Good Business

[JohnDenver]

I hope so, bring on 40yrs unbroken in the top division :thumbup:

...and a cheeky FA Cup win.

 

[alcoblade]

The accounts say we have to find £4.5m from somewhere before we kick-off - we are struggling to remain solvent.
We will have to sell more players.
We cannot go into admin because we owe a good half of the cash to the bloke who owns the club and who got us into this situation in the first place.
As for firesale, what does SUFC have to sell? Chengdu? A second division Chinese football club? A hotel on which we owe about £20m? Anything else?

This is the nub of the problem we have now:

- we are heavily in debt and the club do not want to take on more debt
- the man who owns the club will not put in any more funding
- we have to sell more players and cut the wage bill, but no one will bring in any money as we have no very good players anymore
- at present, we seem to have no first team ready youngsters and those we did have were sold quickly
- money raised from sales is not being used for player purchases.
- as most of the debt is owed to the man who owns the club, there will be no "clean slate" via administration (not that I desire this, but it's one way forward)
- our supposedly income generating assets are not currently generating any income

To me this looks like paralysis. In these circumstances there is no prospect of building a good team. We are stuck in this league, or worse, until we have new investment or until we develop/buy good players who are not sold instantly. That scenario looks a long way off.

If someone bet me a grand that United would be in the PL again before 2015, I'd bet against that. We're turning into Coventry.

Spot on post. But what's worse, I don't want more "investment" as it inevitably means more debt. We need to find a way to live off our own money. Luckily our enormous wagebill (thanks again Robson / McCabe) will come down naturally as Speed and Naysmith leave and contracts are renegotiated (just how much do we pay the likes of Monty, Morgan etc? Good players but vastly overpaid I suspect). Then we need an end to the recession - so our assets can start generating rather than bleeding cash.

It could all come off in a few years - until then we have more years of austerity. Either way I've relegated McCabe to the ranks of Brealey and Woolhouse. Another in a long list who've fucked us up. In his defence, I think his intentions were honourable. But just as he'd be due huge plaudits if it had paid off, he must kop the flack for the reality of utter failure.



UTB

 

[Revolution]

I hope so, bring on 40yrs unbroken in the top division

I was thinking more of the 10 years of no playoff appearance and lower mid table obscurity...

 

[Darren]

I hope so, bring on 40yrs unbroken in the top division :thumbup:

34 Actually 1967-2001

 

[Beighton_Blade]

Surely the best thing to come of all this mess (although i would still argue the "mess" is no where near as dramatic as some would/or would like to suggest!), is that we have to get back to being a "smarter", transfer-market-wiser, financially profitable football club.

Stop paying average players vast sums of money they would now (in the current market) struggle to be paid elsewhere, stop paying over-inflated fees for average players a la Hendo, Sharp, Cotterill, Howard, Taylor, Ched etc etc, stop investing large sums of money in players with no re-sale value unless on minimal wages (im talking the likes of Ugo, Speed, Camara - as good as some of them have been), and continue to invest on players with potential to improve or generate future cash flows (Ward, Willo, Yeates etc), start to consider taking gambles on utilising any potential from the Academy rather than investing significant somes on average 'do-a-job' players (Taylor's shocking contributions should/could have surely been equalled by a promising youngster?)

But most improtantly, get a manager who is capable of achieving all of this - imho - Blackwell is not that man, his success in the transfer market is average at best, and what he does invest is mainly in over-priced/over-rated players who are still unproven successes in promotion winning sides - i do not trust him to utilise what little funds we will now have in the same way others (O'Driscoll, Warnock, Coppell, McCarthy, Pearson) might, and i just dont see in him the ability, self-belief or charisma capable of achieving our newly-set goals.

UTB!

 

[Sothall_Blade]

The accounts say we have to find £4.5m from somewhere before we kick-off - we are struggling to remain solvent.
We will have to sell more players.
We cannot go into admin because we owe a good half of the cash to the bloke who owns the club and who got us into this situation in the first place.
As for firesale, what does SUFC have to sell? Chengdu? A second division Chinese football club? A hotel on which we owe about £20m? Anything else?

The last accounts didn't include the sales of Naughton, Walker and Kilgallon for £10M. Surely we've already made up the shortfall for this season and next?

 

[Bramley]

Surely the best thing to come of all this mess (although i would still argue the "mess" is no where near as dramatic as some would/or would like to suggest!), is that we have to get back to being a "smarter", transfer-market-wiser, financially profitable football club.

Stop paying average players vast sums of money they would now (in the current market) struggle to be paid elsewhere, stop paying over-inflated fees for average players a la Hendo, Sharp, Cotterill, Howard, Taylor, Ched etc etc, stop investing large sums of money in players with no re-sale value unless on minimal wages (im talking the likes of Ugo, Speed, Camara - as good as some of them have been), and continue to invest on players with potential to improve or generate future cash flows (Ward, Willo, Yeates etc), start to consider taking gambles on utilising any potential from the Academy rather than investing significant somes on average 'do-a-job' players (Taylor's shocking contributions should/could have surely been equalled by a promising youngster?)

But most improtantly, get a manager who is capable of achieving all of this - imho - Blackwell is not that man, his success in the transfer market is average at best, and what he does invest is mainly in over-priced/over-rated players who are still unproven successes in promotion winning sides - i do not trust him to utilise what little funds we will now have in the same way others (O'Driscoll, Warnock, Coppell, McCarthy, Pearson) might, and i just dont see in him the ability, self-belief or charisma capable of achieving our newly-set goals.

UTB!

Good post BB.

 

[Bramley]

The last accounts didn't include the sales of Naughton, Walker and Kilgallon for £10M. Surely we've already made up the shortfall for this season and next?

What you've got to remember Sothall is Len is an expert in, amongst most other things...Insolvency, Accountancy, Global Finance and Commerce, International Real Estate, Modern Football Tactics, Political Spin, and holds a MSc in Circular Arguments and PHD in Self-Righteousness.

 

[alcoblade]

The last accounts didn't include the sales of Naughton, Walker and Kilgallon for £10M. Surely we've already made up the shortfall for this season and next?

I thought they did along woith the Tevez cash, hence the football club actually making a profit, but I'm happy to be corrected. Are you sure of this?

UTB

 

[Chingo]

Surely the best thing to come of all this mess (although i would still argue the "mess" is no where near as dramatic as some would/or would like to suggest!), is that we have to get back to being a "smarter", transfer-market-wiser, financially profitable football club.

Stop paying average players vast sums of money they would now (in the current market) struggle to be paid elsewhere, stop paying over-inflated fees for average players a la Hendo, Sharp, Cotterill, Howard, Taylor, Ched etc etc, stop investing large sums of money in players with no re-sale value unless on minimal wages (im talking the likes of Ugo, Speed, Camara - as good as some of them have been), and continue to invest on players with potential to improve or generate future cash flows (Ward, Willo, Yeates etc), start to consider taking gambles on utilising any potential from the Academy rather than investing significant somes on average 'do-a-job' players (Taylor's shocking contributions should/could have surely been equalled by a promising youngster?)

But most improtantly, get a manager who is capable of achieving all of this - imho - Blackwell is not that man, his success in the transfer market is average at best, and what he does invest is mainly in over-priced/over-rated players who are still unproven successes in promotion winning sides - i do not trust him to utilise what little funds we will now have in the same way others (O'Driscoll, Warnock, Coppell, McCarthy, Pearson) might, and i just dont see in him the ability, self-belief or charisma capable of achieving our newly-set goals.

UTB!

So we should turn into Crewe ?

It is proven over the years that any good "prospect" we have is a goner for the 1st half decent offer , with that approach we will be treading water at best ... if not regressing !





Oh and before you ask I don't have a solution (apart from investment) ... seems like we're snookered and in for a long period of stagnation , cheers Kev.

 

[Rustyblade]

lets be honest, there probably isnt a professional club in englnad that doesnt own any debt. look at manchester united, arguably the biggest club in the world, sells the most merchandise, and they have redidulous debts.

Not quite.

Man U was extremely profitable until the Glazers bought it. The problem was that they borrowed the money to buy it in the name of the club itself. Hence the debt.

Bugger all to do with the revenue streams or the way it's run. Just a totally dodgy and yet wholly legal bit of business. The leveraged buyout.

 

[Sothall_Blade]

I thought they did along woith the Tevez cash, hence the football club actually making a profit, but I'm happy to be corrected. Are you sure of this? UTB

The Kyles were sold on the 22nd July and United's Financial Yearend is June, so on the face of it their sales shouldn't be included.

However, I'm not an accountant and maybe there's a way of shuffling the money around? Not quite sure what United would gain by doing that?

 

[Nick Jansky]

I am struggling to believe that people are suggesting that we go into Administration. That is what a business does when it is insolvent and can no longer pay it's creditors.

We are not insolvent, and we are a very long way from being insolvent.

Let's have a reality check here folks - yes, we are in debt, but so is virtually every other club in the land. The difference is that in many cases their debts are not secured on assets such as the ones that exist within the group. And we are quite capable of servicing that debt, although it means we have to be "prudent". However, we are still investing in players, both in terms of transfer fees & wages (unlike many, many other clubs), which tells us that any sort of meltdown is hardly imminent. Unfortunately, Beighton hits the nail very squarely on the head above, when he questions the effectiveness of the investments in playing staff that we have made - that, for me, is the biggest issue.

Yes, cash is tight at the moment, but less so than it is for a whole host of other clubs - who, exactly, is lashing out on large transfer fees just now? And players in virtually every club in the land will find that when they come to the end of their current lucrative contract they will not be renewing on anything like the same terms, as it has become unsustainable.

Our current position is down to a number of things:

Making a sound business decision to invest in assets that, in normal times, would generate a healthy return which could be used to part fund the football side of things.

Unfortunately this investment was made shortly prior to a collapse in asset prices, particularly in commercial property, which very few people predicted - certainly nobody on here.

At the same time, banks decided that repairing their balance sheets was paramount, and stopped lending to all but the soundest bets - which doesn't include football clubs or property development. Fortunately KM had the wherewithal to lend what the banks wouldn't.

We failed to get back to the PL before the parachute payments ran out.

But, to reiterate, we are not "struggling to remain solvent" and the debt, (although obviously I wish it wasn't there, but I also wish my mortgage and bank overdraft weren't there) appears to be reasonably manageable.

 

[Beighton_Blade]

So we should turn into Crewe ?

It is proven over the years that any good "prospect" we have is a goner for the 1st half decent offer , with that approach we will be treading water at best ... if not regressing !

Oh and before you ask I don't have a solution (apart from investment) ... seem like we're snookered and in for a long period of stagnation , cheers Kev.

Why does:

investing smaller amounts in players with potential (and a future profitable value) = failure?

Thats my whole point! With KB as manager, i feel that is exactly what the answer will be as we set upond reducing our wage bill next term.

However, that DOESN'T have to be the case - the likes of Donny, Barsnley are both performing similarly to us on much reduced resources - why does us matching thier spending therefore mean a lower standard of success?

Managers at clubs like Swansea, Leicester, Cardiff (barring Chorpa), WBA (to an extent), Reading, Wolves, Burnley (grrr), Hull and Stoke have all, recently enjoyed success despite having much lower squad bills than we enjoy at present - why? because they have spent wisely, been managed carefully, and have had managers that get the best our of thier teams by investing in a balanced team, and spending on clever acquisitions (e.g. Doyle, Kightly, Ebanks-Blake, Scotland, Pratley, Dorrans, Koren, Jerome Thomas, Fuller, Hunt bros., Kitson, Ambrose, and to be fair Jamie Ward - all signed by teams not known for paying huge sums of money, yet have invested wisely and improved the team.)

We are one of the top 4 or 5 payers in this league, so why, if success is directly equal to spending, are there a good 3 or 4 teams above us, and another 5 or 6 just behind us, who are all paying much less than we are in wages?

Of course the solution we all hope for is either i) new investment or ii) KM writing off our debt to him and us just having the 'mortgage' on the Hotel remaining - thus freeing more revenue for the team spending.

However, without this, we need to accept, and appoint the best person, capable of achieving under these new circumstances - we have done it before (Warnock (eventually) cracked it spending about 1/8th of the money Blackwell has), and other managers frequently do so. IT CAN BE DONE and our reduced spending is NO EXCUSE for why it can not be done again here!

In the premiership i would say your arguments hold more water, but in this league, it is more about building a strong, balanced, positive and confident team rather than spending bid money on a few quality players!

UTB!

 

[Nick Jansky]

Why does:

investing smaller amounts in players with potential (and a future profitable value) = failure?

Thats my whole point! With KB as manager, i feel that is exactly what the answer will be as we set upond reducing our wage bill next term.

However, that DOESN'T have to be the case - the likes of Donny, Barsnley are both performing similarly to us on much reduced resources - why does us matching thier spending therefore mean a lower standard of success?

Managers at clubs like Swansea, Leicester, Cardiff (barring Chorpa), WBA (to an extent), Reading, Wolves, Burnley (grrr), Hull and Stoke have all, recently enjoyed success despite having much lower squad bills than we enjoy at present - why? because they have spent wisely, been managed carefully, and have had managers that get the best our of thier teams by investing in a balanced team, and spending on clever acquisitions (e.g. Doyle, Kightly, Ebanks-Blake, Scotland, Pratley, Dorrans, Koren, Jerome Thomas, Fuller, Hunt bros., Kitson, Ambrose, and to be fair Jamie Ward - all signed by teams not known for paying huge sums of money, yet have invested wisely and improved the team.)

We are one of the top 4 or 5 payers in this league, so why, if success is directly equal to spending, are there a good 3 or 4 teams above us, and another 5 or 6 just behind us, who are all paying much less than we are in wages?

Of course the solution we all hope for is either i) new investment or ii) KM writing off our debt to him and us just having the 'mortgage' on the Hotel remaining - thus freeing more revenue for the team spending.

However, without this, we need to accept, and appoint the best person, capable of achieving under these new circumstances - we have done it before (Warnock (eventually) cracked it spending about 1/8th of the money Blackwell has), and other managers frequently do so. IT CAN BE DONE and our reduced spending is NO EXCUSE for why it can not be done again here!

In the premiership i would say your arguments hold more water, but in this league, it is more about building a strong, balanced, positive and confident team rather than spending bid money on a few quality players!

UTB!

Nail. On. Head. Exactly right.

And as players everywhere come out of contract, we won't have to spend as much in any case. Players wages below the PL are going to come down with an almighty crash, as football clubs can no longer borrow to finance them. But, despite our debt, we can still afford more than most in this league.

 

[Micalijo]

Nick, excellent post and hard to disagree with anything, but even so I have a nasty taste in my mouth caused by the thought that McCabe (although not predciting the recession) went into the JV knowing that if things did go belly up with the economy and the property, he had the cushion of the SUFC Ltd assets to back it up. By this I am referring to the ground, the players and hopefully Premier football. That's only my take on it, I know nothing of the detail obviously

I totally agree that on paper the idea looked brilliant but my take on it is that a chairman should make money separate from the football club and if he so chooses invest those profits into the club. The club should not be at such direct risk from a downturn as seems to be the case know - and by risk I don't mean recession, rather the sad fact that any decent players are being sold.

I find the comments from Birch etc that the recession has affected all businesses in all industries a bit rich when I don't think the recession has affected us at all really in terms of paying customers - season tickets still huge last season, advertising boards pretty full, platinum seems pretty full all the time etc.

 

[LouTheBlade]

lets be honest, there probably isnt a professional club in englnad that doesnt own any debt. look at manchester united, arguably the biggest club in the world, sells the most merchandise, and they have redidulous debts.

This post is spot on. ALL football clubs have debt and I mean ALL of them. The most horrendous and unmanageable levels of debt are found in the PL.

This is fairly common knowledge to most but after seeing several published accounts and also having a little 'insider knowledge' of certain clubs, you would be alarmed beyond any expectations at what some clubs are saddled with. Particularly the big ones!

Football = lunacy and has done for many years. Its being governed and run by the wrong people and that's why its in a complete fucking mess. Banks will lend all day long to football clubs because they know they will get their money back on interest alone.

Many people think that if a club goes into administration, that's it - no more money owed. Or if a club is taken over by a big investor and he pays off the debt, great - its all paid back and not a penny more.....WRONG! Banks love lending money to football clubs because they know it will take them donkey's years to pay the money back and in the meantime the massive interest rate they put on it nets them a wedge of profit. The only losers are the clubs and their supporters........

We need to wake up and say no, not anymore. We're being taken for mugs. When a club reduces its debt/outgoings etc. how often do you see supporters' football related outgoings reduced?! I'll open up the floor on that one

 

[alcoblade]

So we should turn into Crewe ?

It is proven over the years that any good "prospect" we have is a goner for the 1st half decent offer , with that approach we will be treading water at best ... if not regressing !

Care to list the decent prospects we've let go too easily and what they went on to do? It's not a very long list of getting it wrong I suspect.

Whilst we're all putting the boot into the club, let's not get carried away and perpetuate the myth that on the whole, we undersell our players.

UTB

 

[Sothall_Blade]

Unfortunately this investment was made shortly prior to a collapse in asset prices, particularly in commercial property, which very few people predicted - certainly nobody on here.

The interesting thing is that Kevin McCabe did kind of predict the collapse in asset prices. In August 2007, he sold most of his business to Valad and made £150M personal profit.

He was quoted as saying ‘We were a European company. OK, the UK has peaked, but Europe hasn’t, and Valad has bought a European company. Also, it has bought a business, not just a portfolio.'

 

[lenners]

I seem to recall mention of the £4.5m needed in the context of United as a going concern in the last set of accounts.

 

[Beighton_Blade]

...I have a nasty taste in my mouth caused by the thought that McCabe went into the JV knowing that if things did go belly up...he had the cushion of the SUFC Ltd assets to back it up. By this I am referring to the ground, the players and hopefully Premier football. That's only my take on it, I know nothing of the detail obviously

I totally agree that on paper the idea looked brilliant but my take on it is that a chairman should make money separate from the football club and if he so chooses invest those profits into the club. The club should not be at such direct risk from a downturn as seems to be the case know - and by risk I don't mean recession, rather the sad fact that any decent players are being sold.

I'm sorry if what i am about to say sounds at all arrogant or pompous but "WTF!!?"...

SUFC will never (like 99.9% of football clubs) be a 'cushion' for owners to rely on if there other interests suffer - more accurate is that their other interests act as a cushion for the football clubs!

The joint ventures, and investments in non-football related activities (Hotel etc) were all done in the hope of generating further income FOR the club, a means of sustaining the football clubs entirely and independently - in other words - a means of becoming self-sufficient. In this way, we would no longer rely on KMc, or any other future owner/invester, as the club would fund itself. Unfortunately, the biggest of these investments (Hotel) came at a time when the economy collapsed, and as such will not represent its real value (and revenue) until another 12 months or so (much like most newly-built Hotels tbh!).

The idea is a morally and financially astute, genuine and long-term desire to have this club become "self-funding". The fact that we have experienced the biggest recession in years is simply hard luck and bad timing, and the fact we have (so far) been unable to benefit from our existing resources (and parachute payments in the last two years) by building a promotion-winning squad is the fault of little else other than (mainly) the previous manager and (now to a smaller degree) his successor.

We have in the past 10 years, relied on KMc and his groups as a 'cushion' for our operating and functioning - to now criticise this set up as the incomes are no longer forth-coming is a little naive and harsh imho. Scarborough and KMc etc are certainly not using SUFC as a cushion, either now or in the past, and their loans which we are now indebted into paying have been given to us for a reason (we the club needed cash from them NOT them from us! - so how can they be reliant on US?). The fact that KMc is no longer willing to subsidise us further means that we simply have to become "smarter" and more effective in our spending (transfers), and that we hope for our investments to bear fruit (post-recession) soon - if they do, then the investments will have indoubtedly proved successful!

You ask the chairman of the 92 professional league clubs in this country how much their wealth and interests 'rely' on their clubs, and i'll guarantee 99.9% of them say "zilch", and moreso, most will say it "reduces their wealth" i.e. football clubs are loss making activities, and until such time where this is no longer the case (as McCabe was/is hoping for us with his actions), then owners are actually funding them through thier own wealth, not the other way around!

summed up perfectly by Spurs chairman Levy who recently said something like if you want to run a football club, be prepared to lose money.

Just because KMc is no longer willing to fund us beyond our own means, does not mean he is using us as a cushion, nor does it mean we have to inherently become less succesfull, which is where my plea for smarter and better management come in!!

UTB!

 

[Houso]

I know very very VERY little about accountancy and I've only had a quick squint through the last accounts available on the website.

I'm curious about our shortfall of 4.5 million that I keep hearing bandied about. Won't this be covered (and then some) by player sales (i.e. the Kyles) and also a reduction in playing staff wages?

On the last set of accounts - we have player sales of 7.4 million. Who is included in that figure?
- Beattie: 2.5
- Hulse: 1.75
- Shelton: 1.0
- Stead: 750,000
- Armstrong: 500,000
- Tonge: 1.0
These are pretty much guesses for the most part, but they come to around 7.5million. I keep hearing that the Kyles' sales will have been included in the last accounts, but this would suggest otherwise surely?

Now the wages from some of the above, not to mention players like Ugo, Webber, Hendrie, Sun etc, will have been included in last years accounts. So, assuming we've reduced the wage bill and increased sales; would the shortfall not already be covered? Especially given that we've also sold players such as Killa, Carney, Howard and Bromby.

I'm happy to be proven wrong given my proviso at the start of the post.

 

[Micalijo]

Beighton, like I said I agree with Nick, and therefore I pretty much agree with what you are saying. Looked good on paper etc but haas gone wrong for whatever reason for now.

I don't like McCabe and I don't like what he has done, no matter how genuine and well intentioned it was (and I agree it was with the best interest at heart). You have to read mys posts with that in mind - it's just the way it is for me.

I do think that there is an argument to say that Realty and Scarborough are struggling and that player sales have been accelerated in order to meet banking requirements. That is what I meant by cushion. You disagree with that I assume - fair enough

You've put alot of effort into rubbishing a point of view that I don't hold but it's a good post, enjoyed it

I don't understand why the hotel will suddenly become a good deal if it isn't now. we get a set annual income of Copthorne which I don't believe covers the full mortgage costs. Why will this change? I think cash is needed from other areas f the business to pay for the hotel.

I totally agree with you re management. These cuts should not mean we give up on top 6 football. we have huge advantages still over vast majority in the tier.

 

[alcoblade]

I'm sorry if what i am about to say sounds at all arrogant or pompous but "WTF!!?"...

SUFC will never (like 99.9% of football clubs) be a 'cushion' for owners to rely on if there other interest suffer - more accurate is that their other interests act as a cushion for the football clubs!

The joint ventures, and investments in non-football related activities (Hotel etc) were all done in the hope of generating further income FOR the club, a means of sustaining the football clubs entirely and independently - in other words - a means of becoming self-sufficient. In this way, we would no longer rely on KMc, or any other future owner/invester, as the club would fund itself. Unfortunately, the biggest of these investments (Hotel) came at a time when the economy collapsed, and as such will not represent its real value (and revenue) until another 12 months or so (much like most newly-built Hotels tbh!).

The idea is a morally and financially astute, genuine and long-term desire to have this club become "self-funding". The fact that we have experienced the biggest recession in years is simply hard luck and bad timing, and the fact we have (so far) been unable to benefit from our existing resources (and parachute payments in the last two years) by building a promotion-winning squad is the fault of little else other than (mainly) the previous manager and (now to a smaller degree) his successor.

We have in the past 10 years, relied on KMc and his groups as a 'cushion' for our operating and functioning - to now criticise this set up as the incomes are no longer forth-coming is a little naive and harsh imho. Scarborough and KMc etc are certainly not using SUFC as a cushion, either now or in the past, and their loans which we are now indebted into paying have been given to us for a reason (we the club needed cash from them NOT them from us! - so how can they be reliant on US?). The fact that KMc is no longer willing to subsidise us further means that we simply have to become "smarter" and more effective in our spending (transfers), and that we hope for our investments to bear fruit (post-recession) soon - if they do, then the investments will have indoubtedly proved successful!

You ask the chairman of the 92 professional league clubs in this country how much their wealth and interests 'rely' on their clubs, and i'll guarantee 99.9% of them say "zilch", and moreso, most will say it "reduces their wealth" i.e. football clubs are loss making activities, and until such time where this is no longer the case (as McCabe was/is hoping for us with his actions), then owners are actually funding them through thier own wealth, not the other way around!

summed up perfectly by Spurs chairman Levy who recently said something like if you want to run a football club, be prepared to lose money.

Just because KMc is no longer willing to fund us beyond our own means, does not mean he is using us as a cushion, nor does it mean we have to inherently become less succesfull, which is where my plea for smarter and better management come in!!

UTB!

Good post, but rightly or wrongly I take ikssue with the bit highlighted in bold. I would read that as though we've been living on handouts, gifts from McCabe. As is clear, he's put money in - but he's taking it out, with plently of interest. For McCabe, read RBS, Lloyds, or any other banking institution.

In my naivity I thought he was building up the other businesses with rights issues and funding from the premiership. When I realised it was with £50M of debt - that would have been £80M had we not sold the two Kyles and won Tevez - any sense of oweing McCabe gratitude for our sutuation was evaporated.

UTB

 

[Houso]

Good post, but rightly or wrongly I take ikssue with the bit highlighted in bold. I would read that as though we've been living on handouts, gifts from McCabe. As is clear, he's put money in - but he's taking it out, with plently of interest. For McCabe, read RBS, Lloyds, or any other banking institution.

In my naivity I thought he was building up the other businesses with rights issues and funding from the premiership. When I realised it was with £50M of debt - that would have been £80M had we not sold the two Kyles and won Tevez - any sense of oweing McCabe gratitude for our sutuation was evaporated.

UTB

See my post above. Again, I'm willing to be proven wrong and this is more curiosity than argument. But won't the Kyle cash be in the next set of accounts and not these?

 

[lenners]

Houso,
You could look at it in fairly simple terms.
Season ticket and matchday income will probably be around £6 to £7m. Wages will be double that.
We'll have tv money, not much, and commercial income but not much elsewhere.
Aside from the wage bill, we have huge commitments to repay McCabe and our bank loan. That's before contemplating the cost of Chengdu which I think drained £2m last year.
We simply don't create enough income to cover what's needed. Player sales will have helped but unlikely to have helped enough.

 

[alcoblade]

See my post above. Again, I'm willing to be proven wrong and this is more curiosity than argument. But won't the Kyle cash be in the next set of accounts and not these?

I thought not but don't have access to the accounts at the moment so I'm not sure now you ask. Either way, we have far too much debt for my liking and the interest payments, stated in the accounts, are going to leave us short of cash. The numbers may vary a little, the conclusion doesn't, for me.

UTB

 

[alcoblade]

Houso,
You could look at it in fairly simple terms.
Season ticket and matchday income will probably be around £6 to £7m. Wages will be double that.
We'll have tv money, not much, and commercial income but not much elsewhere.
Aside from the wage bill, we have huge commitments to repay McCabe and our bank loan. That's before contemplating the cost of Chengdu which I think drained £2m last year.
We simply don't create enough income to cover what's needed. Player sales will have helped but unlikely to have helped enough.

I agree with the gist of that, but our wagebill will be much less than that next season, I believe. Speed and Naysmith alone would, I'd hazard a guess, wipe £2M a year from the current number. Other contracts will be seriously negotiated downwards - hence the stalling over Monty's deal.

UTB

 

[Houso]

Houso,
You could look at it in fairly simple terms.
Season ticket and matchday income will probably be around £6 to £7m. Wages will be double that.
We'll have tv money, not much, and commercial income but not much elsewhere.
Aside from the wage bill, we have huge commitments to repay McCabe and our bank loan. That's before contemplating the cost of Chengdu which I think drained £2m last year.
We simply don't create enough income to cover what's needed. Player sales will have helped but unlikely to have helped enough.

That's all understandable Len, and when put in terms like that, it's worrying.

On the other hand, surely you can only go on the last accounts and then take into consideration changes in the current tax year.

So, season tickets will remain around the same I assume. Repayments will remain around the same. Chengdu may cost us an extra million. Player sales will increase. Player purchases will drop. Player wages will drop. Tevez income will continue.

Does that not mean our next accounts will look better? Or am I missing something?

 

[Beighton_Blade]

...I don't like McCabe and I don't like what he has done, no matter how genuine and well intentioned it was (and I agree it was with the best interest at heart)...

...I don't understand why the hotel will suddenly become a good deal if it isn't now. we get a set annual income of Copthorne which I don't believe covers the full mortgage costs. Why will this change? I think cash is needed from other areas f the business to pay for the hotel...

Fair enough, although (and im no KMc lover btw) i just dont see the reasoning behind the anger towards a guy who has genuinely done his best for SUFC and who without his interventions we would be in a much less attractive state now, and would undoubtedly not be the club we are today (i wonder if our expectations would be so high if he had never been chairman?).

I can forgive the so-called bad decisions (and bad luck) with the mess we are now in as they were done with the best of intentions and in most cases would have (and could still) proven an absolute genuis and astute move to making us self-sufficient - had this been all done and KMc was calling in his loans right now and demanding all his money and walking away I would say different, but there is no signs of this being the case!

re. the bold bit about the hotel - a building such as the hotel is nearly always unprofitable and loss making for the first 12-18 months (initial decorating, renovations, ammendments, employee costs, with a lack of revenues and minimal operations make sure of that!) - after this sort of period is when a return starts to be realised - now can you see the logic and benefit in that? An asset that is not yet earning its 100% potential revenue is unlikely to show a profit immediately, but thats not to say it wont (in fact in most hotels' cases it is pretty much accepted!)

If the hotel in the next 12 month returns a profit (and remember much of its running costs is covered by the agreement with Copthorne etc), and then does so for the next 20 years, then has it not proven a good deal?

...as though we've been living on handouts, gifts from McCabe. As is clear, he's put money in - but he's taking it out, with plently of interest. For McCabe, read RBS, Lloyds, or any other banking institution...In my naivity I thought he was building up the other businesses with rights issues and funding from the premiership. When I realised it was with £50M of debt...any sense of oweing McCabe gratitude for our sutuation was evaporated.

But, tbf, for much of his tenure WE HAVE been living on his handouts, prior to our most recent extravegances (sp?) on the ground, chegdu, hotel, investments etc he (and his co's) has underwritten millions of pounds in share issues in United (shares which anyone could have bought if they'd so chosen), all the while KMc knew he was more than likely going to be left to buy them hisself - he has ammassed substantion shareholding through this, spending well over £10m i'd imagine, he has bought the shareholdings of various other parties for similar expenses, and allowed united to join in some of his companies ventures when he could quite easily have left it for himself (some of the investment sales have gained profits in the past).

There comes a time when he can no longer continue this, and like you say he is now simply a creditor, however, despite earning substantial interest (but nothing compared to what might be available to him elsewhere for the sums owed by us), he has stated no intention of "calling in" these debts, so barring any takeover or a complete fall-out, this debt is not a problem.

You try asking for the same sort of security (especially now) from the likes of HSBC, LLoys, Barclays or even the Co-op and see what they offer. there is no suggestion that KMc is even thinking of calling these debts in, and for all we know he could negate some of these in the event of any takeover, or simply convert them too into further shareholdings or (unlikely but possible) he writes them off. As long as this remains the case we have nothing to fear from McCabes "debt".

UTB!