kpturner Posted 5 June, 2009 Posted 5 June, 2009 http://news.bbc.co.uk/1/hi/business/8084182.stm Recent discussions on this forum (while waiting for a buyer) touched on the possibility that football in this country is heading for meltdown. Holding companies going bust is a subject close to home for Saints fans, but when you consider that even a successful Premier League team (who finished second this season) may also be in the same boat, does it mean the beginning of the end? I also heard that Man Utd debts are around the £1bn mark!! Obscene? Sorry if this has already been covered - couldn't find it.
krissyboy31 Posted 5 June, 2009 Posted 5 June, 2009 Unforetunately, it seems it's different rules for the "big four" than for the rest. I can't see Barclays bouncing one of thier cheques forcing them into administration.
SaintRichmond Posted 5 June, 2009 Posted 5 June, 2009 http://news.bbc.co.uk/1/hi/business/8084182.stm Recent discussions on this forum (while waiting for a buyer) touched on the possibility that football in this country is heading for meltdown. Holding companies going bust is a subject close to home for Saints fans, but when you consider that even a successful Premier League team (who finished second this season) may also be in the same boat, does it mean the beginning of the end? I also heard that Man Utd debts are around the £1bn mark!! Obscene? Sorry if this has already been covered - couldn't find it. I have absolutely no sympathy with any Club that is now finding the financial strain For far too long, Football has been living in "Cloud Cuckoo Never Never Land ", all due mainly to the DISEASE in this country called EASY CREDIT I have no objection to any Team buying any player they wish ... but do it in REAL money ... not £10 down and £50 per week for 200 years Households have to live within a budget, and a lot of successful businesses do too Football does not, and that is why you see such ridiculous Transfer Fees and Salaries IMHO, The QUICKER a BIG NAME Club goes to the wall, the better, because until that happens, football in this country will continue on a Never Never Land self destruct mindset
Beer Engine Posted 5 June, 2009 Posted 5 June, 2009 Actually debt is essentail to our economic prosperity. It is a good thing because it accelerates investment and consumption - it's like a turbo-charger for the economy. Debt only becomes a problem when you either cannot obtain replacement credit and/or service the interest payments on your current borrowings. Even if your business trading model is good, if your debt levels are too high, your business becomes far too vulnerable to unpredictable changes in global financial markets. So, in the long run , your business will be more stable if it goes for slower but sustainable growth and lower debt levels. Shimples! PS - football isn't really a proper business
Nineteen Canteen Posted 5 June, 2009 Posted 5 June, 2009 Unforetunately, it seems it's different rules for the "big four" than for the rest. I can't see Barclays bouncing one of thier cheques forcing them into administration. Yeah, they said that about Lehman Brothers and refused their help at the 11th hour and then cherry picked the best parts of the Lehman's business after they filed for bankruptcy protection. I continue to use the phrase that football will eat itself and many fans who were once forced to go on a 'football diet' as a result of disillusionment, being priced out of the game, recession or whatever will never come back as we are saturated with an oversupply of endless crappy European games, unxcompetitive Premiership matches involving one of the big 4 watching and some seriously over paid players swan around sometime playing a bunch of poor European part timers. There is then the crisis behind the scenes in desperately poor third world countries where shysters masquerading as scouts from the top clubs rob kids and their families of significant sums of money (to them) on the promise of a non-existent contract. Then in this country we have the FA's respect campaign and Parent's code of conduct which is not admitted but borne out of greed as oppose to any desire on the Parent's part to see their son play well and do well. They all want their boy to be the next Theo or Wayne and get the big money without having to 'graft' and in the process ruin the confidence and boyhood experiences of their boys who have 0.001% chance of success if that. I know half a dozen boys who have gone to the Chelsea Academy but how many from their academy have actually made it, and compare that to youth programmes with much lower level leagues? Some of these bigger clubs IMO are ruining our talent but setting unreasonable demands on their young players and ignoring their development by opting to pay megabucks for players like Ballack and Shevchenko? 1 lad I know who was very good chose to walk away from Chelsea because he couldn't cope with the stress - he was 13! Football needs to make huge changes and need to stop talking a good game about the importance of grass roots and actually do something about it. Salary caps or a deferral scheme (post playing pension) and a strict limit on foreign players or a minimum of homegrown players to be played are just a start and we can then tackle ticket pricing the role of TV etc. Good thread and much to discuss.
Flyer Posted 5 June, 2009 Posted 5 June, 2009 Unforetunately, it seems it's different rules for the "big four" than for the rest. I can't see Barclays bouncing one of thier cheques forcing them into administration. The difference is Man U can pay it back, Saints couldnt. It doesnt matter what the debt is, if you can pay it back, the banks will be happy. If you cant pay it back, the club will go into admin.
Johnny Bognor Posted 5 June, 2009 Posted 5 June, 2009 Unforetunately, it seems it's different rules for the "big four" than for the rest. I can't see Barclays bouncing one of thier cheques forcing them into administration. I think it's more a case of "if you owe the bank a small amount of money, you have a problem. If you owe the bank a shedload of money, they have a problem".
Leslie Charteris Posted 5 June, 2009 Posted 5 June, 2009 Can Liverpool pay their debt back? If Gillet and Hicks cannot refinance their current debt next month, then, no and LFC are in serious trouble.
Nineteen Canteen Posted 5 June, 2009 Posted 5 June, 2009 I have absolutely no sympathy with any Club that is now finding the financial strain For far too long, Football has been living in "Cloud Cuckoo Never Never Land ", all due mainly to the DISEASE in this country called EASY CREDIT I have no objection to any Team buying any player they wish ... but do it in REAL money ... not £10 down and £50 per week for 200 years Households have to live within a budget, and a lot of successful businesses do too Football does not, and that is why you see such ridiculous Transfer Fees and Salaries IMHO, The QUICKER a BIG NAME Club goes to the wall, the better, because until that happens, football in this country will continue on a Never Never Land self destruct mindset Either that or they need to be forced to realign their financial structures and that IMO can only be done via a catastrophic event in Football as you suggest like the Banking crisis or change is forced through regulation of the Associations, Club's and Media Rights. IMO clubs are run a bit like the householder who realises his house he puchased for £30,000 20 years ago is now worth £300,000 and start's to dip into his equity without a thought for the future. Easy money acheived through being in the right place at the right time - in football's case the advent of Satellite TV. I don't believe football can continue to grow and get away with it much like the Housing bubble and the Associations can wait for that to happen as Richmond suggests and they deal with the fall out or start to address the problems (which are many) through regulation perhaps not dissimilar to what the FIA are trying to impose to promote competitiveness and perhaps make the sport more palatable in a changing world.
Dicko Posted 5 June, 2009 Posted 5 June, 2009 I would love to see a huge club like Liverpool go into administration
Ivan Katalinic's 'tache Posted 5 June, 2009 Posted 5 June, 2009 I would love to see a huge club like Liverpool go into administration They probably wouldn't take the 10 points off such a big club stating it was because the owners, and not the club, who were in administration. Oh...
a1ex2001 Posted 5 June, 2009 Posted 5 June, 2009 Would certainly be interesting if Liverpool went into admin, not sure the premier league would be as keen to throw the book at them as the FA was with us.
Nineteen Canteen Posted 5 June, 2009 Posted 5 June, 2009 Would certainly be interesting if Liverpool went into admin, not sure the premier league would be as keen to throw the book at them as the FA was with us. The FA didn't throw the book at us it was the football league. That siad it would be interesting to know if the Premier League's rules on administration are any different but whatever the rules they wouldn't be able to ignore them just because it's Liverpool as oppose to say a Hull or a Wigan.
a1ex2001 Posted 5 June, 2009 Posted 5 June, 2009 The FA didn't throw the book at us it was the football league. That siad it would be interesting to know if the Premier League's rules on administration are any different but whatever the rules they wouldn't be able to ignore them just because it's Liverpool as oppose to say a Hull or a Wigan. I believe the premier league has a lower points deduction and being the members only club it is I can't see them ever enforcing it against one of the big boys.
dubai_phil Posted 5 June, 2009 Posted 5 June, 2009 Can Liverpool pay their debt back? They made 10 mil profit last year Their INTEREST is 32 mil... There have been many articles on this in the past year or so, the Setanta issue made a few journos sit up and think. Back at the height of the free money from Banks days, a mate of mine actually showed me how even someone like me could have borrowed 40+ mil with NO guarantees at all, taken over Saints (in the old days) and just loaded the whole debt onto the club. It was exactlly the same thing that Hicks & Gillett had done, and even then when he explained how it would be impossible to not only ever pay it back but also how the club would be torn to shreds just paying the interest anyone with a brain had to ask - WHY?. And yet it was going on all the time in the PL. Football is wrong, the structure is wrong even if we as fans love most of what our own team try and provide each week. Because you could never be "revolutionary" (apart from rosy cheeks) and try and do it a different way, unless somebody BIG goes pop, it will never change. Liverpool will be ok, they are too big and RBS is owned by you lot anyway
INFLUENCED.COM Posted 5 June, 2009 Posted 5 June, 2009 IMHO, The QUICKER a BIG NAME Club goes to the wall, the better, because until that happens, football in this country will continue on a Never Never Land self destruct mindset Are you suggesting us and Leeds were not 'a BIG NAME Club' ? in 2003 we would have laughed if someone suggested we would find ourselves in this position 6 years down the line, Sothampton football Club was a house hold name across the nation as was Leeds so imo what you ask for has already happened.
Beer Engine Posted 5 June, 2009 Posted 5 June, 2009 With all of the "top 4" struggling under a mountain of debt I wonder what motivates people like the Glaziers, Abramovich, Hicks and Gillett to invest such outlandish sums. Are they hoping to make money or is it just an ego thing? Genuine question.
Cricketphilly Posted 5 June, 2009 Posted 5 June, 2009 IMHO, The QUICKER a BIG NAME Club goes to the wall, the better, because until that happens, football in this country will continue on a Never Never Land self destruct mindset Leeds United is an example everyone chooses to ignore
krissyboy31 Posted 5 June, 2009 Posted 5 June, 2009 The difference is Man U can pay it back, Saints couldnt. It doesnt matter what the debt is, if you can pay it back, the banks will be happy. If you cant pay it back, the club will go into admin. It's actually Liverpool we're talking about here but if their auditors are questioning their going concern status, then I would say they are struggling to pay it back.
INFLUENCED.COM Posted 5 June, 2009 Posted 5 June, 2009 a mate of mine actually showed me how even someone like me could have borrowed 40+ mil with NO guarantees at all, taken over Saints Your failure to act has resulted in our administration. Fact(as some say)
alpine_saint Posted 5 June, 2009 Posted 5 June, 2009 IMHO, The QUICKER a BIG NAME Club goes to the wall, the better, because until that happens, football in this country will continue on a Never Never Land self destruct mindset Have to say, this is spot-on.
Fitzhugh Fella Posted 5 June, 2009 Posted 5 June, 2009 I have absolutely no sympathy with any Club that is now finding the financial strain For far too long, Football has been living in "Cloud Cuckoo Never Never Land ", all due mainly to the DISEASE in this country called EASY CREDIT I have no objection to any Team buying any player they wish ... but do it in REAL money ... not £10 down and £50 per week for 200 years Households have to live within a budget, and a lot of successful businesses do too Football does not, and that is why you see such ridiculous Transfer Fees and Salaries IMHO, The QUICKER a BIG NAME Club goes to the wall, the better, because until that happens, football in this country will continue on a Never Never Land self destruct mindset Quite correct. The Guardian recently carried a big piece on Premiership debt which is now over £3b with the top 4 responsible for two thirds. The trouble is, well run clubs - in an effort to keep apace with the "idiot" clubs who throw money they haven't got around like confetti - are forced to spend more than they can afford to compete on a level playing field. The whole thing is a spiraling merry-go-round and sooner or later the bubble will burst. In a way, Lowe was right about pushing out the boat too far but he knew he had no option but to in order to stay in the Premiership. Without a sugardaddy Saints were never going to survive. Even when you bring young talent through the academy one of the glutonous "idiot" clubs will throw a load of money at you and before you can say "Theo Walcott" he'll be gone.
Fitzhugh Fella Posted 5 June, 2009 Posted 5 June, 2009 Yeah, they said that about Lehman Brothers and refused their help at the 11th hour and then cherry picked the best parts of the Lehman's business after they filed for bankruptcy protection. I continue to use the phrase that football will eat itself and many fans who were once forced to go on a 'football diet' as a result of disillusionment, being priced out of the game, recession or whatever will never come back as we are saturated with an oversupply of endless crappy European games, unxcompetitive Premiership matches involving one of the big 4 watching and some seriously over paid players swan around sometime playing a bunch of poor European part timers. There is then the crisis behind the scenes in desperately poor third world countries where shysters masquerading as scouts from the top clubs rob kids and their families of significant sums of money (to them) on the promise of a non-existent contract. Then in this country we have the FA's respect campaign and Parent's code of conduct which is not admitted but borne out of greed as oppose to any desire on the Parent's part to see their son play well and do well. They all want their boy to be the next Theo or Wayne and get the big money without having to 'graft' and in the process ruin the confidence and boyhood experiences of their boys who have 0.001% chance of success if that. I know half a dozen boys who have gone to the Chelsea Academy but how many from their academy have actually made it, and compare that to youth programmes with much lower level leagues? Some of these bigger clubs IMO are ruining our talent but setting unreasonable demands on their young players and ignoring their development by opting to pay megabucks for players like Ballack and Shevchenko? 1 lad I know who was very good chose to walk away from Chelsea because he couldn't cope with the stress - he was 13! Football needs to make huge changes and need to stop talking a good game about the importance of grass roots and actually do something about it. Salary caps or a deferral scheme (post playing pension) and a strict limit on foreign players or a minimum of homegrown players to be played are just a start and we can then tackle ticket pricing the role of TV etc. Good thread and much to discuss. Don't often agree with you but I do on this.
Trader Posted 5 June, 2009 Posted 5 June, 2009 The difference is Man U can pay it back, Saints couldnt. It doesnt matter what the debt is, if you can pay it back, the banks will be happy. If you cant pay it back, the club will go into admin. But can they? Their debt currently stands at over TWICE their turnover. All the "big 4" are in similar positions - that's unsustainable. Once one of these clubs goes into admin - inevitable in my view - there could be a domino effect.
Under Weststand Posted 5 June, 2009 Posted 5 June, 2009 (edited) Just been an economist on Sky Sports Talking about Liverpool case 300-mill in Debt 32-mill in interest payments alone said that Gillet & Hicks have a real problem. Says they may be forced to sell/ get another investor in to help out. This just shows along with United that how dangerous it is as these foreign owners, they are not buying the clubs with there own money, & just putting clubs into debt & allowing the clubs to foot the buyout with massive loans. Edited 5 June, 2009 by Under Weststand
krissyboy31 Posted 5 June, 2009 Posted 5 June, 2009 Just been an economist on Sky Sports Talking about Liverpool case 300-mill in Debt 32-mill in interest payments alone said that Gillet & Hicks have a real problem. Says they may be forced to sell/ get another investor in to help out. This just shows along with United that how dangerous it is for these foreign owners, they are not buying the clubs with there own money, & just putting clubs into debt & allowing the clubs to foot the buyout with massive loans. And all this is before the multi-millions they plan to spend (borrow) on the new Stanley Park stadium.
Under Weststand Posted 5 June, 2009 Posted 5 June, 2009 And all this is before the multi-millions they plan to spend (borrow) on the new Stanley Park stadium. Yes that gets me too, Is any of this debt towards the new stadium if not where the hell has a club that was Debt free before they took over suddenly have a 300-mill debt???
SaintRichmond Posted 5 June, 2009 Posted 5 June, 2009 (edited) The difference is Man U can pay it back, Saints couldnt. It doesnt matter what the debt is, if you can pay it back, the banks will be happy. If you cant pay it back, the club will go into admin. Sure about that ???.... The Glasers transferred the USA debt to Man U ..... False economy and everlasting credit has been the reason why the UK in in financial turmoil It's about time that the policy of " If you want it, save up for it" was reintroduced, instead of making all the Fat Cats even Fatter, and bailing out our wonderful Financial Institutions when they themselves have been so abysmally poor, that they virtually go to the wall owing BILLIONS, and then being bailed out by the stupid Government of the day What chance of you or I in getting a hand out from the Government if we go into the Red ...... NONE whatsoever Football should balance it's Books, and live within it's means, IMHO, it is SICK to realise that the so called "Stars" earn more per WEEK, than most of us earn in several years ......... That is NOT right, especially in this economic climate Edited 5 June, 2009 by SaintRichmond
Ludwig Posted 5 June, 2009 Posted 5 June, 2009 They shouldn't necessarily balance the books, but be in a position where if they had to balance them immediately, they could.
St_Tel49 Posted 5 June, 2009 Posted 5 June, 2009 This thread is reinforcing to me that Pinnacle's stated approach that club should, by and large, stand on its own two feet is the right thing to do.
Flyer Posted 5 June, 2009 Posted 5 June, 2009 But can they? Their debt currently stands at over TWICE their turnover. All the "big 4" are in similar positions - that's unsustainable. Once one of these clubs goes into admin - inevitable in my view - there could be a domino effect. If they struggle, they can sell Torres, same for Gerrard. They have assets to cover their running. When they cant act as a going concern, the club would have to be sold (clubs debts like Man U and Liverpool arent as a result of the outgoings exceeding their incomings like Saints or Leeds, they are because huge sums were borrowed to buy the clubs in the 1st palce) or the banks would take ownership of the club which is making profit (bar the debt borrowed from the banks to buy the club) I dont think people should be allowed to borrow huge sums to buy a club like the yanks have done. I highly doubt any club will go into admin in the prem, it will be a Wigan, Bolton, Spurs etc should they get relegated and then the outgoings exceed their income.
Barry the Badger Posted 5 June, 2009 Posted 5 June, 2009 With all of the "top 4" struggling under a mountain of debt I wonder what motivates people like the Glaziers, Abramovich, Hicks and Gillett to invest such outlandish sums. Are they hoping to make money or is it just an ego thing? Genuine question. I think they have bought the club without spending much, if any of their own money. If they pull it off they walk away with millions, if it goes tits up they walk away no worse off it's just the club that is ****ed.
MarkSFC Posted 5 June, 2009 Posted 5 June, 2009 I thnk part of the problem, particlarly for clubs outside the Premiership is the "transfer windows". This restriction on trade means that clubs cannot "bail themselves out " say in October...or March, if they find themselves in difficulty. During the "no transfers allowed" months the only real way to get money is by borrrowing...catch 22 for most. IMHO the immediate removal of the transfer window will benefit clubs more for financial and existance reasons, than for the supposed reason of "fairness" that the powers thought it would create on the playing side of things.
Scottie Posted 5 June, 2009 Posted 5 June, 2009 Yes that gets me too, Is any of this debt towards the new stadium if not where the hell has a club that was Debt free before they took over suddenly have a 300-mill debt??? The debt is not the clubs's, it's the holding company. Effectively they borrowed the money to buy the club and the 300 million is the remaining balance of the loan. There is almost no chance of LFC going into admin, the holding company might but the club won't. The most likely scenario is that they refinance the loan or get investment.
MarkSFC Posted 5 June, 2009 Posted 5 June, 2009 The debt is not the clubs's, it's the holding company. Effectively they borrowed the money to buy the club and the 300 million is the remaining balance of the loan. There is almost no chance of LFC going into admin, the holding company might but the club won't. The most likely scenario is that they refinance the loan or get investment. But is Kop Football Ltd "intrinsically linked" to LCF Ltd???!!!!!
Block 5 Posted 5 June, 2009 Posted 5 June, 2009 a mate of mine actually showed me how even someone like me could have borrowed 40+ mil with NO guarantees at all, taken over Saints (in the old days) and just loaded the whole debt onto the club. Was this Marc Jackson by any chance?
krissyboy31 Posted 5 June, 2009 Posted 5 June, 2009 But is Kop Football Ltd "intrinsically linked" to LCF Ltd???!!!!! I'll bet that if Grant Thorton were brought in at Anfield, they would come to a completely different verdict for precisely the same circumstances.
MarkSFC Posted 5 June, 2009 Posted 5 June, 2009 I'll bet that if Grant Thorton were brought in at Anfield, they would come to a completely different verdict for precisely the same circumstances. Probably but then Lord "smug f*****" Mal-whiney wont be involved
oxfordshire_saint Posted 5 June, 2009 Posted 5 June, 2009 Liverpool will be fine, apparently Hicks and Gillet have enough assets in the US to sell off and will be able to stabilise themselves. Worst comes to worst, Liverpool may have to sell off a couple of crown jewels, but they will still exist. For a real horror story, read up on the current state of Valencia and how they got there. A truly shocking example of how a football club shouldn't be ran!
INFLUENCED.COM Posted 5 June, 2009 Posted 5 June, 2009 Liverpool will be fine, apparently Hicks and Gillet have enough assets in the US to sell off and will be able to stabilise themselves. IF a buyer exists for alleged assets and said assets are theirs to sell
Barry the Badger Posted 5 June, 2009 Posted 5 June, 2009 I don't really understand how it is legal for somebody to buy a club with a massive loan, transfer the loan to the club, use the club's profits to pay off that loan, and then sell the club and walk away with hundreds of millions!!! Anybody?
John Boy Saint Posted 5 June, 2009 Posted 5 June, 2009 Unforetunately, it seems it's different rules for the "big four" than for the rest. I can't see Barclays bouncing one of thier cheques forcing them into administration. I think it does spread further than them, as not a Dickie bird has been said about West Ham and their owners money disappearing into the Icelandic banking collapse, I thought he had lost the lot and only goodwill was keeping him afloat. It would be funny to see either the Glaziers or Gillette and his mate go tits up and no bugger being around to clear up such huge debts with their loose change and then seeing what is done about it.
suewhistle Posted 5 June, 2009 Posted 5 June, 2009 http://www.guardian.co.uk/football/2009/jun/04/liverpool-tom-hicks-george-gillett-debt More on liverpool's situation here, and the fact that the owners are seeking re-financing.
charlie saint Posted 5 June, 2009 Posted 5 June, 2009 This thread is reinforcing to me that Pinnacle's stated approach that club should, by and large, stand on its own two feet is the right thing to do. Absolutely. And be happy to support a club which might eventually challenge for the Championship play-off places once in a while.
kpturner Posted 5 June, 2009 Author Posted 5 June, 2009 .... or is it the end of the beginning????Your post certainly stands out from all the others Oooh - have a guess why :-)
dubai_phil Posted 5 June, 2009 Posted 5 June, 2009 Was this Marc Jackson by any chance? Lol, I actually posted the entire process ages ago. Think it was a "Platini may have the right idea" sort of thread Was given to me by a Senior VP at the Emirates/NBD Go to the right bank with a nice suit on, show them a simple business plan to set up a holding company, ask them for 40-60mil loan for the holding co against the book value of the property and assets, agree a nice interest rate and bingo draw down as you acquire the shares. There were a few complexities in it of course, like being able to afford the right quality suit as far as I was concerned, but the principle was sound. Personally being a fan, I thought it sucked. Would have got rid of Rupe's but it still sucked especially when you consider interest would have been about 4mil a year and we were already losing that much money
SaintRichmond Posted 5 June, 2009 Posted 5 June, 2009 The debt is not the clubs's, it's the holding company. Effectively they borrowed the money to buy the club and the 300 million is the remaining balance of the loan. There is almost no chance of LFC going into admin, the holding company might but the club won't. The most likely scenario is that they refinance the loan or get investment. Oh Good ............ I'd hate for the League to dock them 10 points ........
ooohTerryHurlock Posted 5 June, 2009 Posted 5 June, 2009 Your post certainly stands out from all the others Oooh - have a guess why :-) Because it was brilliant in its simplicity?
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