strung out
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Paul Hardyman
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Post by strung out on Feb 12, 2015 13:31:17 GMT
I would suspect that most League 2 clubs would make a profit if they had our level of income. How do you know that? How would you know what & how much they would spend. How do you know they wouldn't piss it all away? Also, how many league 2 clubs run at a profit? Not many I bet. Not league 2, but Walsall (average attendance of just over 4,000) have posted a profit for 9 consecutive years, consistently cutting debt, while staying in league 1 pretty comfortably. Pretty sure that there are a few other examples out there too.
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faggotygas
Byron Anthony
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Posts: 1,862
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Post by faggotygas on Feb 12, 2015 13:34:32 GMT
Might be me not understanding business loans, but MSP couldn't just take the Mem if Rovers were unable to repay, could they? I mean, its worth way more than 2 million, so although they could repossess, the Mem would have to be sold and any profit after fees over the £2m returned to Rovers, wouldn't it? That's what happens with residential mortgage. The loans are secured on the Mem and day to day business cashflow. if Rovers default MSP can take possession, flog the Mem for whatever they can get ~ they won't worry as long as their debt/interest/fees are paid ~ and any balance left over (if any) is handed back to the club. Whether we can continue to play there while this happens would be up to MSP ~ they may want to sell with vacant possession.... MSP are a business and not a charity. They won't worry about the adverse publicity of putting Rovers out of business. Therefore it is vitally important that we win the case or get substantial compensation and quick. Would they not have a duty to get a reasonable price, as banks do? Guess it depends on the contract.
Ah, hell. If we lose this court case then I suppose that the best case scenario would be the directors paying off the loan but ongoing losses having to be eliminated - so a slashed wage bill and a mid-table conference football club for the time being.
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Post by fanatical on Feb 12, 2015 13:35:00 GMT
But as far as we can see the MSP money is NOT a mortgage. It is a loan with the Mem used as security. Later this year they will ask for their money back. If we can't pay then we've defaulted on the loan terms and the security passes to MSP who then own the Mem. Maybe we could negotiate a new deal either with MSP or some other Wonga style company but I assume the terms would be a lot worse than 14%. Terminology my dear Watson - a first charge on property is in any other name a mortgage. Most loans/mortgages are repayable on demand if defaulted. In this instance BOD presumably believe that determination of the Sainsburys deal would be within twelve months and are confident they will win. Looking at what the monthly repayments will be I suggest you turn up every game and buy a pie, cup of bovril and a programme to help the club.
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Post by Topper Gas on Feb 12, 2015 13:51:33 GMT
But as far as we can see the MSP money is NOT a mortgage. It is a loan with the Mem used as security. Later this year they will ask for their money back. If we can't pay then we've defaulted on the loan terms and the security passes to MSP who then own the Mem. Maybe we could negotiate a new deal either with MSP or some other Wonga style company but I assume the terms would be a lot worse than 14%. Terminology my dear Watson - a first charge on property is in any other name a mortgage. Most loans/mortgages are repayable on demand if defaulted. In this instance BOD presumably believe that determination of the Sainsburys deal would be within twelve months and are confident they will win.Looking at what the monthly repayments will be I suggest you turn up every game and buy a pie, cup of bovril and a programme to help the club. Clearly Barclays weren't and so we've turned to a Wonga type loan co., rather than being confident is it last chance saloon for Rovers & NH's own "investment" as for all we know Sainsbury's may have a "watertight" get out clause. Perhaps if we lose the Sainsbury action either a trip to Wembley &/or promotion could be our saviour?
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faggotygas
Byron Anthony
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Post by faggotygas on Feb 12, 2015 13:55:02 GMT
But as far as we can see the MSP money is NOT a mortgage. It is a loan with the Mem used as security. Later this year they will ask for their money back. If we can't pay then we've defaulted on the loan terms and the security passes to MSP who then own the Mem. Maybe we could negotiate a new deal either with MSP or some other Wonga style company but I assume the terms would be a lot worse than 14%. No, I'm certain that MSP would be able to possess the Mem and force a sale, but they would only be entitled to their loan back plus interest and fees as agreed in the contract.
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irishrover
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Post by irishrover on Feb 12, 2015 14:12:31 GMT
I would suspect that most League 2 clubs would make a profit if they had our level of income. But how many of them actually do make a profit? I think there is a tendency to live beyond your means in football with speculate to accumulate being the strategy and luck and chemistry being the missing ingredients in most cases. Of course it is possible to build a break even operating model but you will always be overtaken by your more ambitious or reckless peers. People don't protest that loudly at BRFC over the level of losses, they protest if the board won't fund a signing or if we miss out on a player to another club. Thats not an excuse for the mess we're in, its a fact. As the chairman says in his report, not getting any Sainsburys money will be hard to contemplate. I think if a plan is presented to fans and put in the proper context and a culture of 'we're all in this together' then I actually think most would accept Rovers cutting their cloth and trying to live more within their means (not miracles - it would be a slow process). In fact we have an example of that within the club's own history - people didn't moan and bleat about Rovers ability to spend when we were at Twerton. They accepted our limitations and it was actually important in binding the club together. There'll always be a few discontents with an unrealistic view of what we should be spending but in general it seems to be me that the fanbase will respond provided that the people at the top of the club are open about it, have a clear strategy and make people feel properly included in the club. People won't accept this though where the decision makers are secretive, don't have a clear plan and create an 'us and them' environment between the board and the fans. It just invites people to assume the worse of those who make the decisions in absence of a clear strategy or unifying leadership. I'd say a transformation from the one culture to the other has been one of the causes of our struggles.
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brizzle
Lindsay Parsons
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Post by brizzle on Feb 12, 2015 14:19:32 GMT
I'm not sure how it compares to other clubs at L2 level but that wage bill illustrates why, outside of the premiership, it is very difficult to find a sustainable business model. We knew the MSP money would probably be expensive but, at 14.4% annualised, let's hope that a financial settlement is reached in May. We don't want to be in the uncomfortable position of having to ask for an extension when the loan falls due for repayment "later this year". Points from this: ~ the directors either haven't got the cash or don't want to fund the club further - if we are that desperate to be honest I would rather they lent the club the money and charged interest. ~ MSP is the type of company that will not take prisoners. They will want their money repaid on the dot. If not refinancing will come at an extortionate cost. ~ the final decision on the Sainsbury contract needs to come quickly and hopefully it will be in our favour because if not.....I think that this point was touched upon in a recent post, when exactly will the legal process be at an end? Or put more bluntly, is there any appeal process available to the unsuccessful party? After all we have all witnessed how the legal processes have be used to the disadvantage of BRFC over the past few years.
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irishrover
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Post by irishrover on Feb 12, 2015 14:23:26 GMT
Points from this: ~ the directors either haven't got the cash or don't want to fund the club further - if we are that desperate to be honest I would rather they lent the club the money and charged interest. ~ MSP is the type of company that will not take prisoners. They will want their money repaid on the dot. If not refinancing will come at an extortionate cost. ~ the final decision on the Sainsbury contract needs to come quickly and hopefully it will be in our favour because if not.....I think that this point was touched upon in a recent post, when exactly will the legal process be at an end? Or put more bluntly, is there any appeal process available to the unsuccessful party? After all we have all witnessed how the legal processes have be used to the disadvantage of BRFC over the past few years. Yes - I asked that question in another thread and no one seems to have provided an answer to it yet.
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brizzle
Lindsay Parsons
No Buy . . . No Sell!
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Post by brizzle on Feb 12, 2015 14:46:14 GMT
I think that this point was touched upon in a recent post, when exactly will the legal process be at an end? Or put more bluntly, is there any appeal process available to the unsuccessful party? After all we have all witnessed how the legal processes have be used to the disadvantage of BRFC over the past few years. Yes - I asked that question in another thread and no one seems to have provided an answer to it yet. If it were winner takes all on the day, that would be one thing. But given the respective assets of Sainsburys and BRFC, should we head off down the appeals route then we wouldn't get too far, but Sainsburys would surely succeed given their resources. They could effectively ''buy'' their success. But of course this is all speculation, as we don't know the answer to the question . . . but there must be one.
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Post by Blue Mist on Feb 12, 2015 14:49:10 GMT
I think that this point was touched upon in a recent post, when exactly will the legal process be at an end? Or put more bluntly, is there any appeal process available to the unsuccessful party? After all we have all witnessed how the legal processes have be used to the disadvantage of BRFC over the past few years. Yes - I asked that question in another thread and no one seems to have provided an answer to it yet. The decision from high court judge may be appealed to the court of appeal or House of Lords; the decision of court of appeal may be appealed to the House of Lords. I can see this going all the way to the top.
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brizzle
Lindsay Parsons
No Buy . . . No Sell!
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Post by brizzle on Feb 12, 2015 15:22:18 GMT
Yes - I asked that question in another thread and no one seems to have provided an answer to it yet. The decision from high court judge may be appealed to the court of appeal or House of Lords; the decision of court of appeal may be appealed to the House of Lords. I can see this going all the way to the top. Thanks for that Blue Mist. Unlike you though I can't see it going ''all the way to the top,'' because BRFC surely couldn't afford to fund the huge legal costs that would be involved. I think that they are hoping for a first round KO, or alternatively a compromise settlement.
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vaughan
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Post by vaughan on Feb 12, 2015 15:22:56 GMT
I wrote this last December on the Forum and I maintain this. **** I think it's a lot worse than any of us dare think. We have sold out effectively to a new set of credit financiers (MCP - DYOR) who will effectively strip us of the Mem asset. If UWE folds, then Higgs and Co will get their money back via limited compensation deal and the ground will go via MCP if we can not pay back loans. We are tonight looking at the end-game. Read more: gasheads.org/thread/1898/sainsburys-mem#ixzz3RXobzesT
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LPGas
Stuart Taylor
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Post by LPGas on Feb 12, 2015 15:26:35 GMT
How do you know that? How would you know what & how much they would spend. How do you know they wouldn't piss it all away? Also, how many league 2 clubs run at a profit? Not many I bet. Not league 2, but Walsall (average attendance of just over 4,000) have posted a profit for 9 consecutive years, consistently cutting debt, while staying in league 1 pretty comfortably. Pretty sure that there are a few other examples out there too. Walsall make no money from football, but on top of their stadium they have large advertising hoardings which are VERY visible from the M6. That is where the bulk of their income comes from
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Deleted
Joined: January 1970
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Post by Deleted on Feb 12, 2015 15:28:58 GMT
Not league 2, but Walsall (average attendance of just over 4,000) have posted a profit for 9 consecutive years, consistently cutting debt, while staying in league 1 pretty comfortably. Pretty sure that there are a few other examples out there too. Walsall make no money from football, but on top of their stadium they have large advertising hoardings which are VERY visible from the M6. That is where the bulk of their income comes from And very good conference facilities (no puns please) bang in the heart of the motorway network too.
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Post by shineongas on Feb 12, 2015 15:34:48 GMT
Walsall make no money from football, but on top of their stadium they have large advertising hoardings which are VERY visible from the M6. That is where the bulk of their income comes from And very good conference facilities (no puns please) bang in the heart of the motorway network too. And the Bescot market!
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Deleted
Joined: January 1970
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Post by Deleted on Feb 12, 2015 15:39:22 GMT
And very good conference facilities (no puns please) bang in the heart of the motorway network too. And the Bescot market! How's our car boot sell going?
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Post by upminstergas on Feb 12, 2015 15:45:45 GMT
The decision from high court judge may be appealed to the court of appeal or House of Lords; the decision of court of appeal may be appealed to the House of Lords. I can see this going all the way to the top. Thanks for that Blue Mist. Unlike you though I can't see it going ''all the way to the top,'' because BRFC surely couldn't afford to fund the huge legal costs that would be involved. I think that they are hoping for a first round KO, or alternatively a compromise settlement. There is no automatic right of appeal for the loser, the loser can ask the judge for leave to appeal, which he can grant or refuse, if he grants you leave its off to the Court of Appeal, if he refuses permission you can still go to the Court of Appeal and seek leave to appeal directly from them, if they refuse permission..........
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strung out
Administrator
Paul Hardyman
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Post by strung out on Feb 12, 2015 15:50:27 GMT
Not league 2, but Walsall (average attendance of just over 4,000) have posted a profit for 9 consecutive years, consistently cutting debt, while staying in league 1 pretty comfortably. Pretty sure that there are a few other examples out there too. Walsall make no money from football, but on top of their stadium they have large advertising hoardings which are VERY visible from the M6. That is where the bulk of their income comes from Where they get their money from isn't really the point. Both Rovers and Walsall have turnovers of around £4,000.000 and while we're making losses of up to a million a year, Walsall are run within their means, make a small profit and are in league 1. Comparing the money available to Rovers and Walsall (as an example, but there are many more), Walsall are absolutely streets ahead of Rovers in financial management and league position. I really cannot understand the people who tell me that I should be grateful to the current board for funding their own failure.
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Post by Blue Mist on Feb 12, 2015 15:58:16 GMT
Thanks for that Blue Mist. Unlike you though I can't see it going ''all the way to the top,'' because BRFC surely couldn't afford to fund the huge legal costs that would be involved. I think that they are hoping for a first round KO, or alternatively a compromise settlement. There is no automatic right of appeal for the loser, the loser can ask the judge for leave to appeal, which he can grant or refuse, if he grants you leave its off to the Court of Appeal, if he refuses permission you can still go to the Court of Appeal and seek leave to appeal directly from them, if they refuse permission.......... Aye this is true, and the timescales... There is a need for a permission from a higher court in order to be able to appeal. There is a time limit of 21 days within which a party can appeal. Time limitations relating to appeals from Court of Appeal to House of Lords is 1 month from the date when the order was made or 3 months if permission is granted form Court of Appeal.
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Post by CountyGroundHotel on Feb 12, 2015 16:31:13 GMT
This certainly confirms just how bad the situation is. We're running at a yearly loss of about £1m (apart from the Lambert windfall), debts of almost £6m, a BoD refusing to put in more money and a loan from MSP (secured on the Mem) at 14% a year partly used to pay off Dunford and the rest for the case against Sainsbury's. So as everybody says it's s..t or bust with bust looking the best bet at the moment. Can we really say that the BoD have acted responsibly? We are in hoc to a firm that would surely take the Mem cheap at £2m and sell from under us and charge a high rental while they do it. May be Sainsbury's pay us enough to write off about £7.5/8m of debts (probably £9m now) or some unknown benefactor buys the club - but would they do it knowing they could sell the Mem and then clear off? All this has happened to other clubs. Administration in the Conference means a loss of 10 points (either this season with the play-offs much more difficult) or next. Insolvency means automatic relegation to Conference South but as Hereford found out that isn't automatic - it could be worse. Might be me not understanding business loans, but MSP couldn't just take the Mem if Rovers were unable to repay, could they? I mean, its worth way more than 2 million, so although they could repossess, the Mem would have to be sold and any profit after fees over the £2m returned to Rovers, wouldn't it? That's what happens with residential mortgage. Thank God someone else understands what a charge means. Have explained this a number of times but no-one wants to listen. So again MSP have a charge against the Mem. If we fail to pay interest on the loan or fail to repay the principle per the contract they would be able to force us into Administration at which point the Administrator would take control (not ownership) of all assets. As a secured creditor MSP would have to be paid out first from any income from the sale of those assets. Indeed as they have a charge over the Mem ownership of the Mem cannot change without their loan being repaid or with their agreement. To take ownership of the Mem MSP will have to submit a bid to the Administrator if we entered Administration. In practice this bid would have to be the market rate less what they are owed. Simple really but give it a day & two and some simpleton will be spouting that MSP will own the ground again
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