Madejski being booed yesterday

[Lower West]

Covering the year to June 30 2007, Chelsea's accounts show that the club's largest creditor was the owner himself, Roman Abramovich, who had poured £578m into the club, not as a donation but as an interest-free loan. As stated by the chief executive, Peter Kenyon, in February, Chelsea did not owe "external debt" to any bank.

Why does Abramovich not care amount of money he has poured into Chelsea? Simple really. The loan will be secured against the freehold property known as Stamford Bridge through one of his companies..... remember it sits in real prime estate terrority in West London. Arsenal are as much a property company as a football club. They need to sell the flats at the old Highbury ground to repay the money owed on building the Emirates and along with filling their corporate suites every day of the week. Football is business , business is football.

A great post Dick Gently by the way.

[PEARCEY]

Are we paying interest on any of these loans from JM?

Apparently not but it would be nice to see it in black and white.

[Arch]

Correct me if I'm wrong but the accounts released, so far, only go up to the end of the first season?

This is no dig and no attack at the club, just a request for clarification.

Yep. The rest of my post was a bit of speculation as to what might be expected in forthcoming accounts. The point was that it's possible to make reasonable guesses about "where the money's gone" by looking at past accounts and figuring it out.

So when are they out and we can know what happened a year ago, for sure?

If we know how to interpret them, yes. Anyway all this "where's the money gone", "where's the loot", "21m in, 1.4m out", etc. is just too foolish. You don't need to be a genius to do some simple calculations, extrapolate from past evidence, and come up with a reasonable conjecture about the club's budget. People who see huge sums of money in and think of it as cash to go shopping with probably aren't too hot with their own budgets either.

[Uke]

Are we paying interest on any of these loans from JM?

I could not say, but the bulk of the loan is from giving the club the stadium IIRC

[Southbank Old Boy]

Are we paying interest on any of these loans from JM?

The loan is in two parts, one to the football club and the other to the hotel

According to the accounts interest has been charged at 1% below HSBC base rate on the of £8.75m loan which is to the football club itself

No interest has been charged on the £17m loan to the hotel (which is a subsidary of the football club)

[papereyes]

Yup, but as I correctly pointed out, the two things are significantly different. No idea what the proper term is (secured?) but they are different. As I showed in the original, correct, post.

Yes, the owner of the club could chose to call in the debt from the club that he owns but I'm struggling for an example other than Gretna (which was through illness, iirc, and I thought more a case of an unsustainable business being propped up). In the latter case, the money used to buy the club by the Glazers was borrowed from elsewhere so the club owns that amount of money to someone other than the owners.

No way can those owners afford to write off the debts like Papereyes implies.

I didn't imply it. I didn't even come close to suggesting it.

I suggest that you re-read my post but I shall state, for your ease, that the key point, that was missed in an earlier post stating the two clubs debts, is that United's and Chelsea's debts are structured in different ways.

The debts aren't written off. They are, however, different.

Apologies over implying you implied.

I get your point about the debts to an owner being different, but still the owner can call them in or write off part to sell on the club should they need to.

I would be very concerned if I were a Chelski fan given the current political and economic climates. Also for those club with owners with big depreciating assets in the US too. Its clear what will go first when they have a need to be more fiscally prudent.

I just don't see why the owner of the club would do so from the club they own except in exceptional circumstances. Yes, they could, but they probably will not. EDIT: Lower West - I thought that was the case, cheers.


And I'd be much, much more concerned as a United fan, because of the way that club was bought.

[Southbank Old Boy]

If we know how to interpret them, yes. Anyway all this "where's the money gone", "where's the loot", "21m in, 1.4m out", etc. is just too foolish. You don't need to be a genius to do some simple calculations, extrapolate from past evidence, and come up with a reasonable conjecture about the club's budget. People who see huge sums of money in and think of it as cash to go shopping with probably aren't too hot with their own budgets either.

Go on then, I'd like to see a reasonable conjecture about the clubs finances from June 07 to date but I don't think I could do it with any accuracy

[Cookie]

I can't comprehend why a day after we beat a Neil Warnock team 4-2 and after a week in which we scored nine goals and featured several members of our long awaited academy, anyone's first instinct this morning should be to start yet another negative thread making exactly the same points as were made ad nauseam yesterday, last week and all summer long. Turn it off and get behind a winning team.

Good post Arch. I was well embarrassed by the boos that came from behind me.

[papereyes]

If we know how to interpret them, yes. Anyway all this "where's the money gone", "where's the loot", "21m in, 1.4m out", etc. is just too foolish. You don't need to be a genius to do some simple calculations, extrapolate from past evidence, and come up with a reasonable conjecture about the club's budget.

I'll be honest and say it seems like an awful amount to go "in" (40 % wage reduction, £10 million plus in transfer fees, various sums of TV and parachute money) with so little spent and I can't, for the life of me, see how it means we simply cannot have spent more, if it brought one or two better players of the right type (ie NOT LIKE LEEDS) which would, imo, have given us either a greater chance last season or this (either as a player, or from their sale). Given that the defences of the club on here have swung from "we tried to buy Mensah/Brown for nearly £5 million" to "we could barely afford Marek and Kebe at £1.5 million the pair" depending on what argument is put to them, you can further see why there's some scepticism - why was the money there before and not after?

I think, really, that the club have to do better PR as most people will simply see only the headline figures, especially with the Premiership being sold as a land of milk, honey and streets paved with gold. However, if that Premiership spell means that we're better prepared to stay up next time (through a securing of our debts and slow march to self-sufficiency), then I can accept that and I think most fans would. But that's an argument for the club to make, that they possibly have to make and I don't think they have.

Go on then, I'd like to see a reasonable conjecture about the clubs finances from June 07 to date but I don't think I could do it with any accuracy

I think you could make reasonable guesses but I am pretty sure that everyone on here would add their own (unconscious) bias to the calculations.

[Dirk Gently]

Also - and for legal reasons - I must state that this refers to none of those mentioned above - it has been pointed out that if someone wanted to "launder" large quantities of dirty money then owning a PL football club would be a near-perfect way to do it, and the returns offered this way would be much better than the conventional methods for cleaning such money.

And, of course, the Serious Fraud/Organised Crime Squad (or whatever their latest names are) are too dumb to work this out for themselves and won't be taking a very keen interest in such operations?

Having said that, our current set of politicians might just be happy for foreign investment to be coming into the country, regardless of how clean the money is! (so I'm not just cynical about football chairmen! )

Yes to both - but if it's money which is foreign money which is being cleaned then the SFO/SOCA don't have much to go on and might have even less motivation to investigate. If is was - to take a country at random - Icelandic money, for instance, where would they start to investigate it - and why?

[PEARCEY]

Are we paying interest on any of these loans from JM?

The loan is in two parts, one to the football club and the other to the hotel

According to the accounts interest has been charged at 1% below HSBC base rate on the of £8.75m loan which is to the football club itself

No interest has been charged on the £17m loan to the hotel (which is a subsidary of the football club)

I stand corrected....interest is being charged but at a generous rate to the club. Thanks for clarifying this.

[Uke]

Presumably if we keep hold of our good players until midnight this will be Madejski's fault to and signify our lack of ambition.

Hammond out for failing to offload Leroy!

[Tamworth_Royal]

Are we paying interest on any of these loans from JM?

The loan is in two parts, one to the football club and the other to the hotel

According to the accounts interest has been charged at 1% below HSBC base rate on the of £8.75m loan which is to the football club itself

No interest has been charged on the £17m loan to the hotel (which is a subsidary of the football club)

And who own's the Hotel......... is it RFC Ltd or one of JM's companies ?

[Southbank Old Boy]

Are we paying interest on any of these loans from JM?

The loan is in two parts, one to the football club and the other to the hotel

According to the accounts interest has been charged at 1% below HSBC base rate on the of £8.75m loan which is to the football club itself

No interest has been charged on the £17m loan to the hotel (which is a subsidary of the football club)

And who own's the Hotel......... is it RFC Ltd or one of JM's companies ?

To make that a little clearer, the full title of the hotel part of the business is Madejski Stadium Hotel Limited. They are a wholly owned subsidary of Reading Football Club Limited which is owned by the holding company names The Reading Football Club (Holdings) PLC

[RoyalBlue]

The loan is in two parts, one to the football club and the other to the hotel

According to the accounts interest has been charged at 1% below HSBC base rate on the of £8.75m loan which is to the football club itself

No interest has been charged on the £17m loan to the hotel (which is a subsidary of the football club)

And who own's the Hotel......... is it RFC Ltd or one of JM's companies ?

To make that a little clearer, the full title of the hotel part of the business is Madejski Stadium Hotel Limited. They are a wholly owned subsidary of Reading Football Club Limited which is owned by the holding company names The Reading Football Club (Holdings) PLC

And the overwhelming majority shareholder of The Reading Football Club (Holdings) PLC is presumably JM.

[Southbank Old Boy]

And the overwhelming majority shareholder of The Reading Football Club (Holdings) PLC is presumably JM.

Yes

[Yellowcoat]

May I just say what a pleasant change it is to see a sensible discussion rather than the ill informed rantings of the negative clique and their cohorts.

[brendywendy]

If we know how to interpret them, yes. Anyway all this "where's the money gone", "where's the loot", "21m in, 1.4m out", etc. is just too foolish. You don't need to be a genius to do some simple calculations, extrapolate from past evidence, and come up with a reasonable conjecture about the club's budget.

I'll be honest and say it seems like an awful amount to go "in" (40 % wage reduction, £10 million plus in transfer fees, various sums of TV and parachute money) with so little spent and I can't, for the life of me, see how it means we simply cannot have spent more, if it brought one or two better players of the right type (ie NOT LIKE LEEDS) which would, imo, have given us either a greater chance last season or this (either as a player, or from their sale). Given that the defences of the club on here have swung from "we tried to buy Mensah/Brown for nearly £5 million" to "we could barely afford Marek and Kebe at £1.5 million the pair" depending on what argument is put to them, you can further see why there's some scepticism - why was the money there before and not after?

I think, really, that the club have to do better PR as most people will simply see only the headline figures, especially with the Premiership being sold as a land of milk, honey and streets paved with gold. However, if that Premiership spell means that we're better prepared to stay up next time (through a securing of our debts and slow march to self-sufficiency), then I can accept that and I think most fans would. But that's an argument for the club to make, that they possibly have to make and I don't think they have.

Go on then, I'd like to see a reasonable conjecture about the clubs finances from June 07 to date but I don't think I could do it with any accuracy

I think you could make reasonable guesses but I am pretty sure that everyone on here would add their own (unconscious) bias to the calculations.

but taking into consideration only the money coming into a football club is always going to give massively misleading figures, and inevitably lead to people "wondering where all the money has gone"
its no good just listing whats come in, without adding the 18-20M wage bill going out this season for instance

and all of the argument based around thinking we havent "lost" 22 million is also a bit misleading.
as a business, you do your financial budgets bases on predicted incomes and outgoings
if as a business you have 30+ million coming in one year from TV, and spend 30M on your wages
but the next year that income reduces to 11 million, then clearly youll have to reduce those outgoings accordingly.

[Cpl Jones Dont panic]

Thanks for posting such good information regarding the set up of the companies.

What would JM be willing to sell, if it is only parts this could explain the lack of intrest.

I cannot see JM wanting the lose the hotel and conference centre, but with the link with the ground, would the " new owners" have to be tenants of a JM company?

There is also the lease given to London Irish [ still beggars belief, the lenght of the lease], would any " new owners" be happy with this arrangment?

[RoyalBlue]

May I just say what a pleasant change it is to see a sensible discussion rather than the ill informed rantings of the negative clique and their cohorts.

So the positive clique and their cohorts always know best and are highly informed? Or just make out that that is the case?!!