This debt thing

[AlienWoodward]

Sorry for visiting old ground but ...
Could someone please make it a nice simple approximite figure as to how much or how little debt we are supposedly in.
Taking into account what we do and don't own. All I am getting at the moment are porkers telling me we are in a right old mess.
Are we really,because i'm afraid I never look at the figures and I wouldn't know where to start if I did.
Anyone help nice and simply ?
Ta
UTB

 

[alcoblade]

Sorry for visiting old ground but ...
Could someone please make it a nice simple approximite figure as to how much or how little debt we are supposedly in.
Taking into account what we do and don't own. All I am getting at the moment are porkers telling me we are in a right old mess.
Are we really,because i'm afraid I never look at the figures and I wouldn't know where to start if I did.
Anyone help nice and simply ?
Ta
UTB

I'd guess (that's all it is) that it's about £20M, owed to McCabe.

The sale of the assets, followed by future Tevez money, should wipe out "external" debt - according to the club. I presume "internal" debt is that we owe MCCabe - and I believe that was about £20M, though he may have taken some payment in the recent shake-up.

The 2 big issues are;

1. Reducing the wagebill in line with current income (preventing further debt) - which requires contracts for dross (Evans etc) to expire, or for us to find an idiot willing to pay.

2. How much interest McCabe actually charges.

Based on this I don't think the financial state is too bad - providing we can ride out the next 18 months. What we need to do is ensure that we stop paying average players world class salaries.

UTB

 

[sheffielder]

the way I understand it is like this. McCabe has put XX amount of money in the club and he considers that what the club owes him. If Milan wanted his money back out of the pigs they would owe him 15million once all the debts etc; have been paid. I wouldn't worry too much because the real estate of Sheff Utd, the Lane and surrounding areas is worth more than the money we 'owe' McCabe and he aint going anywhere. Unfortunately he needs to give us some move guv'ner for us really to be able to stand on our own feet in the next couple of years

 

[Highbury_Blade]

I'd guess (that's all it is) that it's about £20M, owed to McCabe.

The sale of the assets, followed by future Tevez money, should wipe out "external" debt - according to the club. I presume "internal" debt is that we owe MCCabe - and I believe that was about £20M, though he may have taken some payment in the recent shake-up.

The 2 big issues are;

1. Reducing the wagebill in line with current income (preventing further debt) - which requires contracts for dross (Evans etc) to expire, or for us to find an idiot willing to pay.

2. How much interest McCabe actually charges.

Based on this I don't think the financial state is too bad - providing we can ride out the next 18 months. What we need to do is ensure that we stop paying average players world class salaries.

UTB

So you're not concerned about the 5.2m we have to find from somewhere in the next 12 months?

 

[alcoblade]

So you're not concerned about the 5.2m we have to find from somewhere in the next 12 months?

It will come from 2 sources, I believe. Offlaoding players (point 1) - and let's be honest there's little damage that can be done there, or McCabe's pocket (point 2).

The £5.2m was rolled into the accounts that also had us externally debt free by 2012 (?), so that being the case I think my points hold.

UTB

 

[sheffielder]

So you're not concerned about the 5.2m we have to find from somewhere in the next 12 months?

I think the club knows we have to bring in players from lower leagues and the academy which will save money in wages on players who are getting overpaid. Nosworthy himself would be roughly a 1million saving next season. The club needs to build to save and I think they know it

 

[alcoblade]

A further point re crowing pig fans. They weren't actually paying off much interest to the bank. Most of it had been "parked". It's then questionable that the writing off of this debt will significantly improve their financial state on a day to day basis. Clearly is puts out the fire, but I can't see any wholesale spending coming, unless Manderic wants to follow previous messy paths.

UTB

 

[DuncDisorderly]

What we can't save in the budget to meet the shortfall, KevMc will have to stump up. He is not unable to do so, just unwilling.

Wednesday also have a shortfall, about £3m this year, which guess what...Mandaric will have to stump up if they can't find savings to meet it.

There are plenty of 'tap-room accountants' who can add up a few numbers and draw the wrong conclusion. A classic example was the '£48m debt' (yes, but £68m of assets, etc) that they tried to beat us with last year...

 

[Rustyblade]

Hasn't quite a chunk of that 68 million just been sold for a quid?

 

[beightonblade]

Alien thats a very hard question to answer.

Two options read the Beano or accounts and make a guess or go to the AGM and ask Mr McCabe.
Remember one thing the accounts submitted to HMRC and Companies House are for Mr McCabes benifit and not there's !

Think about it like musical money

 

[alcoblade]

There are plenty of 'tap-room accountants' who can add up a few numbers and draw the wrong conclusion. A classic example was the '£48m debt' (yes, but £68m of assets, etc) that they tried to beat us with last year...

To be fair Dunc, I'm sure you were assuring us all that the assets outweighed the debts. Aren't you too concerned that after we've sold everything off, we still owe McCabe a chunk? It's still real debt, we can just hope that McCabe is kind with the terms.

UTB

 

[Jim Chimmerney]

We could have saved ourselves several £M by appointing SO'D in the Summer !

 

[grafikhaus]

Apparently, his £10m 'investment' will be enough to make Wendy a 'top ten' club. Dream on, pal. Dream on.

Link.

 

[Jim Chimmerney]

Apparently, his £10m 'investment' will be enough to make Wendy a 'top ten' club. Dream on, pal. Dream on.

Link.

Did he specify which division

 

[ghandi]

I think the club knows we have to bring in players from lower leagues and the academy which will save money in wages on players who are getting overpaid. Nosworthy himself would be roughly a 1million saving next season. The club needs to build to save and I think they know it

The deficit is 5m plus from the date of the accounts - so that's a the amount that has to be found in by next November. The accounts report that this 5m will be met from Investment (no chance), cost cutting( might be able to find about 1-2m) or bank borrowing (highly likely as St Kev isn't stumping up his own cash). The internal debt is misleading this is just the money McCabe is looking to take out of the club (his price for selling up) he has already gathered the assets (Hotel etcto himself in the form of his other companies. We need to pull a rabbit out of the hat in someone just stumbling on a team winning formula for nothing otherwise we will be borrowing from the banks a la Pigs and admin may well beckon. This is where McCabe buys the club back for 1p in £ or whatever and paints himself as a MM type saviour.

 

[DuncDisorderly]

To be fair Dunc, I'm sure you were assuring us all that the assets outweighed the debts. Aren't you too concerned that after we've sold everything off, we still owe McCabe a chunk? It's still real debt, we can just hope that McCabe is kind with the terms.

UTB

No, not really concerned. So long as we are paying the VAT and PAYE, which i assume we are, the only person who could really hurt the club is McCabe himself, by withdrawing his money, but as he has the debt, then what would be the point. Then there is the whole SUFC vs SUFC plc thing and where McCabe has been swapping things between pockets. If as he has said, the football club is available in 2 years without debt and owning its assets (and I've no reason to doubt him) then the debt and the secondary assets will be in the plc, and just a short jump away from being sold to scarborough to leave the club as a freestanding entity. No, not concerned at all.

Incidentally, the figure of £5.6m or whatever it was as a shortfall. As this was written last year for the accounts about this years trading, makes me wonder how much of those savings in the new player contracts, shifting of Kenny and others already dealt with..?

 

[Micalijo]

No, not really concerned. So long as we are paying the VAT and PAYE, which i assume we are, the only person who could really hurt the club is McCabe himself, by withdrawing his money, but as he has the debt, then what would be the point. Then there is the whole SUFC vs SUFC plc thing and where McCabe has been swapping things between pockets. If as he has said, the football club is available in 2 years without debt and owning its assets (and I've no reason to doubt him) then the debt and the secondary assets will be in the plc, and just a short jump away from being sold to scarborough to leave the club as a freestanding entity. No, not concerned at all.

Incidentally, the figure of £5.6m or whatever it was as a shortfall. As this was written last year for the accounts about this years trading, makes me wonder how much of those savings in the new player contracts, shifting of Kenny and others already dealt with..?

Your comments in brackets - truly hilarious!

He aint been swapping - imo he's been selling the likes of Walker and using the Tevez wedge to fund property debt - property he now owns. All fine and well within his rights etc but it aint helped the football side of things which is now little more than a laughing stock.

 

[Studge]

Well I finally managed to look briefly at a copy of the accounts yesterday and our net debt had risen from £47M to £57M that obviously does not reflect the moving of the debt contained in Sheffield united Hotels to Scarborough Estates together with the Hotel in November 2010. One other thing that caught my eye was in the resolutions to authorise and allot shares in the sums of approx £9M and £4M so I wonder if Mr Mccabe is once again planning to swap some more debt for equity.

 

[Worksop II]

Incidentally, the figure of £5.6m or whatever it was as a shortfall. As this was written last year for the accounts about this years trading, makes me wonder how much of those savings in the new player contracts, shifting of Kenny and others already dealt with..?

The £5.3 million is the predicted shortfall in the Cashflow, thats money to operate now, so its not been dealt with

We have not got the money to carry on the normal business of the club.

We can Shed Wages = Players Out

Receive Transfer Fees = Players Out

Borrow from the Bank = Increase Debt

Borrow from McCabe = Increase Internal Debt

Receive a Windfall from an Investor = Cloud Cuckoo Land

Not my read on the Situation, all from SUFC, Kev will sort it to suit himself

 

[SUFC Handsworth]

Have to admit I can't for the life of me understand how they've managed to lose £8m in the last financial year (£10m was a property write-down). They got shut of all the big hitters off the wage bill. £10m for the Kyles, £750k for Paddy, £2m for Kilgallon. Average gates for that year were just under 25k. To me it doesn't stack up unless United were proping up other businesses under our wing.

I also don't understand the obsession with getting debt down to zero in the next three years. If that happens at the cost of team building, crowds will decrease, the team will go down and we'll be in a downward spiral. Surely the debt only has to be maintained at a manageable level, especially if it means pushing team building forward and the pot of gold at the end of the tunnel (in the Premier).

---------- Post added at 11:08 PM ---------- Previous post was at 11:06 PM ----------

Have to admit I can't for the life of me understand how they've managed to lose £8m in the last financial year (£10m was a property write-down). They got shut of all the big hitters off the wage bill. £10m for the Kyles, £750k for Paddy, £2m for Kilgallon. Average gates for that year were just under 25k. To me it doesn't stack up unless United were proping up other businesses under our wing.

I also don't understand the obsession with getting debt down to zero in the next three years. If that happens at the cost of team building, crowds will decrease, the team will go down and we'll be in a downward spiral. Surely the debt only has to be maintained at a manageable level, especially if it means pushing team building forward and the pot of gold at the end of the tunnel (in the Premier).

 

[JohnDenver]

To answer the original question, it all comes down to McCabe. Do you trust him?

He invested and got us up. Then, I guess, he had wanted to sell for a profit, only for relegation to intervene. Now that he's given up on the plan, and that the diversification approach has been abandoned, he's stuck being owed a lot of money.

What he chooses to do with his dues will determine the future of SUFC.

 

[super_pig]

strikes me he used the football club money to pay off the property debt and then sell it to himself for less than the market value.. is that a correct interpretation?

 

[alcoblade]

I don't follow. After we've sold off all the assetts, we'll still be in debt to McCabe. So the armchair accountants assertions that the debt outweighed the assets was spot on.

I have the feeling that if we appointed the manager from the Red Lion, sold up and moved to Dronfield - you'd see it s a positive step forward for the club. At least planet Dunc is a happy place, and there's nowt wrong with that fella..

UTB

 

[raul]

Amen. Just imagine what he's going to be like over Xmas after eating chocoloate all day and working his way through his boxed set of Norman Wisdom dvd's with the little Disorderlys?

 

[Micalijo]

strikes me he used the football club money to pay off the property debt and then sell it to himself for less than the market value.. is that a correct interpretation?

Nearly right I think.

I think that the properties had horrendous negative equity.

Bank wanted out of the situation.

Only option was to get the loan from Santander guaranteed by the Tevez wedge.

Ie they loan us £15m. (we will also pay em a big chunk for the pleasure).

Of this £15m, the accounts say that £4m went straight to bank to reduce the hotel debt. I imagine this payment eradicated the negative equity and kept the bank happy. McCabe then buys the shares in hotel limited for £1 - which is the market value of the company ie asset worth circa £10m with a newly reduced mortgage debt/loan of £10m.

 

[raul]

Wonder what happens when the loan is due for repayment and Gollivan tell us to do one?

 

[beightonblade]

I don't know what the fook he's up to ...he's smarter than me ................. if yer trust him we'll be alreight ...... if yer don't .....well ?

 

[Maidenhead]

Nearly right I think.

I think that the properties had horrendous negative equity.

Bank wanted out of the situation.

Only option was to get the loan from Santander guaranteed by the Tevez wedge.

Ie they loan us £15m. (we will also pay em a big chunk for the pleasure).

Of this £15m, the accounts say that £4m went straight to bank to reduce the hotel debt. I imagine this payment eradicated the negative equity and kept the bank happy. McCabe then buys the shares in hotel limited for £1 - which is the market value of the company ie asset worth circa £10m with a newly reduced mortgage debt/loan of £10m.

I thought that Ccopthorne had bought an operating lease on the hotel?

Surely this will provide guaranteed (subject to continuing viability of Copthorne) future income to the owner of the freehold and will therefore have a commercial value as with any tenanted property?

The value will depend on the terms of the lease and the strength of the tenant but I would bet you £1 that the value is more than £1.

I think you're valuation is far too simplistic, not that I have any better idea of the numbers.

 

[Micalijo]

I don't know what the fook he's up to ...he's smarter than me ................. if yer trust him we'll be alreight ...... if yer don't .....well ?

Said this before BB but I think you give him way too much credit. He lived through a massive property bubble when every tom dick and harry in that geme with a bit about em was living it up. Sure he's a big hitter, one of the top men, and he knows his stuff but all yer seeing at the moment is a businessman trying to keep his head above water in very stressful times and protect his family wedge - it aint some grand plan as far as I'm concerned - unfortunately it's ruining SUFC but nowt we can do about it.

---------- Post added at 10:19 AM ---------- Previous post was at 10:15 AM ----------

I thought that Ccopthorne had bought an operating lease on the hotel?

Surely this will provide guaranteed (subject to continuing viability of Copthorne) future income to the owner of the freehold and will therefore have a commercial value as with any tenanted property?

The value will depend on the terms of the lease and the strength of the tenant but I would bet you £1 that the value is more than £1.

I think you're valuation is far too simplistic, not that I have any better idea of the numbers.

Purely illustrative my £10m.

Totally agree with lease value.

Remember Macca bought a company.

In my example, the company has assest of say £10m and a mortgage of £10m

It gets income from Copth of say £500k and has to pay say £500k costs - interest etc. Therefore it breaks even and the company value stays at £1.

If the income outweighs the annual costs - then yes - he's got a bargain.

I was just trying to give a feel for how it worked and how £1 could be market value and what bank would possibly be thinking etc etc.

£10m seems reasonable to me but if its worth £12m and bank wanted a £12m debt the same point applies

 

[beightonblade]

Said this before BB but I think you give him way too much credit. He lived through a massive property bubble when every tom dick and harry in that geme with a bit about em was living it up. Sure he's a big hitter, one of the top men, and he knows his stuff but all yer seeing at the moment is a businessman trying to keep his head above water in very stressful times and protect his family wedge - it aint some grand plan as far as I'm concerned - unfortunately it's ruining SUFC but nowt we can do about it.

---------- Post added at 10:19 AM ---------- Previous post was at 10:15 AM ----------



Purel illustrative my £10m. Totally agre with lease value.

Remember Macca bought a company.

The company has assest of say £10m and a mortgage of £10m

It gets income from Copth of £500k and has to pay £500k costs - interest etc. Therefore it breaks even and the company value stays at £1.

If the income outweighs the annual costs - then yes - he;s got a bargain.

I was just trying to give a feel for how it worked and what bank would possibly be thinking etc etc.

£10m seems reasonable to me but if its worth £12m the same point applies

hey up Mic.........

I'll stand by him with my opinion on his property acumen ....he's shit hot, on that i have no doubt.