I hope you now realise...

[NG32]

Surely this thread is missing NE5................

[Parky]

Its just a pitty you still don't realise that the £70m debt wasn't the issue Parky.  The problem was our continued and unmanagable losses, which were getting further and further out of control each year.

 

Its just a shame that Ashley's moronic decision making, particularly managerial appointments, has taken away what was a great opportunity to stabilise our finances.  With some of our more obsenely overpaid players due to leave we really could have gotten sorted financially and moved forwards had we stayed in the Premiership.

 

 

 

Fulham

 

Accounts for the year to 30 June 2008

 

Ownership Mafco Holdings Limited, a Bermuda (tax haven) company, which is owned by Mohamed Al Fayed and his family

 

Turnover £53.7m (up from £39.7m last year, a 35.2% increase)

 

Gate and match-day £9.6m

 

TV and broadcasting £34m

 

Commercial activities £4.9m

 

Sponsorship £3.6m

 

Other operating income £1.6m

 

Wage bill £39.3m (up from £35.2m the previous year, an 11.6% increase)

 

Wages as proportion of turnover 73%

 

Profit before tax £3.2m

 

Debts £197m, included £174m owed to Al Fayed

 

Interest payable £1.8m

 

Highest paid director Unnamed: £228,083

 

State they're in Mohamed Al Fayed continued his extravagant funding of Fulham, increasing the loans from his companies to £174m, the second highest subsidy of any club by an owner behind Chelsea's Roman Abramovich. The loans are all interest free and during the year £9.5m was written off completely. Al Fayed, resident in Monaco, has had the reward this season of Fulham's highest ever finish, and he vehemently insists he has no intention of selling.

 

[madras]

Its just a pitty you still don't realise that the £70m debt wasn't the issue Parky.  The problem was our continued and unmanagable losses, which were getting further and further out of control each year.

 

Its just a shame that Ashley's moronic decision making, particularly managerial appointments, has taken away what was a great opportunity to stabilise our finances.  With some of our more obsenely overpaid players due to leave we really could have gotten sorted financially and moved forwards had we stayed in the Premiership.

 

 

 

Fulham

 

Accounts for the year to 30 June 2008

 

Ownership Mafco Holdings Limited, a Bermuda (tax haven) company, which is owned by Mohamed Al Fayed and his family

 

Turnover £53.7m (up from £39.7m last year, a 35.2% increase)

 

Gate and match-day £9.6m

 

TV and broadcasting £34m

 

Commercial activities £4.9m

 

Sponsorship £3.6m

 

Other operating income £1.6m

 

Wage bill £39.3m (up from £35.2m the previous year, an 11.6% increase)

 

Wages as proportion of turnover 73%

 

Profit before tax £3.2m

 

Debts £197m, included £174m owed to Al Fayed

 

Interest payable £1.8m

 

Highest paid director Unnamed: £228,083

 

State they're in Mohamed Al Fayed continued his extravagant funding of Fulham, increasing the loans from his companies to £174m, the second highest subsidy of any club by an owner behind Chelsea's Roman Abramovich. The loans are all interest free and during the year £9.5m was written off completely. Al Fayed, resident in Monaco, has had the reward this season of Fulham's highest ever finish, and he vehemently insists he has no intention of selling.

 

their debts are owed to the owner......were ours under fred ?

 

just a slight ever so subtle difference it makes to the relative positions.

[UV]

Was our debt even manageable? There would have had to have been cuts if Shepherd had stayed just like there were cuts when Ashley came in. There's only so much debt you can get into before it gets out of hand and you either have to win something or sell a few of your more valuable players.

 

I think this was the problem. By 2007 the club had borrowed against every asset it had and there was nowhere else to go. Given the precarious financial position at that time I doubt any bank would have lent further funds unless there was security. I still can't work out how Shepherd thought he was going to get out of that mess, he didn't want to sell up like Hall did, so he must have thought he could carry on. Either he had a cunning plan or he was deluded about the financial status of the club. 

 

In 2007? Banks were still lending money hand over fist to anyone who could lie on an application form then weren't they?

 

Regardless, what makes you think the club needed significant extra borrowing anyway? In 06-07 IIRC the club had around £10m more going out than coming in, which is around the same amount as was spent on transfers. In the 07-08 season the TV revenues increased and brought in £18m more revenue than in the previous year. In actual fact the total revenue increased by £12m (we weren't in Europe that season). If we'd had another £10m transfer budget, and maintained the same wage level (a number of high earners were removed from the wage bill in Summer 07 - Parker, Dyer, Emre, Luque, Carr, Babayaro, Solano) we'd have broken even or made a profit. The club had a large enough turnover to make it self-sustaining. We could afford to spend more than most other clubs in the league. We didn't need a billionaire to support us.

 

The debt was £70m of which £45m was a fixed long term loan for the stadium expansion which easily paid for it's own interest repayments. That leaves £25m attributable to the running of the club over the previous 15 years. Look at the debt of other clubs from their 07-08 accounts. Only Blackburn and the newly promoted teams had a debt less than £25m. Only 7 had a debt less than £60m, and we had a far bigger turnover than those clubs. We were the 12th/13th richest club in the world, and we couldn't afford the repayments on a £70m loan? Give me a break.

 

The only reason the debt has spiralled in the last couple of years is due to the increase in wages from £62m to £76m, and because of Ashley's pay up front for incoming transfers policy. Neither of which was necessary or inevitable.

 

Did we go bankrupt in 2001 when the debt was £67m and turnover was £55m? No.

Unmanageable debt? Financial disaster? Inevitable bankruptcy? Don't make me laugh.

[Teasy]

 

We were relegated primarily for not investing in new players in the 3 windows, it was argued at the time here and elsewhere and by Mashley that we had to get the books in order first.

 

That was a secondary reason, we were relegated primarily due to a series of insane managerial appointments.

[madras]

Was our debt even manageable? There would have had to have been cuts if Shepherd had stayed just like there were cuts when Ashley came in. There's only so much debt you can get into before it gets out of hand and you either have to win something or sell a few of your more valuable players.

 

I think this was the problem. By 2007 the club had borrowed against every asset it had and there was nowhere else to go. Given the precarious financial position at that time I doubt any bank would have lent further funds unless there was security. I still can't work out how Shepherd thought he was going to get out of that mess, he didn't want to sell up like Hall did, so he must have thought he could carry on. Either he had a cunning plan or he was deluded about the financial status of the club. 

 

In 2007? Banks were still lending money hand over fist to anyone who could lie on an application form then weren't they?

 

Regardless, what makes you think the club needed significant extra borrowing anyway? In 06-07 IIRC the club had around £10m more going out than coming in, which is around the same amount as was spent on transfers. In the 07-08 season the TV revenues increased and brought in £18m more revenue than in the previous year. In actual fact the total revenue increased by £12m (we weren't in Europe that season). If we'd had another £10m transfer budget, and maintained the same wage level (a number of high earners were removed from the wage bill in Summer 07 - Parker, Dyer, Emre, Luque, Carr, Babayaro, Solano) we'd have broken even or made a profit. The club had a large enough turnover to make it self-sustaining. We could afford to spend more than most other clubs in the league. We didn't need a billionaire to support us.

 

The debt was £70m of which £45m was a fixed long term loan for the stadium expansion which easily paid for it's own interest repayments. That leaves £25m attributable to the running of the club over the previous 15 years. Look at the debt of other clubs from their 07-08 accounts. Only Blackburn and the newly promoted teams had a debt less than £25m. Only 7 had a debt less than £60m, and we had a far bigger turnover than those clubs. We were the 12th/13th richest club in the world, and we couldn't afford the repayments on a £70m loan? Give me a break.

 

The only reason the debt has spiralled in the last couple of years is due to the increase in wages from £62m to £76m, and because of Ashley's pay up front for incoming transfers policy. Neither of which was necessary or inevitable.

 

Did we go bankrupt in 2001 when the debt was £67m and turnover was £55m? No.

Unmanageable debt? Financial disaster? Inevitable bankruptcy? Don't make me laugh.

the problem as i saw it wasn't so much the debt but it's make up (ie wages and the length of the contracts therein)and growing year on year losses. meaning banks may not have seen us as a cushy place to loan money to.

[Parky]

Its just a pitty you still don't realise that the £70m debt wasn't the issue Parky.  The problem was our continued and unmanagable losses, which were getting further and further out of control each year.

 

Its just a shame that Ashley's moronic decision making, particularly managerial appointments, has taken away what was a great opportunity to stabilise our finances.  With some of our more obsenely overpaid players due to leave we really could have gotten sorted financially and moved forwards had we stayed in the Premiership.

 

 

 

Fulham

 

Accounts for the year to 30 June 2008

 

Ownership Mafco Holdings Limited, a Bermuda (tax haven) company, which is owned by Mohamed Al Fayed and his family

 

Turnover £53.7m (up from £39.7m last year, a 35.2% increase)

 

Gate and match-day £9.6m

 

TV and broadcasting £34m

 

Commercial activities £4.9m

 

Sponsorship £3.6m

 

Other operating income £1.6m

 

Wage bill £39.3m (up from £35.2m the previous year, an 11.6% increase)

 

Wages as proportion of turnover 73%

 

Profit before tax £3.2m

 

Debts £197m, included £174m owed to Al Fayed

 

Interest payable £1.8m

 

Highest paid director Unnamed: £228,083

 

State they're in Mohamed Al Fayed continued his extravagant funding of Fulham, increasing the loans from his companies to £174m, the second highest subsidy of any club by an owner behind Chelsea's Roman Abramovich. The loans are all interest free and during the year £9.5m was written off completely. Al Fayed, resident in Monaco, has had the reward this season of Fulham's highest ever finish, and he vehemently insists he has no intention of selling.

 

their debts are owed to the owner......were ours under fred ?

 

just a slight ever so subtle difference it makes to the relative positions.

 

Our debts were owed to Ashley have you forgotten?

[madras]

Its just a pitty you still don't realise that the £70m debt wasn't the issue Parky.  The problem was our continued and unmanagable losses, which were getting further and further out of control each year.

 

Its just a shame that Ashley's moronic decision making, particularly managerial appointments, has taken away what was a great opportunity to stabilise our finances.  With some of our more obsenely overpaid players due to leave we really could have gotten sorted financially and moved forwards had we stayed in the Premiership.

 

 

 

Fulham

 

Accounts for the year to 30 June 2008

 

Ownership Mafco Holdings Limited, a Bermuda (tax haven) company, which is owned by Mohamed Al Fayed and his family

 

Turnover £53.7m (up from £39.7m last year, a 35.2% increase)

 

Gate and match-day £9.6m

 

TV and broadcasting £34m

 

Commercial activities £4.9m

 

Sponsorship £3.6m

 

Other operating income £1.6m

 

Wage bill £39.3m (up from £35.2m the previous year, an 11.6% increase)

 

Wages as proportion of turnover 73%

 

Profit before tax £3.2m

 

Debts £197m, included £174m owed to Al Fayed

 

Interest payable £1.8m

 

Highest paid director Unnamed: £228,083

 

State they're in Mohamed Al Fayed continued his extravagant funding of Fulham, increasing the loans from his companies to £174m, the second highest subsidy of any club by an owner behind Chelsea's Roman Abramovich. The loans are all interest free and during the year £9.5m was written off completely. Al Fayed, resident in Monaco, has had the reward this season of Fulham's highest ever finish, and he vehemently insists he has no intention of selling.

 

their debts are owed to the owner......were ours under fred ?

 

just a slight ever so subtle difference it makes to the relative positions.

 

Our debts were owed to Ashley have you forgotten?

no and i said ashley should have spent some of his money if only to protect his asset (ie he'd make more money selling a prem club than a fizzy pop one).

 

but then again it's up to them how much they spend of their money.

 

 

[Teasy]

Parky, as Madras says Fulham's debts are held completely by their owner as a interest free loan and obviously he's happy to continue to lose that money.  Obviously Ashley wasn't happy to continue to subsidise the club with bigger and bigger loans every year.  I still agree with the need to stabalise the club financially before moving forward and its obvious to me that was easily achievable.  All that was required was to have one manager in control of the club all season with any money coming in from players being available to him for transfers.  What we got was three managers and a couch in charge at different times in the season, transfer money being spent by a midget and some of the money which came in never getting spent.

[Thomson Mouse]

....it's not possible to stay in/compete in the PL without racking up debt. I'd rather still owe the 70m and be in the PL. 

 

A poor attempt to get a big thread.

 

What an utterly ridiculous statement.

[quayside]

Its just a pitty you still don't realise that the £70m debt wasn't the issue Parky.  The problem was our continued and unmanagable losses, which were getting further and further out of control each year.

 

Its just a shame that Ashley's moronic decision making, particularly managerial appointments, has taken away what was a great opportunity to stabilise our finances.  With some of our more obsenely overpaid players due to leave we really could have gotten sorted financially and moved forwards had we stayed in the Premiership.

 

 

 

Fulham

 

Accounts for the year to 30 June 2008

 

Ownership Mafco Holdings Limited, a Bermuda (tax haven) company, which is owned by Mohamed Al Fayed and his family

 

Turnover £53.7m (up from £39.7m last year, a 35.2% increase)

 

Gate and match-day £9.6m

 

TV and broadcasting £34m

 

Commercial activities £4.9m

 

Sponsorship £3.6m

 

Other operating income £1.6m

 

Wage bill £39.3m (up from £35.2m the previous year, an 11.6% increase)

 

Wages as proportion of turnover 73%

 

Profit before tax £3.2m

 

Debts £197m, included £174m owed to Al Fayed

 

Interest payable £1.8m

 

Highest paid director Unnamed: £228,083

 

State they're in Mohamed Al Fayed continued his extravagant funding of Fulham, increasing the loans from his companies to £174m, the second highest subsidy of any club by an owner behind Chelsea's Roman Abramovich. The loans are all interest free and during the year £9.5m was written off completely. Al Fayed, resident in Monaco, has had the reward this season of Fulham's highest ever finish, and he vehemently insists he has no intention of selling.

 

 

Following your earlier post I Just had a look at Fulham's accounts at Companies House. Although some of the detail above is incorrect the gist of it is right, in that Fulham owes its existence to a huge loan from Al Fayed.

 

I'll be honest I'm not sure where you are going with this one Parky. If you are saying that Ashley didn't lend the club enough for it to be able to invest properly in ther first team squad and hence survive in the Premiership - then it's hard to argue that point. But that isn't really what you said in the opening post... 

[Parky]

Parky, as Madras says Fulham's debts are held completely by their owner as a interest free loan.  The same way ours are now held by Ashley.  Under Shepherd we did not have a billionaire to keep us afloat.

 

In the football business model and especially with us as we are essentially a monopoly I really don't think debt would ever be an issue if we kept the club in the top 8 with the occasional European run.

 

Ok, our club was valued (by my mate at Coutts  ) at roughly 240m, that's turnover x 3, which is normal gearing for a business such as ours. This is essentially what Banks look at....With a turnover over of 100m ish a year we can service debt of 100m a year at a cost of 10m or so...This is not big money.

[Slugsy]

....it's not possible to stay in/compete in the PL without racking up debt. I'd rather still owe the 70m and be in the PL. 

 

Who's been relegated from the PL without debt then?

 

Are you being thick?

 

Don't we owe MA £100m?

 

He's written it off.

 

But, I'd rather still owe the 70m debt the club had 2 years ago and remain in the PL. Comprende?

 

Who says he's written it off?

 

 

 

Exactly, I've been harping on about this from day 1 - the debt is still there.

[Teasy]

Parky, as Madras says Fulham's debts are held completely by their owner as a interest free loan.  The same way ours are now held by Ashley.  Under Shepherd we did not have a billionaire to keep us afloat.

 

In the football business model and especially with us as we are essentially a monopoly I really don't think debt would ever be an issue if we kept the club in the top 8 with the occasional European run.

 

Ok, our club was valued (by my mate at Coutts  ) at roughly 240m, that's turnover x 3, which is normal gearing for a business such as ours. This is essentially what Banks look at....With a turnover over of 100m ish a year we can service debt of 100m a year at a cost of 10m or so...This is not big money.

 

But we couldn't service any debt effectively, we were paying debt with debt.  We had a turnover of £100m but costs well over £100m every year (with each years costs increasing faster then the revenue was increasing) and that was before we got to paying the interest on our loans.  That isn't sustainable unless you have a bloke there who will just keep loaning you money, like fatty big balls is doing at Fulham.  Ashley has done it as well but obviously wasn't prepared to keep doing it forever and had a plan to make the club self sufficient.  Which for a club like ours was actually possible without a completely bonkers wage bill.  Problem is Ashley's plan was thought out and even worse executed by.. Ashley.

 

By the way by being self sufficient I don't mean not having debt, I mean being in a position where you can actually afford the repayments on that debt.  Debt is absolutely fine, the massive majority of companies have it and its often neccesary to expand your business.

[Teasy]

....it's not possible to stay in/compete in the PL without racking up debt. I'd rather still owe the 70m and be in the PL. 

 

Who's been relegated from the PL without debt then?

 

Are you being thick?

 

Don't we owe MA £100m?

 

He's written it off.

 

But, I'd rather still owe the 70m debt the club had 2 years ago and remain in the PL. Comprende?

 

Who says he's written it off?

 

 

 

Exactly, I've been harping on about this from day 1 - the debt is still there.

 

I believe he is writing it off for any new owner.  Firstly because the papers got his asking price right the last time (people thought it was going to be £250-£300, they said it was £400m which has now been shown to be correct) and this time they're telling us he's selling for £100m with the debt written off.  And secondly because nobody on earth would even be interest right now if he was trying to sell the club for £200m.

[ToonTastic]

....it's not possible to stay in/compete in the PL without racking up debt. I'd rather still owe the 70m and be in the PL. 

 

Who's been relegated from the PL without debt then?

 

Are you being thick?

 

Don't we owe MA £100m?

 

He's written it off.

 

But, I'd rather still owe the 70m debt the club had 2 years ago and remain in the PL. Comprende?

 

Who says he's written it off?

 

 

 

Exactly, I've been harping on about this from day 1 - the debt is still there.

 

I believe he is writing it off for any new owner.  Firstly because the papers got his asking price right the last time (people thought it was going to be £250-£300, they said it was £400m which has now been shown to be correct) and this time they're telling us he's selling for £100m with the debt written off.  And secondly because nobody on earth would even be interest right now if he was trying to sell the club for £200m.

 

Only one paper has said he will write the debt off, just today SSN i believe it was said the debt would still be there so you are looking at £200m

[NG32]

....it's not possible to stay in/compete in the PL without racking up debt. I'd rather still owe the 70m and be in the PL. 

 

Who's been relegated from the PL without debt then?

 

Are you being thick?

 

Don't we owe MA £100m?

 

He's written it off.

 

But, I'd rather still owe the 70m debt the club had 2 years ago and remain in the PL. Comprende?

 

Who says he's written it off?

 

 

 

Exactly, I've been harping on about this from day 1 - the debt is still there.

 

I believe he is writing it off for any new owner.  Firstly because the papers got his asking price right the last time (people thought it was going to be £250-£300, they said it was £400m which has now been shown to be correct) and this time they're telling us he's selling for £100m with the debt written off.  And secondly because nobody on earth would even be interest right now if he was trying to sell the club for £200m.

 

Only one paper has said he will write the debt off, just today SSN i believe it was said the debt would still be there so you are looking at £200m

 

[Teasy]

Well I'd have to check to be totally sure but I'm pretty sure numerous papers have been unamimous in the idea that the loan would be written off.  If SSN were right then no way will any of these takeovers go any further then due diligence, nobody in there right mind would pay £200m for Newcastle United in its current state.

[NG32]

Well I'd have to check to be totally sure but I'm pretty sure numerous papers have been unamimous in the idea that the loan would be written off.  If SSN were right then no way will any of these takeovers go any further then due diligence, nobody in there right mind would pay £200m for Newcastle United in its current state.

 

Yup, not a chance.

[ToonTastic]

Well I'd have to check to be totally sure but I'm pretty sure numerous papers have been unamimous in the idea that the loan would be written off.  If SSN were right then no way will any of these takeovers go any further then due diligence, nobody in there right mind would pay £200m for Newcastle United in its current state.

 

yeah but all of these took there articles from the original article. I unfortunately can't remember who it was. I really wouldn't just assume the debt is paid off. I'm not saying he'll force them to pay it off I'm saying he might make them pay the loan off monthly to him, probably including interest.

[Teasy]

Doesn't matter how he structures it, he'd still be selling the club for £200m and I don't believe for a minute that anyone would pay that.

[ToonTastic]

Doesn't matter how he structures it, he'd still be selling the club for £200m and I don't believe for a minute that anyone would pay that.

 

We'll have to wait and see, nothing would suprise me.

[quayside]

Was our debt even manageable? There would have had to have been cuts if Shepherd had stayed just like there were cuts when Ashley came in. There's only so much debt you can get into before it gets out of hand and you either have to win something or sell a few of your more valuable players.

 

I think this was the problem. By 2007 the club had borrowed against every asset it had and there was nowhere else to go. Given the precarious financial position at that time I doubt any bank would have lent further funds unless there was security. I still can't work out how Shepherd thought he was going to get out of that mess, he didn't want to sell up like Hall did, so he must have thought he could carry on. Either he had a cunning plan or he was deluded about the financial status of the club. 

 

In 2007? Banks were still lending money hand over fist to anyone who could lie on an application form then weren't they?

 

Regardless, what makes you think the club needed significant extra borrowing anyway? In 06-07 IIRC the club had around £10m more going out than coming in, which is around the same amount as was spent on transfers. In the 07-08 season the TV revenues increased and brought in £18m more revenue than in the previous year. In actual fact the total revenue increased by £12m (we weren't in Europe that season). If we'd had another £10m transfer budget, and maintained the same wage level (a number of high earners were removed from the wage bill in Summer 07 - Parker, Dyer, Emre, Luque, Carr, Babayaro, Solano) we'd have broken even or made a profit. The club had a large enough turnover to make it self-sustaining. We could afford to spend more than most other clubs in the league. We didn't need a billionaire to support us.

 

The debt was £70m of which £45m was a fixed long term loan for the stadium expansion which easily paid for it's own interest repayments. That leaves £25m attributable to the running of the club over the previous 15 years. Look at the debt of other clubs from their 07-08 accounts. Only Blackburn and the newly promoted teams had a debt less than £25m. Only 7 had a debt less than £60m, and we had a far bigger turnover than those clubs. We were the 12th/13th richest club in the world, and we couldn't afford the repayments on a £70m loan? Give me a break.

 

The only reason the debt has spiralled in the last couple of years is due to the increase in wages from £62m to £76m, and because of Ashley's pay up front for incoming transfers policy. Neither of which was necessary or inevitable.

 

Did we go bankrupt in 2001 when the debt was £67m and turnover was £55m? No.

Unmanageable debt? Financial disaster? Inevitable bankruptcy? Don't make me laugh.

 

OK - I’ll have a go at that point by point.

 

You are confusing personal debt with corporate debt. Banks have never been happy to lend money to businesses unless there was adequate security. By July 2007 every asset and revenue source the club had was in hock and had been used as collateral for loans. And for just about every loan the club had taken out the bank had demanded security.

 

Just for your info at 30th June 2007 the club had the following loans:

 

• £43 million at rates of between 7.36% and 7.65% secured on future ticket sales and corporate hospitality revenues (and not secured on the stadium as is widely believed). These loan notes matured in equal instalments up to 2016.

 

• £13.1 million at 8.55% secured on future sponsorship income repayable half yearly up to July 2010.

 

• £4.5 million at LIBOR + 2.25%.secured on the training ground.

 

• £8 million at 11.72% secured on future broadcasting revenue.

 

• £1.5 million interest free secured as a second charge over the training ground.

 

 

Why then is a bank suddenly going to lend unsecured money to a business that has the above loans already, has accumulated trading trading losses of £92 million and is technically insolvent? When you factor in the fact that the club was lower mid table and not progressing it makes it even more unattractive. The club was screwed.

 

Your belief that the wage bill could be contained is naïve. The likes of Parker, Dyer, Solano, Luque, and Babayaro (there was also Bramble, Moore and Onyewu) all had to be replaced. And let us not forget that the person who got rid of those players and then set about replacing them with players on higher wages was the chosen manager of the previous board. So it would have all been different under Shepherd and co eh? No negotiations of terms took place with Viduka and Barton until Ashley owned the club?

 

The point about us being the 13th richest club in the world is and always has been complete and utter tripe. The table of richest clubs produced by Deloitte is based purely on income and takes no account whatsoever of costs or net worth. Leeds were 16th on that list in 2004 ffs. If you earn £1 million a year and your costs are £1.5 million a year and you are £1 million in debt you are worth £1 million are you? Like hell you are. No wonder people think we are deluded if we believe that crap.

 

Yes the debt spiraled due partly to the wages increase as a result of the players brought in by Allardyce. But of course that would not have happened if Allardyce had been working under Shepherd and co would it?  On the point about payment up front of transfer fees I know this was done in the January window for Nolan. If there is any evidence that it was done for every player bought since Ashley arrived I haven’t seen it. 

 

Of course the club didn’t go bankrupt in 2001. At that point the club was still solvent, so why would it go bust?.

 

I have no idea what would have happened if we had continued under the previous board but it is nothing short of blind denial if you think the clubs financial position was fine and easily manageable. Sh1t stinks - it always has done and always will do.

 

[NG32]

Time to crack out my "bring back freddy t shirt"

[Parky]

Was our debt even manageable? There would have had to have been cuts if Shepherd had stayed just like there were cuts when Ashley came in. There's only so much debt you can get into before it gets out of hand and you either have to win something or sell a few of your more valuable players.

 

I think this was the problem. By 2007 the club had borrowed against every asset it had and there was nowhere else to go. Given the precarious financial position at that time I doubt any bank would have lent further funds unless there was security. I still can't work out how Shepherd thought he was going to get out of that mess, he didn't want to sell up like Hall did, so he must have thought he could carry on. Either he had a cunning plan or he was deluded about the financial status of the club. 

 

In 2007? Banks were still lending money hand over fist to anyone who could lie on an application form then weren't they?

 

Regardless, what makes you think the club needed significant extra borrowing anyway? In 06-07 IIRC the club had around £10m more going out than coming in, which is around the same amount as was spent on transfers. In the 07-08 season the TV revenues increased and brought in £18m more revenue than in the previous year. In actual fact the total revenue increased by £12m (we weren't in Europe that season). If we'd had another £10m transfer budget, and maintained the same wage level (a number of high earners were removed from the wage bill in Summer 07 - Parker, Dyer, Emre, Luque, Carr, Babayaro, Solano) we'd have broken even or made a profit. The club had a large enough turnover to make it self-sustaining. We could afford to spend more than most other clubs in the league. We didn't need a billionaire to support us.

 

The debt was £70m of which £45m was a fixed long term loan for the stadium expansion which easily paid for it's own interest repayments. That leaves £25m attributable to the running of the club over the previous 15 years. Look at the debt of other clubs from their 07-08 accounts. Only Blackburn and the newly promoted teams had a debt less than £25m. Only 7 had a debt less than £60m, and we had a far bigger turnover than those clubs. We were the 12th/13th richest club in the world, and we couldn't afford the repayments on a £70m loan? Give me a break.

 

The only reason the debt has spiralled in the last couple of years is due to the increase in wages from £62m to £76m, and because of Ashley's pay up front for incoming transfers policy. Neither of which was necessary or inevitable.

 

Did we go bankrupt in 2001 when the debt was £67m and turnover was £55m? No.

Unmanageable debt? Financial disaster? Inevitable bankruptcy? Don't make me laugh.

 

OK - I’ll have a go at that point by point.

 

You are confusing personal debt with corporate debt. Banks have never been happy to lend money to businesses unless there was adequate security. By July 2007 every asset and revenue source the club had was in hock and had been used as collateral for loans. And for just about every loan the club had taken out the bank had demanded security.

 

Just for your info at 30th June 2007 the club had the following loans:

 

• £43 million at rates of between 7.36% and 7.65% secured on future ticket sales and corporate hospitality revenues (and not secured on the stadium as is widely believed). These loan notes matured in equal instalments up to 2016.

 

• £13.1 million at 8.55% secured on future sponsorship income repayable half yearly up to July 2010.

 

• £4.5 million at LIBOR + 2.25%.secured on the training ground.

 

• £8 million at 11.72% secured on future broadcasting revenue.

 

• £1.5 million interest free secured as a second charge over the training ground.

 

 

Why then is a bank suddenly going to lend unsecured money to a business that has the above loans already, has accumulated trading trading losses of £92 million and is technically insolvent? When you factor in the fact that the club was lower mid table and not progressing it makes it even more unattractive. The club was screwed.

 

Your belief that the wage bill could be contained is naïve. The likes of Parker, Dyer, Solano, Luque, and Babayaro (there was also Bramble, Moore and Onyewu) all had to be replaced. And let us not forget that the person who got rid of those players and then set about replacing them with players on higher wages was the chosen manager of the previous board. So it would have all been different under Shepherd and co eh? No negotiations of terms took place with Viduka and Barton until Ashley owned the club?

 

The point about us being the 13th richest club in the world is and always has been complete and utter tripe. The table of richest clubs produced by Deloitte is based purely on income and takes no account whatsoever of costs or net worth. Leeds were 16th on that list in 2004 ffs. If you earn £1 million a year and your costs are £1.5 million a year and you are £1 million in debt you are worth £1 million are you? Like hell you are. No wonder people think we are deluded if we believe that crap.

 

Yes the debt spiraled due partly to the wages increase as a result of the players brought in by Allardyce. But of course that would not have happened if Allardyce had been working under Shepherd and co would it?  On the point about payment up front of transfer fees I know this was done in the January window for Nolan. If there is any evidence that it was done for every player bought since Ashley arrived I haven’t seen it. 

 

Of course the club didn’t go bankrupt in 2001. At that point the club was still solvent, so why would it go bust?.

 

I have no idea what would have happened if we had continued under the previous board but it is nothing short of blind denial if you think the clubs financial position was fine and easily manageable. Sh1t stinks - it always has done and always will do.

 

 

Football clubs rarely make money Quay. Live with it.