Off Topic League 2 Promotion Finances

Interesting story here about one of the teams we're competing with. The interesting fact is in para 10:

"Even adding that( unbudgeted cup income) all together, the club is still not sustainable. But, I don't think that at League Two or League One level that's achievable without some benefits of player trading"

Given the risks inherent in future on-pitch performance and positive gains from transfer dealing, I'm not at all clear how a director can say that and then discharge his legal responsibility to assure investors and creditors that the business is a going concern. Hey, that's the weird, wonderful and apparently totally unregulated world of football finances isn't it?

http://www.bbc.co.uk/sport/football/35996749

 

You are talking Oxford and I read that as well. Whatever happened to the 55% rule? That's the one the nice Mr Brent always refers to. To justify him not spending anything of course.

 

You mean the 55% rule intended to save football clubs from irresponsible owners? I don't know, perhaps we dreamt it.

 

Have they flaunted the rules ?......and if they have why is nothing being done about it.......no promotion would be a good punishment........

 

Because the 55% rule is fantasy that's why. If the owner wants to spend money on the club he can. The only thing he can't add to is wages of players so he can spend money to buy players and pay agents and so on as much as he likes. He can sponsor the club for a stupid amount which increases the 55% available to player wages by loads. The rule is a joke and always has been. It's used by owners who don't want to spend anything as their justification for not doing so. I mean it wouldn't be cricket would it.

 

One thing's for sure, it isn't stopping the chairman of Oxford stating publicly that the financial structure of the club and business he runs is sustainable ONLY if a) it's promoted to League 1, b) it again has success in several cup competitions, c) it's scouting network finds quality players and d) it can keep those young stars long enough for their value to crystallise and d) those players can be sold on at values so high that that they outweigh the cost of maintaining your own (necessarily) successful team.

That doesn't sound like the kind of single season that comes along too often to me let alone a condition that can be maintained season after season.

You are spot on Sensible, whatever the rules are, they clearly aren't stopping owners taking ludicrous risks with the clubs their fans love even when the chairman points out their obvious failure in the press!

 

You mentioned their scouting network.....when did our scouting network last find any talent.....and please please don't remind me of the welsh fireman.

 

They found Rory Fallon once

 

Found him already playing for Swansea.....I think Joe.

 

Is he still playing there?

 

Isn't he at Bristol Rovers?

If the Chairman or rather wallet on legs is a fan of both football and the club then the debts are his and the club is fine as long as he remains. They tend to virtually give the club the cash and write it off. Unlike our super fan who loans it and expects a big return for doing so. Either in land or cash he isn't bothered in the end which. Just watch him buy the ground. Watch him take anything worth anything he can lay his hands on before he disappears eventually. Remember you read it here first.

 

On a good note, Albion have been bought by two former players who run businesses.. Nut they went into admin on Friday and got docked 30 points? But they will be in the same league next year.. so hope fully they move on a bit.. Some good news in the city for sport at last.. now we need to go UP..

 

Pity about anyone who was owed money by them before Admin though. Still, wouldn't want to see them disappear. This City has little in the first place so don't want to lose what we do have.

 

Yes there is always the companies that get caught when a firm goes into administration.. i know to well.. Had a few go on us..

 

Sensible you are peddlling dangerous and inaccurate ideas about owning a football club.

Whether or not an owner creates loans or writes his investment off, his situation is much the same financially

Assume first he buys a club for £1m debt free and puts in £10m by way of charitable donation. That £10m goes to buy and pay players, who are wasting assets in that their value declines as they age. However, let's assume a footballing miracle happens and the club's position improves substantially. Eventually, he sells it for £25m. debt free. His net cash position is £25m - £1m = +£24m on buying and selling the club, minus £10 written off = +£14m net profit overall.

If instead the £10m is treated as a loan then that will as you complain of have to be paid back when the club is sold. However, the debt free market value is still £25m, so only £15m net goes to him as the equity owner. He gets £15m net for the club, £10m in debt repaid less £1m for the original purchase and minus £10m for the cash injection = +£14m overall, the same as before.

The advantage of creating loans is that where there are several owners each having part of the equity, the increase in market value goes more fairly back to the person who injected the cash to make the value go up.

In the first example, assume that the initial £1m isn't for all of the club but just for 75% of it. In other words the whole club is worth £1.3m (forget the roundings) He puts in the £10m but it's written off. To avoid me cheating, let's assume the total value of the club on sale is £33m debt free. On sale, he gets 75% of £33m = £25m minus £1m minus £10m = £14m net. His mate who owns the other 25% had an investment worth only £0.3m at the start. He now owns 25% of £33m = £8m but put nothing in to move the club forward. Is that fair? I think not.

In the same example the £10m is treated as a loan. On exit, Moneybags gets £17m for his 75% plus £10m loan repaid less £1m less £10m injected = +£16m overall. His mate's investment is worth (£33m - £10m debt) x 25% = £6m. He's still gained a lot more than he deserves because the big jump in value was levered by the £10m loan that Moneybags put into the club but, it's fairer than before. If Moneybags had had interest on his loan then the balance between the two would be fairer still...... so that's why they do that.

Now don't say you are aren't interested in the numbers because if you aren't, then don't judge Brent on his supposed financial dealings. More otten that not, it's not a question of how much you make but how much you lose. As I've said many times before, nobody but a mug would invest in the average football club so just be grateful there are mugs out there.

 

No Joe.....we bought him from Swansea.

 

I'm not disputing any of your post notdistant. My point is that Brent is ONLY doing what he has done for 2 reasons. This is following him acquiring the club cheaply. We have paid the debt not him so to all intents and purposes he culd almost call it debt free when he got it. The first reason he bought into Argyle was to get a foothold into Plymouth and specificly the Council. He courted then to get certain contracts for development he would not have got if he wasn't the new masiah at Home Park. The second is that he would loan then money and ensure he got a decent return and profit from doing so. Lets not start believing his PR crap about Plymouth being a big City who should have a football club and he was doing everyone a favour. I won't even go into the "he was the only one" thing either because I still do not believe that for one minute.

When I compare Argyle to other clubs and lets take Oxford as the example, the ownership is not even close to being the same. I want an owner who is a genuine fan. Not a pretend fan who tries to speak the speak for the supporters ears when he doesn't mean any of it. He would only lend money to Argyle if there is a big enough profit in it. He would in no way write anything off as do other owners who are real fans. When he walks away then he will ensure he does so with his pockets bulging. Now I don't mind somebody making a profit before anyone jumps on that. What I do mind is the bullshit that he has done any of this for Argyle. Be honest and tell people how it really is. There's a novel concept in business notdistant. He comes out with this prospective investors every week who approach stuff. Yet we are meant to believe he was the only one originally. We are meant to believe that the nice gentleman is the saviour of OUR club and should be reveered. It's about time Argyle fans woke up and saw the real reasons for him being here and stop making excuses for him because he saved us. Believe me, the crowds will drop and the revenue will suffer because we get repeated outcomes to seasons over and over and people aren't that stupid forever.

 

He got it on the way of Brown envelopes as most of these sharks do.. Brent has no money, this has ben seen with other sites he has supposedly tried to develop.. He has ****ed them up and will do the same at Argyle given the chance.. Surely no promotion this season is his fault not just the manager or players.. he should have supported the club in January when injuries were big time and seen how well we had done the first half os the season. I dont think or believe it was because the manager could not find replacements. bollox

 

I remember only too well being told by several posters on the old 606 site about the goings on and that the crap was about to hit the muck spreader. I remember believing in the old Board and giving those who doubted everything short shrift. They tell you something and of course because they were business people then who were these upstarts to disbelieve anything. Well that got us into Administration and into this bloody league in the first place. I along with numerous others were wrong then and I hold my hands up to that. Then along comes a fiend in disguise of a preferred bidder. Heaney the developer. He's terrible we were told by those who seem to sit in the Director's Box these days and hold titles. War was declared in favour of this new and exciting honest broker.

Now The Loan Ranger rode into town declaring he was new to this football game but that he felt it was a moral duty to do something for his favourite City. Plymouth deserved nothing less. He wasn't going to chuck money at it but felt it was only right to see us develope the ground and get us back into the Championship at the very least. He was going to make us self sufficient with his new grandstand which would fund the football side of things. He negotiated the most frugal of payouts to people owed money and the ground was sold to PCC as part of that deal. Those people he couldn't sell short owed money would be paid over time financed by the future revenue. He didn't actually say that but it is how it turned out. Here we now are 5 years on in the same league. The new granstand is non existant but Brent owns a bit more land he acquired to do the building bit he never started. He has a deal to acquire the ground at a fixed price if he wishes. Any bets he will exercise that right? This will give him the freehold of the lot all for him. He will pocket the rent paid by the club and the value of his intervention will have gone up considerably. None of that was fortold at the outset was it. All we were told was that this nice genuine man whose lip quivered was our saviour and we should tip our cap to him at every opportunity. The point to all this is that I can't see any difference between Brent and Heaney. If Heaney was this terrible person we should avoid then why should we be grateful to Brent. I genuinely believe we were shafted by certain people in the War and the Administration process and people. If there are people out there now who make offers regularly for Argyle as we are told they do then do you really believe there were none before?

If I'm told to expect something then I expect it to happen. I do not just accept blindly that some fine gentleman can do no wrong. I did that before. I do not accept that Brent has Argyle at heart at all. I do not accept that he ever has. Nothing he has done so far proves he has. Anything that would benefit the Team has failed to materialise. Anything that benefits Brent has happened with more to come. You can think he is wonderful but I don't have to. He chose to get involved in Argyle so if it is as much a suicide mission to get into football as is being said then he wasn't forced. He needs to do something for his customers to make it worthwhile them paying him money each season. If he doesn't he will have a lot less of them soon. And that precludes lying to them all the time.

 

As I remember it, the difference was that Heaney didn't try to buy the club did he? That would have been contrary to the rules for owning a football club. Oh no, it was a anonymous group of Irish investors who wanted to buy PAFC wasn't it? No, really, it was. And anyway, that bid from however those secretive characters were collapsed after taking so long to proceed that PAFC nearly went under in the meantime.

And Mr Heaney didn't subsequently go bankrupt leaving Truro City in debt and becoming one of the few men actually to be declared unfit to own a football club. There weren't shady dealings there that left Truro City's ground in the hands of a property company controlled by anonymous investors were there?

There weren't allegations that Heaney was involved in the running of Salisbury City while he was the owner of Truro City were there? Surely not.

Mr Heaney's Cornish Homes business wasn't involved in the stalled Stadium for Cornwall project was it?

............Jesus Christ Sensible