ALK Capital or Farnell/Elkashashy takeover

[ClaretPete001]

An intercompany debt only gets paid back if the debtor company has it. There is no evidence ALK has it and therefore the debt is really just a notional debt.

The MSD loan was made against the clubs assets and was not taken out by ALK that is why it is an intercompany loan. The £68 million scheduled payments to the former owners was taken out by ALK and that is why none of us know how it was funded. My guess is that any investment in the club was used to pay that off.

The concerning thing is that the balance sheet is held together by that notional intercompany debt because the Creditor figure is now over £230 million, which means that upon relegation not only will the club be hit by a loss of £50 million in broadcast revenue, likely tens of millions in relegation loan repayments but it will also have lost some of the parachute payments taken as unearned revenue in the balance sheet and already spent.

Remember, £40 million was not included in the last accounts. Normally, you would consider that in Year 1 of a promotion season the club would make a healthy profit except this time but we have added 18 PL contracts to an already £50 million wage bill. And somehow funded the £40 million above.

I don't think it would irresponsible to conjecture that the ability of the club to meet it's cashflow obligations will be dependent upon how many players the club can unload this summer. Certainly, the auditor expressed a concern about it. The notional view is that the club is good for a season and will only have problems in Year 2 after relegation.

Looking at the figures I'm not so sure. The last time we went down we unloaded 10 or so out of contract players and made £70 million by selling playing assets who likely had paid up contracts (Cornet aside). We are not going to make £70 million this time so it will be a case of selling anyone and everyone just to get them off the wage bill.

I suspect it's going to be quite a summer and we are likely to see the first signs of financial stress from ALK if they do not have the cash reserves to pay back at least some of the £124 million.

[roperclaret]

There’s an awful lot of conjecture on this thread now.

[ClaretPete001]

There’s an awful lot of conjecture on this thread now.

The auditors have said the club has to sell to meet it's cash obligations or the club will run into cash flow problems very quickly.

They clearly haven't been shown significant cash reserves or they wouldn't have issued a warning. It is in the group's interest to avoid such warnings and there is little incentive not to share with auditors cash held by the group. It's inconceivable the owners did not sit down with the auditors and discuss the warning. It didn't happen last time because we had £80 million in the bank and no debt.

When you look at the analysis CP provided (on another thread) there is a good deal of uncertainty as to how buoyant the transfer market will be this summer. Plus the fact that most of the players are contracted and those that are likely to be highly sought after are the players that were expensively bought last summer notably Berge and Odobert.

We still don't know how the £40 million not included in the accounts were funded. Of course, there is conjecture here but not without a good deal of evidence to back it up.

[Paul Waine]

The auditors have said the club has to sell to meet it's cash obligations or the club will run into cash flow problems very quickly.

They clearly haven't been shown significant cash reserves or they wouldn't have issued a warning. It is in the group's interest to avoid such warnings and there is little incentive not to share with auditors cash held by the group. It's inconceivable the owners did not sit down with the auditors and discuss the warning. It didn't happen last time because we had £80 million in the bank and no debt.

When you look at the analysis CP provided (on another thread) there is a good deal of uncertainty as to how buoyant the transfer market will be this summer. Plus the fact that most of the players are contracted and those that are likely to be highly sought after are the players that were expensively bought last summer notably Berge and Odobert.

We still don't know how the £40 million not included in the accounts were funded. Of course, there is conjecture here but not without a good deal of evidence to back it up.

There are some things you need to understand, Pete.

1) International Auditing Standards require auditors to not only consider if going concern basis of preparing accounts is reasonable, but that for recent years they must also make the "material uncertainty" statement in their "true and fair" audit report.

2) Of course, all audit matters will be discussed with the client, but auditors can only audit what is in front of them. They cannot assume an inter company debtor will provide the necessary funds, if that inter company entity doesn't provide undertaking to that effect. It isn't sufficient for EY to say we are also the audit of the debtor entity and we know (or don't know) that that other entity has the cash to repay the borrowing...

3) The secured bank creditor we can assume had repayment clauses in the event of relegation. That was the source of the repayment obligations. We know that the bank creditor was repaid a week or so after the accounts were signed off with the new loan from MGX Luxembourg. We don't know the terms of the new loan, but we can be very confident that thus new loan won't require significant repayment on relegation. The club had no reason to take this new loan without this significant difference with the earlier loan.

4) The auditors didn't say "the club has to sell players." The auditors only said "if the club chose to raise cash - to meet bank loan repayment obligation - then transfer values were uncertain."

[NewClaret]

Looking at the figures I'm not so sure. The last time we went down we unloaded 10 or so out of contract players and made £70 million by selling playing assets who likely had paid up contracts (Cornet aside). We are not going to make £70 million this time so it will be a case of selling anyone and everyone just to get them off the wage bill.

Wouldn’t be so sure on that.

I know you’re a glass completely empty type Pete, so won’t debate it, but Matt Williams said “market forces will dictate that we lose a few players [if relegated] but we’ll be keeping the core squad together”… or words to that effect.

In the video CP posted above, Stuart Hunt said they were working on a couple of transactions to buy football clubs by the end of the year so that “our players get good game time”.

Now maybe that’ll all turn out to be rubbish but personally I don’t see Matt Williams lying or us buying other clubs while needing fire sales of our own squad.

In any event, we’ll see in summer.

[ClaretPete001]

There are some things you need to understand, Pete.

1) International Auditing Standards require auditors to not only consider if going concern basis of preparing accounts is reasonable, but that for recent years they must also make the "material uncertainty" statement in their "true and fair" audit report.

2) Of course, all audit matters will be discussed with the client, but auditors can only audit what is in front of them. They cannot assume an inter company debtor will provide the necessary funds, if that inter company entity doesn't provide undertaking to that effect. It isn't sufficient for EY to say we are also the audit of the debtor entity and we know (or don't know) that that other entity has the cash to repay the borrowing...

3) The secured bank creditor we can assume had repayment clauses in the event of relegation. That was the source of the repayment obligations. We know that the bank creditor was repaid a week or so after the accounts were signed off with the new loan from MGX Luxembourg. We don't know the terms of the new loan, but we can be very confident that thus new loan won't require significant repayment on relegation. The club had no reason to take this new loan without this significant difference with the earlier loan.

4) The auditors didn't say "the club has to sell players." The auditors only said "if the club chose to raise cash - to meet bank loan repayment obligation - then transfer values were uncertain."

I don't get your points Paul because you have clearly re-iterated what I have said.

The auditors cannot assume anything, however, it is not in the club's interests to have a set of accounts with a warning in it. As such they provided the auditors with some kind of cash flow forecast, which showed that the loss of PL broadcast revenue would be covered by player trading. All this is in the accounts.

What they didn't do is re-assure the auditors. We were relegated two years ago without a warning. Those are the facts make of it what you will.

We don't know the terms of the new loan, but we can be very confident that thus new loan won't require significant repayment on relegation. The club had no reason to take this new loan without this significant difference with the earlier loan.

The evidence so far is that loans taken in the PL do have repayment clauses upon relegation. Stating that you are confident this one doesn't without a shred of evidence is not an argument.

This The auditors didn't say "the club has to sell players." The auditors only said "if the club chose to raise cash - to meet bank loan repayment obligation - then transfer values were uncertain.

The auditors report says this....!

We draw attention to note 2.4 to the financial statements concerning the company’s ability to continue as a going concern. Should the forecasts, which include receipts from player trading, continuation of external facilities,
receipts of factored receivables and operating cost reductions, prepared by the board not be realised, the company would need to find further sources of funding in order to bridge its cash flow position until appropriate player transactions are fulfilled. As stated in note 2.4, these events or conditions indicate that a material uncertainty exists which may cast significant doubt about the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

So, we know ALK prepared a cash flow forecast of some kind, which includes player trading, cost reductions etc but the auditors cited player trading as the issue they chose to highlight.

And while you may argue that accountants are a bit lackadaisical in their use of language etc. I can only cite what I read.

[ClaretPete001]

Wouldn’t be so sure on that.

I know you’re a glass completely empty type Pete, so won’t debate it, but Matt Williams said “market forces will dictate that we lose a few players [if relegated] but we’ll be keeping the core squad together”… or words to that effect.

In the video CP posted above, Stuart Hunt said they were working on a couple of transactions to buy football clubs by the end of the year so that “our players get good game time”.

Now maybe that’ll all turn out to be rubbish but personally I don’t see Matt Williams lying or us buying other clubs while needing fire sales of our own squad.

In any event, we’ll see in summer.

I like to re-iterate I am cup half empty. I think it's only fair to anyone reading to make that point.

But arguments citing what company employees say and not addressing the accounts is problematic in my opinion.

ALK are an investment group who may have sourced money ring fenced for acquisitions so it's perfectly feasible that they have money for acquisitions and not to prop up the balance sheet of existing companies within the group.

I am not an expert on 777 but they seem to own a number of fairly ordinary footballing brands some of whom are doing well and others not...! The risk to ALKs investment is a lack of cash not the playing strength of the current squad.

If they have any business sense they will shore up the cash position first and worry about the squad second.

The company I work for is acquisitive and owned by VCs. There is a funding round every five years and the company trots off and buys companies like a kiddy in a sweet shop. Some work - some don't and some just plod along.

As I always say you can't defeat the fundamentals of business.

[dsr]

4) The auditors didn't say "the club has to sell players." The auditors only said "if the club chose to raise cash - to meet bank loan repayment obligation - then transfer values were uncertain."

You're correct that it wasn't the auditors who said that the club would have to sell players. What you've left out is that the directors themselves, in note 2.4 of the accounts, have said that we will have to sell players. The auditors have said that if player sales don't go to plan, we could be in Dicky's meadow. (Not the exact wording. )

The crucial omission from the audit report is the bit about the directors financially supporting the club if we're struggling to meet obligations. Other clubs, especially those who are heavily in debt to their owners, have that assurance. We, who are owed a fortune by our owners, don't even get an assurance that that loan will be repaid.

[ClaretPete001]

You're correct that it wasn't the auditors who said that the club would have to sell players. What you've left out is that the directors themselves, in note 2.4 of the accounts, have said that we will have to sell players. The auditors have said that if player sales don't go to plan, we could be in Dicky's meadow. (Not the exact wording. )

The crucial omission from the audit report is the bit about the directors financially supporting the club if we're struggling to meet obligations. Other clubs, especially those who are heavily in debt to their owners, have that assurance. We, who are owed a fortune by our owners, don't even get an assurance that that loan will be repaid.

It was both. It was made in by the Directors in point 2.4 and also re-iterated by the Auditors in the Auditors report.

There are other issues. Claims that Debtors are published net of doubtful debtors do not seem to address the fact that £124 million of the debtors are an intercompany loan to a group that it seems unlikely have £124 million to pay it back. ALK are clearly a very material doubtful debtor.

The fact that the Directors can simply say they have the funds to address material uncertainties without actually saying what they are seems to me to render the whole thing to be pointless.

How can there be a material uncertainty if the Directors are certain that in the event it happens they can cover the material loss?

The report also seemingly can't say with any real certainty who the controlling party for the company is....!

It may make sense to accountants but for the lay person trying to read them, which I presume is who this is aimed at the lack of Accounting Standards seem more material than the use of them.

[Vegas Claret]

Do we know if anyone is behind ALK and Pace and Co are just effectively running the show for a much larger group ?

[dsr]

It was both. It was made in by the Directors in point 2.4 and also re-iterated by the Auditors in the Auditors report.

There are other issues. Claims that Debtors are published net of doubtful debtors do not seem to address the fact that £124 million of the debtors are an intercompany loan to a group that it seems unlikely have £124 million to pay it back. ALK are clearly a very material doubtful debtor.

The fact that the Directors can simply say they have the funds to address material uncertainties without actually saying what they are seems to me to render the whole thing to be pointless.

How can there be a material uncertainty if the Directors are certain that in the event it happens they can cover the material loss?

The report also seemingly can't say with any real certainty who the controlling party for the company is....!

It may make sense to accountants but for the lay person trying to read them, which I presume is who this is aimed at the lack of Accounting Standards seem more material than the use of them.

The directors are confident that if we can't get enough cash from selling players and other sources.
The material uncertainty is that the auditors don't share their confidence. The auditors don't go so far as to say they think the directors are wrong. That would be a huge step. What the auditors are saying is that if the player sales etc. didn't raise enough, they can't be confident that the directors' backup plan would work.

[Tall Paul]

You're correct that it wasn't the auditors who said that the club would have to sell players. What you've left out is that the directors themselves, in note 2.4 of the accounts, have said that we will have to sell players. The auditors have said that if player sales don't go to plan, we could be in Dicky's meadow. (Not the exact wording. )

The crucial omission from the audit report is the bit about the directors financially supporting the club if we're struggling to meet obligations. Other clubs, especially those who are heavily in debt to their owners, have that assurance. We, who are owed a fortune by our owners, don't even get an assurance that that loan will be repaid.

That isn't an omission, that note is only required where a company is technically insolvent and supported by directors'/owners' loans and is there to assure users of the accounts that the support won't be withdrawn. The fact that the balance sheet includes the inter-company debtor at its full value means that the auditors were satisfied that it will be repaid.

[ClaretPete001]

That isn't an omission, that note is only required where a company is technically insolvent and supported by directors'/owners' loans and is there to assure users of the accounts that the support won't be withdrawn. The fact that the balance sheet includes the inter-company debtor at its full value means that the auditors were satisfied that it will be repaid.

So, why issue a warning on cash flow? And why can't they say who the controlling party is....?

It doesn't make sense.

[Tall Paul]

So, why issue a warning on cash flow? And why can't they say who the controlling party is....?

It doesn't make sense.

The accounts do say who the controlling party is - Alan Pace. As for the question on cash flow, it's already been answered multiple times in this thread.

[ClaretPete001]

The accounts do say who the controlling party is - Alan Pace. As for the question on cash flow, it's already been answered multiple times in this thread.

It doesn't say who the controlling party is...! Unless, accountants have a different version of the English language it says Alan Pace is 'considered' - it doesn't say: 'Alan Pace is the controlling party'!

Considered by whom to be the controlling party?

Where has it been addressed elsewhere on this thread? As far as I can tell the general consensus is that the £124 million is unlikely to be repaid and that the group is unlikely to have £124 million in cash.

If the auditors are satisfied that there is a £124 million debt that is available when required then why issue a warning? And why would the club want a warning on the accounts, if they have the cash to avoid one?

And why pay all this interest if there is £124 million floating around the group?

[Tall Paul]

It doesn't say who the controlling party is...! Unless, accountants have a different version of the English language it says Alan Pace is 'considered' - it doesn't say: 'Alan Pace is the controlling party'!

Considered by whom to be the controlling party?

It's pretty standard wording, particularly in the case of complicated group structures. Pace has control of the club, that's clear.

Where has it been addressed elsewhere on this thread? As far as I can tell the general consensus is that the £124 million is unlikely to be repaid and that the group is unlikely to have £124 million in cash.

If the auditors are satisfied that there is a £124 million debt that is available when required then why issue a warning? And why would the club want a warning on the accounts, if they have the cash to avoid one?

And why pay all this interest if there is £124 million floating around the group?

If there's a consensus that the inter-company loan is unlikely to be repaid, the auditors aren't part of it. They will have required evidence that the debt is recoverable or would have had to qualify their opinion on that basis. That doesn't mean that it can be treated the same as cash as you seem to think.

And it's been addressed by the other Paul (maybe not in this thread to be fair), it's not really a "warning" it's a risk that if the club's income forecasts aren't realised there may be a going concern issue. This isn't anything we didn't already know before the accounts were issued, relegation from the PL will always be a risk to a club that doesn't have owners willing or able to pump money into it.

[NewClaret]

It doesn't say who the controlling party is...! Unless, accountants have a different version of the English language it says Alan Pace is 'considered' - it doesn't say: 'Alan Pace is the controlling party'!

Considered by whom to be the controlling party?

Where has it been addressed elsewhere on this thread? As far as I can tell the general consensus is that the £124 million is unlikely to be repaid and that the group is unlikely to have £124 million in cash.

If the auditors are satisfied that there is a £124 million debt that is available when required then why issue a warning? And why would the club want a warning on the accounts, if they have the cash to avoid one?

And why pay all this interest if there is £124 million floating around the group?

Can anyone answer these questions?

There’s some alternative, equally unanswerable, questions we could ask…

What were the £88m and £80m cash deposits in the parent companies?

Was that the same cash moved around, or £168m in total?

Why on earth was that invested there and where is it now?

Why haven’t we seen the accounts of other group companies?

Why would some fairly high profile people like Kompany and JJ Watt get involved in a football club built on high levels of debt and therefore high risk? They’ve put their personal brands behind this and in JJ’s case his own money too.

Why would we even consider buying other clubs if we’ve got cash flow problems in the main operational entity?

This analysis is of the language of individual statements within one set of accounts (when we know said company is part of a wider group of companies) is a bit akin to analysing your current account statement and drawing conclusions on your wealth… despite having lots of other assets, investments and bank accounts - you’re only looking at one part of the puzzle.

This isn’t naïvety on my behalf. I’m not saying the picture you’re describing is the wrong one, just that you’re doing it with only a small number of pieces of the puzzle because the others aren’t available to us.

We’ll know a lot more come the end of summer, particularly on your fire sale comments.

[KRBFC]

The Green Bay comparison is a stupid one, the NFL is a closed shop and the teams are set up to be pretty even with the spending caps and draft system. It means you’re effectively one good draft/off season away from going from the worst to the very best.

[ClaretPete001]

It's pretty standard wording, particularly in the case of complicated group structures. Pace has control of the club, that's clear.



If there's a consensus that the inter-company loan is unlikely to be repaid, the auditors aren't part of it. They will have required evidence that the debt is recoverable or would have had to qualify their opinion on that basis. That doesn't mean that it can be treated the same as cash as you seem to think.

And it's been addressed by the other Paul (maybe not in this thread to be fair), it's not really a "warning" it's a risk that if the club's income forecasts aren't realised there may be a going concern issue. This isn't anything we didn't already know before the accounts were issued, relegation from the PL will always be a risk to a club that doesn't have owners willing or able to pump money into it.

There isn't (as far as I can see) a warning on Luton's account or Sheffield Uniteds. Nor was there a warning on the last set of accounts when we were relegated probably because we had money in the bank and saleable assets with contracts paid off.

There is a warning on Everton's accounts.

I don't see how an auditor can seek evidence that a debt is recoverable when that debt has no repayment terms.

And if the debt is recoverable in any meaningful way - why is there a warning?

It seems to me, self evident why there is a warning in place. The business has over £200 million of net creditors and is about to lose £50 million of revenue and the £114 million debt is not recoverable in any meaningful way.

[ClaretPete001]

Can anyone answer these questions?

There’s some alternative, equally unanswerable, questions we could ask…

What were the £88m and £80m cash deposits in the parent companies?

Was that the same cash moved around, or £168m in total?

Why on earth was that invested there and where is it now?

Why haven’t we seen the accounts of other group companies?

Why would some fairly high profile people like Kompany and JJ Watt get involved in a football club built on high levels of debt and therefore high risk? They’ve put their personal brands behind this and in JJ’s case his own money too.

Why would we even consider buying other clubs if we’ve got cash flow problems in the main operational entity?

This analysis is of the language of individual statements within one set of accounts (when we know said company is part of a wider group of companies) is a bit akin to analysing your current account statement and drawing conclusions on your wealth… despite having lots of other assets, investments and bank accounts - you’re only looking at one part of the puzzle.

This isn’t naïvety on my behalf. I’m not saying the picture you’re describing is the wrong one, just that you’re doing it with only a small number of pieces of the puzzle because the others aren’t available to us.

We’ll know a lot more come the end of summer, particularly on your fire sale comments.

The world is complex and you never have all the information.

The way forward is to take the evidence you have and construct reality based upon it and then evolve that reality as you get more evidence.

Otherwise, you just incorporate unevidenced facts into your picture or are simply incapable of forming an opinion.

So, for you because I like you so much I will caveat my point above.

The club has over £200 million of net creditors and is about to lose £50 million of revenue however it is possible that there is a £124 million floating around in the group somewhere or that JJ Watt and some other marketing gurus from Honk Kong have invested £80 million in the group, which ALK will use when it is required.

And to be fair I think I got drawn into this because Paul said he was enjoying watching how ALK are managing the club, which blows my mind but each to his own.

[aggi]

There are some things you need to understand, Pete.

1) International Auditing Standards require auditors to not only consider if going concern basis of preparing accounts is reasonable, but that for recent years they must also make the "material uncertainty" statement in their "true and fair" audit report.

2) Of course, all audit matters will be discussed with the client, but auditors can only audit what is in front of them. They cannot assume an inter company debtor will provide the necessary funds, if that inter company entity doesn't provide undertaking to that effect. It isn't sufficient for EY to say we are also the audit of the debtor entity and we know (or don't know) that that other entity has the cash to repay the borrowing...

3) The secured bank creditor we can assume had repayment clauses in the event of relegation. That was the source of the repayment obligations. We know that the bank creditor was repaid a week or so after the accounts were signed off with the new loan from MGX Luxembourg. We don't know the terms of the new loan, but we can be very confident that thus new loan won't require significant repayment on relegation. The club had no reason to take this new loan without this significant difference with the earlier loan.

4) The auditors didn't say "the club has to sell players." The auditors only said "if the club chose to raise cash - to meet bank loan repayment obligation - then transfer values were uncertain."

A material uncertainty caveat is rare though. We both know that the owners will have tried to not have that in the financial statements and obviously couldn't convince the auditors.

Again, we both know that there are various undertakings owners could take to give a high level of comfort that such debt could be repaid (proof of funds and a legal undertaking for instance). The main reason the debt is still at full value is because of the view that the football club should be able to be profitable enough to pay dividends up to ALK which will reduce the debt i.e. using the club's money to pay off ALK's debt (admittedly I'm not sure how that interacts with the material uncertainty).

We don't know the terms of the new loan, but we can be very confident that thus new loan won't require significant repayment on relegation

I assume I missed some earlier chat on this, can you remind me why we can be confident of this?


I think the doom and gloom from some is probably excessive (and is probably in part a reaction to what's been happening on the pitch) but I think it's a tough sell to convince anyone that bringing in Pace et al is worth eight times or so our record transfer fee.

[aggi]

No probs, just had to dig back as it’s a couple of weeks since I made that post. But the quote from Pace where he says the deal was incredible was in reference to the financial structure of the takeover, not about the town or club.

Not sure about the Green Bay comparison as it’s unlikely we’ll ever be a world renowned sports club. I think we were probably the best value club available to buy at the time, and any narrative about the appeal of the town and its working class people etc is just a bit of easy PR.

Personally I had no idea who the Green Bay Packers were before this recent discussion. Given the relative popularity of the Premier League and NFL, I do wonder whether Burnley or Green Bay would be better known worldwide.

[Tall Paul]

I don't see how an auditor can seek evidence that a debt is recoverable when that debt has no repayment terms.

They can and they are required to get that evidence. If the debt isn't recoverable, the accounts aren't true and fair.

[Rileybobs]

Personally I had no idea who the Green Bay Packers were before this recent discussion. Given the relative popularity of the Premier League and NFL, I do wonder whether Burnley or Green Bay would be better known worldwide.

It’s hard to gauge that really. But if you asked ‘soccer’ fans across the world to name English football clubs it’s unlikely we’d be in the top 20 names, whereas if you asked American football fans across the world Green Bay Packers would be near the top of everyone’s list.

So we’re not even one of the most well renowned clubs in England, whereas they’re one of the most renowned in the entire sport.

[Big Vinny K]

We don't know the terms of the new loan, but we can be very confident that thus new loan won't require significant repayment on relegation

I assume I missed some earlier chat on this, can you remind me why we can be confident of this?

I’m assuming the confidence is because of the millions of pounds that was paid in early redemption penalty fees to refinance the old loan.
I have no idea whether it’s correct but seems fairly logical.

[ClaretPete001]

They can and they are required to get that evidence. If the debt isn't recoverable, the accounts aren't true and fair.

If the debt was recoverable in the short term then why issue the warning. It clearly isn't recoverable in the short term.

If the debt has no repayment terms then the owners can kick it down the road beyond the scope of the audit and who can argue?

[ClaretPete001]

I’m assuming the confidence is because of the millions of pounds that was paid in early redemption penalty fees to refinance the old loan.
I have no idea whether it’s correct but seems fairly logical.

Fair point, it is an explanation of why ALK would want to do it.

It doesn't explain why a lender would want to bear the risk of a football clubs failure to maintain it's PL status.

[ClaretPete001]

It’s hard to gauge that really. But if you asked ‘soccer’ fans across the world to name English football clubs it’s unlikely we’d be in the top 20 names, whereas if you asked American football fans across the world Green Bay Packers would be near the top of everyone’s list.

So we’re not even one of the most well renowned clubs in England, whereas they’re one of the most renowned in the entire sport.

Indeed, the Packers is an iconic brand. They are the NFL team of Wisconsin. Nearest rivals are Minnesota and Chicago 3- 4 hours away.

It would be something similar to Burnley being the team of the North West with Birmingham and Newcastle as their nearest rivals.

[Big Vinny K]

Fair point, it is an explanation of why ALK would want to do it.

It doesn't explain why a lender would want to bear the risk of a football clubs failure to maintain it's PL status.

Most traditional lenders don’t now.
Back in the day (15 or 20 years ago) football clubs were often still basket cases from a financial point of view but traditional banks often lent money to them for the prestige. In the case of where I worked we had members of the executive who supported Liverpool and Man City so we were bankers to both and both were significant loss makers.
We also had a number of clubs who were in a mess financially - Celtic, Sheffield Wednesday, Chelsea (under Ken Bates) and many others. You would think any lending we did to these clubs reflected the risk - but it was quite the opposite. We were financing these clubs at extremely low margins over base rate (or LIBOR at the time)
Eventually like most order main banks we pulled out of the sector completely.

The specialist companies now who lend to football clubs now charge through the nose for it. The rates, penalty and other fees reflect the risk.

What was our first loan under the new owners ? I can’t remember exactly but was it not around 8.5% and we refinanced it a slightly better rate initially.

[Jakubclaret]

You've got to absolutely love this forum you have overwhelming evidence & god knows how many loans taken out to support the assertion that the finances are up sh1t creek & you still have people pretending everythings rosy. I'm not quite sure how low things have to sink before the penny drops with some folk. It's more important to argue about the nuances of accountants wordings on published documents than accept the realization of what's actually happening.

[AshevilleNCClaret]

I find this thread fascinating. American sports teams just don't have this kind of worry: teams are guaranteed income, don't have to worry about relegation, usually getting public funding for stadiums, and if things go sour, frequently up and move the franchise to another city, who sweeten the deal with tax incentives.
I think this summer will be telling... i suspect there will be a fire sale. A lot of the older players should get off the books. I think the clubs plan was to get a bunch of young-ish players, and hope a few shined bright enough to warrant a larger payday to a bigger club. I think a few players will move on, but not quite the "100 million pound player" just yet.

[Chester Perry]

Most traditional lenders don’t now.
Back in the day (15 or 20 years ago) football clubs were often still basket cases from a financial point of view but traditional banks often lent money to them for the prestige. In the case of where I worked we had members of the executive who supported Liverpool and Man City so we were bankers to both and both were significant loss makers.
We also had a number of clubs who were in a mess financially - Celtic, Sheffield Wednesday, Chelsea (under Ken Bates) and many others. You would think any lending we did to these clubs reflected the risk - but it was quite the opposite. We were financing these clubs at extremely low margins over base rate (or LIBOR at the time)
Eventually like most order main banks we pulled out of the sector completely.

The specialist companies now who lend to football clubs now charge through the nose for it. The rates, penalty and other fees reflect the risk.

What was our first loan under the new owners ? I can’t remember exactly but was it not around 8.5% and we refinanced it a slightly better rate initially.

DEC 2020 - MSD - £65m at 8% plus LIBOR, Which changed to SONIA in 2022 after LIBOR was stopped, term length 5 years, enforced repayments every season outside Premier League. It was possible to trace debt levels on TISE

NOV 2022 - new loan of £39,748,458 at fixed rate of 7.5% the lender remains undisclosed (no information ever provided on term length, repayment schedule or what would happen if the club is outside the Premier League)

JUNE 2023 - Macquarie - new loan £70m at 8% plus SONIA over 5 years with a repayment schedule plus enforced repayments if not a member of the Premier League - Accounts revealed the next periods capital repayment - £4.3m in current accounting year, probably much bigger payments in subsequent years.

JAN 2024 - MGG - new loan, no detail, the suspicion that the Accounts brought forward so as not to reveal details is high (with me at least). As likely to be for an even greater sum as for a lower one than Macquarie, interest rate likely to be high, may not have an in term repayment schedule (which would make it attractive re cash flow), unknown in regards to what happens when outside the Premier League, though enforced capital reduction seems a reasonable expectation, unless penalty interest rates apply - it just seems too fanciful (to me) for there to be no penalty arising out of relegation. That said the standard interest could be so high that a single season in the Championship could be allowed without further penalty.

[Steve-Harpers-perm]

I find this thread fascinating. American sports teams just don't have this kind of worry: teams are guaranteed income, don't have to worry about relegation, usually getting public funding for stadiums, and if things go sour, frequently up and move the franchise to another city, who sweeten the deal with tax incentives.
I think this summer will be telling... i suspect there will be a fire sale. A lot of the older players should get off the books. I think the clubs plan was to get a bunch of young-ish players, and hope a few shined bright enough to warrant a larger payday to a bigger club. I think a few players will move on, but not quite the "100 million pound player" just yet.

‘I suspect there will be a fire sale.’ Everyone kept saying this two years ago and it didn’t happen.

[Rileybobs]

‘I suspect there will be a fire sale.’ Everyone kept saying this two years ago and it didn’t happen.

Really? We sold or lost all of our most valuable assets that summer in Pope, McNeil, Collins, Cornet, Tarkowski and Mee.

I don’t think we’ll be inundated with offers this summer so we will more than likely have to cash in on the 2 or 3 players who could give us a good return.

[NewClaret]

Really? We sold or lost all of our most valuable assets that summer in Pope, McNeil, Collins, Cornet, Tarkowski and Mee.

I don’t think we’ll be inundated with offers this summer so we will more than likely have to cash in on the 2 or 3 players who could give us a good return.

I think that’s a fair assessment, unfortunately, although I think there will be one or two offers that surprise many on here.

At least we won’t be losing our best players for free this year and those who are OOC probably help get the wage bill right down so act in our favour this time.

[Jakubclaret]

I think that’s a fair assessment, unfortunately, although I think there will be one or two offers that surprise many on here.

At least we won’t be losing our best players for free this year and those who are OOC probably help get the wage bill right down so act in our favour this time.

They'll lower the wage bill for sure but they'll still need replacing & in turn you have to offer somebody else a wage. You might save on wages man to man but will the quality be the same. There's no magic easy solution it'll need a lot of tinkering.

[NewClaret]

They'll lower the wage bill for sure but they'll still need replacing & in turn you have to offer somebody else a wage. You might save on wages man to man but will the quality be the same. There's no magic easy solution it'll need a lot of tinkering.

I disagree.

In Cork and Jay’s case I don’t think they need replacing. Neither have played any substantial game part this year. I’d be quite happy running with Foster, Obafemi and Mellon for the strikers (we only play one) and Massengo can replace Cork.

Thats not true of Charlie but I suspect we’ll find one on much lower wages so the net effect will be positive.

I actually think our larger squad benefits us with departing players because we don’t have to go out and replace players. Obviously you lose experience but we do also have a lot of experience of winning this league now embedded in the wider squad since they’ve all done it.

[Jakubclaret]

I disagree.

In Cork and Jay’s case I don’t think they need replacing. Neither have played any substantial game part this year. I’d be quite happy running with Foster, Obafemi and Mellon for the strikers (we only play one) and Massengo can replace Cork.

Thats not true of Charlie but I suspect we’ll find one on much lower wages so the net effect will be positive.

I actually think our larger squad benefits us with departing players because we don’t have to go out and replace players. Obviously you lose experience but we do also have a lot of experience of winning this league now embedded in the wider squad since they’ve all done it.

Cork & jay are far too old now & haven't played a part because they are both past it. The 2 you have mentioned need replacing more than anybody the only reason to keep them is sentimental or try to get them to accept less money & keep them.

[ClaretPete001]

Really? We sold or lost all of our most valuable assets that summer in Pope, McNeil, Collins, Cornet, Tarkowski and Mee.

I don’t think we’ll be inundated with offers this summer so we will more than likely have to cash in on the 2 or 3 players who could give us a good return.

We also lost about 10 out of contract players.

The challenge for the club will not be losing players but being able to move enough on to meet cash obligations and re-calibrate the squad.

[Big Vinny K]

I’d be quite happy running with Foster, Obafemi and Mellon for the strikers (we only play one)

You’d be quite happy with a striker with a known issue which could (and already has) means he misses months of the season at any point and with little or no forewarning ?

Backed up by a striker who was not deemed good enough for the championship last time under VK and was not even a regular starter for a mid table championship team this season.

And another striker who has never played at a level above league 2 in this country and then spent the last couple of months on the bench for Dundee. How many times have you actually seen him even play ?

That’s a pretty low bar of happiness.

[NewClaret]

You’d be quite happy with a striker with a known issue which could (and already has) means he misses months of the season at any point and with little or no forewarning ?

Backed up by a striker who was not deemed good enough for the championship last time under VK and was not even a regular starter for a mid table championship team this season.

And another striker who has never played at a level above league 2 in this country and then spent the last couple of months on the bench for Dundee. How many times have you actually seen him even play ?

That’s a pretty low bar of happiness.

I suppose it does to an extent revolve around how confident we are that his treatment has been effective, how he’s feeling, etc.

What I do think is that if he’s fit and healthy he’ll be our first choice. So that rules out loans to a large extent and I don’t expect we’ll be throwing millions at another striker to come in to cover Foster.

Obafemi - is a proven goalscorer at championship level with Swansea. Perhaps a bit off the boil but with the chances we’d create he’d refind form I’m sure.

Mellon - I’ve watched all his goals, including his one at the weekend. General assessment is he’s a good finisher. Not someone who will create goals by running at players but takes up good positions and finishes positively when they’re created. A poacher. Given I expect we’ll create a decent number of chances in the league below I think he’d score goals and at some point we need to either back these young players for our team or let them go.

We also have JBL and Amdouni who I didn’t mention as we don’t know if they’ll be here but both can play in the striker role if needed.

In the Championship I really expect we’ll be looking to share the goals around. Barnes got 7 in 39 apps last year. I expect Obafemi or Mellon could match that if needed and given a run. Then there’s of course the January window if things aren’t working out.

Equally, if we signed one I would not be disappointed, but I don’t think there’s an absolute necessity to replace any of our older OOC players bar Charlie which I think is one of the benefits of carrying a larger squad and loaning players out in the way we have.

[Big Vinny K]

I suppose it does to an extent revolve around how confident we are that his treatment has been effective, how he’s feeling, etc.

What I do think is that if he’s fit and healthy he’ll be our first choice. So that rules out loans to a large extent and I don’t expect we’ll be throwing millions at another striker to come in to cover Foster.

Obafemi - is a proven goalscorer at championship level with Swansea. Perhaps a bit off the boil but with the chances we’d create he’d refind form I’m sure.

Mellon - I’ve watched all his goals, including his one at the weekend. General assessment is he’s a good finisher. Not someone who will create goals by running at players but takes up good positions and finishes positively when they’re created. A poacher. Given I expect we’ll create a decent number of chances in the league below I think he’d score goals and at some point we need to either back these young players for our team or let them go.

We also have JBL and Amdouni who I didn’t mention as we don’t know if they’ll be here but both can play in the striker role if needed.

In the Championship I really expect we’ll be looking to share the goals around. Barnes got 7 in 39 apps last year. I expect Obafemi or Mellon could match that if needed and given a run. Then there’s of course the January window if things aren’t working out.

Equally, if we signed one I would not be disappointed, but I don’t think there’s an absolute necessity to replace any of our older OOC players bar Charlie which I think is one of the benefits of carrying a larger squad and loaning players out in the way we have.

Going into the season with those 3 strikers would be crazy IMHO.

Obafemi a”proven” goal scorer on championship ? Really ? He’s had one half decent season when he scored 12 goals and that was 4 years ago. He’s a less than 1 in 5 striker.

Mellon might have potential but he’s not played anywhere near championship level yet.

So that leaves one striker who we can be pretty sure cannot play a full season - or it’s a huge and unnecessary risk to think he can.

[aggi]

I’m assuming the confidence is because of the millions of pounds that was paid in early redemption penalty fees to refinance the old loan.
I have no idea whether it’s correct but seems fairly logical.

Cheers. I'm not as confident as Paul in that case then if that's the only reason. Particularly given our history of repeated refinancing (which doesn't look amazing from the outside).

[aggi]

Kettering Capital now to be wound up (voluntary rather than a compulsory strike-off).

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

[Chester Perry]

Kettering Capital now to be wound up (voluntary rather than a compulsory strike-off).

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

I was aware that this action was planned a couple of months back, just not the exact timing of it - I understand from the same source that this approach is intended for Calder Vale Holdings too,

I am trying to find out how it affects (or not) the FOI appeals about Companies House actions re these two entities - one is due to be heard in June

[bumba]

‘I suspect there will be a fire sale.’ Everyone kept saying this two years ago and it didn’t happen.

Really? Was you asleep all that summer we sold or lost the majority of the squad

[Chester Perry]

Kettering Capital now to be wound up (voluntary rather than a compulsory strike-off).

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

also it is no surprise that BDO are carrying out the action on behalf of ALK/VSL

[Chester Perry]

Kettering Capital now to be wound up (voluntary rather than a compulsory strike-off).

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

I was aware that this action was planned a couple of months back, just not the exact timing of it - I understand from the same source that this approach is intended for Calder Vale Holdings too,

I am trying to find out how it affects (or not) the FOI appeals about Companies House actions re these two entities - one is due to be heard in June

And so it comes to pass

Calder Vale Holdings Limited joins the Voluntary winding up party

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

The declaration of solvency will be interesting - just what will be happening with that £124.1m of debt owed to the club

[Bordeauxclaret]

Really? Was you asleep all that summer we sold or lost the majority of the squad

‘Fire Sale
a sale of goods or assets at a very low price, typically when the seller is facing bankruptcy.’

[boyyanno]

And so it comes to pass

Calder Vale Holdings Limited joins the Voluntary winding up party

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

The declaration of solvency will be interesting - just what will be happening with that £124.1m of debt owed to the club

Burnley fans should be keeping a very close eye on this.