The problem is that our financials tell a fairly different story. We're increasingly in debt, with a high-interest loan facility secured against the club's assets, and an owner who cannot/will not cover those debts himself. We'll save a small amount of money by dumping him entirely versus farming him out on loan (presuming Lazio was paying a fair chunk of his wages, we'll save something like £1-2m compared to last season), and it's certainly good to get that off the books, but the sum total of money raised/saved from the release of Bertrand, and sale of Gunn/Hoedt would be about the equivalent of what we'd pay, in fee/bonuses/first-year wages, for a cheap replacement LB alone.
The plan was always to strengthen the squad in the summer without the need to sell first team players. I concede that might have happened sooner had we not had the baggage of players under contract who did not fit Ralphs style of play. But now, in just the last 12 months we've offloaded / released Cedric, Harrison, Yoshida, Carillo, Boufal, Hojbjerg, Bertie, and now Hoedt. It looks like Valery , Lemina and Gunn may be exiting along with Sims, Hesketh. We also have Djenepo, Obafemi, N'Lundulu considering season long loans away (possibly Long and Slatterly too). That's a huge slice off the wage bill with 16 outgoing and only 4 incoming players in the same period. The loan is actually a positive. The club could see that COVID was going to hit us hard - as it has everyone. But by taking out a loan to cover those estimated losses it has protected the strategy of offloading players and replacing them with quality first team players. The repayments, though high, are covered in our financial projections. We don't know whether the owner could or would cover our debts but as we operate under a self sustaining financial model, the question is irrelevant.
No, we really don't. We *talk* about our self-sustaining financial model. Most of that talk about our self-sustaining financial model was simply a justification for past owners not putting money in. Our actual finances do not reflect that; we're sinking fairly deep into debt.
Probably a few more. Because the behaviour from the board does not suggest this. If we were comfortable we would have got cover in vital areas long ago. Look at what happened last season, a couple of injuries descemated the squad. I suspect we need to get a few off the wage bill before we buy in.
Unless we're relegated in the next 3/4 years of course. Don't see how a loan with such high interest can be seen as positive tbh.
Taking out a massive loan with big interest payments is a big plus, that is ridiculous spin even for Mowgli
I'm not being argumentative and you are dead right about getting rid of the bloat but I will believe the 'we don't need to sell' line when I see it. In this case actions definately speak louder than words. Saying 'we don't need to sell' and 'we can't go over 10m for a player' (Ralph's words) doesn't add up to a solid transfer window in my mind. Hopefully player values have dropped and 10m goes further than it has in the past because only a couple of players in the starting 11 that cost less than that.
Yep, I know, also Romeu. But in return I present Vesty, Gunn, Diallo, Ings, Elyonoussi, Hoedt, Lemina, Adams, Djenepo, KWP, bertrand, forster, Salisu aaaaand Carillo to name just a few
Agreed, but a little unfair on KWP and Adams, who were not huge money and are now more valuable. I know, I am missing the point, what players can you buy under £10mm. In the not too distant pass Vardy at approx £1mm, Deli Alli at £5mm. There are bargains if you invest hard work and timing in scouting young talent in the lower echelons.
It's also worth noting that our 2019/20 accounts explicitly stated that one of the biggest impacts of COVID on our finances was that it limited our ability to generate profit on player sales: https://find-and-update.company-information.service.gov.uk/company/00053301/filing-history (Page 5 of the Feb 2021 filing)
Maybe because the players we were trying to get rid of were worse than me, Hoedt, Lemons etc. Sorry I am being a little facetious, but it is difficult to get rid of crap players in good times, but in bad times.......
Yeah, when you add up the losses on players signed and sold or loaned out in the last few years you get pretty close to the size of the debt we have.
Indeed. Which is part of the issue: because the PL is the richest league in the world, average PL wages are well above average anywhere else. So our 'cheap' signings that don't work out are really difficult to ditch, because if no other PL club wants them, and perhaps 20 clubs in Europe don't either, they're nigh on impossible to shift at the best of times, and the depths of a global pandemic does not qualify as the best of times. But financially we're also reliant on profiting on player sales, and that means also selling players who have some talent at football; even with the bizarre accounting of football transfers we'll never register a 'profit' (real or paper) on the likes of Hoedt.
Haha. Maybe calling it a big plus was a bit OTT but it's still a good move. We are about to see interest rates rocket over the next few years as the economy rebuilds post COVID. What seems like an extortionate rate of interest now (fixed by the way) will be quite favourable in a couple of years. We're actually taking the loan out before we really need it keeping our cash reserves at a constant level. Now is a good time for anyone to take out a loan but only if the fixed interest rate is guaranteed.
It's the same old story. We sold a world c look class striker in 1992 and thought we could upgrade with four players, I give you Dixon, Speedie, Groves. 2017, £75mm gets wasted on Carillo, Lemina, Hoedt, Elanoussi. Different times twenty gives years apart, but very poor scouting and judgement of players to fit the tesm
We aren't likely to be see interest rates rocket to the point where a 9.14% annual rate looks good, and that's what we're paying on a £78.8m loan. That's not far off what I pay on my credit card, and it means that we're accruing £7m just in interest alone each year.
Without getting into the world of economics, what makes you surmise that interest rates will rocket. I read somewhere that our loan was if the magnitude of 10% per annum.Base rate is 0.1%. Not in a month of Sunday's can I anywhere begin to justify that as a value loan
Yeah, unfortunately, I'm afraid that this isn't a case of Saints deftly anticipating future fluctuations in the debt market and maneuvering to secure favourable terms. It's a case of Saints having no cash, and an owner who is actively looking to sell, and consequently the club secured a large loan on terms best described as Hopefully Not My Problem. The high interest is likely there because the loan does not require repayment until 2025, at which point Gao will expect to have gotten shot of the club and someone else will be saddled with that debt. Alas, having that hanging over the club also makes it harder to find a buyer, and additionally means that if we were to get relegated at some point before a (well-heeled) buyer appears, we are well and truly ****ed.