Burnley's MSD loan reduction essentially confirmed

[GodIsADeeJay81]

Yes.

The principle is the same though, selling players to generate funds to keep the club operating.

Yes this time it's about the loan etc, but the club has had to pay back loans before too, from Modus after it went bust for example.

Using PL money to buy the ground and gawthorpe(?) back after Kilby sold it to himself/shell company etc.

[aggi]

By “a little bit”, I assume you mean relaxed it by £37m? Since that’s how much we could have spent and be no worse cash position than we are now.

Or £102m if you want to include the debt (£87m following recent deductions, which I assume was funded by the Wood sale that could have otherwise been put back in to the club)?

On the face of it, it was a prudent strategy aimed at protecting the best interests of the club & I can understand why some fans supported it, but I cannot fathom why anyone would have anything other than complete contempt for it after the takeover.

Well no, because we now have concerns about being able to cope financially in the Championship.

In hindsight, with knowledge of how it panned out, it's easy to criticise. But, if we'd stuck with the prudent approach and gone down with £60m in the bank, as appeared to be the plan, we'd be sitting a bit more comfortably now.

[Steddyman]

Well no, because we now have concerns about being able to cope financially in the Championship.

In hindsight, with knowledge of how it panned out, it's easy to criticise. But, if we'd stuck with the prudent approach and gone down with £60m in the bank, as appeared to be the plan, we'd be sitting a bit more comfortably now.

And still only signing Andrew Driver in the window.

[dsr]

The principle is the same though, selling players to generate funds to keep the club operating.

Yes this time it's about the loan etc, but the club has had to pay back loans before too, from Modus after it went bust for example.

Using PL money to buy the ground and gawthorpe(?) back after Kilby sold it to himself/shell company etc.

The principle of how to pay it back is the same.

The difference in principle is why we had to pay it back.

The Modus money was put into the club and used for buying players and for running costs. We spent the money, successfully, on getting into the PL/

We had to buy back Turf Moor and Gawthorpe because we had sold them to raise money for the club, which again, we had spent on players and running costs in a bid to improve the product on the field.

This loan is different. Burnley have been forced to hand over the surplus cash, and borrow £65m that we didn't need. All of that £102m could have been used for buying players and running the club. Instead, all of that money has been handed over to Alan Pace. via a devil's pact with Mike Garlick, so that Alan Pace can make an investment which he hopes will make himself a lot of money and will benefit the club not one ha'penny.

To mortgage the club to the hilt so we can buy new players, that's one thing. To mortgage the club to the hilt so that Alan Pace can pay his debts, that's quite different.

[Stevie Morgan]

Well no, because we now have concerns about being able to cope financially in the Championship.

In hindsight, with knowledge of how it panned out, it's easy to criticise. But, if we'd stuck with the prudent approach and gone down with £60m in the bank, as appeared to be the plan, we'd be sitting a bit more comfortably now.

Was the plan not actually to fatten the goose over the last few years of MGs stewardship?

[NewClaret]

Well no, because we now have concerns about being able to cope financially in the Championship.

In hindsight, with knowledge of how it panned out, it's easy to criticise. But, if we'd stuck with the prudent approach and gone down with £60m in the bank, as appeared to be the plan, we'd be sitting a bit more comfortably now.

Is the worry our cash balance or our debt though? I’d argue it’s not our cash but the £65/50m debt causing concern.

We could’ve gone down with current cash levels having spent £37m on players with no debt and been fine. Not worried at all. Arguably with more assets to sell on for a profit (had we invested it well).

As it happens the cash is in MG/JB’s pockets.

But I think we’re agreeing. It seemed prudent and I can see why some fans supported it on that basis (although I thought too prudent, which was disconcerting). Only they were duped because it wasn’t motivated by financial responsibility but greed. Less as saving for a rainy day, more saving for a pay day.

[arise_sir_charge]

When you read these threads you’d think that Magic Mike had been kidnapped, handcuffed and forced to sell the thing he held so dear, against his will.

The reality is of course much different and the sooner the anti Pace brigade get their heads round it, the sooner we can all move on.

Will what has happened work and see us stronger in the future, who knows?

However to keep pouring over it time after time and to long for the days of the man who sold the silver is pointless.

Let’s move on and see where we end up.

[Top Claret]

Well no, because we now have concerns about being able to cope financially in the Championship.

In hindsight, with knowledge of how it panned out, it's easy to criticise. But, if we'd stuck with the prudent approach and gone down with £60m in the bank, as appeared to be the plan, we'd be sitting a bit more comfortably now.

The problem was the previous owners never had any intention of reinvesting the 60 million back into the football club, it was always sat there for themselves for when the time came to cut and run

[gawthorpe_view]

The principle is the same though, selling players to generate funds to keep the club operating.

Yes this time it's about the loan etc, but the club has had to pay back loans before too, from Modus after it went bust for example.

Using PL money to buy the ground and gawthorpe(?) back after Kilby sold it to himself/shell company etc.

Leverage buy out.

Completely different to loans / resultant debts / operating losses.

Avoidable risk v unavoidable change in circumstances.

ITV Digital collapse was not down to anyone anyone at BFC.

So yes, very different.

[ClaretPete001]

By “a little bit”, I assume you mean relaxed it by £37m? Since that’s how much we could have spent and be no worse cash position than we are now.

Or £102m if you want to include the debt (£87m following recent deductions, which I assume was funded by the Wood sale that could have otherwise been put back in to the club)?

On the face of it, it was a prudent strategy aimed at protecting the best interests of the club & I can understand why some fans supported it, but I cannot fathom why anyone would have anything other than complete contempt for it after the takeover.

I have to agree - it's a most bizarre argument. How can anyone claim it was prudent when the new owners have used nearly £50 million on buying shares.

The reality is - he was saving up for the relegation that he was busy ensuring happened.

[ClaretPete001]

Yep, the fans that lauded the financial management under MG were plain wrong. Unless there’s more to the structure than meets the eye, in which case I’ll be happy to be wrong.

I agree, there isn’t much to substantiate hope. And what there is to give me hope is pretty fluffy:

- MG’s proclamations of being a custodian and operating in the best interests of the club.
- Pace’s proclamations of a “beautiful deal”, “one day I hope the fans will love what we do”, etc.
- Dyche speaking highly of Pace/ALK (saying he trusts them, etc).
- VK saying “I see a plan, after a difficult start will come an incredible future”. No idea what that means, and it could be PR bs, but it’s enough to give me hope.

There’s a lot of experienced and clever people that appear to have bought in to the plan. Whatever it is!

I sense whatever I say, you’re the type of personality that will fear the worst and I’m the type that will hope for the best (albeit possibly naïvely), so I’m not trying to convince you, just explain my perspective.

My point re: Pace is that he has unquestionably recruited a) younger, exciting players with potential, and/or b) International standard. Orsic would have ticked this box too. I personally think he needed one or two more signings in that category, earlier, and we might not be where we are.

But anyhow, my point being that IF he maintains this approach, signs good quality internationals (Cullen, etc) and we go up & he uses player purchases/sales to sustainably develop the club and pay off the debt he took on, I will accept that because in my mind it’s a better model than the previous one, he’ll have added the value (through his decision making) to create funds and pay the debt. It won’t be easy or of guaranteed outcome though.

Re: British players, I’m not sure of your point. I was being critical of the previous owners for never looking abroad and going for overpriced British players (accepting Dyche may have been responsible for that too). We needed modernising in the recruitment dept and Pace seems to be doing that.

I think you are right about personality; however, I do tend to try and go with the evidence and mitigate the bias.

I tend to think, the commoditising players is a bit fantasy world because it is a highly competitive market and we are going to suffer a serious loss of income to the point where we won't be able to compete for talent.

I see it as a thinly veiled sh*t or bust strategy.

The former strategy of buying effective players and blending them into a trust and tried formula is the way forward and would have continued to be successful had it not been for the former owners not investing enough to keep the team competitive.

The evidence is: it worked for 6 out of 7 seasons. We still got 35 points and looked competitive even with little investment.

Other smaller clubs like Bolton and Rovers had significant investment from wealthy owners.

No club has achieved what we achieved. And it is the model Pace proclaimed when he invested in the club with the equally sensible strategy of trying to buy younger players.

The problem is when you commoditise players - it makes it harder for a manager to build a playing strategy because players are being bought for commercial as opposed to playing reasons.

But let's see how it pans out - you may be proven right...!

[NewClaret]

I think you are right about personality; however, I do tend to try and go with the evidence and mitigate the bias.

I tend to think, the commoditising players is a bit fantasy world because it is a highly competitive market and we are going to suffer a serious loss of income to the point where we won't be able to compete for talent.

I see it as a thinly veiled sh*t or bust strategy.

The former strategy of buying effective players and blending them into a trust and tried formula is the way forward and would have continued to be successful had it not been for the former owners not investing enough to keep the team competitive.

The evidence is: it worked for 6 out of 7 seasons. We still got 35 points and looked competitive even with little investment.

Other smaller clubs like Bolton and Rovers had significant investment from wealthy owners.

No club has achieved what we achieved. And it is the model Pace proclaimed when he invested in the club with the equally sensible strategy of trying to buy younger players.

The problem is when you commoditise players - it makes it harder for a manager to build a playing strategy because players are being bought for commercial as opposed to playing reasons.

But let's see how it pans out - you may be proven right...!

I get your point on this. Particularly that the previous strategy was working to a large degree and could have continued to do so with more investment in prior years after making Europe.

I actually think the downfall of both Garlick and Dyche in the end was the failure of either party to compromise: Garlick on loosening the purse strings and taking more risks, Dyche on the type of player to sign. Had they met in the middle more, I’d guess the approach could’ve continued to be a success.

What concerns me most about next season is I don’t want VK to prioritise the transition to his style over short-term results. I’ve been starved of decent football for a while now, some minor improvements coupled with the pragmatism to grind out results will do me. I also don’t want him to prioritise playing a load of loanee kids over some with the experience of the league/English football. That Muric (City keeper) is an interesting one in that respect - he looks good on the highlights reel, and probably a top prospect, but I’d rather keep Hennessey for the experience.

I also agree that if we go up with a load of talented kids it will be harder to stay up than under the previous “system”. Experience is invaluable in the PL, but tbf he did buy Weghorst (29), Cornet (26?) & try for Orsic (29) so I assume he knows that the blend needs to be right.

[ClaretPete001]

I get your point on this. Particularly that the previous strategy was working to a large degree and could have continued to do so with more investment in prior years after making Europe.

I actually think the downfall of both Garlick and Dyche in the end was the failure of either party to compromise: Garlick on loosening the purse strings and taking more risks, Dyche on the type of player to sign. Had they met in the middle more, I’d guess the approach could’ve continued to be a success.

What concerns me most about next season is I don’t want VK to prioritise the transition to his style over short-term results. I’ve been starved of decent football for a while now, some minor improvements coupled with the pragmatism to grind out results will do me. I also don’t want him to prioritise playing a load of loanee kids over some with the experience of the league/English football. That Muric (City keeper) is an interesting one in that respect - he looks good on the highlights reel, and probably a top prospect, but I’d rather keep Hennessey for the experience.

I also agree that if we go up with a load of talented kids it will be harder to stay up than under the previous “system”. Experience is invaluable in the PL, but tbf he did buy Weghorst (29), Cornet (26?) & try for Orsic (29) so I assume he knows that the blend needs to be right.

You think in ways I could never imagine thinking in.

The club has huge debts and is about to lose £50 million quid of PL broadcast revenue.

We still have a plethora of players in their 30s who I can't see getting through a Championship season and we haven't signed a single player yet: talented, young or otherwise.

I want to hug VK and tell him no matter what happens his mummy will always love him while you are talking about promotion to the Premiership with a bunch of talented young players.

[RVclaret]

You think in ways I could never imagine thinking in.

The club has huge debts and is about to lose £50 million quid of PL broadcast revenue.

We still have a plethora of players in their 30s who I can't see getting through a Championship season and we haven't signed a single player yet: talented, young or otherwise.

I want to hug VK and tell him no matter what happens his mummy will always love him while you are talking about promotion to the Premiership with a bunch of talented young players.

I think you are the one in the need of a hug from mummy telling you it’s all gonna be okay

[ksrclaret]

You think in ways I could never imagine thinking in.

The club has huge debts and is about to lose £50 million quid of PL broadcast revenue.

We still have a plethora of players in their 30s who I can't see getting through a Championship season and we haven't signed a single player yet: talented, young or otherwise.

I want to hug VK and tell him no matter what happens his mummy will always love him while you are talking about promotion to the Premiership with a bunch of talented young players.

I’m sure Kompany doesn’t need to be patronised like that by someone anonymous on a message board.

He’s quite successful in his own right after all, isn’t he?

[NewClaret]

You think in ways I could never imagine thinking in.

The club has huge debts and is about to lose £50 million quid of PL broadcast revenue.

We still have a plethora of players in their 30s who I can't see getting through a Championship season and we haven't signed a single player yet: talented, young or otherwise.

I want to hug VK and tell him no matter what happens his mummy will always love him while you are talking about promotion to the Premiership with a bunch of talented young players.

Mate you need to chill.

You keep referencing the debt without any acknowledgment of the the assets. I’m sure you’re not the type to value our players too highly but even taking the absolute most pessimistic valuations we hold more than £50m of assets. Most will likely leave this summer and the debt will be largely sorted (I’d much rather we weren’t in a situation where player sales were being used to pay down debt, or that they would stay & help us up, but I’m just making this point because the debt seems to stress you so much).

As for running costs/revenue reduction, we’ve lost 10 high earners and it’s well acknowledged that the senior players left will be on half the wages they were. Of them, most don’t have long remaining on their deals. They’ll all cycle out in a year or so before the parachute payments run out. We also had £50m cash in the bank at the last accounts and whilst that will have reduced, doubt we’ll be in the overdraft yet. That’s before you consider that we have two very rich directors now!!!

Yes we need to sign players and you’ve heard VK and Pace say we will. Of all the managers we could have chosen to attract players, Kompany is right up there. Look forward to seeing who we’ll bring in.

[dsr]

You keep referencing the debt without any acknowledgment of the the assets. I’m sure you’re not the type to value our players too highly but even taking the absolute most pessimistic valuations we hold more than £50m of assets. Most will likely leave this summer and the debt will be largely sorted (I’d much rather we weren’t in a situation where player sales were being used to pay down debt, or that they would stay & help us up, but I’m just making this point because the debt seems to stress you so much).

Don't forget the "asset" of the £112m that our chairman owes the club. Once that gets paid, we'll be sitting pretty.

Of course, we could buy a EuroMillions lottery ticket in hopes of getting the same level of funds. With perhaps a greater chance of success ...

[Taffy on the wing]

This thread will never end.........

[ClaretPete001]

Mate you need to chill.

You keep referencing the debt without any acknowledgment of the the assets. I’m sure you’re not the type to value our players too highly but even taking the absolute most pessimistic valuations we hold more than £50m of assets. Most will likely leave this summer and the debt will be largely sorted (I’d much rather we weren’t in a situation where player sales were being used to pay down debt, or that they would stay & help us up, but I’m just making this point because the debt seems to stress you so much).

As for running costs/revenue reduction, we’ve lost 10 high earners and it’s well acknowledged that the senior players left will be on half the wages they were. Of them, most don’t have long remaining on their deals. They’ll all cycle out in a year or so before the parachute payments run out. We also had £50m cash in the bank at the last accounts and whilst that will have reduced, doubt we’ll be in the overdraft yet. That’s before you consider that we have two very rich directors now!!!

Yes we need to sign players and you’ve heard VK and Pace say we will. Of all the managers we could have chosen to attract players, Kompany is right up there. Look forward to seeing who we’ll bring in.

Just a bit of humour to demonstrate our thinking is polls apart.

I wasn't patronising VK I was acknowledging the size of his challenge as opposed to trivialising it by suggesting he is likely to return to the PL having purchased enough quality young players to achieve it.

We don't have £50 million in the bank - we had £50 million at the year end, which consisted of PL broadcast money to be offset against upcoming expenditure. Subsequent to that we had large sums disappear on inter-company transfers (Discounting the MSD loan - £37 million plus £10 million post accounting period and debt repayments: allegedly £15 million).

Does a club the size of Burnley have nearly £62 million in cash to spend on buying shares (cited in the accounts) and debt repayments?

The loss of the parachute money will be covered by the loss of broadcast revenue.

It is true we have £50 million worth of assets but if we lose our best players and have to replace a significant number of OOC players then it will cost to buy the quality and experience to regain a place in the PL.

And you forget the further £70 million of PL broadcast money that will disappear in yrs 2 and 3 if we can't achieve the above so without a return to the PL I see little chance of paying off the debt.

As I've said before it is an irresponsible sh*t or bust scenario.

I personally, don't and won't criticise the players or manager whatever happens and hope they succeed but will outline the precarious nature of the situation when other descend into their fantasy world scenarios albeit we've just had 6 seasons in the Premiership so sometimes these things do happen.

[ClaretPete001]

We don't have £50 million in the bank - we had £50 million at the year end, which consisted of PL broadcast money to be offset against upcoming expenditure. Subsequent to that we had large sums disappear on inter-company transfers (Discounting the MSD loan - £37 million plus £10 million post accounting period and debt repayments: allegedly £15 million).

To clarify the above. £102 million went during the accounting period. Another £10 million after the accounting period and a further £15 million in debt repayments seems to have occurred after the accounting period.

Of course, there are lots of in and outs but these are huge sums for Burnley as they would be for Barcelona.

[aggi]

To clarify the above. £102 million went during the accounting period. Another £10 million after the accounting period and a further £15 million in debt repayments seems to have occurred after the accounting period.

Of course, there are lots of in and outs but these are huge sums for Burnley as they would be for Barcelona.

The £15m is already part of the £102m, you can't count it twice.

[RVclaret]

The £15m is already part of the £102m, you can't count it twice.

Oh it’s not like Pete to just chuck random blown up numbers out there.

[aggi]

Is the worry our cash balance or our debt though? I’d argue it’s not our cash but the £65/50m debt causing concern.

We could’ve gone down with current cash levels having spent £37m on players with no debt and been fine. Not worried at all. Arguably with more assets to sell on for a profit (had we invested it well).

As it happens the cash is in MG/JB’s pockets.

But I think we’re agreeing. It seemed prudent and I can see why some fans supported it on that basis (although I thought too prudent, which was disconcerting). Only they were duped because it wasn’t motivated by financial responsibility but greed. Less as saving for a rainy day, more saving for a pay day.

The "current" cash levels (i.e. at the end of July 2021) are a bit deceptive though. It is almost certain that that £50m contains a large chunk (maybe £35m or so) of the following season's premier league money, obviously in the event of relegation we wouldn't have received that money and cash would be looking less healthy.

But, as you say, we're generally agreeing. Personally I don't think it was the strategy at the start to build up the balance to facilitate a takeover but that is clearly where we ended up.

[ClaretPete001]

The £15m is already part of the £102m, you can't count it twice.

Fair enough, where is £15 million cash counted twice?

[ClaretPete001]

The "current" cash levels (i.e. at the end of July 2021) are a bit deceptive though. It is almost certain that that £50m contains a large chunk (maybe £35m or so) of the following season's premier league money, obviously in the event of relegation we wouldn't have received that money and cash would be looking less healthy.

But, as you say, we're generally agreeing. Personally I don't think it was the strategy at the start to build up the balance to facilitate a takeover but that is clearly where we ended up.

Why don't you think the balance was designed not to facilitate a takeover?

It was clear we needed more investment in the playing squad; the average age is testament to that...!

And it is clear, at the point MG was talking publicly about refusing to invest due to a financial meltdown of up to £50 million due to the Covid pandemic, we had that amount to spend on buying shares.

All the talk of prudence etc. went out of the window at the point the deal was done. Where does any of this make any sense other than there was a plan to facilitate a leveraged buyout?

[aggi]

Fair enough, where is £15 million cash counted twice?

The £15m was counted twice, not £15m cash. The £102m was £37m cash and £65m loan. By current estimates it is now £52m cash and £50m loan.

[aggi]

Why don't you think the balance was designed not to facilitate a takeover?

It was clear we needed more investment in the playing squad; the average age is testament to that...!

And it is clear, at the point MG was talking publicly about refusing to invest due to a financial meltdown of up to £50 million due to the Covid pandemic, we had that amount to spend on buying shares.

All the talk of prudence etc. went out of the window at the point the deal was done. Where does any of this make any sense other than there was a plan to facilitate a leveraged buyout?

Gut feeling. Personally I reckon if he was a good enough football businessman that this was all a plan from the start (buy the club, get them promoted, keep them up, hugely grow the value, sell) he'd be very sought after.

At some point, possibly when the relationship started to break down with Dyche, maybe the focus changed. We'll probably never know for sure though.

[NewClaret]

The "current" cash levels (i.e. at the end of July 2021) are a bit deceptive though. It is almost certain that that £50m contains a large chunk (maybe £35m or so) of the following season's premier league money, obviously in the event of relegation we wouldn't have received that money and cash would be looking less healthy.

But, as you say, we're generally agreeing. Personally I don't think it was the strategy at the start to build up the balance to facilitate a takeover but that is clearly where we ended up.

Re: cash, in this post (which was before some of my others) was referring to the cash pile as the £80m, since that’s where it peaked. I think we’ve now established that it sat at £50m (with some expenses to be paid as you point out), but that £37m had been “pilfered” prior to find the takeover. Had that not happened, the expenses would still need to have been paid but the cash balances would have been higher.

I tend to agree with your theory that it might not have been the intended strategy at the outset but became the plan when the relationship deteriorated. As you say, guess we’ll never know and I don’t suppose it matters now because the outcome is the same. I just sense, and get quite frustrated by the fact, that I think two peoples failure to evolve/develop their working relationship and possibly egos have led us to this situation - where these debates are even necessary!!

[ClaretPete001]

The £15m was counted twice, not £15m cash. The £102m was £37m cash and £65m loan. By current estimates it is now £52m cash and £50m loan.

The original point was that we had £50 million in the bank. My point was that much of that is pre-paid broadcast money and since then we have spent £10 million on an inter company loan after the end of the banking period and (arguably) £15 million on a loan re-payment so we haven't got £50 million in the bank.

On a broader point the club has spent £37 million in cash on the initial purchase, a further £10 million probably to smaller share holders and a £15 million cash repayment = £62 million.

The £65 million was paid from MSD to the former owners. In terms, of cash it only comes into play when we re-pay the loan so I don't think I've included it twice.

[ClaretPete001]

Gut feeling. Personally I reckon if he was a good enough football businessman that this was all a plan from the start (buy the club, get them promoted, keep them up, hugely grow the value, sell) he'd be very sought after.

At some point, possibly when the relationship started to break down with Dyche, maybe the focus changed. We'll probably never know for sure though.

I think if you accept that he is a clever businessman then it is not possible to sustain the view the bank balance wasn't part of a plan to sell the club.

It's just not possible to believe that at the point MG was talking to the media about the consequences of the pandemic he had no idea that we would eventually end up with £80 million in the bank with enough to spend nearly £50 million on a takeover.

The evidence is: he did the deal!

It's not credible to sustain the view that MG and co did not realise the lack of investment and the subsequent risk that this deal would incur.

It's just not a credible gut feeling to sustain; if you also accept MG and colleagues were competent business people who had run a tight ship for a number of years.

Of course, what actually happened we will never know - it's what constitutes a credible view that is the issue.

[ClaretPete001]

Re: cash, in this post (which was before some of my others) was referring to the cash pile as the £80m, since that’s where it peaked. I think we’ve now established that it sat at £50m (with some expenses to be paid as you point out), but that £37m had been “pilfered” prior to find the takeover. Had that not happened, the expenses would still need to have been paid but the cash balances would have been higher.

I tend to agree with your theory that it might not have been the intended strategy at the outset but became the plan when the relationship deteriorated. As you say, guess we’ll never know and I don’t suppose it matters now because the outcome is the same. I just sense, and get quite frustrated by the fact, that I think two peoples failure to evolve/develop their working relationship and possibly egos have led us to this situation - where these debates are even necessary!!

The £80 million was the balance at the end of 19/20 and £50 million at 20/21.

The £80 million almost doubled in a year from £40 million the year before. It's just not possible to credibly believe at some point the bank balance did not become part of the sale plan even if that is indeed the case.

I don't think it's fair to blame Dyche because he was an employee who would reasonably expect a certain level of investment in a team he was culpable for.

I do share the frustration we are talking about this...

[NewClaret]

The £15m was counted twice, not £15m cash. The £102m was £37m cash and £65m loan. By current estimates it is now £52m cash and £50m loan.

Yes, essentially my argument is that the discussion doesn’t acknowledge “net debt”. Obviously this fluctuates as income is received and expenses paid but as your post highlights, there’s arguably zero net debt.

[NewClaret]

The £80 million was the balance at the end of 19/20 and £50 million at 20/21.

The £80 million almost doubled in a year from £40 million the year before. It's just not possible to credibly believe at some point the bank balance did not become part of the sale plan even if that is indeed the case.

I don't think it's fair to blame Dyche because he was an employee who would reasonably expect a certain level of investment in a team he was culpable for.

I do share the frustration we are talking about this...

Yes, we’re agreeing; it was £80m pre-takeover, £50m after, of which £37m of the reduction is explained by using it to fund the takeover.

Had it not been, it’s reasonable to assume it would have increased again, even during COVID, which illustrates how well the club was run.

We basically had a year-on-year increase in cash for 3/4 years which illustrates we were cash generative & should give you some hope that going in to this season we should have a healthy cash balance before player sales.

On the final point, I have to say at the time I sympathised A LOT more with Dyche than Garlick on their differences. I also supported the takeover on the basis rumour had it their relationship had broken down and I’d have much preferred to lose Garlick than Dyche. But I do think Dyche was stubborn with the type of player he would sanction signing. As things turned out, I might have selected a different path with the benefit of hindsight!!

[ClaretPete001]

Yes, we’re agreeing; it was £80m pre-takeover, £50m after, of which £37m of the reduction is explained by using it to fund the takeover.

Had it not been, it’s reasonable to assume it would have increased again, even during COVID, which illustrates how well the club was run.

We basically had a year-on-year increase in cash for 3/4 years which illustrates we were cash generative & should give you some hope that going in to this season we should have a healthy cash balance before player sales.

On the final point, I have to say at the time I sympathised A LOT more with Dyche than Garlick on their differences. I also supported the takeover on the basis rumour had it their relationship had broken down and I’d have much preferred to lose Garlick than Dyche. But I do think Dyche was stubborn with the type of player he would sanction signing. As things turned out, I might have selected a different path with the benefit of hindsight!!

I don't think we disagree on how we came to be here I think we disagree on the likely consequence, which is fair enough neither of us has a crystal ball.

I think the club was well run up to 2018 - after that it looks like something changed and we stopped investing in playing assets, which resulted in the problems we have now.

I think we generated cash in the first few years in the PL because we had a Championship costs base and made profits.

After the first few years we started to generate cash because of a lack of activity in the transfer market; particularly in the last couple of years.

As we gradually accrued a PL cost base we stopped making the profits we did after promotion in 2016. So, again I'm not as optimistic as you are on the cash.

Like you, in hindsight I feel all this was totally avoidable and that causes a great deal of the irritation I feel.

[NewClaret]

Don’t disagree with any of that ClaretPete. And entirely share the frustration.

[Nori1958]

Yawn....... Done to death..... Nobody knows the current situation

[aggi]

The original point was that we had £50 million in the bank. My point was that much of that is pre-paid broadcast money and since then we have spent £10 million on an inter company loan after the end of the banking period and (arguably) £15 million on a loan re-payment so we haven't got £50 million in the bank.

On a broader point the club has spent £37 million in cash on the initial purchase, a further £10 million probably to smaller share holders and a £15 million cash repayment = £62 million.

The £65 million was paid from MSD to the former owners. In terms, of cash it only comes into play when we re-pay the loan so I don't think I've included it twice.

Maybe I missed your point but you referenced £102m and then a further £15m, I was just pointing out that it's not a "further" £15m, it's already in the £102m. Obviously big figures regardless though.

I think if you accept that he is a clever businessman then it is not possible to sustain the view the bank balance wasn't part of a plan to sell the club.

It's just not possible to believe that at the point MG was talking to the media about the consequences of the pandemic he had no idea that we would eventually end up with £80 million in the bank with enough to spend nearly £50 million on a takeover.

The evidence is: he did the deal!

It's not credible to sustain the view that MG and co did not realise the lack of investment and the subsequent risk that this deal would incur.

It's just not a credible gut feeling to sustain; if you also accept MG and colleagues were competent business people who had run a tight ship for a number of years.

Of course, what actually happened we will never know - it's what constitutes a credible view that is the issue.

I think maybe we're looking at different timescales here. I'm talking from about 2016 onwards, when we got back into the Premier league. The point when MG was talking to the media about the consequences of the pandemic was 4 years after that.

[NewClaret]

Yawn....... Done to death..... Nobody knows the current situation

You’re absolutely right. Hoping Tony bans the takeover/finances topic (with a short window when the accounts are released/new info comes to light because it’s otherwise all been said!!!)

[Chester Perry]

The £15m is already part of the £102m, you can't count it twice.

The issue is more that the £15m used for the reduction of the MSD Capital sum plus any other fee/penalty (if there were any) related to the transaction has once again come from the cash flow of the club - yes the balance in the loans to VSL remains unchanged but not the material cost impact on the clubs cashflow.

On the subject of cashflow Dave Thomas is reporting in the latest edition of the London Clarets magazine - Something to write home about - that this months stage payment has been pushed out to September. He also reckons that the sum outstanding in these payments is more than I have been suggesting.

FWIW. Dave is currently writing two books - one with Clive Holt and one with Barry Kilby

[Lancasterclaret]

The issue is more that the £15m used for the reduction of the MSD Capital sum plus any other fee/penalty (if there were any) related to the transaction has once again come from the cash flow of the club - yes the balance in the loans to VSL remains unchanged but not the material cost impact on the clubs cashflow.

On the subject of cashflow Dave Thomas is reporting in the latest edition of the London Clarets magazine - Something to write home about - that this months stage payment has been pushed out to September. He also reckons that the sum outstanding in these payments is more than I have been suggesting.

FWIW. Dave is currently writing two books - one with Clive Holt and one with Barry Kilby

I'm relieved now

If Dave thomas is saying it, then its almost certain to be wrong

[Nori1958]

I'm relieved now

If Dave thomas is saying it, then its almost certain to be wrong

Agreed

[ClaretPete001]

The issue is more that the £15m used for the reduction of the MSD Capital sum plus any other fee/penalty (if there were any) related to the transaction has once again come from the cash flow of the club - yes the balance in the loans to VSL remains unchanged but not the material cost impact on the clubs cashflow.

That is exactly the point.

And the question is how can a club the size of Burnley afford to pay out this amount of cash and maintain a healthy cashflow?

[Paul Waine]

The £80 million was the balance at the end of 19/20 and £50 million at 20/21.

The £80 million almost doubled in a year from £40 million the year before. It's just not possible to credibly believe at some point the bank balance did not become part of the sale plan even if that is indeed the case.

I don't think it's fair to blame Dyche because he was an employee who would reasonably expect a certain level of investment in a team he was culpable for.

I do share the frustration we are talking about this...

Hi Pete, there are some facts that go against your "sale plan" views on the evolution of the cash balances. The accounts for the period end 31st July 2020 covered a 13 months period. The accounts for the period before were for the 12 months to 30th June 2019. The "almost doubled" cash balance is a simple result of the receipt in July 2020 of the first instalment of Premier League money for the 2020/21 season. You can see this advanced income reported in a similar jump in the "accruals and deferred income" reported in the 31st July 2020 accounts.

May I also suggest you take a look at the meaning of "culpable." I'm sure you aren't intending to "blame Dyche" because you've said you "don't think it's fair..."

UTC

[ClaretPete001]

Hi Pete, there are some facts that go against your "sale plan" views on the evolution of the cash balances. The accounts for the period end 31st July 2020 covered a 13 months period. The accounts for the period before were for the 12 months to 30th June 2019. The "almost doubled" cash balance is a simple result of the receipt in July 2020 of the first instalment of Premier League money for the 2020/21 season. You can see this advanced income reported in a similar jump in the "accruals and deferred income" reported in the 31st July 2020 accounts.

May I also suggest you take a look at the meaning of "culpable." I'm sure you aren't intending to "blame Dyche" because you've said you "don't think it's fair..."

UTC

Hi Paul

I think the evidence points to the "sale plan" - I don't know if that was the intention but based on the assumption of the competence and talent of MG and Co that is what it looks like.

And to re-iterate - there is nothing wrong with businessmen seeking to leverage their asset.

I realise this is a complex issue and we can debate the minutiae to infinity but neither of the above can contradict my point because you can't argue that we were not carrying a lot of wasted cash (in business terms) because we spent £37 million on purchasing shares in 2020/21 and still ended up with £50 million in cash.

We subsequently spent another £10 million in inter company transfer, which according to your good self was to pay small shareholders and another £15 million to pay off the MSD debt. In other words, another £25 million after the last accounts.

So that's £62 million in cash not spent on playing assets or any other kind of business asset but on purchasing the club in a relatively short space of time. And we got relegated so the consequence of doing so is there for all to see.

How else can you look at it?

On your second point:

I think the word culpable has nuanced meaning but I've added the words in brackets which may help:

"I don't think it's fair to blame Dyche because he was an employee who would reasonably expect a certain level of investment (for) a team (situation) he was (likely to be held) culpable for...."

[Paul Waine]

Hi Paul

I think the evidence points to the "sale plan" - I don't know if that was the intention but based on the assumption of the competence and talent of MG and Co that is what it looks like.

And to re-iterate - there is nothing wrong with businessmen seeking to leverage their asset.

I realise this is a complex issue and we can debate the minutiae to infinity but neither of the above can contradict my point because you can't argue that we were not carrying a lot of wasted cash (in business terms) because we spent £37 million on purchasing shares in 2020/21 and still ended up with £50 million in cash.

We subsequently spent another £10 million in inter company transfer, which according to your good self was to pay small shareholders and another £15 million to pay off the MSD debt. In other words, another £25 million after the last accounts.

So that's £62 million in cash not spent on playing assets or any other kind of business asset but on purchasing the club in a relatively short space of time. And we got relegated so the consequence of doing so is there for all to see.

How else can you look at it?

On your second point:

I think the word culpable has nuanced meaning but I've added the words in brackets which may help:

"I don't think it's fair to blame Dyche because he was an employee who would reasonably expect a certain level of investment (for) a team (situation) he was (likely to be held) culpable for...."

Sorry, Pete, no, you are ignoring the facts and trying to make a claim that doesn't stand up to examination. The reason there was £80m in cash on the balance sheet at 31st July 2020 was because a little more than £30m was paid to the club in July as tv money for the upcoming season. Exactly the same happened the following year. If the accounting period end hadn't been changed there would have been £30m+ less cash at each period end date. You cannot use the timing of receipt of tv money / revenue that is already committed to paying wages and other expenses to support your argument that cash was being hoarded to make a leveraged sale possible. I guess, the covid-19 pandemic was also part of Mike Garlick's "sale plan" in your book? Without the delay in completing the 2019/20 season there would have been no reason to change the accounting period end date.

Yes, given the change in ownership, the new owners made a decision to use £37m of the previous owners' cash reserves to assist their payment for the shares they had bought. That Alan Pace has done that is not evidence that Mike Garlick had planned that that would be done by a new owner.

So far as the later transactions, the offer and purchase of the shares of the small shareholders and the paying off of £15m of the MSD debt are both actions by the new shareholders. There's no way that the previous owners could include any of those actions in their "sale plan."

Of course, my opinion is "nuanced" just like your opinion appears to be "nuanced."

I'm looking forward to the next few weeks of the transfer window and watching as Vincent Kompany re-builds the Clarets.

[ClaretPete001]

Sorry, Pete, no, you are ignoring the facts and trying to make a claim that doesn't stand up to examination. The reason there was £80m in cash on the balance sheet at 31st July 2020 was because a little more than £30m was paid to the club in July as tv money for the upcoming season. Exactly the same happened the following year. If the accounting period end hadn't been changed there would have been £30m+ less cash at each period end date. You cannot use the timing of receipt of tv money / revenue that is already committed to paying wages and other expenses to support your argument that cash was being hoarded to make a leveraged sale possible. I guess, the covid-19 pandemic was also part of Mike Garlick's "sale plan" in your book? Without the delay in completing the 2019/20 season there would have been no reason to change the accounting period end date.

Yes, given the change in ownership, the new owners made a decision to use £37m of the previous owners' cash reserves to assist their payment for the shares they had bought. That Alan Pace has done that is not evidence that Mike Garlick had planned that that would be done by a new owner.

So far as the later transactions, the offer and purchase of the shares of the small shareholders and the paying off of £15m of the MSD debt are both actions by the new shareholders. There's no way that the previous owners could include any of those actions in their "sale plan."

Of course, my opinion is "nuanced" just like your opinion appears to be "nuanced."

I'm looking forward to the next few weeks of the transfer window and watching as Vincent Kompany re-builds the Clarets.

In 2017, the television right were £104 million. In 2018, £121 million, In 2019 £115 million and in 2020 £113 million.

So, relatively speaking there was no increase in TV revenue. In fact, it went down so there was no extra cash coming into the business to increase the cash balance.

You might say, well the accounting period changed or the point at which the TV revenues is paid changed and that artificially made it look as though there was more cash in the business than before.

However, in year 19/20 there was a cash balance of 80 million. In the following year 20/21 there was a £37 million payment and the cash balance was still £50 million, which clearly suggests two things:

a) Had the cash not been paid the cash balance would have been nearly £90 million

b) the business comfortably absorbed the £37 million cash payment to buy the club

You can't have it both ways; either, there was £37 million to spare or we have a potential cash crisis.

If you don't think we are currently facing a cash crisis - the question is why was it not used? And one explanation, offered by Chester, was that it was because of the conservatism of the former owners and Covid.

And my rebuttal to that is based on the fact that in a relatively short space of time we have spent £62 million, which would have been known to the former owners because that would have been discussed as part of the original deal assuming they were aware of the ten million to the small shareholders.

They would certainly been aware of the consequences of relegation and the MSD repayments.

MG and co are smart guys - it's not possible to think they didn't consciously build up the cash reserves for a reason.

And if you currently don't believe we are facing a cash crisis I don't see how you can disagree with my view based upon a change in accounting periods. Or if you can you'll have to explain how in more detail.

[aggi]

In 2017, the television right were £104 million. In 2018, £121 million, In 2019 £115 million and in 2020 £113 million.

So, relatively speaking there was no increase in TV revenue. In fact, it went down so there was no extra cash coming into the business to increase the cash balance.

You might say, well the accounting period changed or the point at which the TV revenues is paid changed and that artificially made it look as though there was more cash in the business than before.

However, in year 19/20 there was a cash balance of 80 million. In the following year 20/21 there was a £37 million payment and the cash balance was still £50 million, which clearly suggests two things:

a) Had the cash not been paid the cash balance would have been nearly £90 million

b) the business comfortably absorbed the £37 million cash payment to buy the club

You can't have it both ways; either, there was £37 million to spare or we have a potential cash crisis.

If you don't think we are currently facing a cash crisis - the question is why was it not used? And one explanation, offered by Chester, was that it was because of the conservatism of the former owners and Covid.

And my rebuttal to that is based on the fact that in a relatively short space of time we have spent £62 million, which would have been known to the former owners because that would have been discussed as part of the original deal assuming they were aware of the ten million to the small shareholders.

They would certainly been aware of the consequences of relegation and the MSD repayments.

MG and co are smart guys - it's not possible to think they didn't consciously build up the cash reserves for a reason.

And if you currently don't believe we are facing a cash crisis I don't see how you can disagree with my view based upon a change in accounting periods. Or if you can you'll have to explain how in more detail.

And if we don't go up we will have a cash crisis.

The club could absorb that £37m (whether spent on players or a leveraged buyout) but, all things being equal using prior accounts as a basis, it means we go down with £15m in the bank rather than £50m.

Cash is king and all that but you still can't ignore the rest of the balance sheet.

[Paul Waine]

In 2017, the television right were £104 million. In 2018, £121 million, In 2019 £115 million and in 2020 £113 million.

So, relatively speaking there was no increase in TV revenue. In fact, it went down so there was no extra cash coming into the business to increase the cash balance.

You might say, well the accounting period changed or the point at which the TV revenues is paid changed and that artificially made it look as though there was more cash in the business than before.

However, in year 19/20 there was a cash balance of 80 million. In the following year 20/21 there was a £37 million payment and the cash balance was still £50 million, which clearly suggests two things:

a) Had the cash not been paid the cash balance would have been nearly £90 million

b) the business comfortably absorbed the £37 million cash payment to buy the club

You can't have it both ways; either, there was £37 million to spare or we have a potential cash crisis.

If you don't think we are currently facing a cash crisis - the question is why was it not used? And one explanation, offered by Chester, was that it was because of the conservatism of the former owners and Covid.

And my rebuttal to that is based on the fact that in a relatively short space of time we have spent £62 million, which would have been known to the former owners because that would have been discussed as part of the original deal assuming they were aware of the ten million to the small shareholders.

They would certainly been aware of the consequences of relegation and the MSD repayments.

MG and co are smart guys - it's not possible to think they didn't consciously build up the cash reserves for a reason.

And if you currently don't believe we are facing a cash crisis I don't see how you can disagree with my view based upon a change in accounting periods. Or if you can you'll have to explain how in more detail.

I think you've lost me, Pete. I'm no longer sure what you are arguing. What has the tv rights paid out over the seasons you quote got to do with the cash on the balance sheet? Yes, the tv money varies with the positions club finish in the league, higher finishes brings in more money. But, higher finishes also results in higher bonuses for the players, so the net effect on the club's cash balances doesn't directly reflect tv money received for each season. What does directly effect the cash balance is the date the tv money is received and the period end date that the club uses to prepare the accounts. If the period end is 30th June and the first instalment of tv rights for the following season are received in July, that money won't be part of the period end cash balance. If, as happened, the period end is deferred until 31st July, the tv rights received in July will be included in the cash at 31st July. (But, those tv rights aren't included in the revenue for the period, because they are included in "accruals and deferred income" - in the same way as the following season's season ticket payments received and any sponsorship paid in advance.

I can't make head nor tail over the rest of the stuff you say. As I said above, I'm leaving it there.

Do I think the club is facing a "cash crisis?" No, not at this time and not based on the facts available to us. Do I know all the details? No, of course, not. None of us do. We will have to wait and see how the transfer window progresses. We will have to wait and see how Vincent Kompany and his new team perform next season. We will have to wait and see what we learn from the accounts when they are pubished. Maybe, or maybe not, there will also be other developments that put information of BFC's financial status in the public domain.

UTC

[ClaretPete001]

And if we don't go up we will have a cash crisis.

The club could absorb that £37m (whether spent on players or a leveraged buyout) but, all things being equal using prior accounts as a basis, it means we go down with £15m in the bank rather than £50m.

Cash is king and all that but you still can't ignore the rest of the balance sheet.

If you accept the club could absorb £37 million and probably more then why did we not spend it on players? And instead, accept it in exchange for shares in the business?

[dsr]

If you accept the club could absorb £37 million and probably more then why did we not spend it on players? And instead, accept it in exchange for shares in the business?

One thing that we know as fact. Alan Pace has taken £112m out of the club. It is apparently arguable whether we would have been better off spending that on the team.