Finances chat

  • Please bear with us on the new site integration and fixing any known bugs over the coming days. If you can not log in please try resetting your password and check your spam box. If you have tried these steps and are still struggling email [email protected] with your username/registered email address
  • Log in now to remove adverts - no adverts at all to registered members!
So if I have this right and the other consortium had taken over instead of SD and taken the debt on. That means the club is essentially bought for £80 million. Short doesn't lose any more money.

So the club then has £80 million worth of debt and is losing money hand over fist, the PP don't cover the debt so we would need seriously wealthy and generous owners just to stay in business

Or have I missed something simple

Yeah you're missing what I was saying. We don't know what the plan was for the debt, but in most cases, they would have refused to pay a fee for the club (the shares) and instead taken on the debt, or a substantial portion of it.

They could then have paid that debt off, replaced it with debt to them, or paid it off with parachute payments and their own money. Or any combination of the above.

But again, we're talking about a deal that we don't know details of, so it's impossible to say whether it would be a better or worse situation right now.
 
Yeah you're missing what I was saying. We don't know what the plan was for the debt, but in most cases, they would have refused to pay a fee for the club (the shares) and instead taken on the debt, or a substantial portion of it.

They could then have paid that debt off, replaced it with debt to them, or paid it off with parachute payments and their own money. Or any combination of the above.

But again, we're talking about a deal that we don't know details of, so it's impossible to say whether it would be a better or worse situation right now.
They couldn't pay it off with PP as they don't cover it, but it seems to me that we would be in a worse position and relying on the owner / owners to keep the club going.

That to me isn't a great way forward
 
Yeah you're missing what I was saying. We don't know what the plan was for the debt, but in most cases, they would have refused to pay a fee for the club (the shares) and instead taken on the debt, or a substantial portion of it.

They could then have paid that debt off, replaced it with debt to them, or paid it off with parachute payments and their own money. Or any combination of the above.

But again, we're talking about a deal that we don't know details of, so it's impossible to say whether it would be a better or worse situation right now.
So in other words if Short had reduced the debt to 40 million then SD and Co could have refused to pay a fee for the club and then used 15 million of their own and 25 million of the parachute payments to clear the debt and that would be ok with you?

Instead they paid Short 15m, Short took on the 25m SBC debt secured against the parachute payments which when received by the club were used to pay off Short.
In effect Short was a 25m creditor and the club used the para payments to clear that debt.

Is it only me but they appear to be the same thing just ones a bit more confusing than the other.
 
So in other words if Short had reduced the debt to 40 million then SD and Co could have refused to pay a fee for the club and then used 15 million of their own and 25 million of the parachute payments to clear the debt and that would be ok with you?

Instead they paid Short 15m, Short took on the 25m SBC debt secured against the parachute payments which when received by the club were used to pay off Short.
In effect Short was a 25m creditor and the club used the para payments to clear that debt.

Is it only me but they appear to be the same thing just ones a bit more confusing than the other.
This was kind of my point, the PP were more than likely always going to go on repaying debts.

The biggest mistake SD has made is saying he paid £40 million for the club when it appears he paid £15 million
 
It would be bizarre to leap to the conclusion that any other deal would make us worse off without knowing any detail whatsoever. Particularly as there's absolutely zero evidence for any of it.

Again, none of this changes that as late as April, Donald was still using club funds to pay off Ellis Short directly for some of the £15m portion of his debt, that related to his shares. Why? Why not use his own money at that point?
 
As already stated: I am not KM and am not responsible for anything the poster has said here or anywhere else. I've been pretty vocal before so suddenly turning anonymous wouldn't make a lot of sense.

Please acknowledge this and stop lumping me in with something I have no desire to be a part of on here. I don't want to have to request threads get pulled as I think the discussion is worthwhile, I just can't be getting tagged with the actions/words of others.

Thanks.
Sorry, I'm not saying KM and Chris are the same person, just that they have very similar views which is why a lot of people have asked if they are the same person. Chris seemed to know much more about FFP/SCMP than KM so I'm convinced they are different.
 
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:
You must log in or register to see media

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. :emoticon-0114-dull:

I'm clearly not Chris ffs, please stop perpetuating this as some people will believe it :D 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?



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.
There are very few facts, just speculation and ifs and buts. And for every 'snippet' that suggests one thing (EFL £20m) I can find a snippet that suggests another thing (EFL £50m). Pointless trying to go through all this and argue with you when it's mostly guess work. Give it a rest and come back when we know more from the July 2019 accounts and future RAWA meetings.
 
I take that as one of the gravest insults ever levelled at another human being :D If there's one thing I take pride in, it's spelling.

which is my exact point about Kildare on there, he's doing it on purpose ! he's an intelligent chap, and his spelling errors are glaringly obvious !!!!!!!!!!!!!!!
 
Was Drumaville not the folk before Ellis?

There’s questions to be answered but there’s nothing massively out of the ordinary for financing a £40 million purchase by a private investor in my eyes.
 
Was Drumaville not the folk before Ellis?

There’s questions to be answered but there’s nothing massively out of the ordinary for financing a £40 million purchase by a private investor in my eyes.
I think Ellis bought Drumaville which in turn owned the club
 
  • Like
Reactions: Nads
Interesting counter viewpoint. Is this just your theory on what's happened regarding the parachute payments or backed up with facts?

FFP restrictions would mean that we won't be bringing anyone in during the January window either which is a little disappointing.
It's based on what had been said in the podcasts, press, RAWA meetings, FFP/SCMP rules, and my experience as an accountant who managed the audit of a professional football club for about 8 years.

If we're at our SCMP limit we'd have to sell to buy or hope that new investment money comes into the club but this would affect FFP losses if we go up.
 
Please excuse me if I'm asking the obvious but I have nothing to do with finance and all this is making my brain hurt, so feel free to call me a dumbass, etc, and I'll just take it on the chin.

Aren't you saying here that SD has bought the club with the club's own money, which he is paying back (and can you confirm or otherwise that we don't know over what period or even if there is any interest attached to this loan - so that by using the parachute payments, SD, as much as the club, has saved HIMSELF ££££££££s on the takeover payments to ES because he keeps his own money invested and earning for himself?

I don't really care one way or t'other because it is all legal (so I've seen confirmed on here no end).
That's more or less how I see it. When the takeover was announced the press mentioned 2 years to pay off ES.
 
There are very few facts, just speculation and ifs and buts. And for every 'snippet' that suggests one thing (EFL £20m) I can find a snippet that suggests another thing (EFL £50m). Pointless trying to go through all this and argue with you when it's mostly guess work. Give it a rest and come back when we know more from the July 2019 accounts and future RAWA meetings.

Sorry but are you saying that Stewart Donald saying himself that he had £20m not £50m is incorrect? That is pretty bold :D

There are facts to support everything I've said. Where have you provided any? You haven't shown how you know we're at the SCMP limit, Or how you know that Donald paying back his debt would not count as revenue.
 
Sorry but are you saying that Stewart Donald saying himself that he had £20m not £50m is incorrect? That is pretty bold :D

There are facts to support everything I've said. Where have you provided any? You haven't shown how you know we're at the SCMP limit, Or how you know that Donald paying back his debt would not count as revenue.
EFL wanted to see £50m in SD's account. SD thought he would only need a spare £20m to cover losses etc.
You must log in or register to see media
You must log in or register to see media
 
which is my exact point about Kildare on there, he's doing it on purpose ! he's an intelligent chap, and his spelling errors are glaringly obvious !!!!!!!!!!!!!!!

He's definitely linked to the club like. Some say it's Methven and that would make sense;. He posted a lot on the Oxford forum, he had that slight arrogant manner that kildare often displays, sometimes he seems to make "mistakes" that almost seem set up to make him look like he's not involved, he randomly disappeared when there was talk of NDAs (not sure it's ever been proved that he was banned). If it's not him it's someone close to him
 
  • Like
Reactions: wilberforce
Sorry but are you saying that Stewart Donald saying himself that he had £20m not £50m is incorrect? That is pretty bold :D

There are facts to support everything I've said. Where have you provided any? You haven't shown how you know we're at the SCMP limit, Or how you know that Donald paying back his debt would not count as revenue.
SCMP limit hit next year
You must log in or register to see images

https://medium.com/@christoph_21/sunderland-afc-ffp-scmp-an-assessment-c5eeba00f4cb
 
Sorry but are you saying that Stewart Donald saying himself that he had £20m not £50m is incorrect? That is pretty bold :D

There are facts to support everything I've said. Where have you provided any? You haven't shown how you know we're at the SCMP limit, Or how you know that Donald paying back his debt would not count as revenue.
"the FL Turnover figure includes donations from the owners to the club and injections of equity."
http://www.financialfairplay.co.uk/scmp.php