The way I see it is that there's a pretty fundamental point being missed by KM/Chris. This was never a £40m upfront deal. From the start, SD always said that ES would be paid off gradually. Most business takeovers are done by instalments. If ES wanted £40m from SD upfront, there would never have been a deal between them and who knows what might have happened to the club - it may have been 'Buried'.
The problem with SD paying off ES/SBC gradually, is that ES/SBC would still have a security charge hanging over the club, putting off any new investors. So to avoid that, SD used the club's parachute payments to pay off ES/SBC upfront, and instead is now paying back the club gradually instead of ES.
By doing this they've saved the club £millions of interest on the SBC debt and put us in a position where we are on the verge of a gradual takeover by several multi-billionaires (hopefully). Who by the way have used an expensive top team of due diligence auditors to go through everything with a fine tooth comb. Yet, according to KM/Chris they might have missed or forgotten to get assurances in the deal about the £20m (or however much it might be now) owed to the club.
As far as I'm concerned, the reason we haven't splashed money on players is due to FFP/SCMP limits, if not hitting us this year, then next year. It's not because SD is skint, unless he blatantly lied about showing the EFL he had £50m in his account.
I wish KM/Chris would stop this obvious vendetta until they know for a fact that SD has done something wrong instead of just speculating that they might eventually rip the club off or could be spending much more on players. All it does it spread more negativity and desperation for the takeover news. Rant over!
This all sounds good at first reading, but it's contradicted by a few facts:
unless he blatantly lied about showing the EFL he had £50m in his account
Donald only proved he had £20m in his account according to his own words. Listen here:
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The problem with SD paying off ES/SBC gradually, is that ES/SBC would still have a security charge hanging over the club, putting off any new investors.
Agreed, but why didn't Donald pay that off in April, instead of using the club's money again? Specifically, this portion also related to his shares, which again makes it all the more illogical that he did not pay for it out of his own pocket, but put yet more onto an i.o.u slip.
Yet, according to KM they might have missed or forgotten to get assurances in the deal about the £20m (or however much it might be now) owed to the club.
I'm clearly not Chris ffs, please stop perpetuating this as some people will believe it
but as for your point, I have said before, but him owing the club £20m (as an example) is not a good thing during a takeover, of course they're going to know about it, but that doesn't mean they will like it.
Put it this way, if he owes the club £20m for the SBC debt, and (rough estimate) another £6.5m for the Short debt, and he paid £5m up front, that means even before we take into account the 'drip feed', he has either paid, or has liabilities totalling around £32m in the club.
He owns 74% of the club right now, so to make a profit, he needs to get an asking price of around
£44m. That's assuming he didn't put a penny more into the club last year. If he sold the club for £40m today, and that debt had to be paid off, he would make a loss of
at least £2m on the whole endeavour, and you can add on other funds he's spent on it too.
Do you think people are offering £44m for us right now lads? Honest question. Because that's the minimum that Donald needs to make a profit.
Now, if he put that money back in, there should be no doubting that it's a good thing for the club. The chances of success go up as the money is paid back. Does anyone disagree with that logic? It would also subsequently give us a better chance of achieving a situation where someone was willing to pay £44m for the club. As it stands, we're in a situation where that 'gamble', despite being a very clear pathway to success, is not one the owner is willing to take because he would rather not even put a few million in.
As far as I'm concerned, the reason we haven't splashed money on players is due to FFP/SCMP limits, if not hitting us this year, then next year.
I agree this is a factor, but do we know what the wage bill for players is? If we don't, then we can't be sure about any of it. I don't want to get into a guessing game, but part of the issue for me is this:
If Donald wanted to put money in because he has a liability to the club, that would absolutely count as revenue. Is it possible you misread this part of the EFL rules?
2.7 Equity Injections – Only include non-redeemable Equity investments received (or to be received) in the relevant Reporting Period. The:
2.7.1 conversion to Equity of any debt; and/or
2.7.2 writing off of any debt,
where such debt was created in any prior Reporting Period, does not constitute a form of revenue as no cash is provided to the Club to finance wages in the current Reporting Period.
This actually refers to the other way around. If the club owed someone £10m, and that money was written off, it would not count as 'additional revenue' even though the net effect on the club's finances would be +£10m in the next accounts. If someone owes the club £10m and pays it back, then that would count as revenue.
Also worth noting that had Donald left the parachute payments in the club of £6-7m that he paid to Short in April, that would have been carried over to this year and helped with FFP too.
So if you know of a specific rule that says that someone paying their liability to the club (which is all most revenue ends up being, even as far down as a supporter paying off direct debits for season cards) does not count towards revenue, then I would like to see it.
By doing this they've saved the club £millions of interest on the SBC debt and put us in a position where we are on the verge of a gradual takeover by several multi-billionaires (hopefully).
The last point on this is that the SBC loan debt is often portrayed as an incredible amount, something like £8m. Actually, the debt had interest of 8.5%, which would have equated to £2m p/a on the £25m outstanding. Now, I can absolutely get behind the SBC debt being paid off using parachute payments (shock!) because £2m a year is still a lot, albeit I should point out that the debt was Donald's, not the club's. The debt was simply secured against the club, so the interest saved was actually Donald's liability, not the club's.
I just think that the entire point with that portion of debt is that whatever the rights and wrongs of using the club money early to sort it out, Donald does not appear to be paying it off in the foreseeable future based on his words and actions.
