[Archived] Our Debt

[OJRovers]

Answer the question not just make snide meaningless comments, please. Can you understand accounts - are you a qualified accountant or do you disagree with the figures I have put forward?

I agree with you Al looking at the accounts the debt is not so big that the club wouldn't be able to survive a drop! Yes we would have to sell some players and drastically reduce the wage bill but wouldn't (at this stage) go out of existence.

You will notice that any football club funded by the bank, like us, will be very closely managed so that over spending doesn't lead to administration.

[allanncd]

Although the parachute payments may be secured by the Bank, they can't take any more money when their loans have been fully repaid. Is there any reason to think that the Bank is owed more than £30m? I agree the squad would be thin but most teams in The Championship rely on loans (including some of those that have been promoted).

[Hasta]

Although the parachute payments may be secured by the Bank, they can't take any more money when their loans have been fully repaid. Is there any reason to think that the Bank is owed more than £30m? I agree the squad would be thin but most teams in The Championship rely on loans (including some of those that have been promoted).

If the bank think there is a possibility of us going bust they will try and reclaim as much of the debt as possible. With £30+ million at stake I suspect they aint going to want to take much of a chance.

No parachute payments = meltdown.

[allanncd]

If the Bank is owed (say) £30m and they take all the proceeds of player sales of (say) £30m how can they also take any of the parachute payments? Perhaps I've been wasting my time as a qualified accountant for the last 30 years?

[yoda]

Answer the question not just make snide meaningless comments, please. Can you understand accounts - are you a qualified accountant or do you disagree with the figures I have put forward?

Not a qualified accountant no, but good in business,

I disagree with the the figures and your assumptions because of the glaring ommsion you made in constructing your post relegation scenario,

No mention what so ever about Kean still being in charge, if that is the case and it looks like it will be, then your story will not be viable as we will continue sliding further out of existance.

Is that clear enough?

ps

"Perhaps I've been wasting my time as a qualified accountant for the last 30 years?"

If the cap fits, wear it

[roverandout]

allan is another supporter with his head in the clouds!!!

[Kendalrover]

I just don't understand the hysteria by so many on this MB that Rovers are in any danger of going bust even if relegated (as does seem likely). In my opinion most of the senior players are easy to sell and, after taking account of the relegation clauses applicable to most, if not all, players the wage bill should be comfortably covered by the first year's parachute payment of £16m. The fees received for the squad will enable all the borrowings of c£30m to be repaid. Some may disagree but the following fees should be easily achieved -Robinson £2m, Samba 8m (net of sell-on), Dann 3, Givet 1, Olsson 3, N'Zonzi 4, Formica 2, Yakubu 2, Hoilett 5 - a total of £30m. Other high earners are out of contract - Salgado, Dunn, Andrews and Grella. The remaining squad would need to be bolstered by frees and loans but would still be the basis of a presentable line-up for the Championship - Bunn, Lowe, Henley, Hanley, Petrovic, Pedersen, Vukcevic, Rochina, Goodwillie plus Morris, Kean, Blackman,Slew and Linganzi.

Al one of the problems is highlighted in your comment. Yes we could sell all our 'saleable' players but it would be below their true market values as (1) players will make it plain they want to leave and we all know you can't keep players who do not want to be here, and (2) buyers will know that they can get them on the cheap through the 'sales'.

However what you have failed to consider is that most transfers are now paid on the 'never never', say over 4 years. So although you think we could raise £30M in year one it would probably only be £7.5M which would still leave a big hole in the debt.

[Hasta]

If the Bank is owed (say) £30m and they take all the proceeds of player sales of (say) £30m how can they also take any of the parachute payments? Perhaps I've been wasting my time as a qualified accountant for the last 30 years?

I'm sure the bank would take the guaranteed money when available rather than wait for what happens IF we can sell players for their accurate value.

Either way we either A ) Go bust or B ) Have a poor side, paying poor wages with no money and no prospects of progressing. Wahoooooooooo. The future's bright,

[technoprisoners]

My link

This May 2011 Guardian article about West Ham makes interesting reading now we find ourselves potentially in a similar situation. The parachute payments to relegated clubs in 2011 were estimated to be £48m spread over 4 years compared with TV revenue in 2011/12 to Premiership clubs of circa £40m p.a.

By the end of season 2009/2010 WHU's former owners had mortgaged all of the real estate and put the club into around £100m debt leaving the new owners (Sullivan and Gold) with little room for manouevre with their bank.

What happened when S&G took charge? A very unpopular cost-cutting drive was forced on the club by Karen Brady to reduce wages and other outgoings, but this was not enough to keep the creditors at bay. After selling their best players WHU still had to raise between £20m and £40m which S&G put in finally from their own money to keep the club afloat = an act of unbelievable bravery or stupidity depending upon your point of view!

On relegation WHU's options were:

1 S&G to underwrite the future of the club (which they have done)

2 to find another investor to share the costs (which they couldn't)

3 let the club go bust and sell off the remaining assets - like the Pompey debacle.

Which option do you see Venky's London Ltd taking when the going gets tough?

Let's hope Rovers have a very wealthy white knight(s) waiting in the wings for when the club becomes a damsel in distress!

[allanncd]

West Ham have sold very few players and certainly not to the value of £30m. They have retained much of their squad from last season so this is not a valid comparison. In assessing £30m of transfer income I have already written down the value of players below their full value. In any case this is a market where quality players attract multiple buyers so values hold up. I would expect interest from more than one club for Olsson, Samba, Hoilett, N'Zonzi and Yakubu - which is most of the £30m. I am not saying this outcome would be anything less than a catastrophe - but not the end of the Club as some hysterics on here say.

[Hasta]

West Ham have sold very few players and certainly not to the value of £30m. They have retained much of their squad from last season so this is not a valid comparison. In assessing £30m of transfer income I have already written down the value of players below their full value. In any case this is a market where quality players attract multiple buyers so values hold up. I would expect interest from more than one club for Olsson, Samba, Hoilett, N'Zonzi and Yakubu - which is most of the £30m. I am not saying this outcome would be anything less than a catastrophe - but not the end of the Club as some hysterics on here say.

If we made an £18mill loss in the 12 months up to June 2011, how much loss will we make in the current 12 months under Venkys up to June 2012. How much of the above transfer fees are used to cover this loss rather than the existing debt to Barclays? Or do you think Venkys will stand the loss?

[roverandout]

west ham have a very competent manager in charge with owners who know at least a bit at what they are doing, we DONT!!!

[yoda]

West Ham have sold very few players and certainly not to the value of £30m. They have retained much of their squad from last season so this is not a valid comparison. In assessing £30m of transfer income I have already written down the value of players below their full value. In any case this is a market where quality players attract multiple buyers so values hold up. I would expect interest from more than one club for Olsson, Samba, Hoilett, N'Zonzi and Yakubu - which is most of the £30m. I am not saying this outcome would be anything less than a catastrophe - but not the end of the Club as some hysterics on here say.

West Ham have a manager

[PAFELL]

Although the parachute payments may be secured by the Bank, they can't take any more money when their loans have been fully repaid. Is there any reason to think that the Bank is owed more than £30m? I agree the squad would be thin but most teams in The Championship rely on loans (including some of those that have been promoted).

You have forgot something. VENKYS. If rovers sell players in light of relegation. There is nothing to stop them taking the money themselves. No proof that they would use the money to fund the team.

[technoprisoners]

West Ham have sold very few players and certainly not to the value of £30m. They have retained much of their squad from last season so this is not a valid comparison. In assessing £30m of transfer income I have already written down the value of players below their full value. In any case this is a market where quality players attract multiple buyers so values hold up. I would expect interest from more than one club for Olsson, Samba, Hoilett, N'Zonzi and Yakubu - which is most of the £30m. I am not saying this outcome would be anything less than a catastrophe - but not the end of the Club as some hysterics on here say.

We are not in the same situation as WHU yet as Venky's have not sold off/mortgaged assets to the same extent as the Icelanders at WHU prior to the Sullivan Gold takeover. That's not to say it won't happen (why were Yakubu, Samba and Hoillet "rested" today?), and my fear is that the Raos will mortgage or sell capital and feed the proceeds into revenue (wages, agents' fees) over the next 4 years (the parachute payments period) until the Club's creditworthiness is junk. They will then fail to put their hands in their pockets to allay creditors' fears leaving a moribund shell to go pop. Meanwhile the team goes into a catastrophic decline and is stuck playing in the lower divisions - like Coventry, Notts Forest, Leeds, Charlton, Sheffield clubs, Oldham etc etc.

Another worry is that Barclays Bank are behaving like they want out (fear that they may not get their money back?) by making public their demands for £10m by 31/12/11 - another deadline missed by Venky's. Going public about the tensions which have been caused by Venky's repeated failure to stick to loan repayment agreements is not the behaviour you expect from happy bankers who want to cultivate a long-term relationship with a trusted business partner. This public spat over money is bad for Rovers as it sends a worrying message to other potential creditors.

I look forward to reading the accounts.

On a very pessimistic note, this season reminds me of my first year of watching Rovers - 1965-66 - when we produced an abysmal 20 points from 42 games (2pts for win), got relegated, lost our captain to Spurs, leading to 25 years of being a "selling club". A rot which took Jack Walker's millions to stop. It could have been worse.... I could have been born in Burnley!

[roverandout]

i was born in burnley, so think how i feel!!!

[technoprisoners]

i was born in burnley, so think how i feel!!!

You must have been ecstatic to have found there was a proper football team just down the road :-)

[mjwood00]

Has anyone done the maths to see how prepared we are for the new fair play rules in the football league next season? No doubt linked to forcing high earners out.

[Paul]

How many companies would continue to supply a customer that appeared to lack the funds to settle its liabilities?

[roverandout]

techno in my defence i was only born there, so thankfully i was cleansed as soon as i left the hospital.

[Stuart]

How many companies would continue to supply a customer that appeared to lack the funds to settle its liabilities?

The same one that continues to employ a contractor despite unprecedented poor delivery performance and results?

[booth]

techno in my defence i was only born there, so thankfully i was cleansed as soon as i left the hospital.

I hope you sought professional psychological help, and divorced your parents

[Sparky Marky]

Every child will be born in bumley cos queens park dont have maternity there anymore...off to bumley.

[thenodrog]

Another worry is that Barclays Bank are behaving like they want out (fear that they may not get their money back?) by making public their demands for £10m by 31/12/11 - another deadline missed by Venky's. Going public about the tensions which have been caused by Venky's repeated failure to stick to loan repayment agreements is not the behaviour you expect from happy bankers who want to cultivate a long-term relationship with a trusted business partner. This public spat over money is bad for Rovers as it sends a worrying message to other potential creditors.

I look forward to reading the accounts.

Barclays will surely have access to more facts than us and it's obvious that they have no confidence in either the ability, the wealth or the intentions of the Venkeymob. They will be making decisions on here unencumbered by emotions as we are (see my sig). They are not sitting on fences either like some on here. I feel somebody at Barclays has access to fact(s) that has him sweating at his desk over this issue.

[longsiders1882]

We are not in the same situation as WHU yet as Venky's have not sold off/mortgaged assets to the same extent as the Icelanders at WHU prior to the Sullivan Gold takeover. That's not to say it won't happen (why were Yakubu, Samba and Hoillet "rested" today?), and my fear is that the Raos will mortgage or sell capital and feed the proceeds into revenue (wages, agents' fees) over the next 4 years (the parachute payments period) until the Club's creditworthiness is junk. They will then fail to put their hands in their pockets to allay creditors' fears leaving a moribund shell to go pop. Meanwhile the team goes into a catastrophic decline and is stuck playing in the lower divisions - like Coventry, Notts Forest, Leeds, Charlton, Sheffield clubs, Oldham etc etc.

I thought they had already mortgaged the ground, training facilities and future income? I was sure I read somewhere about Venkys London registering mortgages against BRFC assets?