£10m FFP Bill

[Ramet]

31 minutes ago, Angry Ram said:

The Academy will probably fail like they all do.. Don’t hang your hat on that.

Accountants are paid to move money around, it does not matter where the poo sits, it’s still poo. 

Ramnut is in essence right, we trade at a loss, the rest is semantics.. 

You made a bold statement in an earlier post that Morris is going nowhere. How do you know that?

I have no need to tell you how i know morris is going nowhere but i have good reason to believe it to be true. Like all things there is no guarantees but its a statement i stand by very strongly. Everyone has every reason to ask all these questions it shows the passion that breeds within our club but when people have vast knowledge of something and they share and explain things sometimes people just need to take the answer for what it is. As for the academy people need to understand this is a long term thing and is done to benefit the club in the long run, to say they all fail is very incorrect just ask Southampton etc, not to mention Man utds glory years ( becks,nev bros etc) it only takes x1 player at 30mil and it then looks like a good bit of investment.

[RamNut]

3 hours ago, Ramet said:

Again the bit you dont seem to get it the debt is to mel from servco and servco it owned by mel.so for the last time there is not debt owed to mel FROM DCFC.

Lol ffs

i get it. It makes no difference. I never said the debt was to DCFC. Do you get that?

 

[Ramet]

3 minutes ago, RamNut said:

Lol ffs

i get it. It makes no difference. I never said the debt was to DCFC. Do you get that?

 

Ok fair enough ment no harm apologies.

[Angry Ram]

11 minutes ago, Ramet said:

I have no need to tell you how i know morris is going nowhere but i have good reason to believe it to be true. Like all things there is no guarantees but its a statement i stand by very strongly. Everyone has every reason to ask all these questions it shows the passion that breeds within our club but when people have vast knowledge of something and they share and explain things sometimes people just need to take the answer for what it is. As for the academy people need to understand this is a long term thing and is done to benefit the club in the long run, to say they all fail is very incorrect just ask Southampton etc, not to mention Man utds glory years ( becks,nev bros etc) it only takes x1 player at 30mil and it then looks like a good bit of investment.

So it was a bollx statement then. Okay fair enough. 

There are many more failures with academy’s than successes. We are hardly Man U and what a Southampton doing now. 

 

[Ramet]

7 minutes ago, Angry Ram said:

So it was a bollx statement then. Okay fair enough. 

There are many more failures with academy’s than successes. We are hardly Man U and what a Southampton doing now. 

 

Only a bollx statement if you CHOOSE not to believe it.not that im that bothered if or do or not.

[RadioactiveWaste]

What do people expect out the academy anyway?

Transfers out to mostly cover costs of running it?

Regular first team squad players?

Regular first team starters?

Big money star players?

It'll probably be another 6 years of sustained investment before the first two look even likely, bar a couple of fluke awesome players turning up. It takes a long time to build,a lot of commitment, and even then likely not produce as many first team players as we'd like. However, I'm sure it helps the club in a lot of ways to have a well respected academy, builds the footballing culture, engaged the young, engaged the community, give fans a sense of continuity etc.

 

[Ramet]

13 minutes ago, RadioactiveWaste said:

What do people expect out the academy anyway?

Transfers out to mostly cover costs of running it?

Regular first team squad players?

Regular first team starters?

Big money star players?

It'll probably be another 6 years of sustained investment before the first two look even likely, bar a couple of fluke awesome players turning up. It takes a long time to build,a lot of commitment, and even then likely not produce as many first team players as we'd like. However, I'm sure it helps the club in a lot of ways to have a well respected academy, builds the footballing culture, engaged the young, engaged the community, give fans a sense of continuity etc.

 

Well said. We already have a hand full i believe will make the grade this year

[RoyMac5]

46 minutes ago, RamNut said:

Lol ffs

i get it. It makes no difference. I never said the debt was to DCFC. Do you get that?

Not that I'm really bothered - but all that arguing seemed to be for the sake of it - number of angels dancing on the head of a pin stylee!

What *was* your point behind all the verbage, cos it got well and truly buried. 

Edit: be succinct.

[cheron85]

14 hours ago, curtains said:

So how much would they have to pay as it stands.   That’s the whole point if Mel were to sell he would need to slim the club down. 

Hence the not sustainable comments I assume. 

They'd pay whatever Morris was prepared to take for it - Whether that was more or less than he put in or not - If you buy a house and then spend thousands on garish wallpaper it doesn't increase the value of the house by as much as you've spent

[Curtains]

1 hour ago, cheron85 said:

They'd pay whatever Morris was prepared to take for it - Whether that was more or less than he put in or not - If you buy a house and then spend thousands on garish wallpaper it doesn't increase the value of the house by as much as you've spent

Ok so Mel if he sold wouldn’t necessarily lose money then 

[RamNut]

1 hour ago, RoyMac5 said:

Not that I'm really bothered - but all that arguing seemed to be for the sake of it - number of angels dancing on the head of a pin stylee!

What *was* your point behind all the verbage, cos it got well and truly buried. 

Edit: be succinct.

sorting the over-spending out is a pre-requisite to achieving anything

[Wolfie]

46 minutes ago, RamNut said:

sorting the over-spending out is a pre-requisite to achieving anything

....or overspend and achieve the objective of getting promoted.

So far it's been overspend and under-achieve. Plan B seems to be to cut back and over-achieve.

Given the gap between our turnover and that of parachute payment clubs, it would be a big ask to cut back to the point of breaking even while achieving promotion.

In Frank we trust....

I'm quite glad it's not me having to make that choice, though.

[Carnero]

3 minutes ago, Wolfie said:

....or overspend and achieve the objective of getting promoted.

So far it's been overspend and under-achieve. Plan B seems to be to cut back ond over-achieve.

Given the gap between our turnover and that of parachute payment clubs, it would be a big ask to cut back to the point of breaking even while achieving promotion.

In Frank we trust....

I'm quite glad it's not me having to make that choice, though.

I heard on the radio the other day that for the 2016-17 season of the 4 clubs who recorded the biggest losses, 3 achieved promotion - being Newcastle, Brighton & Huddersfield.

I was surprised, as I thought that Huddersfield were supposed to be the plucky, on a tight budget underdog.

I assume the 4th club was Aston Villa.

[Van der MoodHoover]

41 minutes ago, curtains said:

Ok so Mel if he sold wouldn’t necessarily lose money then 

He wouldn't necessarily lose ALL the money he had put in.

@RamNut is giving the business perspective, @ramblur the accounting one and both are correct in their respective fields. The rest of us are simply "enthusiastic amateurs".

Mel has put in 95m. And he cannot (legally) get any part of that back out of DCFC the club. So he could sell DCFC the club.........and if he got 50m for it, he's lost and if gets 95m+ for it he will win.

What RamNut is pointing out (I think - and apologies if I am putting words in your mouth) is that Mel has put the 95m into the club in stages and has effectively been putting in some more to DCFC to cover losses. He might get fed up of doing so. He can't get his 95,m back (except by sale) but he can stop putting more in.

DCFC is reliant on Mel continuing to put money in. And the business question would be.......if Mel wants out at any point, then how likely is it that he can find someone who is prepared to put 100m up front (to give to Mel) and then be happy to put money into DCFC year on year to cover the further losses that arise.

Doesn't sound that appetising a business proposition does it?

Of course the grail is promotion. But if we achieve that and its worth 150m or whatever, then does that mean Mel could take his cash back out and leave DCFC short of the cash it would need to be competitive? Don't know, because I don't know which legal entity would receive the cash.....if the prem prize money gets paid to DCFC then perhaps Mel is no better off.......he now has a profitable football entity, but he can STILL only extract cash via profits and dividends.......this is where the accountancy experts know what is going on more than I.

Key point summary:

Mel cannot "bust" DCFC overnight

Mel can stop putting more in and DCFC will run out of cash (it'll be curtains for DCFC lol)

Mel can sell and get some money back...........

 

[Wolfie]

5 minutes ago, Carnero said:

I heard on the radio the other day that for the 2016-17 season of the 4 clubs who recorded the biggest losses, 3 achieved promotion - being Newcastle, Brighton & Huddersfield.

I was surprised, as I thought that Huddersfield were supposed to be the plucky, on a tight budget underdog.

I assume the 4th club was Aston Villa.

Me too. Just had a quick look & their nett transfer spend that season was only £1.3m, with the previous season being a £6.5m nett profit - largely thanks to us?

[Angry Ram]

2 hours ago, Ramet said:

Only a bollx statement if you CHOOSE not to believe it.not that im that bothered if or do or not.

Okay it's bollx then. We can leave it there.

[Curtains]

5 minutes ago, HantsRam said:

He wouldn't necessarily lose ALL the money he had put in.

@RamNut is giving the business perspective, @ramblur the accounting one and both are correct in their respective fields. The rest of us are simply "enthusiastic amateurs".

Mel has put in 95m. And he cannot (legally) get any part of that back out of DCFC the club. So he could sell DCFC the club.........and if he got 50m for it, he's lost and if gets 95m+ for it he will win.

What RamNut is pointing out (I think - and apologies if I am putting words in your mouth) is that Mel has put the 95m into the club in stages and has effectively been putting in some more to DCFC to cover losses. He might get fed up of doing so. He can't get his 95,m back (except by sale) but he can stop putting more in.

DCFC is reliant on Mel continuing to put money in. And the business question would be.......if Mel wants out at any point, then how likely is it that he can find someone who is prepared to put 100m up front (to give to Mel) and then be happy to put money into DCFC year on year to cover the further losses that arise.

Doesn't sound that appetising a business proposition does it?

Of course the grail is promotion. But if we achieve that and its worth 150m or whatever, then does that mean Mel could take his cash back out and leave DCFC short of the cash it would need to be competitive? Don't know, because I don't know which legal entity would receive the cash.....if the prem prize money gets paid to DCFC then perhaps Mel is no better off.......he now has a profitable football entity, but he can STILL only extract cash via profits and dividends.......this is where the accountancy experts know what is going on more than I.

Key point summary:

Mel cannot "bust" DCFC overnight

Mel can stop putting more in and DCFC will run out of cash (it'll be curtains for DCFC lol)

Mel can sell and get some money back...........

 

This is brilliant 

[Ramet]

2 minutes ago, Angry Ram said:

Okay it's bollx then. We can leave it there.

As you wish Mr angry

[Carnero]

8 minutes ago, Wolfie said:

Me too. Just had a quick look & their nett transfer spend that season was only £1.3m, with the previous season being a £6.5m nett profit - largely thanks to us?

They must have had some wage bill then? Or more likely the guy on Talksport was talking bullpoo.

[ramblur]

36 minutes ago, curtains said:

Ok so Mel if he sold wouldn’t necessarily lose money then 

That's bound to be true though, curtains. Because of the amount he's put in at Championship level, and because a large amount of that hasn't really generated value, nobody's going to give him his money back ( and thus pick up the tab for his mistakes) whilst we're still a Championship Club. The only chance he has of gaining ( if he wants to) is by becoming a Premiership club.

In certain ways, it's quite similar to the situation that the late Nigel Doughty faced. A certain amount of his equity was held in share capital, but the majority was loan capital, injected via a holding company ( and classed as 'investment' within this holding company). He actually impaired all these amounts as they went in - a sure sign that he didn't expect to get his money back whilst in the Championship. If the gumps had been promoted, he could have reversed the impairments and started getting partial repayments of his loan, if he wished. The big difference between this and Mel's situation is that Mel will never simply be able to draw cash from DCFC to repay loans,because the loan isn't to the Club, it's to his own investment company, nothing to do with the Club.

There's a massive difference between share equity and loan capital loaded onto a club, something which some seem completely unable to understand ( or maybe now do, but want to hold onto a flawed position, to save face). With the former, cash can't simply be drawn out of the club, whilst with the latter it can ( just as external lenders could be paid).

Going back to the gumps, something occurred which many didn't understand. No fool (even Fawaz) was going to actually pay money to inherit a mass of debt, money that hadn't given value to the club, so a big wedge of this was converted to equity, but this didn't mean the Doughty family were beneficiaries of such equity. All that would have happened would have been that Fawaz would have paid (probably a pretty nominal)amount to acquire the share capital ( including that converted), and then the benefit to the Doughty family would have been the repayment of whatever loan capital remained ( and they should have been pretty grateful for that, as they were in a pretty weak bargaining position). Thus the real takeover value would have been this loan (£30m? I can't remember), plus whatever was paid for the equity, a far cry from the mound of negative equity that existed before conversion.