@JHunterChron #safc's accounts for year ending July 31, 2019 released - Turnover down £5m to £59m - Profit £9m (compared to £20m loss the year before) - Wages down to £27m from £47m Actually, scrub the 'profit'. It didn't include the £20.5m 'exceptional operating expense'. So that'll be an £11.2m loss, then
Wages will always be a problem for us and Newcastle, stuck away in the far NE. The only way forward is thought the Academy and recruitment of young talent we're prepared to use then lose. Buying highly paid players like Grigg, who won't even bring himself to live here, is self destructive. Despite the Sunderland airshow and Newcastle's 'lurds of pubs' people rarely chose to move here.
I would read GOM summary on RTG. I won’t repeat here but it provides some clarity about the Sartori share purchase. He paid £1 for the shares but also made a £3m loan to Madrox. Clearly the two were contingent on each other. Why would he do this? Well if Madrox goes into liquidation, he (as a creditor) gets his £3m before the shareholders get paid out. Same with Donald loan to Madrox later on. Think that was £6m? This is all very likely because not all shareholders paid in equally. So if Madrox has one asset - the club, whatever it can sell that for would be first used to pay off FPP (£9m or so) then the other shareholder loans (£9m total). Then the balance is equity value. So a sale price of £30m would imply £12m of equity value. SD has 74% of the equity so a touch under £9m due to him. JS would get another £1.5m (essentially he is getting shares to pay the interest in his loan, he has the best deal). CM would get £720k. This all assumes that the parachute payments are all done and dusted now. The loan to Madrox is written off so no debt owed back to the club, but if there were, just add that to the sale price needed. All of this is as of the accounts end date though which is some time ago now, but at that time the break-even for SD was £30m sale price. It was £55m before the parachute payment write-off. This is all much higher than previously thought as clearly the losses at the club required extra capital being put in. Hard to imagine that the losses have improved recently. Let’s assume another £7m minimum, though it could easily be more. On the assumption that this either has to be deducted from a sale price or has already been covered with another loan from Madox, that would mean £25m of any headline sale price is just used to pay off Madrox debt (including debt to SD). If what is left is less than £12m, SD is losing money (as that would match the equity that he paid in). So best guess is that the break even is £37m +/- £2m. So he is no doubt asking for £40m or more to make a profit. £40m means that he makes around £2m profit on this whole exercise. Sartori makes £3m, CM £0.9m. £30m means that he loses over £5m. Sartori makes £600k at this price and CM £180k. Not sure how SD put himself in this situation to be honest. The other shareholders are free-riders really. He is the only one with money that is genuinely at risk. For Sartori to lose money the club would have to be sold for less than £18m which isn’t going to happen. CM has nothing at risk. I just cannot see why anyone would pay £40m for SAFC in League One. There is no squad left, no youngsters, season tickets fallen through the floor. If someone paid £30m they are being generous. The sticking point here is clearly the £9m of equity that SD has in Madrox. He paid £9m for that yet JS paid £1 for 20% and CM £0 for 6%. That is the problem. The solution is probably for any new capital injection to be done by a massively dilutive rights issue into Madrox, which would allow the equity holdings to realign with capital paid in.
Firstly, great post. Things like this have a huge bearing on what business, realistically, the club can do. The payments are due to have finished this vey last year according to wiki (take that information as you will - see below). The club did well if they cut £20m worth of wages to compensate for the £19.4m drop in payments but it's hard to see how they are going to allow for the £15.5m drop next year? Was this included in the club turnover, as if so, with season tickets on, if anything, a slight decline (and matchday revenue a non-starter in the current climate) it seems to me that the club turnover would be doing well to be over £40m next year. I find it slightly bleak either way, they need a buyer imminently to raise supporters and revenue as much as anything else. Whilst it's possible that covid19 may reduce wages and affect other teams in the league to a greater extent that it ends up being, in football terms, a strengthening occurrence (apologies if that comes across as tactless) it seems unlikely. I'm just struggling to be positive about any of this.
Am I the only person who doesn’t understand any of this, Can someone just say are we goosed or not. ? .
You’re right mate I am goosed or at least I will be by midnight tonight, just one question though if you needed someone to explain what goosed means how did you know I was. ?.
This is another example though of how people get all steamed up about stuff when they know half the facts. When some people found out Sartori paid £1 for his shares, they went nuts about it. But, in any normal sense, he paid £3m so SD was correct. The flip side of that is SD saying he paid £40m for the club when, in any normal sense, he didn’t. But these accounts show a lot. Essentially that SD got suckered. Which is no doubt why he did the next £6m by way of shareholder loan. Wouldn’t be surprised if any other money he puts in is direct loan to SAFC. When shareholders are not aligned it can create problems. SD is the only one with skin in the game here so people should cut him some slack.
Well I thought 'goosed' meant you have made someone move, ie break cover... or is that just the USA version
RAWA saying We may not like it, but everything that Stewart Donald and his partners in Madrox have done regarding the finances of the club appear to be entirely legal and pretty much consistent with the ways in which football club owners move money in and out of what are, in the end, their own private businesses. https://rokerreport.sbnation.com/20...ow-the-accounts-are-out-we-all-know-the-truth
