[Albion] Albion lost £38.9million in 2016/17

Se20 · Dec 23, 2017

You'll find out this season that you need to use most of your income to survive.
The fees and wages in the PL are hideous, but it's a must to survive.
The worry is the wage bill if you are relegated ( and I include us in this) and the fans expectancy of a quick return.
Your total debt of over £200 mill must be a concern, with little chance of it being reduced in the short term.

Buzzer · Dec 23, 2017

tweenster said:
As I understand tax matters (and I am far from an expert), these losses mean that the club will not pay any corporation tax. As a man with many associated business interests it also means that TB can offset these losses against profits in his other businesses and therefore not pay corporation tax on profits elsewhere, this saving him a bunch of cash. He is a clever man and I am sure will be right on top of money matters.

I'm not a tax accountant but I suspect that he can't do that because the Albion hasn't made a profit in many years (has it ever?) and one of the qualifications for being able to offset losses of one business against another is that the loss-making business has to have a “reasonable expectation of profit”. I suppose he could argue that now we are in the PL there is that possibility but you'd need a bloody good accountant on your side.

Bozza · Dec 23, 2017

Se20 said:
Your total debt of over £200 mill must be a concern, with little chance of it being reduced in the short term.

Total debt to one man, a life-long fan. It seems to be of little concern to Tony Bloom, so it's of little concern to us.

The one small note of caution is if Tony Bloom "does an Eddie Davies". Davies was a lifelong fan of Bolton and pumped in a similar amount of cash, eventually writing off c£185m. The point of concern would come if Tony Bloom decides, one day, that he will not put a further penny into the club. If we are in the Premier League should that ever happen, the club should be able to manage given the vast income stream. If we were in the Championship and Bloom says "enough is enough" then we'd be struggling.

Se20 · Dec 23, 2017

Bozza said:
Total debt to one man, a life-long fan. It seems to be of little concern to Tony Bloom, so it's of little concern to us.

The one small note of caution is if Tony Bloom "does an Eddie Davies". Davies was a lifelong fan of Bolton and pumped in a similar amount of cash, eventually writing off c£185m. The point of concern would come if Tony Bloom decides, one day, that he will not put a further penny into the club. If we are in the Premier League should that ever happen, the club should be able to manage given the vast income stream. If we were in the Championship and Bloom says "enough is enough" then we'd be struggling.

True.
You are reliant on one man, and his wealth.
All is rosy while he keeps bankrolling you.

Buzzer · Dec 23, 2017

Se20 said:
You'll find out this season that you need to use most of your income to survive.
The fees and wages in the PL are hideous, but it's a must to survive.
The worry is the wage bill if you are relegated ( and I include us in this) and the fans expectancy of a quick return.
Your total debt of over £200 mill must be a concern, with little chance of it being reduced in the short term.

Yes, it's high but very common in business when an owner has funded his company's capital purchases. The debt carries no interest, there are no worries about servicing the debt because the owner has not only given assurances he's not seeking repayment any time soon and he has also turned down an offer of a partial repayment. The debt is convertible into shares, once again TB has indicated this is exactly what he will do with the entire sum owed and I think I'm right in saying that he's already done that with something like £30k (need to get the definitive answer from El Pres).

Se20 · Dec 23, 2017

Buzzer said:
Yes, it's high but very common in business when an owner has funded his company's capital purchases. The debt carries no interest, there are no worries about servicing the debt because the owner has not only given assurances he's not seeking repayment any time soon and he has also turned down an offer of a partial repayment. The debt is convertible into shares, once again TB has indicated this is exactly what he will do with the entire sum owed and I think I'm right in saying that he's already done that with something like £30k (need to get the definitive answer from El Pres).

Thanks for the explanation.
Do you think it's fair that laws allow clubs to rack up massive debts, just to convert them to shares ?

Buzzer · Dec 23, 2017

Bozza said:
Total debt to one man, a life-long fan. It seems to be of little concern to Tony Bloom, so it's of little concern to us.

The one small note of caution is if Tony Bloom "does an Eddie Davies". Davies was a lifelong fan of Bolton and pumped in a similar amount of cash, eventually writing off c£185m. The point of concern would come if Tony Bloom decides, one day, that he will not put a further penny into the club. If we are in the Premier League should that ever happen, the club should be able to manage given the vast income stream. If we were in the Championship and Bloom says "enough is enough" then we'd be struggling.

If Bloom ever did that then I think I would be very pissed off with him for mismanaging the club. As owner, it's up to him to decide how much he can afford to invest and cut his cloth accordingly. He has a responsibility to keep the club running as a going concern and football is unique in that the fans and community put a lot of trust in the owner to do that.

Bolton appear to have had a business model based on them remaining in the PL in perpetuity. Gartside's call, a few years back, of closing the PL kind of supports that. And if that is the case then that's planning that's so bad that if it goes belly up (as it did with Bolton) then it's mismanagement of the club. There's only a few clubs that can afford to make that assumption. Even then Arsenal have for a long time budgeted for not being in the Champions League every other year despite until recently qualifying every year.

Buzzer · Dec 23, 2017

Se20 said:
Thanks for the explanation.
Do you think it's fair that laws allow clubs to rack up massive debts, just to convert them to shares ?

It's pretty standard in a lot of owner-run businesses so from a legal point of view it would be difficult to stop but I see no reason for doing so. If the owner is already the majority shareholder then all it does is increase his share in the business he already owns. There's no extra risk as such. The ones who suffer are the minority shareholders. TB owns something like 90% of the club anyway so any extra shares will pretty much make no difference to the power he holds on the club and on other shareholders.

I think far dodgier is what goes on at Man U where the Glazers borrowed money using the club assets as security and milk the club as a cash cow. Also clubs like Blackpool where the owners have paid themselves huge salaries and given themselves loans from the club to the detriment of the players, the ground, the facilities and everything else. There's nothing illegal in law about that but the FA are supposed to have a "fit and proper" rule. On the face of it, neither scenario shows them running their clubs with the best intentions.

Dougie · Dec 23, 2017

lancyclaret said:
At least Brighton and their fans haven't claimed achieving a "Fairytale Promotion" against all odds.....like Bournemouth.

Their fairytale has cost £319 m so far .

Stat Brother · Dec 23, 2017

Dougie said:
Their fairytale has cost £319 m so far .

Come back to us when you're lot has built 1 stand.

Blue Valkyrie · Dec 23, 2017

The " go to thread " for envy [emoji38]ol:

Bozza · Dec 23, 2017

Dougie said:
Their fairytale has cost £319 m so far .

Of which a significant chunk has gone on infrastructure that has set the club up for years to come.

In contrast you've had, what, £400m of Premier League cash and all you have to show for it is some cladding. Well, that and getting to see Adebayor's footballing masterclass in your jester stripes.

dazzer6666 · Dec 23, 2017

Dougie said:
Their fairytale has cost £319 m so far .

Brilliant isn't it that our owner can afford, and wants to do it then without needing, wanting or getting any kind of return but because he loves the club. Also a large part has been invested in top-notch facilities that will serve the club for donkey's years - there's no requirement to invest the PL money into improving dilapidated infrastucture...........

fosters headband · Dec 23, 2017

Se20 said:
Thanks for the explanation.
Do you think it's fair that laws allow clubs to rack up massive debts, just to convert them to shares ?

Do you think it is fair for clubs to rack up massive debts and be allowed to pay them off at just a penny in the pound and just carry on?

dazzer6666 · Dec 23, 2017

Bozza said:
Of which a significant chunk has gone on infrastructure that has set the club up for years to come.

In contrast you've had, what, £400m of Premier League cash and all you have to show for it is some cladding. Well, that and getting to see Adebayor's footballing masterclass in your jester stripes.

Cross-post.......great minds :lolol:

Not Andy Naylor · Dec 23, 2017

Brovion said:
Yes. It always irritates me when a club gets into financial trouble and everybody says "Oh the poor fans! It's not their fault!" I would argue that, yes, actually it is partly the fans' fault. Fans always demand investment, they want to keep up with Jones' and to do that the chairman must 'open his chequebook' in order to 'take the club to the next level'. And if he can't do that then he should get out of the way for someone who can. Then when it all goes tits up and they realise they've spent money they haven't got in order to reach a level they can't sustain - the fans blame everyone but themselves.

Exactly. And the best example is just along the coast, where P*rtsm**th fans were the only people not asking how a club with gates under 20,000 and an owner who apparently owned only a few pizza delivery outlets could afford to buy and pay Jermain Defoe and Peter Crouch. Then complained that selling all their expensive players wasn't going to help them get back into Europe 'where we need to be.'

#twats

matbha · Dec 23, 2017

And what happens when your American investors get bored the price of your new stand that's 200 million you will need to find

Guinness Boy · Dec 23, 2017

Dougie said:
Their fairytale has cost £319 m so far .

Or, as the local traders near Selhurst think of it, £31.90

Sent from my iPhone using Tapatalk

Sussex Nomad · Dec 23, 2017

Se20 said:
Your total debt of over £200 mill must be a concern, with little chance of it being reduced in the short term.

Which, and you and your ilk have been told time and time and time again, will be converted into shares. This is not a club debt but it's a good sound byte for bitter little rivals.

Thunder Bolt · Dec 23, 2017

Sussex Nomad said:
Which, and you and your ilk have been told time and time and time again, will be converted into shares. This is not a club debt but it's a good sound byte for bitter little rivals.

Exactly. It is tangible like a smart modern stadium, training ground, and academy. It isn't wasted like paying inflated wages.

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[Albion] Albion lost £38.9million in 2016/17

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