by Mid Sussex Royal » 25 Sep 2023 15:43
by YorkshireRoyal99 » 25 Sep 2023 15:44
Elm Park Kid3pointsElm Park Kid It still really worries me that we've had these problems from the very start of the season - a time when we should have had the most money in the bank. I don't know whether we just built up large debts last season that we then paid off - but we should have got in June/July:
1 - The bulk share of tv and EFL money (they pay it at the start of the season to give clubs money for the transfer market).
2 - At least the initial instalments of sponsorship monies.
3 - All of the season ticket money.
When you add on the loans that SCL have apparently given us to pay tax and wages in August, it just sounds like something happened to the money. Did Dai instantly transfer it out of the club??
unlikely - the club probably loses £1m per month so it is just a constant battle to keep a positive cashflow if the owner isn't putting cash in to fund those losses. The season ticket money will have been long gone from June onwards. Not sure the TV money comes in all in one go either. I know parachute payments came in at the end of the season.
I don't know - I can't see how it would be spending so much that it would have gotten through the pre-season money by the end of August. Our total wage bill might be something like £1m a month - though that would be very high given the fact that we only have 2-3 players on legacy contracts. Are we really paying an average of like £7k a week to players? Then you do have some match day income from tickets, hospitality, food/drink etc. I don't see how we got through season ticket + efl/tv money + sponsorship cash + player sale money in that short space of time on just normal club operations.
I was definitely expecting us to be in trouble by Christmas. Not now though.
by Winston Biscuit » 25 Sep 2023 15:46
Hound Earnshaw has just posted that players haven’t actually been told anything yet contrary to the earlier report
by Elm Park Kid » 25 Sep 2023 15:57
YorkshireRoyal99Elm Park Kid3points unlikely - the club probably loses £1m per month so it is just a constant battle to keep a positive cashflow if the owner isn't putting cash in to fund those losses. The season ticket money will have been long gone from June onwards. Not sure the TV money comes in all in one go either. I know parachute payments came in at the end of the season.
I don't know - I can't see how it would be spending so much that it would have gotten through the pre-season money by the end of August. Our total wage bill might be something like £1m a month - though that would be very high given the fact that we only have 2-3 players on legacy contracts. Are we really paying an average of like £7k a week to players? Then you do have some match day income from tickets, hospitality, food/drink etc. I don't see how we got through season ticket + efl/tv money + sponsorship cash + player sale money in that short space of time on just normal club operations.
I was definitely expecting us to be in trouble by Christmas. Not now though.
I believe there was an article on The Athletic that "estimated" that we were losing around £500-550k a week, so £2m a month. I can't quite understand where the rest of the money on day-to-day operations is going. That was when we were a Championship club though and we aren't/weren't the only club like this allegedly (Bristol City were losing £450k a week, QPR are losing £450k a week and Birmingham were losing £600k a week, again all estimated).
by WestYorksRoyal » 25 Sep 2023 16:03
by 3points » 25 Sep 2023 16:04
by 3points » 25 Sep 2023 16:10
Elm Park KidYorkshireRoyal99Elm Park Kid
I don't know - I can't see how it would be spending so much that it would have gotten through the pre-season money by the end of August. Our total wage bill might be something like £1m a month - though that would be very high given the fact that we only have 2-3 players on legacy contracts. Are we really paying an average of like £7k a week to players? Then you do have some match day income from tickets, hospitality, food/drink etc. I don't see how we got through season ticket + efl/tv money + sponsorship cash + player sale money in that short space of time on just normal club operations.
I was definitely expecting us to be in trouble by Christmas. Not now though.
I believe there was an article on The Athletic that "estimated" that we were losing around £500-550k a week, so £2m a month. I can't quite understand where the rest of the money on day-to-day operations is going. That was when we were a Championship club though and we aren't/weren't the only club like this allegedly (Bristol City were losing £450k a week, QPR are losing £450k a week and Birmingham were losing £600k a week, again all estimated).
Well, we know for a fact that we lost £17m in 2021/22. I would expect that to be lower last season and lower again this season. At the most it can't be more than the £1m a month figure.
by Snowflake Royal » 25 Sep 2023 17:42
Hound There was obvs rumours of the wages being paid - but not by Dai as such last month
Big day this Friday if that is payday - it might be be is prioritisation wages or it might be he has run out of available money altogether
Fun times
by YorkshireRoyal99 » 26 Sep 2023 08:27
Elm Park KidYorkshireRoyal99Elm Park Kid
I don't know - I can't see how it would be spending so much that it would have gotten through the pre-season money by the end of August. Our total wage bill might be something like £1m a month - though that would be very high given the fact that we only have 2-3 players on legacy contracts. Are we really paying an average of like £7k a week to players? Then you do have some match day income from tickets, hospitality, food/drink etc. I don't see how we got through season ticket + efl/tv money + sponsorship cash + player sale money in that short space of time on just normal club operations.
I was definitely expecting us to be in trouble by Christmas. Not now though.
I believe there was an article on The Athletic that "estimated" that we were losing around £500-550k a week, so £2m a month. I can't quite understand where the rest of the money on day-to-day operations is going. That was when we were a Championship club though and we aren't/weren't the only club like this allegedly (Bristol City were losing £450k a week, QPR are losing £450k a week and Birmingham were losing £600k a week, again all estimated).
Well, we know for a fact that we lost £17m in 2021/22. I would expect that to be lower last season and lower again this season. At the most it can't be more than the £1m a month figure.
by Mid Sussex Royal » 26 Sep 2023 11:30
by Stranded » 26 Sep 2023 11:40
Mid Sussex Royal Not been embargoed yet by EFL and they're usually on this pretty quick. Tax was due Friday, not yesterday as widely reported on Twitter.
by windermereROYAL » 26 Sep 2023 11:47
by Linden Jones' Tash » 26 Sep 2023 12:11
3pointsGreatwesternline3points Technically HMRC should issue a statutory demand, wait three weeks and then issue the WUP. However, for repeat offenders HMRC can issue demand today and only give 24 hours notice of the WUP. However, the hearing at court takes a little while for it to be heard but it is still very much a tightrope that is being walked. And will only buy a pretty short period of time before it has to be paid to have the hearing cancelled. The Directors are unlikely to let the hearing happen anyway, and would opt to place the company (ie the football club) into administration first.
FWIW - I work in the world of restructuring and insolvency and, in imho, I will be surprised if we don't end up in administration before Christmas. I really hope I'm wrong and Dai finds the money (either from his own resources or through investors) but it doesn't look great from the outside (clearly not privy to any inside info here). The fact pattern is similar to many of the situations I work in.
Hi 3 points, i used to work for the insolvency service so am not a complete novice at this. Why in your experience would Reading go into administration? The owner is the only creditor (that we know of) other than the players and HMRC. If the players don't get paid we wil eventually get kicked out of the league so administration doesnt remove those creditors, HMRC would rather wind us up then agree to an administration. If Dai himself puts us into administration the administrators would take control of the club and Dai would lose control of the club. Why is that in his interests?
Because it is the usual route that protects the directors in their directors' duties. A compulsory liquidation will be the end of RFC as we know it. An administration at least allows a chance for the club to be sold and continue to play in the current league, rather than be reformed and start in Tier 9 of the football pyramid.
Agreed that Dai gets nothing out of it in theory. However, as the stadium is not held as an asset of RFC, but a company controlled by him, if the club is solf out of an admin then the new owners will need that club to play in a stadium. Therefore, Dai can get some of his money back in selling the stadium to the new owner of the football club. If it goes into compulsory liquidation, the stadium will have limited or no immediate value as a stadium (unless you have a Wasps / Ricoh scenario - which is very rare). If he wants a short term return on his money I'd say the admin with a stadium sale works best for Dai.
HMRC don't get the choice to agreeing to an administration. The act of placing the company into admin trumps and stays all other creditor actions. So HMRC just have to put up with it, despite maybe not preferring it as an option.
by East Grinstead Royal » 26 Sep 2023 14:00
by Royal Rother » 26 Sep 2023 14:04
by Greatwesternline » 26 Sep 2023 14:52
Linden Jones' Tash This is really interesting, thanks.
I am struggling with this as, as far as I can see, the owner put in a lot of money to get the club into the PL and did it very badly, failed, ended up falling foul of FFP and now, with the difference in income in L1 vs, the Championship, there is a real struggle with cashflow (whether it is due to China issues or because the owner refuses to fund the club further, who knows)
so this bit:
"If he wants a short term return on his money I'd say the admin with a stadium sale works best for Dai."
Surely that would be around the (paper) price sold, if not less?
But if the club owes the owner £180M - isn't that a big paper loss?
by Linden Jones' Tash » 26 Sep 2023 15:56
GreatwesternlineLinden Jones' Tash This is really interesting, thanks.
I am struggling with this as, as far as I can see, the owner put in a lot of money to get the club into the PL and did it very badly, failed, ended up falling foul of FFP and now, with the difference in income in L1 vs, the Championship, there is a real struggle with cashflow (whether it is due to China issues or because the owner refuses to fund the club further, who knows)
so this bit:
"If he wants a short term return on his money I'd say the admin with a stadium sale works best for Dai."
Surely that would be around the (paper) price sold, if not less?
But if the club owes the owner £180M - isn't that a big paper loss?
Sunk costs versus realisable assets.
The money that he has put in, its fair to say is gone, unless Reading make a remarkable footballing comeback without any additional injection of Dai's money, and somehow make it to PL and someone is prepared to pay him the money back he has lost.
Even in that scenario, he seems like the sort of person who would want to own a PL football team, in which case, he'd probably keep the club, and in that scenario the only way he gets the money owed back is Reading make consistent profits for many years and he pays himself back via repaying the loans and paying dividends.
So if we assume none of those things will happen sporting wise, then his best bet to get any money back at all, is to somehow realise the value of the stadium he owns. Give the club to someone else for free, ridding himself of the losses the club makes, and continues to rent out the SCL to the new club, earning him a cashflow, or selling the SCL to someone else who wants it for whatever reason.
by Jackson Corner » 26 Sep 2023 17:15
by morganb » 26 Sep 2023 18:19
ReadingFC placed under transfer embargo after failing to make HMRC payment
by Snowflake Royal » 26 Sep 2023 19:14
Jackson Corner Administration is the best option. Sell the ground and training ground all our players start again in National league south and ground share with Aldershot,
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