in the 60s, but I remember several seasons under Cotterill where we sold our best player in January to balance the books. i don't object to that. We were selling a player to keep the club going, either because the crowds weren't big enough or the club was still reeling from the ITV mess, but this would be different. We'd be selling players to effectively put money in Pace and co's pocket when they come to sell the club. Selling players for the benefit of Burnley FC is very different to selling players for the benefit of investors. That might well be the way that our club or even football in general is going, but I just can't justify it.

Many clubs might carry debt, but is that because they've stretched beyond their means to compete in terms of transfers and wages? Or because some guy with little to no money (in PL terms!), comes along and puts a hell of a lot of risk on to a club with no risk to himself, hoping it pays off?

[OffTheBar]

Hi Paul,

Take your point about the 13 month period but the point is still that the loss in 21/22 is mitigated by the lack of signings in that year and the sale of players like Gibson etc., which generated around £10 million and will not be replicated this year.

Signings don’t affect the profit/loss directly in that year. We will have a roughly 20m gain on sales in this next year with Wood I imagine, not knowing fully how much his value had been amortised.

[Mala591]

If we get relegated from the PL, it won’t be ‘exciting times’ it will be ‘exiting times’

[ClaretPete001]

Signings don’t affect the profit/loss directly in that year. We will have a roughly 20m gain on sales in this next year with Wood I imagine, not knowing fully how much his value had been amortised.

I'm not sure I said they did - the profit/loss on the disposal of player contracts is in the accounts

[Spike]

have we got the money early to pay off the 4 year contracts we recently tore up?

[Chester Perry]

have we got the money early to pay off the 4 year contracts we recently tore up?

one of a number of possiblities

[Paul Waine]

Hi Paul,

Take your point about the 13 month period but the point is still that the loss in 21/22 is mitigated by the lack of signings in that year and the sale of players like Gibson etc., which generated around £10 million and will not be replicated this year.

The £10 million transferred after the accounting date is substantive and we can conjecture what it was for but none of us know. It depends upon how close to the end of the 31st of July deadline it occurred to warrant a mention in the accounts. I would presume it happened close enough to the July y/e to suggest it wasn't for the small shareholders but you could be right.

But again it is not £10 million being spent to improve playing assets. Clubs the size of Burnley can hardly afford to be doing that...!

The cash balance does include the TV money and as you have said before that will be used to pay wages etc; however, as described above, another £10 million went out of cash not to mention funds associated with the initial payments to sign players including agents fees.

I don't know what proportion of the TV money is paid in July - do you (or anyone else know?).

I think the point is that the good performance in the accounts is almost entirely due to the decision not to invest in players in that season as opposed to any structural changes in revenue streams (not possible because of Covid) or reduced costs.

Just on the technical accounting matter. The club's accounts were signed off by Alan Pace on 28th April just gone. If the £10 million was advanced any time after 31st July and before 28th April would need to be reported.

Sorry, I don't know how the proportions of tv money are split.

Yes, of course, there was careful cost control commencing with the suspension of Premier League games in March 2020. That's what Mike Garlick was speaking about, I think in April that year. No surprise that the cost control extended through the summer transfer window. I don't think anyone knew that there'd be a vaccine by the end of the year (2020), never mind how long the pandemic would continue for.

EDIT: We know Mike Garlick was looking for buyers of the club through the summer transfer window period. However, I think it's more likely the cost control on player contracts was more about covid-19 than about any prospective deal for the club.

[BurnleyFC]

These are exciting times.

Cosmic.

[Blakesboots]

have we got the money early to pay off the 4 year contracts we recently tore up?

Depends on the manner of your exit from said contract.

[Paul Waine]

have we got the money early to pay off the 4 year contracts we recently tore up?

Sean Dyche's departure was announced on 16th April. But, the departure is not announced in the club's accounts signed off on 28th April. My speculation is that Sean Dyche and the other departing coaching staff and continuing to be paid by the club. This may continue until they start new jobs, by which time their loss on the termination of their contracts can be determined. Or, it may be shortened with a lump sum settlement. Time will tell.

A notification popped up on my phone yesterday suggesting Sean Dyche is 3-1 favourite for the Watford job. Personally, I can't see Sean Dyche returning to Watford. However, I was surprised that his contract at Burnley was terminated. The way the team has performed afterwards just goes to show that we don't know everything that is going on.

UTC

[Chester Perry]

Sean Dyche's departure was announced on 16th April. But, the departure is not announced in the club's accounts signed off on 28th April. My speculation is that Sean Dyche and the other departing coaching staff and continuing to be paid by the club. This may continue until they start new jobs, by which time their loss on the termination of their contracts can be determined. Or, it may be shortened with a lump sum settlement. Time will tell.

UTC

it was the approach I expected and even suggested at the time not least because it had the least impact on current cash flow

The issue of dismissal date and signing off date is more interesting and no mention in the report - given that the ownership group have previously and publicly stated a number of times just how important Dyche was to their plan - something alluding to him being a key factor in their decision to buy - I wouldn't necessarily expect a mention of the financial cost at this time, particularly if there is no exact sum in the employment contracts, but that and the other exiting of previously key members of staff is ignored

[dsr]

Put it down as good risk management to have £12.5 million cash (less costs) rather than a £12.5m debt to be paid by NUFC next 31st Jan.

If we don't get the points required from our 4 games, we will be in a good place to discuss "significant repayment" with MSD.

If we are rebuilding for Premier League again next season, there's more cash immediately available to support the rebuilding plans.

UTC

It's not risk management at all. In the unlikely event that Saudi Arabia can't afford to pay the £12.5m in February, BFC will have to repay the new loan from another source. It's a secured loan, we haven't sold the debtor.