Update on Burnley's Finances.

[aggi]

there is more to it than it being a repayment - and £30m is quite the rounding up

from the takeover thread


The precise nature of the sum returned (£26.215m) would suggest that this is the reason the repayment was made - to be clear while:
- The EFL allow up to £13m of losses a season (in the 3 year aggregate) anything over £3m of losses must be made up by Owner funds
- The Premier League allow up to £35m of losses a season (in the 3 year aggregate) anything over £5m of losses must be made up by Owner funds

while a loan repayment appears to be a questionable way to be allowed to do this, the powers that be are a little strange in what they allow, for instance Manchester United once covered such a deficit with an overdraft extension. The one thing owners cannot do is have the club take out a loan to cover the deficit.

As I've said before, I'd be amazed if loan repayments could be Secure Funding. It would be so easy to game, lend to the owners in profitable years, repay them if you're looking at a PSR breach. If it was permissible I'm sure we'd have already seen a high profile example.

[ollieclarets8]

I don't know about other people, but cards on the table, i try not to stress myself worrying about things i have no control over.....

Every day you'll get someone posting with "worry" or "concern" on here. I just don't get it. There's much more important things to worry about in life.

[Orangebernard]

Every day you'll get someone posting with "worry" or "concern" on here. I just don't get it. There's much more important things to worry about in life.

You are absolutely correct yet here we are discussing it. Football clubs are like no other business, we wouldn’t be discussing the state of Sainsbury’s or Tesco’s accounts, but it’s because we have an emotional attachment to our clubs . They are a part of our lives, we care, that’s why we are all here. The caring and the passion is also the reason why some owners believe they can exploit our loyalty, not necessarily ALK, but look at the ticket prices at Aston Villa for instance.

[BurnleyFC ISA]

The more people that join us, lend their skills and have their say, the more we can campaign, if ever needed, to absolutely safeguard the future of OUR football club!

www.burnleyfcisa.com


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[Vegas Claret]

Are we screwed then lads ?

[randomclaret2]

Every day you'll get someone posting with "worry" or "concern" on here. I just don't get it. There's much more important things to worry about in life.

It's a football messageboard. I suspect we all know that there are more important things in life to worry about, but this is where our concerns and views about our club can be expressed.

[Chester Perry]

As I've said before, I'd be amazed if loan repayments could be Secure Funding. It would be so easy to game, lend to the owners in profitable years, repay them if you're looking at a PSR breach. If it was permissible I'm sure we'd have already seen a high profile example.

I agree it feels weird for it to be allowed (though the overdraft at Manchester United feels stranger and that was allowed) but I have yet to see anything else in the accounts which could show where the losses are covered via "secure funding".

If it is a loophole, then It may have been part of the plan all along - one thing we do know about Pace and co is that they are not people who would miss such an opportunity, unlike the games authorities, of whom, it has been repeatedly shown write regulations that are very loose.

[Chester Perry]

Are we screwed then lads ?

no more than we were yesterday

[ollieclarets8]

It's a football messageboard. I suspect we all know that there are more important things in life to worry about, but this is where our concerns and views about our club can be expressed.

I think it's a place you should visit to escape your worries and concerns - not add to them.

[kentonclaret]

Whilst playing in the Championship fans on here stress as to whether we will be able to bounce straight back up which, they tell us, is vital for the financial stability of the club. Having come straight back up it seems that the financial worries over the club’s future still persist.
By the sounds of it, if we hadn’t come straight back up the future would be looking pretty grim right now.

[ClaretPete001]

there is more to it than it being a repayment - and £30m is quite the rounding up

from the takeover thread


The precise nature of the sum returned (£26.215m) would suggest that this is the reason the repayment was made - to be clear while:
- The EFL allow up to £13m of losses a season (in the 3 year aggregate) anything over £3m of losses must be made up by Owner funds
- The Premier League allow up to £35m of losses a season (in the 3 year aggregate) anything over £5m of losses must be made up by Owner funds

while a loan repayment appears to be a questionable way to be allowed to do this, the powers that be are a little strange in what they allow, for instance Manchester United once covered such a deficit with an overdraft extension. The one thing owners cannot do is have the club take out a loan to cover the deficit.

Also agree with this..! I doubt it was a deliberate repayment for the simple reason there is no need for it to be repaid as the club stands other than as a measure to resolve some issue or other.

I wasn't really mentioning the debt levels as an example of the club in distress rather to take the point made in the article that the level of debt makes investment more difficult.

As for the purpose of that argument, I exclude playing assets and debt repayments because if you are investing you aren't looking to sell and I'm not convinced what that reduction in the intercompany loan was for...!

As I say, let's see what it looks like at the end of the summer. If we can keep Esteve and Trafford, add two more quality players and sell 6 or 7 squad players for a profit then who can complain?

[ClaretPete001]

Are we screwed then lads ?

I don't think anyone has said we are screwed, the article talks about our challenges investing because of the debt not some catastrophic situation.

Let's see.

[jojomk1]

Can we afford a new fax machine for the end of next month?

[ollieclarets8]

Can we afford a new fax machine for the end of next month?

A big worry and concern we can't afford it.

[ŽižkovClaret]

Are we screwed then lads ?

Dunno. If we are we'll start again. Doubt anyone will die.

Bit of perspective might be needed at times.

[Big Vinny K]

I think it's a place you should visit to escape your worries and concerns - not add to them.

I’m not sure this is the right message board for you !!

[Chester Perry]

Can we afford a new fax machine for the end of next month?

who knows - but this is a strange story - if true

Obafemi and unpaid wages - I will say that he was technically a Plymouth player until the end of last month - whether that deal covered his full wages I do not know

Michael Obafemi's European Move Put On Hold Over Bizarre Dispute With Burnley
https://www.balls.ie/football/michael-o ... ute-636416
https://archive.ph/XLeDq

[Goody1975]

Are we screwed then lads ?

Unfortunately, modern football means if we are too savvy with our money, we'll just become another Preston North End and still haemorrhage money on an annual basis. How many times have they gone to the Hemmings family to put their finances back in order?

[Orangebernard]

Dunno. If we are we'll start again. Doubt anyone will die.

Bit of perspective might be needed at times.

And do you think it would be acceptable for a small group of money men to run our club, with all its history, it’s standing in English football and the hopes and dreams of thousands of fans over 140 years, into oblivion to make a few quid for themselves? I appreciate the sentiment but I’d rather not have my club risked on the off chance that a few of use might get another club up and running in a pub league. Prevention is better than a cure.

[ŽižkovClaret]

And do you think it would be acceptable for a small group of money men to run our club, with all its history, it’s standing in English football and the hopes and dreams of thousands of fans over 140 years, into oblivion to make a few quid for themselves? I appreciate the sentiment but I’d rather not have my club risked on the off chance that a few of use might get another club up and running in a pub league. Prevention is better than a cure.

So, with the means a group of fans have available, within the law, what have you got in mind to prevent it?

[ŽižkovClaret]

It just all feels a little bit "Wealdstone Raider offering out Usyk". Pick your battles

[BleedingClaret]

I still think that most don't realise that the plan will likely never ever be to pay off the debt.

[Orangebernard]

It just all feels a little bit "Wealdstone Raider offering out Usyk". Pick your battles

No one is suggesting that any group of fans can take on ALK in some sort of battle for ownership but maybe an organised group that represents the views of its members can get a constructive dialogue going with the club in order to get across the concerns of some of the fan base and some clarity about their intentions. I get that many fans are not concerned and I wish I could be that way too but I’d rather be proactive than reactive, I’d rather know that I did something than nothing and if all turns out fine in the end then everyone is happy.

[aggi]

Are we screwed then lads ?

Probably at some point. We've ended up at the ludicrous situation where middling championship clubs are racking up huge losses just to stay in the Championship. Millwall owe about £150m to their owners and Preston's owner keeps giving them another £10m each year to subsidise their losses and this is how it works for most of the clubs in there.

At some point we're probably going to end up as one of those clubs and it's unlikely we'll have owners who will sustain us for a decade, but we probably didn't before either.

I would have said the Championship was unsustainable but I said that ten years ago and things have only got worse since then.

[BleedingClaret]

Unfortunately, modern football means if we are too savvy with our money, we'll just become another Preston North End and still haemorrhage money on an annual basis. How many times have they gone to the Hemmings family to put their finances back in order?

Worth noting though Steve that we didn't get to the Premier League initially under this ownership model and we bounced back twice too without it, stayed for 6 years and got into Europe.
Under this ownership we've also gone down twice and got back up twice but one had us with 72 million in the bank admittedly with an ageing squad that looked increasing likely to go down again, but I'll reiterate, with 72 million in the bank and many saleable players.
In this model, we're 100 million and counting in debt with some saleable players but also deadwood that we can't shift, all on good wages.
Going down and not getting back up under the previous ownership would put us back on par with PNE and you know who.
Going down and not getting back up with this ownership model, unless I'm missing something, likely leaves us without a home or training ground.
Going back, to 2008 there was talk that we'd gambled under Coyle, and that we got lucky, and the rest is history, suggestions that we we're in trouble if we didn't get up likely linked to what was caused by the American banking system at that time.
Basic Common Sense tells you that this model of ownership at Burnley and not Man Utd, is unsustainable unless we get lucky time and time again, or we won't be on a par with PNE and them lot, we'll crash and burn.
Most concerning is that a model based on player acquisitions and sales at a profit doesn't seem to calculate interest charges, factoring charges, player wages & expenses and agents fees and costs paid to other individuals directly employed or indirectly linked into these calculation.
We pay too much for unproven players, example Tresor, and we don't shift players when they're most saleable like Zaroury & Benson when they weren't in the managers plans.
Let's hope we get lucky, or that there's a master class going on that I'm too dumb to grasp.

[GetIntoEm]

Proper gloomy lot aren't you.

We are prepping a prem league season and some of you are plotting our demise.

We are nowhere near administration, being insolvent, equivalent to PNE.

Just wise up

[Goody1975]

Worth noting though Steve that we didn't get to the Premier League initially under this ownership model and we bounced back twice too without it, stayed for 6 years and got into Europe.

That is correct and very valid, however I will counter that with saying that football in this country has moved on in the past half dozen years, as much as at any time in the past thirty. The new owners upsetting the settled top four/six has pushed things on financially for everyone, it's become a bit of a basket case. Liverpool have spent nearly £300 million this summer so far and they don't usually have an open chequebook model.

The previous ownership model was reliant on having a freak of a manager who could get the maximum out of not very much, I feel that started to change when players wages moved on from the usual Burnley levels.

We have a pot of money to play with for the playing squad, that is mainly split between transfers fees and wages, once the wages rose, the amount of cash available for transfers decreased and we could only continue to move forward with outside investment, that is where Alan Pace and ALK come into the story.

This is where we are now.

[Goody1975]

Proper gloomy lot aren't you.

We are prepping a prem league season and some of you are plotting our demise.

We are nowhere near administration, being insolvent, equivalent to PNE.

Just wise up

I brought PNE into the discussion as they are a similar sized club to us, once parachute payments run out then just being a solid mid table Championship club sees you lose £90 million in less than ten years. You might as well have similar debts and not tread water is all I'm saying.

[kentonclaret]

That is correct and very valid, however I will counter that with saying that football in this country has moved on in the past half dozen years, as much as at any time in the past thirty. The new owners upsetting the settled top four/six has pushed things on financially for everyone, it's become a bit of a basket case. Liverpool have spent nearly £300 million this summer so far and they don't usually have an open chequebook model.

The previous ownership model was reliant on having a freak of a manager who could get the maximum out of not very much, I feel that started to change when players wages moved on from the usual Burnley levels.

We have a pot of money to play with for the playing squad, that is mainly split between transfers fees and wages, once the wages rose, the amount of cash available for transfers decreased and we could only continue to move forward with outside investment, that is where Alan Pace and ALK come into the story.

This is where we are now.

With regards to Liverpool it should be noted that for the 2023-24 season that they recorded a Club record Revenue of over £600 million, and figures for the 2024-25 season are expected to exceed that still further having become PL Champions and competed in the latter stages of the Champions League. Liverpool also have had relatively low spends over the previous Summer Transfer Windows.
According to an article currently on the Sky Sports App (Transfer Centre) Liverpool could still spend a further £150+m and still be compliant with current spending regulations.

[It Is What It Is]

Every day you'll get someone posting with "worry" or "concern" on here. I just don't get it. There's much more important things to worry about in life.

When I started this thread it was not to cause any worry or concern. It was an article I read this morning which I thought a lot of Clarets fans would find interesting, nothing else.

[ollieclarets8]

Proper gloomy lot aren't you.

We are prepping a prem league season and some of you are plotting our demise.

We are nowhere near administration, being insolvent, equivalent to PNE.

Just wise up

What I've been thinking. People are actually enjoying us failing. It's bloody mad.

[taio]

What I've been thinking. People are actually enjoying us failing. It's bloody mad.

Don't think they are but, in any case, we aren't failing. Some supporters are just concerned about the financial stability of the club in the event PL revenues dry up. I know some supporters aren't particularly interested in that, which is fair enough, and so choose not to revisit threads like this.

[JR1882]

The most shocking bit for me is that we have spend £250m on transfers in the last 5 years just to end up with a top end championship squad.

[Cheshireclaret]

Like it or not, we are leveraged in the same way the Glazers have leveraged MUFC and I said from day one this sits very, very uncomfortably with me. No amount of protests from supporters at Old Trafford has made a jot of difference (Ratcliffe is not there because of them and their woes continue) and ultimately, I cannot see this business model working in the medium to long term.

I hope I'm proved wrong, but when I speak to my FCUM supporting mates when I go on Broadhurst, they have often commented on our situation being akin to that at Old Trafford (clearly it's all relative in terms of revenue etc, but the point stands).

[Big Vinny K]

The most shocking bit for me is that we have spend £250m on transfers in the last 5 years just to end up with a top end championship squad.

How much have we brought in selling players though ?
And how much is our total revenue during that period ?

Taking certain numbers in isolation is pretty meaningless

[kentonclaret]

The most shocking bit for me is that we have spend £250m on transfers in the last 5 years just to end up with a top end championship squad.

I haven’t checked it out but I would imagine that most clubs considered as “established” in the PL have spent well in excess of that figure. Bournemouth, for example, spent well in excess of £80m in last Summer’s Window of which £40m was spent on bringing in Evanilson.

[BleedingClaret]

That is correct and very valid, however I will counter that with saying that football in this country has moved on in the past half dozen years, as much as at any time in the past thirty. The new owners upsetting the settled top four/six has pushed things on financially for everyone, it's become a bit of a basket case. Liverpool have spent nearly £300 million this summer so far and they don't usually have an open chequebook model.

The previous ownership model was reliant on having a freak of a manager who could get the maximum out of not very much, I feel that started to change when players wages moved on from the usual Burnley levels.

We have a pot of money to play with for the playing squad, that is mainly split between transfers fees and wages, once the wages rose, the amount of cash available for transfers decreased and we could only continue to move forward with outside investment, that is where Alan Pace and ALK come into the story.

This is where we are now.

The big difference being that a lot of these other clubs owners have the money we’re betting the ranch

[RVclaret]

The big difference being that a lot of these other clubs owners have the money we’re betting the ranch

We’re not.

[ClaretPete001]

That is correct and very valid, however I will counter that with saying that football in this country has moved on in the past half dozen years, as much as at any time in the past thirty. The new owners upsetting the settled top four/six has pushed things on financially for everyone, it's become a bit of a basket case. Liverpool have spent nearly £300 million this summer so far and they don't usually have an open chequebook model.

The previous ownership model was reliant on having a freak of a manager who could get the maximum out of not very much, I feel that started to change when players wages moved on from the usual Burnley levels.

We have a pot of money to play with for the playing squad, that is mainly split between transfers fees and wages, once the wages rose, the amount of cash available for transfers decreased and we could only continue to move forward with outside investment, that is where Alan Pace and ALK come into the story.

This is where we are now.

I don't want to contribute to this any further but sometimes something is so far removed from the truth you feel inclined to respond despite yourself.

ALK spent £124 million on shares after they bought the club - out of club money. They spent almost £50 million almost straight away. Alan Pace was able to buy the club because the previous owners had a big wedge in the bank.

How do you square those facts with your view that we required outside investment?

[Elizabeth]

Everything will be fine. Alan is excited to be taking us on an incredible journey. Furthermore he is deeply moved by the pride, spirit and history that surrounds us.

[Goliath]

It's been absolutely clear since basically day one that if we were to stay down for more than 2 seasons (possibly 1) then we are in big trouble. Until then we should be OK.

People are right to be concerned

[RVclaret]

It's been absolutely clear since basically day one that if we were to stay down for more than 2 seasons (possibly 1) then we are in big trouble. Until then we should be OK.

People are right to be concerned

Nah, it’s not.

[Wokingclaret]

The question is, do you want it invested in the squad or not?

Without it we'd be heading to League One like Luton

[BleedingClaret]

We’re not.

We’re not?

[Goliath]

Nah, it’s not.

Doesn't even make sense as a response.

[RVclaret]

Doesn't even make sense as a response.

It’s not been absolutely clear since day 1. Makes sense to me.

We’re not?

What is ‘betting the ranch’ in your view (be specific with numbers if possible)?

[Goliath]

It’s not been absolutely clear since day 1. Makes sense to me.


What is ‘betting the ranch’ in your view (be specific with numbers if possible)?

Ah maybe look into the use of tenses

[Conroy92]

It’s true, I’m no finance guy. But we’re over £100m in debt, we lose big money in the Prem, and we lose absolute fortunes in the Championship. All the money covering those losses is borrowed against the club, not donated by a generous benefactor.

I am well up for someone with greater knowledge on this stuff to explain why it’s no cause for concern. I genuinely want to hear that.

To offer an answer, the model is to take on debt Vs a player's potential value. Should we continue to attract good young international players on the event of promotion. Sign them and increase there value we will eventually come good. Trafford is the perfect example. His transfer will have contributed to the loss in the premier league season, but will account for a big return this window. We may not pay the debt off for a long time. But we can hold it and move it on every season for a while until in a position to do so. If that's what pace decides to do.

[BleedingClaret]

It’s not been absolutely clear since day 1. Makes sense to me.


What is ‘betting the ranch’ in your view (be specific with numbers if possible)?

Pre the takeover
We had 72mil in the bank and were in the Premier League
Were likely about to go down with 72 mil in the bank and saleable players with a fairly solid squad besides the players that would want to leave
Now
We are in high interest debt of over 100m and are in the Premier League are likely to go back down with some saleable players and an oversized squad with some quality and some excess

So we are where we were, or maybe a tad in a less good position
But 200mil poorer plus the interest
All secured on land and property of Burnley FC

Owners that are so committed they’ve gone to buy a club in a big city in a warm country which could possibly support the growth they crave and better to attract the investors that they crave

It’s Burnley not Barcelona

[Conroy92]

The most shocking bit for me is that we have spend £250m on transfers in the last 5 years just to end up with a top end championship squad.

What would you rate the current team at in terms of value for us to see though? On the face of it maybe it seems high. But out current side could be worth 150-200? And is 250m a net spend taking sales into account?

I would have thought the 7 following would attract around 150m Trafford, Esteve, Edwards, Anthony, Hartman, Tchouna and Koleosho.

With the likes of Tresor, Amdouni, Ramsey, Flemming Hannibal pushing another 50m.

That's 12 players with a total around 200m. Maybe we havnt done that badly after all?