£180 million. BFC

[aggi]

It's been a fair time since I did a football club valuation but the old fag packet calculation was that clubs tended to be valued at about 1.5 to 2 times their annual turnover. That roughly ties in with the £180m but is a very simplistic model.

There was a more complex model which was:
Club Valuation = (Revenue + Net Assets) x (Net Profit + Revenue)/Revenue x (Stadium Capacity %) ÷ (Wage Ratio %)

(Stadium capacity is how much of the stadium is used on average)

A very rough calculation (estimating the latest accounts) would give a value of ~ £400m which I think most would agree would be too high. The issue being is that formula is used for valuing established clubs. For a club like Burnley you'd have to discount it to represent the chances of us being relegated and a significant drop in turnover.

For comparison, the same formula applied to 2016 (i.e. Championship level) would come out at around £45m so you'd be looking somewhere in between there most likely.

[dsr]

Asset value is relevant too. Firstly the value of the cash at the bank can be added in, and secondly the big intangible - how much is the value of a Premier League place worth?

[cricketfieldclarets]

Hi Cliff, no, I'm not "in the know." Just trying to look for anything that might suggest there is some truth in The Times report. Plus my own speculation.

Times refers to US Media company signing NDA, and other potentially parties including Middle East entity.

My comment re Chinese buying midlands clubs is just in relation to evidence that there is overseas demand to buy clubs, even those in Championship, because of desirability of owning a Premier League club.

We shouldn't overlook the overseas exposure of Premier League clubs - and that some owners are looking to promote their brands in their "home" markets, and are otherwise very small names/brands in UK.

Again, looking for insights (and nothing more) most Burnley fans are aware that there have been some very favourable reports on the club’s development in the US media. Why, for example, would The Washington Post write a report on Burnley FC. I guess we all know they aren't writing just so the Burnley ex-pats living in N.America can keep in touch.

Whatever happens......

UTC

I think you missed the typo

[Paul Waine]

I think you missed the typo

I surery did.

[claretandy]

With the club confirming that they are "open to investment", i don't think it's beyond the realms of possibility that the club planted the story in order to "flush out" any potential investors.

[Chester Perry]

I was researching something else and came across this from 3 years ago,

It is interesting to view some (not too many actually) changing opinions since given we were challenging for Europe at the time and those that appeared in the following years as the relationship between Dyche and Garlick soured.

And I only made one minor contribution to the thread - it was ignored so not too much change there

[djemba-djemba]

And I only made one minor contribution to the thread - it was ignored so not too much change there

Was it to direct people to the MMT?

[Chester Perry]

Was it to direct people to the MMT?

no, I have learnt a lot since then

[CrosspoolClarets]

I find it incredible that the Burnley Express is reporting a source saying there is nothing in it when the Times reports a non disclosure agreement has been signed. Do the BE not understand what a non disclosure agreement is? People HAVE to deny it.

It seems unrealistic that at some point the board will not think of their own families inheritance and sell out.

That could lead to anything. New stadium. New manager. Unique brand disappears. There are positives (decent facilities for the fans maybe, at last?). The negatives (risks, if you will) though seem to far outweigh them, when you look at the fortunes of other clubs who have been bought out. My advice to myself is, enjoy it while I can.

This was my only contribution to this thread 3 years ago - looking back, I’m perfectly happy with how accurate that proved to be

The only thing I’d say about my earlier observation is that the balance of risk changes over time - the apathy in the transfer market, ever crumbling facilities and the worsening relationship between Dyche and Garlick would all have said to me that something needed to change, and now it has.

[GodIsADeeJay81]

I see a few comments from people not seeing the potential for better sponsorship deals etc.

Interesting we've had the same conversations since the takeover.

[aggi]

... I can't see outside investment making that much of a difference unless it is someone with serious money (and I can't see them wanting Burnley).

We shall see.

[Cirrus_Minor]

From my interpretations of the very many words written about the takeover, then it may have cost less than £180 million. Certainly if the ‘dry powder funds’ of £30 million (?) carefully squirrelled away has now been used as part of £200 million buy out. All of this of course done by putting the club in dept.

All of this and the absence of any bold statements about team investment does not give me much confidence for the future.

[Paul Waine]

I was researching something else and came across this from 3 years ago,

It is interesting to view some (not too many actually) changing opinions since given we were challenging for Europe at the time and those that appeared in the following years as the relationship between Dyche and Garlick soured.

And I only made one minor contribution to the thread - it was ignored so not too much change there

Interesting to read these posts again after 3 years.

Exciting times.

UTC

[NewClaret]

Interesting to read these posts again after 3 years.

Exciting times.

UTC

I’m a bit disappointed that there’s not been more developments in recent weeks, Paul. I miss the old days of arguing about the relevance of a Companies House filing. Especially during the boredom of international breaks!

Boring times

UTC

[Devils_Advocate]

I’m a bit disappointed that there’s not been more developments in recent weeks, Paul. I miss the old days of arguing about the relevance of a Companies House filing. Especially during the boredom of international breaks!

Boring times

UTC

What about this version of Paul before he had his road to Damascus like conversion on the merits of an outside investor?

https://www.uptheclarets.com/messageboa ... relegation

[boatshed bill]

What about this version of Paul before he had his road to Damascus like conversion on the merits of an outside investor?

https://www.uptheclarets.com/messageboa ... relegation

I'm lucky if I understand any of PW's posts.

[Paul Waine]

I'm lucky if I understand any of PW's posts.

You and me, too, somedays, bill.

Exciting times.

UTC

[Paul Waine]

I’m a bit disappointed that there’s not been more developments in recent weeks, Paul. I miss the old days of arguing about the relevance of a Companies House filing. Especially during the boredom of international breaks!

Boring times

UTC

It does appear to have been a little quiet these past few weeks, though we are only 13 weeks into our period of new ownership. All the required Companies House filings have been done for the time being. It may be that the next filing that is due are the club's financial accounts for the 13 months period up to 31 July 2020 (remember, the financial y/end was put back a month to cover the delayed end of the season). Of course, those figures will be 5 month before the arrival of our new owners. It will be interesting how much is said about "post balance sheet events." The Directors' Report should be interesting reading, because that will be looking forward. Maybe it will make reference to the club's financial commitments, including debt obligations...

I feel now is the time to be patient and enjoy the football. I'm sure there will be another performance as we've just watched at Goodison Park.

Exciting times.

UTC

[dsr]

It will be interesting how much is said about "post balance sheet events." The Directors' Report should be interesting reading, because that will be looking forward. Maybe it will make reference to the club's financial commitments, including debt obligations...

I suspect the accounts would have been signed before the takeover so they wouldn't have much to say about PBSE. They will probably talk about the sale of shares but not about how the club's assets were stripped to pay for them.

The requirement to disclose post balance sheet events only goes as far as the date the accounts are signed; if the directors then choose to sit on them for the maximum time (which will be another 3 months after the change of accounting date, plus possibly 3 more for a coronavirus delay if that still applied as late as July, but either way it will be at least June 2021 before they must be published) the accounts don't need to be updated.

[Paul Waine]

I suspect the accounts would have been signed before the takeover so they wouldn't have much to say about PBSE. They will probably talk about the sale of shares but not about how the club's assets were stripped to pay for them.

The requirement to disclose post balance sheet events only goes as far as the date the accounts are signed; if the directors then choose to sit on them for the maximum time (which will be another 3 months after the change of accounting date, plus possibly 3 more for a coronavirus delay if that still applied as late as July, but either way it will be at least June 2021 before they must be published) the accounts don't need to be updated.

Hi dsr, I'm getting a bit rusty. Agree, it makes sense for the accounts to be audited and signed off by the then directors before acquisition of shares by ALK Capital. However, 31st July 2020 would still be a long time before 31st Dec 2020, or whatever day the change in ownership was effected, so I'd expect the due diligence prior to completion would include the state of the management accounts up to the date of acquisition, plus appropriate reps and warranties. Alongside that there is the football club's requirement to file the accounts, which I understand is 9 months after the accounting period end, so end of April this year. FRS 21, I think that's the appropriate accounting standard (?) requires post balance sheet events up to the period the accounts are to be signed off for issue. I'm not up to speed with a technical definition of "for issue." I'd interpret it as meaning to be filed as appropriate for the entity. Thus, I'm not sure the accounts could be signed off in, say, November, before the acquisition by ALK and the accounts then just "stuck at the back of a drawer" and otherwise unseen until the end of April. I'm happy to be corrected, but I don't expect post-balance sheet events to omit the acquisition of the club, including the assumption of the charge over the debt(s) taken on by the new ALK Capital corporate structure.

BTW: what club "assets were stripped to pay for them?"

Exciting times.

UTC

[dsr]

Hi dsr, I'm getting a bit rusty. Agree, it makes sense for the accounts to be audited and signed off by the then directors before acquisition of shares by ALK Capital. However, 31st July 2020 would still be a long time before 31st Dec 2020, or whatever day the change in ownership was effected, so I'd expect the due diligence prior to completion would include the state of the management accounts up to the date of acquisition, plus appropriate reps and warranties. Alongside that there is the football club's requirement to file the accounts, which I understand is 9 months after the accounting period end, so end of April this year. FRS 21, I think that's the appropriate accounting standard (?) requires post balance sheet events up to the period the accounts are to be signed off for issue. I'm not up to speed with a technical definition of "for issue." I'd interpret it as meaning to be filed as appropriate for the entity. Thus, I'm not sure the accounts could be signed off in, say, November, before the acquisition by ALK and the accounts then just "stuck at the back of a drawer" and otherwise unseen until the end of April. I'm happy to be corrected, but I don't expect post-balance sheet events to omit the acquisition of the club, including the assumption of the charge over the debt(s) taken on by the new ALK Capital corporate structure.

BTW: what club "assets were stripped to pay for them?"

Exciting times.

UTC

Accounts are prepared as at year end date, but post balance sheet events are up to the date of signature and going concern considerations are up to a year after signature. You don't have re-open the accounts period and get the accounts audited again just because you are slow filing; once the accounts are signed, they are complete.

A 3 month extension has been granted automatically to last summer's company accounts in general. Also, there is an automatic 3-month extension to any company if it changes its year end. The accounts won't need to be filed until at least June.

The PBSE will probably include the takeover of the club but will not include anything that the new owners did after the takeover, such as take all the club's cash out of the bank. That's the asset that has been stripped. (Along with the potential for borrowing which has been drastically restricted.) I know you and I have always disagreed over whether a pot of cash is worth more to the club than an unsecured loan from a company with no liquid assets, so let's leave that for the original thread.

[Paul Waine]

Accounts are prepared as at year end date, but post balance sheet events are up to the date of signature and going concern considerations are up to a year after signature. You don't have re-open the accounts period and get the accounts audited again just because you are slow filing; once the accounts are signed, they are complete.

A 3 month extension has been granted automatically to last summer's company accounts in general. Also, there is an automatic 3-month extension to any company if it changes its year end. The accounts won't need to be filed until at least June.

The PBSE will probably include the takeover of the club but will not include anything that the new owners did after the takeover, such as take all the club's cash out of the bank. That's the asset that has been stripped. (Along with the potential for borrowing which has been drastically restricted.) I know you and I have always disagreed over whether a pot of cash is worth more to the club than an unsecured loan from a company with no liquid assets, so let's leave that for the original thread.

Hi dsr, re your first para, I said I was a little rusty, but I'm not that rusty. My post wasn't suggesting that the accounts would be re-opened and a second audit performed. (There's nothing in the takeover that requires the accounts to be re-stated). I was focussing on the meaning of the term "issued" and what satisfies that term. We know that the accounts haven't been filed with Companies House. I believe we know that the accounts haven't been seen by all the small shareholders - otherwise that would have been mentioned on here. Do we know if the accounts have been submitted to Premier League - as part of the annual disclosure? I was also stating that the acquisition due diligence would not have stopped at the accounts to 31st July 2020, for their purposes ALK would have wanted to see the figures up to Dec 2020. Thus, ALK wouldn't be dependant on the audit of the accounts to 31st July.

So, I agree with you that pbse will extend to the date the accounts are signed off for issue, but are we certain that the accounts have been "issued?"

For clarity, I know that filing at Companies House is not the same as "issuing" the accounts.

Re your second para: we have already seen some clubs file their accounts. Chester Perry will have all the examples, including which if any had extended their year end. Maybe the takeover would be a reason why BFC will take advantage of the extensions you mention. Let's wait and see.

Re your third para: really? you think that the new owners have taken "all the club's cash out of the bank?" I've posted before that we don't have access to the club's cash flow profile. Given that players' wages, income tax to HMRC and other payments will have been due over the 3 months since ALK bought BFC, I'd hope that the club's money is being spent to cover these ongoing obligations. Have you heard anywhere that this isn't the case?

Exciting times.

UTC

[aggi]

Signing and approved by board is the end date for PBSE. This is authorising the accounts to be issued, not actually issuing them.

I'd be very surprised if there was any PBSE disclosure other than something like "the club are in talks about a takeover".

[dsr]

Re your third para: really? you think that the new owners have taken "all the club's cash out of the bank?" I've posted before that we don't have access to the club's cash flow profile. Given that players' wages, income tax to HMRC and other payments will have been due over the 3 months since ALK bought BFC, I'd hope that the club's money is being spent to cover these ongoing obligations. Have you heard anywhere that this isn't the case?

Exciting times.

UTC

If you are asking whether I know for certain that the club has had a zero bank balance since January, the answer is I don't know. I think perhaps you were taking the words "all the club's cash" a bit too literally.

We do know that the club has in recent years had tens of millions in the bank and there is no reason to doubt that it was still there at takeover time. We know that the club now has loans because Pace confirmed that.

It has been widely rumoured that the cash reserve has been taken to pay the owners' debts, and Pace hasn't denied that.

My point is not that the club can't meet its running costs, though I suspect it is now doing so with help of an overdraft; my point is that the club used to have a pot of cash that could be used (if the owner hadn't been hoarding it) to buy new players, but now the club has no pot of cash and is in debt, which makes funding the signing of new players so much harder.

If that cash had been left in the company, the new owner could have used it to buy players. But as the new owner has used it instead to pay his own debts, the club can't use it to buy players.

Isn't that exciting.

[GodIsADeeJay81]

"taken all the clubs cash"

That's something that's been repeatedly stated as a fact several times by people on here when they've been busy throwing stuff at the former and new owners in the hope something sticks.
That's despite the lack of any facts and no desire to wait until the accounts are released, because that's far to sensible

[dsr]

Hi dsr, re your first para, I said I was a little rusty, but I'm not that rusty. My post wasn't suggesting that the accounts would be re-opened and a second audit performed. (There's nothing in the takeover that requires the accounts to be re-stated). I was focussing on the meaning of the term "issued" and what satisfies that term. We know that the accounts haven't been filed with Companies House. I believe we know that the accounts haven't been seen by all the small shareholders - otherwise that would have been mentioned on here. Do we know if the accounts have been submitted to Premier League - as part of the annual disclosure? I was also stating that the acquisition due diligence would not have stopped at the accounts to 31st July 2020, for their purposes ALK would have wanted to see the figures up to Dec 2020. Thus, ALK wouldn't be dependant on the audit of the accounts to 31st July.

So, I agree with you that pbse will extend to the date the accounts are signed off for issue, but are we certain that the accounts have been "issued?"

FRS102 deals with, I believe, accounts preparation up to the time they are authorised for issue. If, as we both believe, the official accounts to July 2020 were signed off by December, then the audit report was also signed off and those accounts cannot be altered unless they are re-opened and the audit work extended to the new date of signature. Remember the audit report does include post balance sheet activity.

[dsr]

"taken all the clubs cash"

That's something that's been repeatedly stated as a fact several times by people on here when they've been busy throwing stuff at the former and new owners in the hope something sticks.
That's despite the lack of any facts and no desire to wait until the accounts are released, because that's far to sensible

For that we would have to wait until perhaps June 2022. The new owners have confirmed that the club is in debt, albeit in a way that will have us say "oh my goodness, this is incredible". What would be the sense of taking out a loan if the club was still awash with cash? If the new owners haven't taken the cash, why wouldn't they say so?

https://www.burnleyexpress.net/sport/fo ... rt-3089574

[GodIsADeeJay81]

For that we would have to wait until perhaps June 2022. The new owners have confirmed that the club is in debt, albeit in a way that will have us say "oh my goodness, this is incredible". What would be the sense of taking out a loan if the club was still awash with cash? If the new owners haven't taken the cash, why wouldn't they say so?

https://www.burnleyexpress.net/sport/fo ... rt-3089574

Yes they've taken a loan out to buy the club, I haven't disputed that.
We won't know the levels of debt until the relevant accounts are released.

My point was there are several people on here who are stating many things as facts without seeing those accounts.
I'd prefer to wait until then tbh, but I'm possibly in a minority on here, or it feels like it at least.

[dsr]

Yes they've taken a loan out to buy the club, I haven't disputed that.
We won't know the levels of debt until the relevant accounts are released.

My point was there are several people on here who are stating many things as facts without seeing those accounts.
I'd prefer to wait until then tbh, but I'm possibly in a minority on here, or it feels like it at least.

The new owners have confirmed that Burnley FC have taken out a loan so that they could buy the club. I don't care about the owners' personal finance, what I'm interested in is the club's finances which have taken a hit. Of course if the owners know that not to be true, they can always release the figures.

[GodIsADeeJay81]

The new owners have confirmed that Burnley FC have taken out a loan so that they could buy the club. I don't care about the owners' personal finance, what I'm interested in is the club's finances which have taken a hit. Of course if the owners know that not to be true, they can always release the figures.

They're not obliged to release anything early, and appeasing fans isn't a reason to do so either.

They'd just be responding to idle Internet gossip and honestly I'd rather they got on with the job in hand, moving the club forwards.

We won't know what sort of hit until the accounts come out and they won't release anything halfway through a season, that's daft.

[Paul Waine]

FRS102 deals with, I believe, accounts preparation up to the time they are authorised for issue. If, as we both believe, the official accounts to July 2020 were signed off by December, then the audit report was also signed off and those accounts cannot be altered unless they are re-opened and the audit work extended to the new date of signature. Remember the audit report does include post balance sheet activity.

As posted on another thread - which I see has now been locked "to avoid confusion:"

Hi dsr, I guess I'm as surprised as you to see that the club has published the accounts on the club website today. (They aren't shown as filed on Companies House, yet. I'd now expect the accounts to be there next week - after the bank/hol w/end etc).

Interesting to see that they were signed off, by Alan Pace on 1st March 2021. Similarly, the auditors signed their report on that date. Seems that we were wrong to think they would have been audited and signed-off by the directors before the takeover was completed.

Good to see that the club had £80 million cash at 31st July 2020.

UTC

EDIT: I'll keep any other comments I have re the club's accounts on the new thread. I'm ok if CT wishes to lock this thread.

[joey13]

"taken all the clubs cash"

That's something that's been repeatedly stated as a fact several times by people on here when they've been busy throwing stuff at the former and new owners in the hope something sticks.
That's despite the lack of any facts and no desire to wait until the accounts are released, because that's far to sensible

Seems to wind you up every time it’s mentioned, so it’s worth repeating just for that alone

[GodIsADeeJay81]

Seems to wind you up every time it’s mentioned, so it’s worth repeating just for that alone

Nah, I just laugh at the sheer stupidity of some people on here

[aggi]

Looks like we were all wrong about the date of signing. Somewhat unusual for it to be the new owners