Question re: Bloom getting his money back

[Herr Tubthumper]

I don't think so. Art, rare books etc are appreciating assets and therefore can be sold in an active market.

Try telling that to someone who invested in, say, Jeff Koons. Not all art continues to appreciate year on year.

And what's your theory behind the huge influx of individual investors into English football if it's is not cash parking?

 

[Herr Tubthumper]

No it's definitely a game of Football Manager on a grand scale for most of them. Best way to become a millionaire by owning a football club is to start off as a billionaire.

Glazer family will probably do well out of owning Man Utd for a few years, but that's an exception.

I just do not believe there is a queue of successful savvy and wealthy individuals with seemingly no previous interest in football queuing up to throw money away on clubs like Fulham, Aston Villa, Cardiff, Hull, Southampton, Sunderland, Birmingham, Blackburn, Bournemouth, Derby, Leicester, Forest etc etc. It does not add up to me. I'm not saying my reasoning is correct, it's just a theory which sounds reasonable to me.

 

[El Presidente]

Try telling that to someone who invested in, say, Jeff Koons. Not all art continues to appreciate year on year.

And what's your theory behind the huge influx of individual investors into English football if it's is not cash parking?

Some are on personal/institutional vanity projects (Chelsea/City/Fulham under Al Fayed) and can afford to incur current and future losses with impunity.

Some are in it with the intention of making a quick buck (Most who have owned Pompey).

Some see the TV millions and also believe that the clubs are not smart enough at maximising revenue (United/Liverpool)..

 

[beorhthelm]

some are in it for publicity, thinking Cardiff, Leicester and Blackburn (in intent, if not deed).

theres only 40 odd big or potentially big clubs in English leagues and an awful lot of wealthy people who like English football.

 

[El Presidente]

Before the latest conversion of debt to equity I believe TB's holding was somewhat less than you state however that is not the main point.

The assurances he gave to the auditors, and quoted in the latest financial report, did not relate to the loan he had made to the club but rather the ongoing trading position.

The club made a loss during the period covered by the audit and was projected to do so over the following year - the liabilities of the club exceeded the assets both in terms of current and long term liabilities. Without the assurance from TB that he was able and willing to cover those losses, (reinforced by the conversion of part of his loan into equity), the auditors would have had no option but to put a note on the accounts that the club was not in a viable trading position and would have been unable to sign off the accounts. Essentially meaning that the club would have had to be put into administration.

But the directors have been giving similar comments to the auditors practically every year though.

 

[El Presidente]

I just do not believe there is a queue of successful savvy and wealthy individuals with seemingly no previous interest in football queuing up to throw money away on clubs like Fulham, Aston Villa, Cardiff, Hull, Southampton, Sunderland, Birmingham, Blackburn, Bournemouth, Derby, Leicester, Forest etc etc. It does not add up to me. I'm not saying my reasoning is correct, it's just a theory which sounds reasonable to me.

There is one club under foreign ownership that allegedly has links with the type of people it is not good to upset. The football club would be a very good vehicle for laundering cash.

 

[Notters]

I believe so, but in any case the criteria may not favour him:

The editors estimate subjects' wealth from a range of public information, based on values at January each year. They typically explain their actions by stating: "We measure identifiable wealth, whether land, property, racehorses, art or significant shares in publicly quoted companies. We exclude bank accounts—to which we have no access..."

More to the point, he lives in Australia so wouldn't be in there anyway.

 

[Lord Bracknell]

Not really as his share of the equity in the club has increased in fact what it has done is dilute the holdings of the other shareholders.

Indeed. And some of those shareholders stumped up cash to invest in the Club when we were in dire straits. Since the Club isn't paying dividends to shareholders, I think it would be a generous gesture if TB bought out their shares and returned some cash to the folk who helped the Club out when it was most needed.

 

[Lord Bracknell]

Knight had no choice. The nation's financial situation meant that the banks weren't lending money.

Not quite so. But it was a much better deal for the Club to accept the offer that TB made.

 

[Creaky]

But the directors have been giving similar comments to the auditors practically every year though.

Yes - and as the annual shortfall has risen then the level of that assurance given to the auditors has increased, alongside the amount of equity invested in the club. Converting loans to equity, equal to or greater than the trading shortfall, is the easiest way of covering the trading loss without pumping more actual cash into the business.

 

[Albion Dan]

Some are on personal/institutional vanity projects (Chelsea/City/Fulham under Al Fayed) and can afford to incur current and future losses with impunity.

Some are in it with the intention of making a quick buck (Most who have owned Pompey).

Some see the TV millions and also believe that the clubs are not smart enough at maximising revenue (United/Liverpool)..

I think the reality is that most foreign owners dont do it for vanity but as a political and personal safeguard by massively raising their public profile. There was a great interview on sky sports news where a journalist lifted the lid on the dark motivation driving many of these billionaires from less than desirable countries.

 

[Pevenseagull]

.................... and to be honest, I suspect he has actually written the whole thing off.

I know the Ipswich result as bad but .......................

 

[BensGrandad]

I just do not believe there is a queue of successful savvy and wealthy individuals with seemingly no previous interest in football queuing up to throw money away on clubs like Fulham, Aston Villa, Cardiff, Hull, Southampton, Sunderland, Birmingham, Blackburn, Bournemouth, Derby, Leicester, Forest etc etc. It does not add up to me. I'm not saying my reasoning is correct, it's just a theory which sounds reasonable to me.

It is rather ironic that each of the clubs you mentioned as not having people queuing up to buy has been sold in recent times to mostly foreign investors.

 

[Adders1]

I disagree, the conversion of debt to equity was an irrelevance as he already owned >90% of the shares, so has been an effective dictator for some time. In relation to the auditors, if he gave assurances that he was not going to collect until at least 2023 then they would have simply given a going concern qualification, which they have done in the existing accounts anyway.

Emphasis of matter is not a qualification

 

[Kalimantan Gull]

No I don't think it will happen. Tony Bloom IS the club, he owns 90%+ of the shares, so whatever he wants he gets. From my understanding he does not have billions, but has sufficient millions left over from his investment in the Albion to live a life that doesn't involve worrying about whether he can pay the 'leccy bill.

His aim is for the Albion to play in the Premier League, but not to do a Palace and budget for instant relegation. Therefore he will allow the playing budget to be competitive for a club wanting to retain its status in the division. Southampton have made themselves a decent sustainable force in this division by spending money, and their sacking of Nerdy Nige, which seemed harsh at the time, now looks a masterstroke.

This is not Palace beating for the sake of it, but Parish and Co have not given Holloway a competitive budget, and so he has had to rely on last year's squad (remember since beating us at Selhurst they only won SEVEN out of the remaining 26 matches) minus it's two best players, and has topped that up with journeymen, never-wases and hopeful punts from the lower leagues.

Also remember that TB is still subsidising every seat at every match at the Amex to the tune of £15 per person.

Its all a bit bizarre - we have the highest gates in the division; at some of the highest ticket prices in the country; we're not paying massive transfer fees; our wages are mid-table; our stadium has effectively cost us nothing; we're making no repayments on TB's loans; we have a nice new sponsorship package; we're paying booking fees and parking fees and membership fees and loads of pies - and still we're losing a load of money and TB is subsidising every seat to the tune of £15 per person

Makes one wonder why every other club in this division isn't doing a pompey

 

[El Presidente]

Yes - and as the annual shortfall has risen then the level of that assurance given to the auditors has increased, alongside the amount of equity invested in the club. Converting loans to equity, equal to or greater than the trading shortfall, is the easiest way of covering the trading loss without pumping more actual cash into the business.

I don't want to be rude but that is garbage.

Issuing shares or converting debt to equity is a balance sheet movement. It has no impact on profits.

 

[El Presidente]

Its all a bit bizarre - we have the highest gates in the division; at some of the highest ticket prices in the country; we're not paying massive transfer fees; our wages are mid-table; our stadium has effectively cost us nothing; we're making no repayments on TB's loans; we have a nice new sponsorship package; we're paying booking fees and parking fees and membership fees and loads of pies - and still we're losing a load of money and TB is subsidising every seat to the tune of £15 per person

Makes one wonder why every other club in this division isn't doing a pompey

1: The Amex only generates income 25 times a year. Our non-wage expenses contain some elements that other clubs don't have. For example the transport bill works out at 26,000 x 25 x £4 = £2.6 million.
2: Cost overruns when we moved to the Amex were horrendous.
3: Player wages, whilst not horrendous, were about £17-18 million last year, total income was about £24-25 million (my estimates based on PY accounts).
4: 8 clubs in this division are in receipt of parachute payments of between £4-12 million.

 

[Brovion]

1: The Amex only generates income 25 times a year. Our non-wage expenses contain some elements that other clubs don't have. For example the transport bill works out at 26,000 x 25 x £4 = £2.6 million.
2: Cost overruns when we moved to the Amex were horrendous.
3: Player wages, whilst not horrendous, were about £17-18 million last year, total income was about £24-25 million (my estimates based on PY accounts).
4: 8 clubs in this division are in receipt of parachute payments of between £4-12 million.

Whilst agreeing with you your point 1 isn't strictly true. The stadium facilities are available for hire (my wife's been to a function there) and the shop is open, as is Dick's. I appreciate that the income from these isn't anything like a match day - but then even on match days most of the income (from STH sales which make up the bulk of the crowd) has already been banked whether the 'customer' turns up or not. I do believe expanding the non-match day stadium income is one of TB's priorities.

 

[WATFORD zero]

The statement i heard was "It took a lot of money for the family to get the club back". I believe that, in some circles, it is seen as a club owned and run by a certain Family and that isn't planned to change at any time in the future.

Thank Goodness

 

[tinycowboy]

Indeed. And some of those shareholders stumped up cash to invest in the Club when we were in dire straits. Since the Club isn't paying dividends to shareholders, I think it would be a generous gesture if TB bought out their shares and returned some cash to the folk who helped the Club out when it was most needed.

Although holdings have been diluted, it's hard to say whether this has actually disadvantaged any of those shareholders. I would guess some voting powers have been lost, but the total value of the non-controlling interests' holdings may be the same, or more or less than before. It all depends on what the market value of those shares now is and how desperate (if at all) TB is to buy then out.