Author Topic: The problem football clubs are now facing.  (Read 8218 times)

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Stan

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Re: The problem football clubs are now facing.
« Reply #105 on: March 23, 2020, 02:41:01 PM »
Would anyone want to ‘invest’ by buying shares in the Football with a big wedge of directors loans.  ?  Unless Mr Cleeve wrote them off ( or converted the loans into shares).
For those fans without a financial background, could you explain that please?

Basically SC hasn't 'given' the club money, rather he as loaned the money to the club.  All well and good whilst he is the sole owner as we all know we are basically one man's play thing until such time as he gets bored / runs out of cash, no real difference between us and Chelsea in that respect.

What I think Mallard is saying is why would the Trust membership vote to effectively 'burn' a sizable amount of the funds they have raised over the years to buy into a club that could still cease to exist by the start of next season should SC decide to call in his loans?  Personally as a Trust member, I would vote against such a proposal.

Exactly Tony.    There speaks the voice of reason
But with a limited liability company a company can only pay out what it has in assets. The chairman can't just take back money loaned if there are no assets to pay them.
So, technically they might be loans but in reality they are gifts. If the chairman walks away he won't be able to get his loans paid. He could put the company into liquidation, I suppose, as its main creditor but there aren't any realisable assets, as far as I know, so what would be the point?

Stan

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Re: The problem football clubs are now facing.
« Reply #106 on: March 23, 2020, 02:43:45 PM »
Also, if the club goes into liquidation it would be sent down the leagues. Surely the trust would want to prevent that from happening again?

TonyM

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Re: The problem football clubs are now facing.
« Reply #107 on: March 23, 2020, 05:38:53 PM »
Stan, slowly but surely you are getting there and now hopefully you see why I am so against the single benefactor model, although something tells me that you might have drawn a different conclusion.  If SC decided he no longer wanted the hassle of running the club he would be left with either getting what he could by selling it (if a buyer could be found) or by winding up the company to reduce any further losses.  I am sorry to say but with the sums involved on the directors loan accounts the Trust would have very little it could do to influence that decision one way or the other.

Nemesis

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Re: The problem football clubs are now facing.
« Reply #108 on: March 23, 2020, 06:12:22 PM »
Also, if the club goes into liquidation it would be sent down the leagues. Surely the trust would want to prevent that from happening again?
I'm sure you know the answer to your own question but just to humour you.

Wouldn't that depend on the size of the debt and whether the club was sustainable at the level it was playing? No point in ploughing money into a club that would only find itself in the same position in a couple of season's time.
“Once you have been in the dark you learn to appreciate everything that shines”

Stan

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Re: The problem football clubs are now facing.
« Reply #109 on: March 23, 2020, 06:29:41 PM »
Stan, slowly but surely you are getting there and now hopefully you see why I am so against the single benefactor model, although something tells me that you might have drawn a different conclusion.  If SC decided he no longer wanted the hassle of running the club he would be left with either getting what he could by selling it (if a buyer could be found) or by winding up the company to reduce any further losses.  I am sorry to say but with the sums involved on the directors loan accounts the Trust would have very little it could do to influence that decision one way or the other.
I'm glad that you think that I am getting there Tony: finance is not really my area. Here's another question for you?
If the trust were able to use their funds to support the club at the present time with what is basically a severe cash flow problem and the deal was some shares perhaps, it appears that, if your view is typical, that the trust would have nothing to do with it because of the current indebtedness to the chairman? So, while these loans exist, the trust will not really have anything to do with the club and because these loans will only ever go away if the club becomes either so profitable that it can afford to clear them or the chairman writes them off or the company goes into liquidation and the first two options are unlikely, the trust's likely course of action is to do nothing and wait for the club to go bust?

MARCUS ROSE

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Re: The problem football clubs are now facing.
« Reply #110 on: March 23, 2020, 08:24:23 PM »
Stan, slowly but surely you are getting there and now hopefully you see why I am so against the single benefactor model, although something tells me that you might have drawn a different conclusion.  If SC decided he no longer wanted the hassle of running the club he would be left with either getting what he could by selling it (if a buyer could be found) or by winding up the company to reduce any further losses.  I am sorry to say but with the sums involved on the directors loan accounts the Trust would have very little it could do to influence that decision one way or the other.
I'm glad that you think that I am getting there Tony: finance is not really my area. Here's another question for you?
If the trust were able to use their funds to support the club at the present time with what is basically a severe cash flow problem and the deal was some shares perhaps, it appears that, if your view is typical, that the trust would have nothing to do with it because of the current indebtedness to the chairman? So, while these loans exist, the trust will not really have anything to do with the club and because these loans will only ever go away if the club becomes either so profitable that it can afford to clear them or the chairman writes them off or the company goes into liquidation and the first two options are unlikely, the trust's likely course of action is to do nothing and wait for the club to go bust?

No use throwing good money after bad Stan.  If the Trust was to buy, say 25% of the club. Then it would be liable for 25% of the debts. Absolute madness and unsustainable. Use the Barrow Trust as an example.

TonyM

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Re: The problem football clubs are now facing.
« Reply #111 on: March 23, 2020, 10:47:02 PM »
Stan, slowly but surely you are getting there and now hopefully you see why I am so against the single benefactor model, although something tells me that you might have drawn a different conclusion.  If SC decided he no longer wanted the hassle of running the club he would be left with either getting what he could by selling it (if a buyer could be found) or by winding up the company to reduce any further losses.  I am sorry to say but with the sums involved on the directors loan accounts the Trust would have very little it could do to influence that decision one way or the other.
I'm glad that you think that I am getting there Tony: finance is not really my area. Here's another question for you?
If the trust were able to use their funds to support the club at the present time with what is basically a severe cash flow problem and the deal was some shares perhaps, it appears that, if your view is typical, that the trust would have nothing to do with it because of the current indebtedness to the chairman? So, while these loans exist, the trust will not really have anything to do with the club and because these loans will only ever go away if the club becomes either so profitable that it can afford to clear them or the chairman writes them off or the company goes into liquidation and the first two options are unlikely, the trust's likely course of action is to do nothing and wait for the club to go bust?

Stan, I don't speak for the Trust, I am just one member with one vote so this is just my opinion.  The problem with the current structure is that  the club is spending way beyond its means and this shortfall is being covered by SC through loans, if the club were to issue shares such that the Trust did end up with 25% then it wouldn't be unreasonable for SC to expect the Trust to cover their share of the any future shortfall without really having any mechanism to change how the club worked.  As for your three options, yes in effect the way SC has operated the club means any prudent Trust would probably not want to get involved, not sure I would class that as 'waiting for the club to go bust', more like waiting for the inevitable based on similar scenarios up and down the country and then being there to pick up the pieces.

Mallard

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Re: The problem football clubs are now facing.
« Reply #112 on: March 24, 2020, 08:55:01 AM »
Whilst not being a Trust member I fully appreciate the need for them to be in place.   Of course I hope there is never a need for them to help mount a rescue plan.

On the other side Stephen Cleeve has done a great job to take us to the level we now find us.   Is it sustainable ?   I hope so, but not with one person ploughing in money.  That is limited to the wealth and continued interest of one person ( in this case).    Stephen is on record as saying he is not going to prop the club beyond this season.   To that end I can see the sense in appointing a full time Commercial Manager.   It is down to Mark Hearle to make good that shortfall next season.    No easy task of course and a lot of the clubs future resting on his shoulders.

When we come out of this current unbelievable situation then the World may well be a different place for everyone,  including Football. 

TonyM

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Re: The problem football clubs are now facing.
« Reply #113 on: March 24, 2020, 01:33:53 PM »
Whilst not being a Trust member I fully appreciate the need for them to be in place.   Of course I hope there is never a need for them to help mount a rescue plan.
Quote

This is a fundamental problem for the B&G Trust, they have allowed themselves to be painted into a corner, first by Buster and now the present owner, marginalising them as a disgruntled safety net and nothing more.  Trusts at some other clubs have a much better working relationship with their club's owners and, in turn, have a much wider involvement with helping their club.  Hopefully, one day, this will also be true at Lynn, although I can't see it in the near future with how SC currently operates.

Stan

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Re: The problem football clubs are now facing.
« Reply #114 on: March 24, 2020, 05:49:04 PM »
Whilst not being a Trust member I fully appreciate the need for them to be in place.   Of course I hope there is never a need for them to help mount a rescue plan.
Quote

This is a fundamental problem for the B&G Trust, they have allowed themselves to be painted into a corner, first by Buster and now the present owner, marginalising them as a disgruntled safety net and nothing more.  Trusts at some other clubs have a much better working relationship with their club's owners and, in turn, have a much wider involvement with helping their club.  Hopefully, one day, this will also be true at Lynn, although I can't see it in the near future with how SC currently operates.
A disgruntled safety net is indeed how they come across, if I'm honest. I have seen a lot of implicit and explicit anti-club (in its current form) rhetoric on this forum over the last few years and would suggest that this hasn't helped the perception of the trust or their cause. I can recall being called Stephen Cleeve in the early days of his tenure simply because of playing devil's advocate and putting his case.
I like the idea of a trust in principle but would not wish to wed myself to a partisan: trust = good; sole-owner = bad or vice versa, as this tends to lead to reductive: if you're not with us you're against us type of thinking and arguments. For me the trust's ostensible intransigence at being ideologically against the sole-owner model is part of the problem. Personally, I don't care which model the club uses so long as it provides good quality and progressive football for the fans.
I support QPR. During the early '60s QPR's typical home attendance was about 4,000. Jim Gregory, a rich sole-owner came in and transformed the club to the extent that in 1976 they were vying for the old first division title and 35,000 watched them play Leeds at home.
Sole-owners aren't always the devils that some paint them. Perhaps both sides need to be a bit more open minded.

Grissles Oleary

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Re: The problem football clubs are now facing.
« Reply #115 on: March 24, 2020, 08:28:23 PM »
How much of a circle can this carry on going round? Has anyone actually emailed the trust to see what their position is,or emailed the club? :dontknow:
“No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?”

MARCUS ROSE

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Re: The problem football clubs are now facing.
« Reply #116 on: March 24, 2020, 10:01:19 PM »
" if you're not with us you're against us type of thinking and arguments"

Stan, that has been the ideology of this clubs owners since its formation, Not the Trust. Both have been more than happy to be one man bands. Which you no doubt know.

MARCUS ROSE

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Re: The problem football clubs are now facing.
« Reply #117 on: March 24, 2020, 10:02:39 PM »
How much of a circle can this carry on going round? Has anyone actually emailed the trust to see what their position is,or emailed the club? :dontknow:

Old Loopy was a lot better than Stan. :laughcry: Grissles.

Grissles Oleary

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Re: The problem football clubs are now facing.
« Reply #118 on: March 24, 2020, 10:50:40 PM »
How much of a circle can this carry on going round? Has anyone actually emailed the trust to see what their position is,or emailed the club? :dontknow:

Old Loopy was a lot better than Stan. :laughcry: Grissles.

At least loopy joined the Trust for a little while and actually made comments based on his experience? :laughcry: :laughcry: :laughcry:
“No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?”

Loopy,linnet

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Re: The problem football clubs are now facing.
« Reply #119 on: March 25, 2020, 02:56:33 AM »
How much of a circle can this carry on going round? Has anyone actually emailed the trust to see what their position is,or emailed the club? :dontknow:

Old Loopy was a lot better than Stan. :laughcry: Grissles.
all this coming from fc United man hey Marcus ,and there’s me thinking you had deserted lynn for the mancs