Melvyn Morris fan club

[rynny]

Just now, Curtains said:

I’m not sure where all this came from because you were discussing this with Roy and I answered one of you questions.

I personally believe financially we would be better off staying in the Championship than getting relegated.and I do believe that the consequences of relegation would be massive.

 

Other people disagree and thanks for your Patience 

 

 

No worries Curtains. 

We would definitely be better off financially being in the championship than league 1, there is no room for debate in that. 

[Rev]

19 minutes ago, ThePrisoner said:

He said in what way does MM think administration is a good idea? I doubt MM would want to or even put us into admin.

Who said this? I've scanned back through the thread, and haven't seen anyone suggesting such an idea?

[Curtains]

8 minutes ago, G STAR RAM said:

As in commonplace with our media the details of the story do not correlate with the headline.

Very true .

 

[ThePrisoner]

3 minutes ago, Rev said:

Who said this? I've scanned back through the thread, and haven't seen anyone suggesting such an idea?

It was in reference to this...

31 minutes ago, rynny said:

In what way would he feel like administration would be a good idea? 

 

[Ken Tram]

1 hour ago, RoyMac5 said:

What? We're now massively in debt with nothing left to hock! Thanks Mel.

Fans might have been unhappy with small spends but at least the clubs existence wasn't threatened like currently.

Are we massively in debt? I think the finances are manageable. It's just that administration, or whatever it is called, could be an option.

Presumably, if Mel sells, he gets cash in his pocket.

If he does not, then he has to finance continued cashflow, without knowing when a sale might take place. And, perhaps, cutting his losses might become the only prudent option. But that wouldn't mean that the debt were unmanageable for a new owner  

Within any process to cut his losses, the true value of the club would be revealed - being the amount that a buyer is willing to pay.

And because our debts are not unmanageable, and our fan base provides income streams that are larger than most other clubs, and the opportunity to make a profit exists - there is surely likely to be a buyer.

So, for all I (don't) know, heading towards some sort of administration, might be necessary to trigger a sale, one way or another - and if the status quo becomes unviable for the owner for any reason.

Edited May 4, 2021 by Ken Tram

[rynny]

3 minutes ago, Rev said:

Who said this? I've scanned back through the thread, and haven't seen anyone suggesting such an idea?

Relates to these posts. 

34 minutes ago, Curtains said:

Of course not .

He hasn’t said he wouldn’t.

Alonso seems to be the guy if he passes EFL fit and proper test to takeover the club .

If we go down I have no idea what would happen with the takeover and  either way it might leave MM still owning the club .

He might feel administration a good option if we go down but that’s  total speculation and fear on my behalf .

 

 

32 minutes ago, rynny said:

In what way would he feel like administration would be a good idea? 

 

[Gee SCREAMER !!]

23 minutes ago, Curtains said:

In the United Kingdom, football clubs sometimes choose to enter administration(sanction) when they are unable to pay off outstanding debts. Administration puts accountants "in charge of pretty much everything apart from coaching the players and picking the team". ...

 

In effect it clears our debts 

It doesn't mate. Its a precluder to bankruptcy in that you still have the possibility to attract new investment and service debts but you can't gather new ones.  There is also a certain amount of creditor agreement.  They might not agree and push for the official receiver to look after affairs via bankruptcy.  This would be the last route as they could be way down the list of creditors and get little back as the bankruptcy period only lasts a year.  Either way if we get an offer of say 2 million quid for a player we value at 5 we may be forced to take it. It's an option best avoided as it would be pick the carcass time.

Hopefully were not at that stage.  Winning this weekend would certainly help.

[Ken Tram]

 

6 minutes ago, Gee SCREAMER !! said:

It doesn't mate. Its a precluder to bankruptcy in that you still have the possibility to attract new investment and service debts but you can't gather new ones.  There is also a certain amount of creditor agreement.  They might not agree and push for the official receiver to look after affairs via bankruptcy.  This would be the last route as they could be way down the list of creditors and get little back as the bankruptcy period only lasts a year.  Either way if we get an offer of say 2 million quid for a player we value at 5 we may be forced to take it. It's an option best avoided as it would be pick the carcass time.

Hopefully were not at that stage.  Winning this weekend would certainly help.

It might be good to start a thread called: Administration: What it really means!

Because all of the stuff that you've just written might be good to have in one place. People mention 30 point deductions. And clearing debts. And links to bankruptcy. And the stadium ownership. Etc.

There's probably only a handful of people who have a good understanding.

Maybe this is something to leave until after the weekend!

[RoyMac5]

8 hours ago, Ken Tram said:

Are we massively in debt? I think the finances are manageable. It's just that administration, or whatever it is called, could be an option.

Presumably, if Mel sells, he gets cash in his pocket.

What are are assets now compared to what they were when Morris took over?

Not just the ground sold as compared to mortgaged. The Academy, mortgaged. But the value of the squad?

The accounts haven't been done for a while waiting until EFL get around to appeal, but I imagine the P&L will show an unhealthy figure, even pre-Covid.

 

[Ken Tram]

12 hours ago, RoyMac5 said:

What are are assets now compared to what they were when Morris took over?

Not just the ground sold as compared to mortgaged. The Academy, mortgaged. But the value of the squad?

The accounts haven't been done for a while waiting until EFL get around to appeal, but I imagine the P&L will show an unhealthy figure, even pre-Covid.

You most definitely have a better idea than me!

After this weekend, I would quite like it if someone started a thread about financial facts, and league rules, etc. 

Perhaps not a thread for discussions! Just a place that people who understand stuff, can share information like  ... this is the published debt ... or this is the bankcruptcy process ... and these are the financial fair play rules ... and so on, all in one place.

These issues are becoming more relevant to more discussions!

And, I have learned lots from people who have taken the time to explain things - but they must have to repeat themselves loads. 

(Maybe it could be a specially moderated thread, or something?)

[G STAR RAM]

13 hours ago, RoyMac5 said:

What are are assets now compared to what they were when Morris took over?

Not just the ground sold as compared to mortgaged. The Academy, mortgaged. But the value of the squad?

The accounts haven't been done for a while waiting until EFL get around to appeal, but I imagine the P&L will show an unhealthy figure, even pre-Covid.

 

Net assets at 30 June 2014 were £27m

Net assets at 30 June 2018 were £122m (this included the loan of circa £80m owed in respect of the sale of the ground)

 

[Spanish]

On 05/05/2021 at 09:13, RoyMac5 said:

What are are assets now compared to what they were when Morris took over?

Not just the ground sold as compared to mortgaged. The Academy, mortgaged. But the value of the squad?

The accounts haven't been done for a while waiting until EFL get around to appeal, but I imagine the P&L will show an unhealthy figure, even pre-Covid.

 

[Spanish]

11 hours ago, G STAR RAM said:

Net assets at 30 June 2014 were £27m

Net assets at 30 June 2018 were £122m (this included the loan of circa £80m owed in respect of the sale of the ground)

 

GS

not sure what makes up the Net assets.  The £80m is the loan owed to the club obviously and that will show an upward trend based on the accounts have swapped a stadium valued at £40m for a loan worth 80.  But what makes up the rest?  Do you have this to hand?

[Spanish]

11 hours ago, G STAR RAM said:

Net assets at 30 June 2014 were £27m

Net assets at 30 June 2018 were £122m (this included the loan of circa £80m owed in respect of the sale of the ground)

 

and Roy mentioned P&L not the balance sheet so net assets I presume are not what he was referring to?

[G STAR RAM]

Just now, Spanish said:

GS

not sure what makes up the Net assets.  The £80m is the loan owed to the club obviously and that will show an upward trend based on the accounts have swapped a stadium valued at £40m for a loan worth 80.  But what makes up the rest?  Do you have this to hand?

Just going on school run but will put a summary up later

[Spanish]

3 minutes ago, G STAR RAM said:

Just going on school run but will put a summary up later

great thanks, grateful if you can do this but don't if it is too much effort.  The group structure is a bit of a web

[Mihangel]

12 hours ago, Ken Tram said:

Perhaps not a thread for discussions! Just a place that people who understand stuff, can share information like  ... this is the published debt ... or this is the bankcruptcy process ... and these are the financial fair play rules ... and so on, all in one place.

 

The problem is there are at least 3 sets of people who could post there. 1) People who fully understand the various accounting rules, FFP etc and the how they particularly relate to DCFC (effectively, that is nobody) 2) People who've read Kieran Mcguire's guesswork/BS/fantasy ideas and think they know, yet are wrong but it won't stop them spouting off 3) Those who see Mel Morris as the anti christ.

For what it's worth, like almost everything else, accounting and other rules are open to interpretation, that's why you have legal cases such as DCFCs battle with the EFL

[Carnero]

1 hour ago, Spanish said:

GS

not sure what makes up the Net assets.  The £80m is the loan owed to the club obviously and that will show an upward trend based on the accounts have swapped a stadium valued at £40m for a loan worth 80.  But what makes up the rest?  Do you have this to hand?

In summary..

Debtors £80m (mainly amounts owed by group undertakings)

+ Player registrations £50m

+ Fixed assets inc leasehold (training ground) £14m

- Creditors £22m

[G STAR RAM]

53 minutes ago, Spanish said:

great thanks, grateful if you can do this but don't if it is too much effort.  The group structure is a bit of a web

Rough guide

                                          2018                               2014

                                            £m                                  £m

ASSETS

Players                               50                                     3

Land, property etc            14                                    53

Inter-company loan           75                                     -              (this is the money owed for the sale of the ground)

Cash                                     3                                     1

Owed for players                 2                                      -

Other                                    3                                      4

TOTAL                              147                                     61

 

LIABILITIES

Bank loans                          3                                       15

Deferred income                6                                         8         (I would guess that this relates mainly to season ticket income)

Other                                   3                                        8

Owed for players              13                                        2

TOTAL                                25                                     33

 

NET ASSETS                   122                                      28

 

Roughly the net assets have gone up by the profit made on the ground of circa £40m plus the increase in player values of £50m, both are which are paper transactions. In summary, up to 30 June 2018, as MM had funded the club through equity we were are pretty much in the same financial position as we were when he took over, except the ground has been replaced with a debtor of £80m.

Of course the key is what has happened between 2018 and today. Has the £75m been paid to the club? I think I read somewhere that it would be paid over 8 years in instalments of £10m but I have not seen that confirmed anywhere. Has the club been laden with debt or has the parent company borrowed the money against the ground and then loaned that money to the club?

 

[kevinhectoring]

21 minutes ago, G STAR RAM said:

Of course the key is what has happened between 2018 and today. Has the £75m been paid to the club? I think I read somewhere that it would be paid over 8 years in instalments of £10m but I have not seen that confirmed anywhere. Has the club been laden with debt or has the parent company borrowed the money against the ground and then loaned that money to the club?

Negative ebitda in recent years implies significant negative cashflow at club level, obviously.  I guess this has been funded by the stadium company paying down the interco balance arising from the stadium sale. The stadium co has financed itself I think from the external borrowings, some of which have been guaranteed by our much maligned benefactor, MM