Blog on Albion finances....

Moshe Gariani · Dec 13, 2016

FatSuperman said:
Love your sentiment and agree entirely, although I would go so far as to say that chairmen like this are much, much, rarer than once in a lifetime. How many clubs have a true, lifelong fan bankrolling them to such an extent - building the stadium, building a future with the academy, being patient and waiting for success rather than lunging at it with the risks that entails. He has been, and continues to be the absolute best of owners.

This. It is so easy to take for granted.

With the kicking we took in our Gory Years we could easily still be a complete basketcase of a club with a crappy ground and no prospect of achieving anything other than bumbling around the lower divisions, beneath a Championship midtable ceiling, for the rest of many of our lives...

The effect of Tony Bloom's QUARTER OF A BILLION POUNDS, that he just happened to have available in ready cash to spend on his hobby, is nothing short of a miracle. The fact that he is such a decent bloke and a lifelong, third generation, Albion fan makes it all the more incredible. There must be one or two competitors for the crown but there can't have been many more transformational Chairmen in the history of club football. We are phenomenally fortunate.

"Much, much rarer than once in a lifetime" is a very good way of putting it.

warmleyseagull · Dec 13, 2016

Peter Grummit said:
[MENTION=31]El Presidente[/MENTION] Does the fact that Tony is starting to convert his debt to equity suggest to you he may sell part of the club (especially if we are promoted)? One couldn't blame him, and it may provide an extra injection of funds?

PG

Converting debt to equity provides no more funds, it is what it says on the tin: a conversion. Don't think any conclusion can be drawn about his likelihood to sell, or anything else for that matter. It might even be for personal tax advantage, though not sure what that would be.

Peter Grummit · Dec 13, 2016

warmleyseagull said:
Converting debt to equity provides no more funds, it is what it says on the tin: a conversion. Don't think any conclusion can be drawn about his likelihood to sell, or anything else for that matter. It might even be for personal tax advantage, though not sure what that would be.

Sorry, I meant that selling part of the club might release extra funds (not simply the conversion to equity).

Ernest · Dec 13, 2016

And some people still think that Dick Tight saved the club

El Presidente · Dec 13, 2016

Peter Grummit said:
[MENTION=31]El Presidente[/MENTION] Does the fact that Tony is starting to convert his debt to equity suggest to you he may sell part of the club (especially if we are promoted)? One couldn't blame him, and it may provide an extra injection of funds?

PG

No. The debt is formally due for repayment in 2023, what TB is doing is effectively writing off the debt by converting to shares. In doing so he is also increasing his stake in the Albion, which is now up to 93%.

El Presidente · Dec 13, 2016

FatSuperman said:
Well some portion of the money he provides has to be converted to equity under the FFP rules, so it's likely to comply with that.

Those rules don't apply any more, it's just a straight £13m a season that is effectively allowed.

QPR, Derby and Cardiff have been creative in previous years in relation to issues relating to their debts though.

Peter Grummit · Dec 13, 2016

El Presidente said:
No. The debt is formally due for repayment in 2023, what TB is doing is effectively writing off the debt by converting to shares. In doing so he is also increasing his stake in the Albion, which is now up to 93%.

Thanks.

I guess if he ever did consider seeking any external investment, his business must give him access to some very high net worth individuals.

El Presidente · Dec 13, 2016

Peter Grummit said:
Thanks.

I guess if he ever did consider seeking any external investment, his business must give him access to some very high net worth individuals.

True, but I think TB likes the idea of the club being owned by a fan. Having had a few chats with wealth management people in the City, their view is that he still has plenty of money in the pot, not quite a billionaire, but would have been one had he not chose to save the Albion.

nwgull · Dec 13, 2016

El Presidente said:
Those rules don't apply any more, it's just a straight £13m a season that is effectively allowed.

QPR, Derby and Cardiff have been creative in previous years in relation to issues relating to their debts though.

Talking of Derby, what do you reckon their chances of avoiding a transfer embargo are this January? We've seemingly gone to the 13m limit last year, so I can't see how they'd manage to be under it after spending 2.5x what we did in transfer fees and the wages that go along with that.

See also Middlesbrough, but that's more of an annoyance now as any fine payable to them won't affect our chances of promotion this year.

El Presidente · Dec 13, 2016

nwgull said:
Talking of Derby, what do you reckon their chances of avoiding a transfer embargo are this January? We've seemingly gone to the 13m limit last year, so I can't see how they'd manage to be under it after spending 2.5x what we did in transfer fees and the wages that go along with that.

See also Middlesbrough, but that's more of an annoyance now as any fine payable to them won't affect our chances of promotion this year.

Boro were allegedly paying Downing £55k a week and Rhodes was on a big wedge too.

Seasidesage · Dec 13, 2016

Blue Valkyrie said:
Dunk for 15 million and Stephens 'on a free'.

I don't think many more sales would happen to be fair.

Not sure. Losing those two plus the sums spent would surely mean a rebalancing of the finances plus some offers that would be hard to refuse? I don't see a fire sale but I would think this squad would lose some of the leading lights and we would begin a new cycle in terms of team building. We would probably lose Murray, Knocky, Hemed, maybe March?

Obviously new players would come in but the height of those players value would be next summer if we failed.

Blue Valkyrie · Dec 13, 2016

Seasidesage said:
Not sure. Losing those two plus the sums spent would surely mean a rebalancing of the finances plus some offers that would be hard to refuse? I don't see a fire sale but I would think this squad would lose some of the leading lights and we would begin a new cycle in terms of team building. We would probably lose Murray, Knocky, Hemed, maybe March?

Obviously new players would come in but the height of those players value would be next summer if we failed.

But why raise about 60 million in player sales and then have to totally rebuild ?

Far better to replace just one or two and have more of an evolution rather than revolution.

Seasidesage · Dec 13, 2016

Blue Valkyrie said:
But why raise about 60 million in player sales and then have to totally rebuild ?

Far better to replace just one or two and have more of an evolution rather than revolution.

Because it would lower the wage bill and the players themselves might seek a move? Might not happen but I wouldn't be surprised to see it TBF. I think it is hard for the non parachute teams to sustain a challenge although we have done it to this point, the bulk of the team that achieved that has moved on now. to keep this lot together for a three or four year period in the face of the wealth of the PL now would be hard I think.

There are obviously no guarantees but I suspect this may be a redundant conversation come next May anyway!

FatSuperman · Dec 13, 2016

El Presidente said:
No. The debt is formally due for repayment in 2023, what TB is doing is effectively writing off the debt by converting to shares. In doing so he is also increasing his stake in the Albion, which is now up to 93%.

He's converting it to shares, thus diluting the value of all the other shares in issue, which he owns practically all of. White Knight, Angel, whatever the term, the man is an absolute hero to so many of us.

I get the impression he wouldn't like a statue or anything remotely obvious like that, he's probably satisfied in just rescuing his club. I hope none of us ever forget him and what he's done.

All that said, what else what a billionaire do with the money, buy some god-awful yacht which has other yachts, subs and choppers inside it? I'm surprised more near-billionaires aren't piling into the Albion tbh. Most of them are obviously classless.

FatSuperman · Dec 13, 2016

Seasidesage said:
Because it would lower the wage bill and the players themselves might seek a move? Might not happen but I wouldn't be surprised to see it TBF. I think it is hard for the non parachute teams to sustain a challenge although we have done it to this point, the bulk of the team that achieved that has moved on now. to keep this lot together for a three or four year period in the face of the wealth of the PL now would be hard I think.

There are obviously no guarantees but I suspect this may be a redundant conversation come next May anyway!

Good points. I suspect that if we didn't make it then some of the squad would be looking to move to PL clubs, for the glory and obvious financial step up. If we took decent offers I'd imagine we'd lose Dunk, Kayal, Knockaert to add to Stephens and Murray going. We aren't going to replace them with similar quality for the money we get, so we'd have to hope we can build another tight-knit group and have that make the difference, plus maybe Towell makes the step up. As mentioned elsewhere, we will also be fighting three PL dropout teams with an eye-watering amount of spending power, in player sales, parachute payments and presumably a fairly decent wedge of the £100m PL money. Play offs would be our target I'd imagine.

Brovion · Dec 13, 2016

FatSuperman said:
I think there was a discussion about this at the end of last season, I actually see this as our last realistic chance unless something significant changes with the payments structure. The three clubs coming down are going to be far wealthier than previous seasons, as this impending round of relegated teams will have at least £100m from the league and the increased parachute payments to rely upon. It's likely they'll need a lot of work and some significant work in the transfer window, but you've got to assume those clubs are going to be right up there.

Yes, yes, Norwich and Villa haven't stormed it, so there is always hope, but the odds are going to be even more stacked than before.

You said it yourself, Newcastle, Norwich and Villa will be the last 'poor' (relatively speaking) clubs to come down as in the future relegated clubs will have the vastly-increased TV revenue. Even the 'little' ones will be a threat. Bournemouth for example as a club are now about five times bigger than we are. That's Bournemouth FFS!

It really is shit or bust this season. Once we're on the gravy train we should (fingers crossed!) be ok as then we'll have financial clout when we get relegated (as we will at some stage).

FatSuperman · Dec 13, 2016

Brovion said:
It really is shit or bust this season. Once we're on the gravy train we should (fingers crossed!) be ok as then we'll have financial clout when we get relegated (as we will at some stage).

Absolutely, and should we get there, I'd hope we would run our PL season sensibly wit ha plan for what may happen if we get relegated - don't want to spend the £100m on transfers and wages in the single year as we'll want a good chunk of it for the next season in the Championship! Parachutes + player sales might be enough but we'll be fighting with two other wealthy relegatees (?) and probably one from the season before.

This really could end up as the same handful of clubs yo-yo'ing up and down for years to come.

Notters · Dec 13, 2016

Mouldy Boots said:
This year is so so crucial to go up, if we didn't already know that.

cooliobhafc said:
It does look like this has to our year.

Brovion said:
It really is shit or bust this season. Once we're on the gravy train we should (fingers crossed!) be ok as then we'll have financial clout when we get relegated (as we will at some stage).

I hear this argument time and time again, and whilst I see where you're coming from, it completely overlooks the bigger picture.

Yes, in the short term, the club will be in a stronger position if it is promoted to the Premier League. But the fact that all of the clubs in the Championship are losing money hand over fist shows that the football structure in this country in its present form is unsustainable. Clubs from all the leagues need to be sustainable or the pyramid will collapse, right down to grass routes level.

I very much hope the club realise this and will work to make the supply of resources more equitable, should we get promoted.

It really is like the UK as a whole in microcosm, with the very few rich getting richer and richer and the rest doomed to failure, despite so much potential.

Hamilton · Dec 13, 2016

Notters said:
I hear this argument time and time again, and whilst I see where you're coming from, it completely overlooks the bigger picture.

Yes, in the short term, the club will be in a stronger position if it is promoted to the Premier League. But the fact that all of the clubs in the Championship are losing money hand over fist shows that the football structure in this country in its present form is unsustainable. Clubs from all the leagues need to be sustainable or the pyramid will collapse, right down to grass routes level.

I very much hope the club realise this and will work to make the supply of resources more equitable, should we get promoted.

It really is like the UK as a whole in microcosm, with the very few rich getting richer and richer and the rest doomed to failure, despite so much potential.

Stop speaking sense!

cooliobhafc · Dec 13, 2016

I couldnt agree more, the state of the game is out of control and surely cannot continue. There has to be a tipping point and if all bar 3 Championship clubs are loosing so much money every year, what is the point and when is enough, enough?

I see the government may step in to reform the FA but will they really push money down to protect the smaller, lower league clubs?

Wages have gone ballistic, spending is matching it but income can never keep up, its a system that has to give at some point, surely?

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