Mr Logic Posted July 10, 2009 Share Posted July 10, 2009 ....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. Were you pissed when you decided to type that? Sustainable debt is fine, racking up debt until it is unmanagable debt is a terminal error. Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted July 10, 2009 Share Posted July 10, 2009 Of course it's possible, it's just more difficult. A couple of goals here and there and we would still be in the premiership now. The problem with debt is who it is owed to. If, like Fulham and Chelsea, all of the debt is owed to the owner who gives very favourable terms and never really wants it back, it's fine (unless he changes his mind). Our spending was unsustainable, even if Fred had stayed it would have had to be seriously cut. The problem with Ashley wasn't the principle of cutting costs, it was all of the incompetent decisions he made while trying to do it. Link to post Share on other sites More sharing options...
Stu Posted July 10, 2009 Share Posted July 10, 2009 Spot on Ian Link to post Share on other sites More sharing options...
Parky Posted July 10, 2009 Share Posted July 10, 2009 Spot on Ian What's spot on about it? Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted July 10, 2009 Share Posted July 10, 2009 Spot on Ian What's spot on about it? The man appreciates a good post, why argue? Link to post Share on other sites More sharing options...
relámpago blanco Posted July 10, 2009 Share Posted July 10, 2009 Spot on Ian What's spot on about it? Because it is a reasoned post with sensible thinking. Link to post Share on other sites More sharing options...
Parky Posted July 10, 2009 Share Posted July 10, 2009 Spot on Ian What's spot on about it? Because it is a reasoned post with sensible thinking. Like how? Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted July 10, 2009 Share Posted July 10, 2009 Link to post Share on other sites More sharing options...
relámpago blanco Posted July 10, 2009 Share Posted July 10, 2009 Spot on Ian What's spot on about it? Because it is a reasoned post with sensible thinking. Like how? Because we woulnd't have been able to service the debts if we continued like we had. One report had us down as being insolvent at the end of 2007 Link to post Share on other sites More sharing options...
bovineblue Posted July 10, 2009 Share Posted July 10, 2009 ....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. And then what? Do you suggest racking up more and more debt to remain competitive? We have sucessfully cut our debts and where are we competing now? So reduced debt is SOLELY to blame for getting relegated? Don't you think we could have scraped together (at least) another point somewhere through the season without the disasterous series of decisions made by Ashley and his cronies? Link to post Share on other sites More sharing options...
Parky Posted July 12, 2009 Share Posted July 12, 2009 How much does it cost to service 70m of debt a year? Think before you ans. Link to post Share on other sites More sharing options...
bovineblue Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. Depends on the rate at which the money is borrowed. Probably somewhere between 3.5 and 7m every year. Link to post Share on other sites More sharing options...
madras Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. Link to post Share on other sites More sharing options...
bovineblue Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. Link to post Share on other sites More sharing options...
madras Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. and meanwhile people think money to come in off transfers can only be used to bring in transfers. for example a club makes a 3mill profit on transfers but is losing 20mill a year and people wonder where the 3mill transfer profit went. Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. and meanwhile people think money to come in off transfers can only be used to bring in transfers. for example a club makes a 3mill profit on transfers but is losing 20mill a year and people wonder where the 3mill transfer profit went. So true, the amount of times I've heard "we made an £Xm profit on transfers in this window...."! FFS, it all comes of the bottom line, if the club is struggling financially the money has to go elsewhere. Link to post Share on other sites More sharing options...
quayside Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. and meanwhile people think money to come in off transfers can only be used to bring in transfers. for example a club makes a 3mill profit on transfers but is losing 20mill a year and people wonder where the 3mill transfer profit went. So true, the amount of times I've heard "we made an £Xm profit on transfers in this window...."! FFS, it all comes of the bottom line, if the club is struggling financially the money has to go elsewhere. It's rather like the "Ashley has pocketed all the Sky money and put none of it back into the club" argument that frequently gets spouted. As madras said servicing £70 million of debt isn't so bad (even at the high rates the club had borrowed at in 2007) the real issue is where you go from there when the borrowing has failed to create an obviously sustainable business. The directors want more debt to have another go and rebuild it but there is nothing to borrow against added to which, from the lenders point of view, there is a question mark over the board's ability to deliver something that will fly. Debt from outside finacial institutions never was available in infinite quantity - it was only available if the the lender had some security on it or a highly credible case could be made for the debt being recoverable. Flash forward to 2008/2009 and it's even harder to make a case for a commercial loan, especially when the balance sheet is shot. Brummie made the point about Villa's debt being due to Lerner and several other clubs are in a similar position. The only cap on the their borrowing is what the owner is prepared to make available, and that is an entirely different proposition to going into the financial markets and raising the same level of debt. The servicing cost of owner debt is frequently zero as well. If our eventual outcome leaves us in a position where our new owners need to borrow heavily from banks and other institutions then I don't believe it will end well. Link to post Share on other sites More sharing options...
Parky Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. The only problem the club has is badly negotiated player contracts, other than that it the last club left on the shelf with massive potential. Link to post Share on other sites More sharing options...
Parky Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. and meanwhile people think money to come in off transfers can only be used to bring in transfers. for example a club makes a 3mill profit on transfers but is losing 20mill a year and people wonder where the 3mill transfer profit went. So true, the amount of times I've heard "we made an £Xm profit on transfers in this window...."! FFS, it all comes of the bottom line, if the club is struggling financially the money has to go elsewhere. 99% of PL clubs struggle financially. Link to post Share on other sites More sharing options...
madras Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. and meanwhile people think money to come in off transfers can only be used to bring in transfers. for example a club makes a 3mill profit on transfers but is losing 20mill a year and people wonder where the 3mill transfer profit went. So true, the amount of times I've heard "we made an £Xm profit on transfers in this window...."! FFS, it all comes of the bottom line, if the club is struggling financially the money has to go elsewhere. 99% of PL clubs struggle financially. and if they keep struggling and their debts are managed the way ours were, the same thing will happen to them. Link to post Share on other sites More sharing options...
Parky Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. and meanwhile people think money to come in off transfers can only be used to bring in transfers. for example a club makes a 3mill profit on transfers but is losing 20mill a year and people wonder where the 3mill transfer profit went. So true, the amount of times I've heard "we made an £Xm profit on transfers in this window...."! FFS, it all comes of the bottom line, if the club is struggling financially the money has to go elsewhere. It's rather like the "Ashley has pocketed all the Sky money and put none of it back into the club" argument that frequently gets spouted. As madras said servicing £70 million of debt isn't so bad (even at the high rates the club had borrowed at in 2007) the real issue is where you go from there when the borrowing has failed to create an obviously sustainable business. The directors want more debt to have another go and rebuild it but there is nothing to borrow against added to which, from the lenders point of view, there is a question mark over the board's ability to deliver something that will fly. Debt from outside finacial institutions never was available in infinite quantity - it was only available if the the lender had some security on it or a highly credible case could be made for the debt being recoverable. Flash forward to 2008/2009 and it's even harder to make a case for a commercial loan, especially when the balance sheet is shot. Brummie made the point about Villa's debt being due to Lerner and several other clubs are in a similar position. The only cap on the their borrowing is what the owner is prepared to make available, and that is an entirely different proposition to going into the financial markets and raising the same level of debt. The servicing cost of owner debt is frequently zero as well. If our eventual outcome leaves us in a position where our new owners need to borrow heavily from banks and other institutions then I don't believe it will end well. If MA was serious and with assets/cash of around 1b, he could have had access to funds around 3b no problem, the sad fact is that he never had the vision to grow the club in the market and was anxious to penny pinch and ask the players to buy their own suits etc....ffs!! Wrong owner, wrong time, wrong league. Link to post Share on other sites More sharing options...
relámpago blanco Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. Well it was more than 70m and if you include the wage bill, installments made to other clubs on players purchased, more than we had. Link to post Share on other sites More sharing options...
Parky Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. Well it was more than 70m and if you include the wage bill, installments made to other clubs on players purchased more than we had. I could cut the wage bill to 15m in the time it takes to make 5 phone calls. Link to post Share on other sites More sharing options...
madras Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. servicing it isn't too bad if you can afford and it's not added to. the problems kick in when you have to borrow more to service the debt amongst other outgoings. And of course you would need to keep increasing the debt to remain competitive. Especially with money you could have used for players or wages now being spent on servicing debt. and meanwhile people think money to come in off transfers can only be used to bring in transfers. for example a club makes a 3mill profit on transfers but is losing 20mill a year and people wonder where the 3mill transfer profit went. So true, the amount of times I've heard "we made an £Xm profit on transfers in this window...."! FFS, it all comes of the bottom line, if the club is struggling financially the money has to go elsewhere. It's rather like the "Ashley has pocketed all the Sky money and put none of it back into the club" argument that frequently gets spouted. As madras said servicing £70 million of debt isn't so bad (even at the high rates the club had borrowed at in 2007) the real issue is where you go from there when the borrowing has failed to create an obviously sustainable business. The directors want more debt to have another go and rebuild it but there is nothing to borrow against added to which, from the lenders point of view, there is a question mark over the board's ability to deliver something that will fly. Debt from outside finacial institutions never was available in infinite quantity - it was only available if the the lender had some security on it or a highly credible case could be made for the debt being recoverable. Flash forward to 2008/2009 and it's even harder to make a case for a commercial loan, especially when the balance sheet is shot. Brummie made the point about Villa's debt being due to Lerner and several other clubs are in a similar position. The only cap on the their borrowing is what the owner is prepared to make available, and that is an entirely different proposition to going into the financial markets and raising the same level of debt. The servicing cost of owner debt is frequently zero as well. If our eventual outcome leaves us in a position where our new owners need to borrow heavily from banks and other institutions then I don't believe it will end well. If MA was serious and with assets/cash of around 1b, he could have had access to funds around 3b no problem, the sad fact is that he never had the vision to grow the club in the market and was anxious to penny pinch and ask the players to buy their own suits etc....ffs!! Wrong owner, wrong time, wrong league. you mean he never wanted to do an abaramovich (even on a smaller scale) and bankroll the club ? Link to post Share on other sites More sharing options...
madras Posted July 14, 2009 Share Posted July 14, 2009 How much does it cost to service 70m of debt a year? Think before you ans. Well it was more than 70m and if you include the wage bill, installments made to other clubs on players purchased more than we had. I could cut the wage bill to 15m in the time it takes to make 5 phone calls. come on then Link to post Share on other sites More sharing options...
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