The Accounts

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Re: The Accounts

Postby Georgee Paris on Mon Mar 12, 2018 9:02 pm

Is that even legal?
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Re: The Accounts

Postby GPW on Mon Mar 12, 2018 9:43 pm

Somebody should give HMRC a nudge.....

The interest paid out on loans is interesting - it will be tax deductible for the club whereas if the club made a profit that profit is subject to tax with any dividends paid to shareholders paid after tax. So, paying interest that goes to shareholders is basically a way of pushing more money out before tax. True that interest is subject to taxed for the individual but in this case it is very likely to be in some shell company to avoid that.

The above is "legal" however there are pretty strict rules around payments made to Directors and shareholders. One rule is that they can not be "disguised dividends" (ie payments that are really dividends but are disguised as salary, bonus or interest. The other is that any interest rates have to paid at a fair market rate. If they are paid above that it should basically reduce the tax deduction and create a taxable benefit for the recipient as it is basically hidden income. I have seen that the interest paid on the currnet loans was about 6%. Anybody else found anywhere they can earn that kind of interest on a loan in the recent years??

The above all has interesting tax consequences especially given the constant spinning that the owners "don't take a penny out by way of salary etc". Effective and accurate media coverage needs somebody to dig beyond the surface and soundbites. There are several signs that suggest there could alot of ways the owners are extracting a return on their "investment". Most likely the business media would address this more effectively than the usual football media. If you know a good business journalist give them a call. Falling that, maybe HMRC ......
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Re: The Accounts

Postby the pink palermo on Mon Mar 12, 2018 9:50 pm

David Conn at the Guardian would be the man for that .
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Re: The Accounts

Postby Albie Beck on Mon Mar 12, 2018 9:51 pm

GPW wrote: I have seen that the interest paid on the currnet loans was about 6%. Anybody else found anywhere they can earn that kind of interest on a loan in the recent years??

Particularly one with a cast-iron guarantee - the fact that it's underwritten by the TV money pretty well guarantees it, doesn't it?
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Re: The Accounts

Postby GPW on Mon Mar 12, 2018 9:58 pm

the pink palermo wrote:David Conn at the Guardian would be the man for that .


Have any inside track with him?

I think there are several aspects of the accounts that are worth a look. Not necessarily from a legal perspective but to challenge the idea that the owners "don't take a penny out". An effective campaign needs a compelling sound bit to repeat. If this one could be proven to be doubtful it might be very powerful especially if there were any HMRC implications.
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Re: The Accounts

Postby the pink palermo on Mon Mar 12, 2018 10:05 pm

I might know someone who does or who could......

I'd be interested to know exactly how much since they came in to the football "industry" exactly how much the two Gold brothers and David Sullivan have put in t football and how much they have taken out .

I believe that when they acquired BCFC all they did was take on board the debts of that club, £1.25m or so, and traded the business for 16 or 17 years , exiting with an £82m sale to the chap from overseas.

Makes me wonder how much of their money that they earned outside of football has ever been invested in football.

I reckon zero. Not a bean.
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Re: The Accounts

Postby QuintonNimoy on Mon Mar 12, 2018 10:11 pm

GPW wrote:Anybody else found anywhere they can earn that kind of interest on a loan in the recent years??

Gold does go on about the 80s, maybe he thinks he's living in them?
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Re: The Accounts

Postby GPW on Mon Mar 12, 2018 10:20 pm

the pink palermo wrote:I might know someone who does or who could......


Makes me wonder how much of their money that they earned outside of football has ever been invested in football.

I reckon zero. Not a bean.


Thing is, in isolation I don't have an issue with that - if they were to admit that's their "model". It's the constant insistence of being in it as fans for the love of it, saved the club, dont take a penny out etc that grates me. It would be good to see that challenged in the media, especially as that would inevitably extend to a debate about how effectively they are running the club. When it appears they are doing it for love the bar for competent management seems to be set quite low.
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Re: The Accounts

Postby Georgee Paris on Mon Mar 12, 2018 10:57 pm

This would also dispel the myth that we would need a multi billionaire to be able to run the club as they have.
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Re: The Accounts

Postby Kev59 on Mon Mar 12, 2018 11:10 pm

the pink palermo wrote:
I reckon zero. Not a bean.


£1? :wink:
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Re: The Accounts

Postby QuintonNimoy on Tue Mar 13, 2018 10:35 am

the pink palermo wrote:Makes me wonder how much of their money that they earned outside of football has ever been invested in football.

I reckon zero. Not a bean.

I remember you making the point during the days of "The Project" when the club was in distress that it's cash flow (or lack of it) that would kill us, and that seems to be pretty much all they've provided - the extra cushion to absorb a loss here or there without the banks foreclosing.
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Re: The Accounts

Postby GPW on Tue Mar 13, 2018 11:07 am

QuintonNimoy wrote:[
I reckon zero. Not a bean.

I remember you making the point during the days of "The Project" when the club was in distress that it's cash flow (or lack of it) that would kill us, and that seems to be pretty much all they've provided - the extra cushion to absorb a loss here or there without the banks foreclosing.[/quote]

That's the case for pretty much every business. Usually cash flow issues that kill the ones that fail. It's also why assessing spend on transfers is a bit misleading - how and when those payments/receipts happen is much more important.

The money and interest in the Premier League means all owners are building wealth through the rising value of a club in the Premier League. If you hang in there and stay in the league it just flows through. True you have to sell your club to realise that gain but eventually that happens. If that is your goal all you need to do in the meantime os service the club with enough cash to survive in the Premier League. That is basically what alot of owners (including ours) are trying to do in my opinion. Of course if you try to do that too much on the cheap or make too many poor decisions you may not get away with that minimal funding approach. Can't help feeling that's where we are.
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Re: The Accounts

Postby Wembley1966 on Tue Mar 13, 2018 12:25 pm

QuintonNimoy wrote:I remember you making the point during the days of "The Project" when the club was in distress that it's cash flow (or lack of it) that would kill us, and that seems to be pretty much all they've provided - the extra cushion to absorb a loss here or there without the banks foreclosing.

They might have provided some cash back when they first took over - but they are now doing the complete opposite. We don't have the cash so we are now having to borrow money from Rights and Media Funding Ltd in order to pay Gold & Sullivan £10m in interest payments.
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Re: The Accounts

Postby djclipz on Tue Mar 13, 2018 1:07 pm

Wembley1966 wrote:They might have provided some cash back when they first took over - but they are now doing the complete opposite. We don't have the cash so we are now having to borrow money from Rights and Media Funding Ltd in order to pay Gold & Sullivan £10m in interest payments.


Same company Everton also took out loans from in 2016.

https://www.theguardian.com/football/2016/dec/29/vibrac-jg-funding-riverdance-everton-shadow-investor-mystery
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Re: The Accounts

Postby Croydon on Tue Mar 13, 2018 1:17 pm

Thanks for the summary GPW
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Re: The Accounts

Postby Wembley1966 on Tue Mar 13, 2018 1:23 pm

djclipz wrote:Same company Everton also took out loans from in 2016.

It's Michael Tabor's company - we've used him for loans a number of years, as have a few other clubs:
http://www.dailymail.co.uk/sport/football/article-4365700/Michael-Tabor-named-one-football-s-biggest-lenders.html
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Re: The Accounts

Postby only1post on Tue Mar 13, 2018 1:47 pm

Before this thread works it's way down the pages, is it worth speculating what we may be discussing in 12 months time.
After all we only have a couple of months to go.
It would seem to be that any possible boost to the next set of figures, will have some downside to counteract it.
The profit on dealing players will be wiped out by a reduction in prize money for a lower league position.
We won't be spending £8m on trying to make the stadium look like our home, but then we won't have any proceeds from the sale of our real home.
Lower debt and rates on that debt will surely mean less interest to be paid, but that will probably be eaten up by wages for the likes of Hart, Zaba, Hernandez, Arnie and now Evra.
Surely the only thong we can look forward to in the next set is hopefully a very slight reduction in the debt, if any.
Thoughts?
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Re: The Accounts

Postby djclipz on Tue Mar 13, 2018 1:56 pm

Wembley1966 wrote:It's Michael Tabor's company - we've used him for loans a number of years, as have a few other clubs:
http://www.dailymail.co.uk/sport/football/article-4365700/Michael-Tabor-named-one-football-s-biggest-lenders.html


Interesting read, thanks!
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Re: The Accounts

Postby GPW on Tue Mar 13, 2018 3:13 pm

only1post wrote:Before this thread works it's way down the pages, is it worth speculating what we may be discussing in 12 months time.
After all we only have a couple of months to go.
It would seem to be that any possible boost to the next set of figures, will have some downside to counteract it.
The profit on dealing players will be wiped out by a reduction in prize money for a lower league position.
We won't be spending £8m on trying to make the stadium look like our home, but then we won't have any proceeds from the sale of our real home.
Lower debt and rates on that debt will surely mean less interest to be paid, but that will probably be eaten up by wages for the likes of Hart, Zaba, Hernandez, Arnie and now Evra.
Surely the only thong we can look forward to in the next set is hopefully a very slight reduction in the debt, if any.
Thoughts?


This is very true. If you live by short term thinking, poor management (eg buying and selling of players on high wages with no resale value) and constantly "kicking financials issues down the line" the cycle just keeps on repeating and you never escape the consequences. Realistically the only escape is through pure luck (eg a Leicester scenario where without a spike in spending you suddeny luck out a get a legaue and CL revenue windfall) or a genuine benfactor comes in and wipes out debt via a genuine "gift".

What this means is that even is the owners were inclined to fund a transfer spending spree it would likely be funded via more loans from the owners, more interest payments to them etc, And so the cycle continues - especiallu if we continue to make dud transfer decisions.
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Re: The Accounts

Postby East Stand Martin on Tue Mar 13, 2018 8:44 pm

GPW wrote:bThe money and interest in the Premier League means all owners are building wealth through the rising value of a club in the Premier League. If you hang in there and stay in the league it just flows through. True you have to sell your club to realise that gain but eventually that happens. If that is your goal all you need to do in the meantime os service the club with enough cash to survive in the Premier League. That is basically what alot of owners (including ours) are trying to do in my opinion. Of course if you try to do that too much on the cheap or make too many poor decisions you may not get away with that minimal funding approach. Can't help feeling that's where we are.


Exactly.

I was only saying the other day that this business model is EXACTLY the same as Old Man Brown's was.

If you believed the owners' PR you would have thought that they were doing the whole thing out of altruism.

No, this is called putting £49 m in loans and £26 m in share capital (£75 m).

The interest pays out on the loans and they are/were secured against assets (The Boleyn, for example). I keep saying this but £16.4 million was taken out of the company by Sullivan and Gold between Aug 16 and August 17. This covered interest and repayment of loans.

Look at the G&S tenure (2010-17) and you an see £148 m cash coming from the club's own operations and £28.7m from the sale of the Boleyn. Add in their £75 m and you get around £252.4 m.

Of that cash £161.1 m was spent (net) on players. If I were being mischievous I would make direct correlation between the cash generated by the club plus the sale of assets and the actual amount net spent on players.

Now, what, my friends does that tell you?
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