QPR REDUCE LOSSES

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I would be interested to know the nature of how these loans have occurred. Sometimes instead investing their money in the club directors will loan the money in order to protect themselves as a creditor. If this is the case then I see nothing dodgy about the write off. It's the shareholders that have basically taken away their own safety net
 
SingRs said:
Some incredible comments and conclusions on here... It strikes me there are some key points:
  • The club was always going to have a difficult financial transition having been relegated from the Premier League - not helped by the (then) FFP rules which have now been amended
  • The owners/shareholders have generously written off £60M which puts the Club in a better position
  • Costs are coming down - indicating lessons learnt.
Happy with audited accounts - nothing shady here.

Thanks to the Board - now let's win a few games in style :)
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I think the bigwigs at the Football League might just take a different view........agree that they have done nothing illegal but if it's a mechanism to avoid FFP should we be relegated this season, then Tone and Co can expect to be asked some awkward questions.
 
Tramore Ranger said:
I think the bigwigs at the Football League might just take a different view........agree that they have done nothing illegal but if it's a mechanism to avoid FFP should we be relegated this season, then Tone and Co can expect to be asked some awkward questions.
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I think Tony is a far better businessman than anyone at the FL. Hopefully he can out manuver them. Hopefully!!!!!
 
Quality Passing Rules said:
I think Tony is a far better businessman than anyone at the FL. Hopefully he can out manuver them. Hopefully!!!!!
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Not sure of its relevance in this situation........The FL made up the rules on FFP and I assume that somewhere in the small print they inserted something about the manipulation of losses to comply with the guidelines to counter this type of Exceptional Item transaction. Time will tell....

Best way is to avoid relegation and then this doesn't apply.....
 
Tramore Ranger said:
Not sure of its relevance in this situation........The FL made up the rules on FFP and I assume that somewhere in the small print they inserted something about the manipulation of losses to comply with the guidelines to counter this type of Exceptional Item transaction. Time will tell....

Best way is to avoid relegation and then this doesn't apply.....
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That would be the best way to counter it for sure. I still think we might have a chance that the court of abitration would come down on our ide as they had to change it the season after. Here's hoping anyway!!!
 
Tramore Ranger said:
I think the bigwigs at the Football League might just take a different view........agree that they have done nothing illegal but if it's a mechanism to avoid FFP should we be relegated this season, then Tone and Co can expect to be asked some awkward questions.
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Awkward questions are fine with audited accounts which comply with accounting rules :)
 
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loomo said:
I would be interested to know the nature of how these loans have occurred. Sometimes instead investing their money in the club directors will loan the money in order to protect themselves as a creditor. If this is the case then I see nothing dodgy about the write off. It's the shareholders that have basically taken away their own safety net
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Yes, you're right, Loomo. It's quite common for investors to invest in a mixture of debt and equity, but there are complex rules around what is called 'thin capitalisation', i.e. having too high a debt:equity ratio. In many cases HMRC will disqualify for tax purposes most (if not all) of the club's interest expense as a consequence. There are other measures they can take too, particularly if they belief the interest rate is not akin to arm's length.

From the investor's perspective it is useful to invest in this way, as it can be a good way of recovering some of your capital early, a good way of receiving a priority pseudo-dividend ahead of ordinary shareholders, and a good way of realising tax losses should the debt get written off (as appears to be the cae in this instance).

By Christ this stuff is boring...sorry.
 
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Uber_Hoop said:
Yes, you're right, Loomo. It's quite common for investors to invest in a mixture of debt and equity, but there are complex rules around what is called 'thin capitalisation', i.e. having too high a debt:equity ratio. In many cases HMRC will disqualify for tax purposes most (if not all) of the club's interest expense as a consequence. There are other measures they can take too, particularly if they belief the interest rate is not akin to arm's length.

From the investor's perspective it is useful to invest in this way, as it can be a good way of recovering some of your capital early, a good way of receiving a priority pseudo-dividend ahead of ordinary shareholders, and a good way of realising tax losses should the debt get written off (as appears to be the cae in this instance).

By Christ this stuff is boring...sorry.
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The football is boring tonight.........roll on tomorrow....
 
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