ALK Capital or Farnell/Elkashashy takeover

[Chester Perry]

Hi CP, is this new information re "initially borrowed circa £23m" etc? Or, am I mis-reading and you are referring to the £37 million loaned by BFC to ALK/VSL?

My expectation of ALK/VS US funding plan - based on seeing many similar structures used across many US business sectors - is that ALK is funded by Alan Pace and his close colleagues and VS US is set up alongside ALK to bring in additional investors. VS US would sell new shares (not "flip" existing shares) to the new investors as they subscribed for the shares. (The US sportsman introduced to Turf Moor in, from memory, Nov 2020, would be one such investor in VS US).

Re player relegation clauses, I'm unsure whether Wout Weghorst did or didn't have a relegation clause. Maybe he did, but also had the commitment to go out on loan on his original Premier League wages, so that he wasn't playing in the Championship on significantly higher wages than his 1st team squad colleagues. WW was signed in Jan when BFC were firmly in the relegation position. Maxwel Cornet may be in a different position. He was signed in August and no one was speaking of the risk of relegation for BFC at that time. It's likely that his BFC wage was higher than he was on in France and higher than he was being offered to move to Germany. It's possible therefore that the Premier League standard (Peter Crouch says relegation clauses are standard) would be accepted in Cornet's contract alongside the modest release clause that would apply on relegation.

As for the change in wording in the accounts, maybe this is no more than creating the space for flexibility with the contracts, flexibility that was being applied imaginatively with WW and MC and may be a good option to have in other circumstances.

I have been through this a number of times previously - it is not that difficult to understand, in fact I am reasonably sure you have concurred with its thinking previously

I believe that the £37m loan from Burnley Football and Athletic Club limited is a combination of £23m paired with the £65m from MSD via Burnley FC Holdings that paid for the expensive shares in the issue for Kettering Capital of December 30 2020 (VSL stumped up £10m for the same type of shares at a substantially reduced rate - the combined sum of £98m forming what I believe to be the upfront payment). The other £14m of the £37m total loan, in my understanding formed the first stage payment (which had gone overdue).

The model you describe is the one I have been talking about for months now and the one you read in my draft correction article

[Jacko]

I'm all for optimism, I want us to do well this season - who knows we may go up - but I simply can't see why anyone who doesn't have a vested interest in ALK, Pace et al could defend what's going on. They are selling our best players to pay for their takeover - it's asset stripping and it stinks.

Lines like, 'we're selling because we went down' may be true to an extent but miss a reality: if we didn't have ALK's debt the receipts could go into the club.

[ClaretPete001]

I’m saying the club is operating under a new financial framework and that selling its best players is not to pay for a new chairman but to service / pay for a very different set of costs and commitments than existed under the previous owners (and with after relegation a very different level of revenue too).
Most clubs that are relegated have always faced similar challenges - sponsorship revenue falling, TV income etc and often when the clubs are debt ridden the debt providers will have clauses relating to relegation to reduce their exposure.

And in our case it’s made significantly harder because we got relegated in the year after a take over that has clearly burdened the club with tens of millions of costs we did not have previously.

Point 1:

I’m saying the club is operating under a new financial framework and that selling its best players is not to pay for a new chairman but to service / pay for a very different set of costs and commitments than existed under the previous owners (and with after relegation a very different level of revenue too).

The new commitments you refer to are the shares paid for by the club and now owned by the new Chairman and his fellow investors.

Point 2:

"Most clubs that are relegated have always faced similar challenges - sponsorship revenue falling, TV income etc and often when the clubs are debt ridden the debt providers will have clauses relating to relegation to reduce their exposure."

This is true but it doesn't tell the whole truth, which is that while most clubs do have issue of the nature you describe Burnley's is exacerbated because the current owners used £50 million quid of the clubs money to buy purchase the club.

Point 3:

And in our case it’s made significantly harder because we got relegated in the year after a take over that has clearly burdened the club with tens of millions of costs we did not have previously.

Well yes to facilitate the new ownership and new chairman

No offence Big Vinny, I don't think I've ever seen anyone go through so many hoops to avoid saying what is self-evidently being said...!

[RVclaret]

I'm all for optimism, I want us to do well this season - who knows we may go up - but I simply can't see why anyone who doesn't have a vested interest in ALK, Pace et al could defend what's going on. They are selling our best players to pay for their takeover - it's asset stripping and it stinks.

Lines like, 'we're selling because we went down' may be true to an extent but miss a reality: if we didn't have ALK's debt the receipts could go into the club.

Asset stripping

‘the practice of taking over a company in financial difficulties and selling each of its assets separately at a profit without regard for the company's future’

- they didn’t take over in financial difficulties
- they aren’t selling each of its assets without regard for the company’s future
- in fact, by investing in young, high potential players, and lowering the wage bill significantly, I would say they are doing the exact opposite of ‘disregarding the club’s future’
- we are currently the highest spenders in the entire league, which again, doesn’t go with the above definition
- the players sold so far are Premier League players with Premier League interest

Hope that helps.

[Chester Perry]

Hi CP, are these the further instalments you are referring to? Is any of this public domain, anywhere?

I have been through this before to

so purchase price = £170m

upfront payment £98m, see reasoning above

first stage payment £14m - paid after going overdue

Second stage payment (following a revision of the schedule £11m paid after going overdue but sweetened with a small advance on the next payment due in June according to my source

170 - (98 + 14 +11) = 47

I was informed in March the June payment was circa £26m which (whenever the outstanding balance on it is/was paid would leave £21m to be paid by a date somewhere in 2023 if the end date suggested in the Freight Investor accounts still holds

It remains notable that while the Offer Letter mentioned a performance bonus on the price per share, it does not state a circumstance for a decrease, rather it gives a price paid per share - perhaps more significantly the Freight Investor Accounts do not mention scope for a price decrease either

[Newcastleclaret93]

Asset stripping

‘the practice of taking over a company in financial difficulties and selling each of its assets separately at a profit without regard for the company's future’

- they didn’t take over in financial difficulties
- they aren’t selling each of its assets without regard for the company’s future
- in fact, by investing in young, high potential players, and lowering the wage bill significantly, I would say they are doing the exact opposite of ‘disregarding the club’s future’
- we are currently the highest spenders in the entire league, which again, doesn’t go with the above definition
- the players sold so far are Premier League players with Premier League interest

Hope that helps.

Going to be really interesting to see at what point you turn.

I suspect it will be in an a year or two but no doubt it will happen.

[RVclaret]

Going to be really interesting to see at what point you turn.

I suspect it will be in an a year or two but no doubt it will happen.

What are you on about?

[Newcastleclaret93]

What are you on about?

When you turn from team ALK

[aggi]

The costs the previous ownership passed on were wages and running costs, all outstanding transfer payments have been made. Contractual provisions mean that all players signed by the previous owners had relegation clauses re wages - my opinion (not universally shared) is that our major signings last season (Wout and Max) did not have wage reduction clauses upon relegation (this is based on very different wording in the accounts around this point).

...

I looked at the accounts last time you mentioned this and I couldn't see anything to support it. What different wording are you basing it on?

[ClaretPete001]

You can't safeguard the squad. The reality is the players have a resale value, if we failed to cash in now, the players stayed and failed to bounce back, even more of those players would be ooc, free to talk to third parties, and they all would have their values drop as a result.
It's always painful as a fan to see your players, especially your best players leave, but it is a reality of the situation relegation brings. The fans would have been happy if we'd tried to hang on, but as a business decision it would have been a bad idea. Without the sales we wouldn't have this huge incoming of new, fresh, younger players, and God knows we needed it. To carry our aged squad for another season would just be pushing an even bigger problem further down the road, it's a gamble that fails far more often than it succeeds.

I'm not privy to what Alan Pace thinks, or does with the money. I just trust him to be doing what he thinks is best for the club, because there isn't a scenario whereby harming the club does him any favours in the long run, and I believe he is here for the long run. Whatever his plan is, it must have been good enough to impress VK, who had other offers on the table, but chose to try and create APs vision at Burnley.

Safeguarding the squad does not entail not selling players it just means ensuring that the quality of it is not diminished.

I therefore presume that you agree had we spent £50 million on players instead of shares then that would constitute safeguarding the quality of the squad. So, the first part of your point is irrelevant.

And no one can argue that we couldn't afford to spend that money because we have done.

Trusting investment banks and investors is a fools paradise. No one can suggest that a small town club spending £50 million on non-trading activities is wise - I'm sure you agree albeit it's less clear why you think it warrants trust.

[RVclaret]

When you turn from team ALK

Firstly, I’m ‘team Burnley’. Secondly, I try to see the bigger picture, while providing a more balanced, rounded view than the constant bashing and negative skew you see on this board. People say daft comments like asset stripping, it gets called out.

[Newcastleclaret93]

Firstly, I’m ‘team Burnley’. Secondly, I try to see the bigger picture, while providing a more balanced, rounded view than the constant bashing and negative skew you see on this board. People say daft comments like asset stripping, it gets called out.

I would suggest your currently team ALK rather than Burnley.

You completely ignore the blinding obvious and would rather call out fans that make good points.

[RVclaret]

I would suggest your currently team ALK rather than Burnley.

You completely ignore the blinding obvious and would rather call out fans that make good points.

Well you’re incorrect. What am I ignoring that’s blindingly obvious?

[Big Vinny K]

I'm all for optimism, I want us to do well this season - who knows we may go up - but I simply can't see why anyone who doesn't have a vested interest in ALK, Pace et al could defend what's going on. They are selling our best players to pay for their takeover - it's asset stripping and it stinks.

Lines like, 'we're selling because we went down' may be true to an extent but miss a reality: if we didn't have ALK's debt the receipts could go into the club.

It’s not asset stripping - I know that’s been a popular phrase on this board recently but without going into detail as to what constitutes real asset stripping I do get why some fans use this term.
The reality of our situation is difficult after the last 8 or 9 years success on and off the field.
But the way our club ran its finances during this period and the success we had is the exception to the rule….rather than the situation we now face which is far more common.
Many clubs burden themselves with high level of debts which are just about manageable in the Premier League but when the inevitable relegation eventually happens the reality of the risks the club quickly becomes very stark - not least of which for fans when they see the exodus of their best players.
The previous owners decided to cash in - it was probably a one in a million chance that we were going to find new owners who were going to put £200m of their own money in and not expect a penny back in dividends or interest for many years.

[Newcastleclaret93]

Well you’re incorrect. What am I ignoring that’s blindingly obvious?

Everything to do with the takeover??

I have literally never seen you be critical about it once. Hence the Team ALK comment

[Claretnick]

If a highly qualified and experienced team of New York financiers cannot keep the finances of Burnley FC in order then there is not much hope for the rest of us....UTC

[forzagranata]

There is one aspect of this that hasn't received as much scrutiny as the excellent posts from Chester and others. I would be interested in any information/thoughts:

From what I understood of ALK's strategy - the idea was that once they had secured ownership of the club (through their highly leveraged takeover) then they would attract a number of private investors to come on board who would inject fresh capital into the club. With the exception of former NFL player Malcolm Jenkins (and who knows what he has invested or how?) this anticipated new investment doesn't seem to have happened. Or am I mistaken?

[ClaretPete001]

If a highly qualified and experienced team of New York financiers cannot keep the finances of Burnley FC in order then there is not much hope for the rest of us....UTC

The rest of us don't run English football clubs and generally speaking neither do salesmen from New York investment banks.

They may run Sports franchises in the States where there are wage caps and no relegation but the English football pyramid is a totally different ball game.

[RVclaret]

Everything to do with the takeover??

I have literally never seen you be critical about it once. Hence the Team ALK comment

It was only a few months ago according to you and others on here, we were basically doomed. Talksport said this, Tariq Panya said that, Keiran Maguire thinks this. That was the narrative.

Since then, we’ve hired an exciting, sought after manager who fans are getting behind (14073 season tickets sold, 10% more than last season) and building an exciting looking playing squad, in accordance with the managers and owners vision. We are currently the highest spenders in the division. Again, there were many comments on here at the time saying we would just sell all our best players, up s*** creek without a paddle as there were so many OOC and we’d just be making loan signings / frees.

Is the leveraged buy out ideal? No. Am I happy that some funds from selling players may be going towards the new debt? Not really. Can I do anything about it? No. Do I blame ALK for the transaction? No, they were entitled to do it. Do I like the noises from the chairman? Yes - vision and ambition? Yes. The way I see it, there is a plan, like I always suggested there would be (proved right so far) and I’m excited for what’s next.

[Paul Waine]

I have been through this before to

so purchase price = £170m

upfront payment £98m, see reasoning above

first stage payment £14m - paid after going overdue

Second stage payment (following a revision of the schedule £11m paid after going overdue but sweetened with a small advance on the next payment due in June according to my source

170 - (98 + 14 +11) = 47

I was informed in March the June payment was circa £26m which (whenever the outstanding balance on it is/was paid would leave £21m to be paid by a date somewhere in 2023 if the end date suggested in the Freight Investor accounts still holds

It remains notable that while the Offer Letter mentioned a performance bonus on the price per share, it does not state a circumstance for a decrease, rather it gives a price paid per share - perhaps more significantly the Freight Investor Accounts do not mention scope for a price decrease either

Hi CP, thanks for responses.

On the first one, £23 million, the way you worded it made me think you were referring to ALK/VSL borrowings from a 3rd party, not part of the £37 million. Hence me asking the question for clarification.

Re the stage payments you reference, am I correct to assume you are being provided this information privately (where you say "according to my source") and it is not available in the public domain?

Where is the funding coming from all the stage payments? I recognise that you've said, above, that £14m is part of the £37m shown in the club's accounts. I think you've also suggested that the second stage payment, £11m, may have been funded by the Macquarie/Wood loan - though it can also be attributed to the £15m MSD loan repayment.

Has the £26m June stage payment also been paid? Has this also been covered by the club?

[Newcastleclaret93]

It was only a few months ago according to you and others on here, we were basically doomed. Talksport said this, Tariq Panya said that, Keiran Maguire thinks this. That was the narrative.

Since then, we’ve hired an exciting, sought after manager who fans are getting behind (14073 season tickets sold, 10% more than last season) and building an exciting looking playing squad, in accordance with the managers and owners vision. We are currently the highest spenders in the division. Again, there were many comments on here at the time saying we would just sell all our best players, up s*** creek without a paddle as there were so many OOC and we’d just be making loan signings / frees.

Is the leveraged buy out ideal? No. Am I happy that some funds from selling players may be going towards the new debt? Not really. Can I do anything about it? No. Do I blame ALK for the transaction? No, they were entitled to do it. Do I like the noises from the chairman? Yes - vision and ambition? Yes. The way I see it, there is a plan, like I always suggested there would be (proved right so far) and I’m excited for what’s next.

Fair enough.

I don’t understand how anyone can be happy with the position they have put us in but each to there own I guess.

[Claretnick]

The rest of us don't run English football clubs and generally speaking neither do salesmen from New York investment banks.

They may run Sports franchises in the States where there are wage caps and no relegation but the English football pyramid is a totally different ball game.

The rest of us are generally not experts in the field of corporate finances. I am also sure these guys or salesmen as you call them have the intelligence to be very quick learners in adapting to the English way of things.. Enjoy your time picking the club's finances too pieces and generally adding to the negative vibe on this forum.

[NewClaret]

Fair enough.

I don’t understand how anyone can be happy with the position they have put us in but each to there own I guess.

Don’t think he said he was happy with the position, did he?

He just explained there are some positives emerging from the situation, which should also be acknowledged in the discussion.

[RVclaret]

Don’t think he said he was happy with the position, did he?

He just explained there are some positives emerging from the situation, which should also be acknowledged in the discussion.

Correct

[Paul Waine]

There is one aspect of this that hasn't received as much scrutiny as the excellent posts from Chester and others. I would be interested in any information/thoughts:

From what I understood of ALK's strategy - the idea was that once they had secured ownership of the club (through their highly leveraged takeover) then they would attract a number of private investors to come on board who would inject fresh capital into the club. With the exception of former NFL player Malcolm Jenkins (and who knows what he has invested or how?) this anticipated new investment doesn't seem to have happened. Or am I mistaken?

Hi fg, CP has referenced "VSL" seeking additional investments by "flipping" shares. He says it's not been successful. I've asked him if any of this is in the public domain. My understanding of US typical investment structures means that Alan Pace (and a small group of colleagues) have set up and invested in ALK. ALK, in turn has set up VS US (I'm using that designation to avoid confusion with VSL, which is the Jersey entity which owns Kettering Capital) and that Alan Pace et al are seeking investors by selling them new shares in VS US. I believe that Malcolm Jenkins will be one such investor in VS US. So far as I know, there's no public domain information on how many have invested in VS US (or how much) - which I believe is in accordance with US law.

There was mention at the time BFC lost at Norwich that Alan Pace had been in China speaking with potential US$100m (or was it GBP) investor, but that had fallen through with relegation approaching. I don't know if any of this was reported/confirmed in public domain.

[Newcastleclaret93]

Don’t think he said he was happy with the position, did he?

He just explained there are some positives emerging from the situation, which should also be acknowledged in the discussion.

He said he is excited for what’s to come? Is that not being happy with the situation?

If he wants to find positives in this situation then fair enough. The reality is the club has loads of risk placed on it.

What have the club actually benefitted from?

[Jacko]

Asset stripping

‘the practice of taking over a company in financial difficulties and selling each of its assets separately at a profit without regard for the company's future’

- they didn’t take over in financial difficulties
- they aren’t selling each of its assets without regard for the company’s future
- in fact, by investing in young, high potential players, and lowering the wage bill significantly, I would say they are doing the exact opposite of ‘disregarding the club’s future’
- we are currently the highest spenders in the entire league, which again, doesn’t go with the above definition
- the players sold so far are Premier League players with Premier League interest

Hope that helps.

I'm familiar with your definition and I stand by the choice of phrase. Whether you wish to be obtuse or not, you and many others know the point: they bought the club/cheap/on tick/whatever and are flogging genuine assets and not reinvesting the cash.

As for being highest spenders, that's largely irrelevant if it's a fraction of what the sales raise. Trading in Wood for Weghorst is not an upgrade, it was a downgrade which left us with less of an asset: Collins for... Etc. We had a squad worth a decent amount when ALK came in, now we have a squad worth less than that and debt. I know a bad deal when I see it.

[KRBFC]

We were told on here that ALK would drastically improve income from shirt sales and take Burnley global etc. How has this gone?

[NewClaret]

He said he is excited for what’s to come? Is that not being happy with the situation?

If he wants to find positives in this situation then fair enough. The reality is the club has loads of risk placed on it.

What have the club actually benefitted from?

Think you’re quoting selectively, he said:

Is the leveraged buy out ideal? No. Am I happy that some funds from selling players may be going towards the new debt? Not really. Can I do anything about it? No. Do I blame ALK for the transaction? No, they were entitled to do it. Do I like the noises from the chairman? Yes - vision and ambition? Yes. The way I see it, there is a plan, like I always suggested there would be (proved right so far) and I’m excited for what’s next.

The benefit, according to RV being: a chairman with vision, ambition and a plan. I would add: a new manager able to attract good young players, a new playing style and a complete refresh of an ageing squad. So far, that is. There’s time yet to build on that or blow it all of course.

You can be unhappy at the way the takeover was structured whilst being pleased with the direction the club has taken since and excited for the future. They’re not mutually exclusive.

[KRBFC]

They've been very fortunate the football has been boring and the fanbase were begging for mass change. Now everybody is excited at something just because it's new (I include myself in this) despite millions being brought in and not reinvested.

[NewClaret]

We were told on here that ALK would drastically improve income from shirt sales and take Burnley global etc. How has this gone?

Who told you that?

[KRBFC]

Who told you that?

I wont call out posters on here by name, they were staunch defenders of the finances behind the deal at the time and they know who they are. Now the accounts have been released, how has this dramatically raising income gone?

Was it pie in the sky fantasy land stuff or did ALK really take Burnley global and raise income significantly.

[Paul Waine]

I'm familiar with your definition and I stand by the choice of phrase. Whether you wish to be obtuse or not, you and many others know the point: they bought the club/cheap/on tick/whatever and are flogging genuine assets and not reinvesting the cash.

As for being highest spenders, that's largely irrelevant if it's a fraction of what the sales raise. Trading in Wood for Weghorst is not an upgrade, it was a downgrade which left us with less of an asset: Collins for... Etc. We had a squad worth a decent amount when ALK came in, now we have a squad worth less than that and debt. I know a bad deal when I see it.

It's all doom, isn't it Jacko, especially if we want it to be all doom. The club didn't "trade Wood" btw, his very fat release clause was triggered by Newcastle. They got themselves so much of a good deal, that it appears that they don't want Wood as a starter this season. Wout Weghorst at Brighton was definitely an upgrade, but after that the whole club struggled. We had an old squad and many of those players were ooc at the end of the season. Those that weren't ooc had relegation clauses that significantly cut their earnings. No surprise that some of those wanted to remain Premier League players. My view is that BFC owed Nick Pope the right to get back in the Premier League.

What we all need to understand is that Alan Pace has brought in Vincent Kompany as our new manager. VK was an elite player for Man City. He's now developing his career in management. Additionally, as I've posted above, VK has an MBA and is perfectly placed to understand ALK's business model and BFC's financial status. We should all take a lot of confidence that VK has joined Burnley with his inside knowledge of the club.

[BurnleyFC]

With all due respect, I don’t think VK will particularly give a stuff about ALK’s finances, so long as they keep paying him £3m a year.

They can talk about long term projects as much as they like but if VK underperforms then he’ll be sacked and if he overperforms then he’ll be poached by a bigger club.

The days of managers building a legacy over a sustained period of time are gone.

[RVclaret]

I'm familiar with your definition and I stand by the choice of phrase. Whether you wish to be obtuse or not, you and many others know the point: they bought the club/cheap/on tick/whatever and are flogging genuine assets and not reinvesting the cash.

As for being highest spenders, that's largely irrelevant if it's a fraction of what the sales raise. Trading in Wood for Weghorst is not an upgrade, it was a downgrade which left us with less of an asset: Collins for... Etc. We had a squad worth a decent amount when ALK came in, now we have a squad worth less than that and debt. I know a bad deal when I see it.

If you know what the term means then why use it when it’s factually incorrect? It’s just another popular saying that’s being used on here recently alongside ‘firesale’, both terribly inaccurate. The facts are they are reinvesting? We’ve brought 8 players in for a ‘total’ of around 13m so far.

As for Wood / Weghorst, many, including myself thought, at the time, it was a very good signing, for half the price we received for Wood. Full Dutch international, 1 in 2 in the Bundesliga, playing Champions League football, could he be the man to fire us to safety - on paper, it looked good, on the pitch too for a short while, until things went wrong.

As for ‘downgrading’ Collins, well yes, it’s highly improbable you’re going to sign someone as good as him right now, otherwise, another Wolves will be all over it, and he’d cost 20m! We’re shopping in a different market. We are currently player trading and it’s a model that we utilised throughout the years Dyche was here, until the last 3/4 when it stopped, and we ultimately paid the price.

[DCWat]

I wont call out posters on here by name, they were staunch defenders of the finances behind the deal at the time and they know who they are. Now the accounts have been released, how has this dramatically raising income gone?

Was it pie in the sky fantasy land stuff or did ALK really take Burnley global and raise income significantly.

To be fair, he did suggest that these things will take time. I’ve been sceptical of some of the claims and my own view is that the ceiling that a club like ours has will be limiting in those aims.

[ClaretPete001]

The rest of us are generally not experts in the field of corporate finances. I am also sure these guys or salesmen as you call them have the intelligence to be very quick learners in adapting to the English way of things.. Enjoy your time picking the club's finances too pieces and generally adding to the negative vibe on this forum.

True but expertise in corporate finance is not required to run a football club with £20 million matchday revenue.

In 2008, investment bankers were happily spending billions on re-packaging sub-prime bad debt causing the biggest economic crash in decades.

They did it because they knew you'd pay for it and be happy to do so because bank bad debt becomes a proxy for unhappiness and paying to make it go away is just what financial markets rely on when they are calculating risk.

It's a beautiful thing when you think about it. They take all the money with no risk and you pay for it.

So, you see learning to live with bad vibes to experience some hard financial truths is good medicine for you.

And free gratis...! No need to thank me.

[ClaretPete001]

It's all doom, isn't it Jacko, especially if we want it to be all doom. The club didn't "trade Wood" btw, his very fat release clause was triggered by Newcastle. They got themselves so much of a good deal, that it appears that they don't want Wood as a starter this season. Wout Weghorst at Brighton was definitely an upgrade, but after that the whole club struggled. We had an old squad and many of those players were ooc at the end of the season. Those that weren't ooc had relegation clauses that significantly cut their earnings. No surprise that some of those wanted to remain Premier League players. My view is that BFC owed Nick Pope the right to get back in the Premier League.

What we all need to understand is that Alan Pace has brought in Vincent Kompany as our new manager. VK was an elite player for Man City. He's now developing his career in management. Additionally, as I've posted above, VK has an MBA and is perfectly placed to understand ALK's business model and BFC's financial status. We should all take a lot of confidence that VK has joined Burnley with his inside knowledge of the club.

We don't need to understand that Paul - what we need to understand is that this is a debate with a variety of opinions....!

Arguing that a leveraged buyout makes sense because the new manager has an MBA is....well - it's an opinion! And you are welcome to it.

[Colburn_Claret]

Safeguarding the squad does not entail not selling players it just means ensuring that the quality of it is not diminished.

How do you sell a premier league footballer, and buy someone of the same quality for less money. If it was as simple as that, everybody would be doing it. Buying younger, cheaper players, is future proofing the club. I can't envisage a day when we won't have to sell players for a profit, in order to be sustainable. That's only achieved by doing what we have done this summer.

I therefore presume that you agree had we spent £50 million on players instead of shares then that would constitute safeguarding the quality of the squad. So, the first part of your point is irrelevant.
25 million on 2 good pros isn't future proofing. Buying 10 young lads with promise, for 5 million is, and there is no guarantee with either option. Just a likelihood that one of those 10 youngsters can pay for another 10.

And no one can argue that we couldn't afford to spend that money because we have done.

Trusting investment banks and investors is a fools paradise. No one can suggest that a small town club spending £50 million on non-trading activities is wise - I'm sure you agree albeit it's less clear why you think it warrants trust.
it's a one off payment that can be serviced. Do I like it, of course not, but this is the real world. It's what makes the wheel turn round. It's what allows people to buy houses, and start businesses. Someone taking a loan to build their dream. Why should football clubs be any different.

[Jacko]

It's all doom, isn't it Jacko, especially if we want it to be all doom. The club didn't "trade Wood" btw, his very fat release clause was triggered by Newcastle. They got themselves so much of a good deal, that it appears that they don't want Wood as a starter this season. Wout Weghorst at Brighton was definitely an upgrade, but after that the whole club struggled. We had an old squad and many of those players were ooc at the end of the season. Those that weren't ooc had relegation clauses that significantly cut their earnings. No surprise that some of those wanted to remain Premier League players. My view is that BFC owed Nick Pope the right to get back in the Premier League.

What we all need to understand is that Alan Pace has brought in Vincent Kompany as our new manager. VK was an elite player for Man City. He's now developing his career in management. Additionally, as I've posted above, VK has an MBA and is perfectly placed to understand ALK's business model and BFC's financial status. We should all take a lot of confidence that VK has joined Burnley with his inside knowledge of the club.

It's not the selling of Wood that's the issue - we all know about the release clause - it's reinvesting only a portion of the income and pocketing the rest. Same with all the sales.

And why should we take confidence from Kompany? I hope he's great; I want him to be. But so far he's done squat, diddly, nothing. We had a manager with a record of achievement, now we don't. It may end up being a wonderful change - I hope so - but football is absolutely riddled with examples of potential which have turned out disastrously. As for the MBA, well good on Kompany, but that's irrelevant to whether the takeover is a good deal or not.

[ClaretPete001]

".....it's a one off payment that can be serviced. Do I like it, of course not, but this is the real world. It's what makes the wheel turn round. It's what allows people to buy houses, and start businesses. Someone taking a loan to build their dream. Why should football clubs be any different."

Take two scenarios

(A) Burnley Football Club in the Premier League has a turnover of £134 million (B) In the Championship, Rovers have a turnover of £16 million.

The only reason Rovers can compete in the Championship is because the Venky's have chucked £20 million ever year in to the tune of £200 million.

We either get promoted or have 3 years to transition from A to B.

It's not like a mortgage or a loan to fund a dream or corporate finance or running a little designer frock shop in Barrowford with the Mrs. It's a very problematic marketplace suffering serious inflation because billionaires are pumping money in left right and centre.

I'm not being negative or casting aspersions on Pace or anything else I'm just telling you how it is. No more - no less..!

[Duffer_]

It’s just another popular saying that’s being used on here recently alongside ‘firesale’, both terribly inaccurate.

What's your definition of fire sale? "Any sale at a deep discount to raise money" seems reasonable to me. I am struggling to see the sale of Nick Pope for £10m to £12m as anything other than that. Factoring the instalments to accelerate cash flow doesn't do anything to challenge that interpretation.

I don't buy the idea that we owed it to Pope to sell him. I also don't get the idea of a verbal agreement with Weghorst that he wouldn't have to play in the Championship. That's what release clauses are for. Just how much do we have to disadvantage ourselves (take any offer?) to "honour" that agreement, if it ever existed?

I am looking forward to a new season and a new style of play under a new manager. There is enough to be genuinely positive about without reverting to self-delusion regards our finances.

[Paul Waine]

We don't need to understand that Paul - what we need to understand is that this is a debate with a variety of opinions....!

Arguing that a leveraged buyout makes sense because the new manager has an MBA is....well - it's an opinion! And you are welcome to it.

I hope you can understand, Pete, that what you have said, is not what I'm saying. I'm saying that Vincent Kompany has good financial qualifications that enable him to make his own assessment of Burnley's finances and understand directly the financial information he has received from Alan Pace. This information will be a lot more than we all have access to from last year's accounts. Based on this information and Alan Pace's expressed ambitions for Burnley with Vincent Kompany as manager, Vincent Kompany has chosen to accept the offer to become BFC's new manager. If an elite and intelligent football leader is able to conclude that Burnley's finances, having seen a lot more of BFC's finances than is in the public domain, aren't a barrier to him taking the role as Burnley's manager, then that is good evidence that the worries expressed on this board and elsewhere are very likely overstated.

[Colburn_Claret]

".....it's a one off payment that can be serviced. Do I like it, of course not, but this is the real world. It's what makes the wheel turn round. It's what allows people to buy houses, and start businesses. Someone taking a loan to build their dream. Why should football clubs be any different."

Take two scenarios

(A) Burnley Football Club in the Premier League has a turnover of £134 million (B) In the Championship, Rovers have a turnover of £16 million.

The only reason Rovers can compete in the Championship is because the Venky's have chucked £20 million ever year in to the tune of £200 million.

We either get promoted or have 3 years to transition from A to B.

It's not like a mortgage or a loan to fund a dream or corporate finance or running a little designer frock shop in Barrowford with the Mrs. It's a very problematic marketplace suffering serious inflation because billionaires are pumping money in left right and centre.

I'm not being negative or casting aspersions on Pace or anything else I'm just telling you how it is. No more - no less..!

I understand that, but relegation is a fact of life. Teams have been relegated that have spent far more money than us. So the idea that spending 50 million on x amount of players would have saved us is wrong. There was always this possibility that one day we would be relegated, and if we were then the revenue from being in the Prem would also dry up. We were always going to face this issue at some point, the only question is how do you solve it. IMO, doing what we are doing, selling our few saleable assets, to buy good quality, but unproven talent, was the way to go. Yes it's a gamble, but it doesn't carry the risks that carrying on with an aged squad would have done.

[Devils_Advocate]

I hope you can understand, Pete, that what you have said, is not what I'm saying. I'm saying that Vincent Kompany has good financial qualifications that enable him to make his own assessment of Burnley's finances and understand directly the financial information he has received from Alan Pace. This information will be a lot more than we all have access to from last year's accounts. Based on this information and Alan Pace's expressed ambitions for Burnley with Vincent Kompany as manager, Vincent Kompany has chosen to accept the offer to become BFC's new manager. If an elite and intelligent football leader is able to conclude that Burnley's finances, having seen a lot more of BFC's finances than is in the public domain, aren't a barrier to him taking the role as Burnley's manager, then that is good evidence that the worries expressed on this board and elsewhere are very likely overstated.

This is nonsense as it could as easily mean the opposite in the scenario where Mr Pace was willing to back Kompany to the hilt and throw the kitchen sink at getting back up in the next couple of seasons even if failure brought the risk of financial ruin for the club

Im not saying this what will happen but you have a disingenuous tendency to link a couple unknown discussion points together as if one is an obvious conclusion based on the other. You then have the cheek to question and challenge anyone else making any assumptions that are not hard facts if it goes against you ideological stance on the subject

[Jakubclaret]

This is nonsense as it could as easily mean the opposite in the scenario where Mr Pace was willing to back Kompany to the hilt and throw the kitchen sink at getting back up in the next couple of seasons even if failure brought the risk of financial ruin for the club

Im not saying this what will happen but you have a disingenuous tendency to link a couple unknown discussion points together as if one is an obvious conclusion based on the other. You then have the cheek to question and challenge anyone else making any assumptions that are not hard facts if it goes against you ideological stance on the subject

“Even if failure brought the risk of financial ruin for the club, I think we are already at that point unless you can dress relegation up to be something other than failure! I’m struggling to think of 1 single thing that’s gone right from day 1 under this regime.

[KRBFC]

I understand that, but relegation is a fact of life. Teams have been relegated that have spent far more money than us. So the idea that spending 50 million on x amount of players would have saved us is wrong. There was always this possibility that one day we would be relegated, and if we were then the revenue from being in the Prem would also dry up. We were always going to face this issue at some point, the only question is how do you solve it. IMO, doing what we are doing, selling our few saleable assets, to buy good quality, but unproven talent, was the way to go. Yes it's a gamble, but it doesn't carry the risks that carrying on with an aged squad would have done.

but the money from sales isn't going into the club accounts to benefit the club, it's going in and straight out to cover debts built up to pay for new owners. Instead under Garlick we could've spent the money in the club and spent a £65m MSD loan all on players and been in a far better position. The fans wouldn't have liked the club to get into debt to buy players but are seemingly content with the club getting into huge debt to fund new owners. Players would've been a far bigger benefit.

[dsr]

Last time we got relegated we kept all possible players and made some big incoming transfers to replace the ones that left. With hindsight, would we have done better selling everything that moved?

Obviously no, but at that point we still had money in the bank and didn't have to spend fortunes on repaying loans and loan interest that brought no benefit ot the club at all.

[dsr]

There was mention at the time BFC lost at Norwich that Alan Pace had been in China speaking with potential US$100m (or was it GBP) investor, but that had fallen through with relegation approaching. I don't know if any of this was reported/confirmed in public domain.

And was it suggested that the 100m was going to be invested in Burnley FC, or was it going to be invested in ALK capital?

[Colburn_Claret]

but the money from sales isn't going into the club accounts to benefit the club, it's going in and straight out to cover debts built up to pay for new owners. Instead under Garlick we could've spent the money in the club and spent a £65m MSD loan all on players and been in a far better position. The fans wouldn't have liked the club to get into debt to buy players but are seemingly content with the club getting into huge debt to fund new owners. Players would've been a far bigger benefit.

If we'd spent 65 million on new players, do you really believe the glass half empty brigade would have been happy if we still got relegated. They'd have pulled Garlick to bits, for buying the wrong players. There is no win in any scenario you paint a picture of, because its all conjecture. Ifs, buts, maybes. The only reality is the one we face, and how do we deal with it. Arguing about how we got there doesn't solve anything. So while it matters, it isn't important.