Generic clubs in financial crisis Thread

[Deadlock]

Interesting article from John Beech here. Basically, Stockport County have been in Administration since April 2009. League rules state that no club can enter two consecutive seasons in Administration, and so unless Stockport get their act together they would be expelled.

The odd bit is that "according to League rules" this would mean that rather than reprieving Grimsby, League 2 would operate with 23 clubs next season instead. Presumably this would also apply if Palace are wound up.

[TFF]

[Tony Le Mesmer]

CPFC 2010 have withdrawn from the deal according to R5L

What a bunch of morons.
From what I understand it hinged on a sell-on-clause for the stadium.
If you are buying a football club "for noble reasons" then why would you care about resale?
They are just PR spindoctors out to make money for themselves, so oxf*rd them.

My thoughts as well.

BOS have offered the ground at a lower price with the sell on clause. Surely the priority is to get the ground and worry about that later? Needs must. If they dont like it, then offer the full market rate for the ground.

The club will not be liquidated, they will just start selling off their players to buy time.

[Thomas L'Heureux]

The club will not be liquidated, they will just start selling off their players to buy time.

Surely one will lead to the other though, Tony?

If they sell the majority of their semi-decent players they will not stand a chance in the Championship next season, and will therefore be a pretty shallow prospect for a potential buyer. Only somebody with deep pockets would stand a chance by investing heavily in the squad.

If the majority of their players are sold off I expect this to end in tears unfortunately.

[Tony Le Mesmer]

The club will not be liquidated, they will just start selling off their players to buy time.

Surely one will lead to the other though, Tony?

If they sell the majority of their semi-decent players they will not stand a chance in the Championship next season, and will therefore be a pretty shallow prospect for a potential buyer. Only somebody with deep pockets would stand a chance by investing heavily in the squad.

If the majority of their players are sold off I expect this to end in tears unfortunately.

Probably yes, but they would still have a chance.

Seem to remember Barnet going down the same route in the early nineties. They had about 4 players in July, finished bottom, but survived as a club.

This will run for a while yet.

[Terminal Boardom]

Rules is rules!

If the Administrator can not find a buyer by the prescribed time then the liqudation process will commence. Once again, the banks fuk up! First Reading away game I ever went to was Selhurst and being a native of Croydon it will be a very sad day for the area.

[Wimb]

I suppose it now depends on whether the football league feel that the club will be able to fulfil their fixtures next season.

[Stranded]

R5 say that the consortium are still in talks with the bank and a deal could still be done.

[Thomas L'Heureux]

Crystal Palace Administrator Brendan Guilfoyle has admitted that the proposed deadline to start the liquidation of the club is likely to slip.

Representatives from the CPFC 2010 consortium have been locked in talks with the Lloyds banking group (Chief creditors in the Selhurst Park administration) since the early hours of this morning, and more time may be given in order for the deal to conclude.

Guilfoyle has threatened to sell Darren Ambrose to QPR in a £750,000 deal if the news from the talks wasn't forthcoming.

Guilfoyle told the Croydon Advertiser: "The 3pm deadline is not set in stone by me, of course I will give 2010 the time to negotiate the deal. The bank are telling me they are now fully engaged with the consortium and significant progress has been made on the sale of the stadium.

"Apparently they are very close to sealing a deal, so things are looking positive."

[PieEater]

CPFC 2010 have withdrawn from the deal according to R5L

What a bunch of morons.
From what I understand it hinged on a sell-on-clause for the stadium.
If you are buying a football club "for noble reasons" then why would you care about resale?
They are just PR spindoctors out to make money for themselves, so oxf*rd them.

My thoughts as well.

BOS have offered the ground at a lower price with the sell on clause. Surely the priority is to get the ground and worry about that later? Needs must. If they dont like it, then offer the full market rate for the ground.
.

It's not quite so simple though, the bank want any profit from a future sale unrelated to what they actually own now. e.g if they build a hotel on the site as part of the ground the bank would want profits from that. I can't see this will be that hard to resolve as long as CPFC2010 can actually talk to those in the bank making the decisions. As it is now there'd be no point in anyone investing anything in the ground ever.

It's brinkmanship from all sides, with PWC racking up the pressure by arranging a cheap sale of Ambrose to QPR just in case, but i can see a deal being done.

[6ft Kerplunk]

Guilfoyle told the Croydon Advertiser: "The 3pm deadline is not set in stone by me, I just made it up to try and force it through but my bluff was called and I'm looking a bit stupid now. "

[RIP ELM Park]

Deal done CPFC survive

http://news.bbc.co.uk/sport1/hi/football/eng_div_1/default.stm

[Tony Le Mesmer]

Club on the brink of going under in survival shock.

[handbags_harris]

For those that don't subscribe, this month's The Football Supporter featured a short article entitled "Was it worth it?". In short, it's about Portsmouth FC, and more specifically the views of a bloke called "Rug" from http://www.portsmouth.vitalfootball.co.uk about whether or not he would have swapped FA Cup boom and administration bust.

"Due to the cup adventure we had three trips to Wembley, I loved them all - as I will our upcoming semi and (hopefully) final. Little old Pompey at the national stadium that many times and winning the Cup can never be taken away!

The resultant European tour was magical too. Games in Portugal - the afternoon in Guimares town square is right up there with the all-time best moments of my entire life - and Germany were fantastic. If only it could have gone on for longer! Milan at Fratton Park, having them on their knees at 2-0 befor it ended 2-2, was special. I don't think the atmosphere that evening could ever be beaten.

So, Cup winners, trips to Wembley, a European tour, and Milan at Fratton. Yep, it all came at a cost with us spending beyond our means, but then again who doesn't in modern day football? The club has paid a heavy price and we might yet pay the ultimate price. But was it worth it? Hell yeah. Play up Pompey!

That last paragraph says it all for me. Complete sweeping statements suggesting every club spends way beyond their means, or in other words every club attempts to financially dope it's way to success. He clearly doesn't think Pompey cheated their way to success. This, ladies and gentlemen, is your average Portsmouth fan. And this article explains better than I ever could the reason why I don't feel a jot of sympathy for them.

[Barry the bird boggler]

When is their next court appearance?

[leww_rfc]

Preston North End, agree takeover with Lancashire businessman Trevor Hemmings.

http://news.bbc.co.uk/sport1/hi/footbal ... 722002.stm

[Wax Jacket]

football club takes over businessman

[Barry the bird boggler]

While not quite a crisis yet, the debts the Glazer's have amounted have now broken through the £billion mark and ManU fans are getting ever more edgy

Manchester United owner's debts hit £1.1bn

John Sweeney followed the debt trail of the Glazer family Manchester United's owners are £1.1bn in debt - £400m more than previously known - after borrowing extensively against their shopping mall business.

BBC Panorama has found evidence that the Glazer family's debt levels may threaten their hold on the club.

A spokesman for the American family has said it holds more than £2bn in assets.

But the extent of the debt owed by the Glazers is likely to fuel a continuing revolt by some supporters, who oppose their ownership of the club.

Details of the financial arrangements of the owners also come at a time when the sport's governing bodies are facing questions about Premier League debts that have reached a combined total of £3.4bn and the growing popularity of leveraged buyouts in English clubs.

These are people who tell us not to worry about Manchester United debt because they are great businessmen. In their core business in the US they got it absolutely wrong

Mortgage documents seen by the BBC show that the Glazers have borrowed £388m ($570m) against shopping malls and £66m ($95m) against their American National Football League team, the Tampa Bay Buccaneers.

In addition to their mortgages in the US, a portion of the Glazer family's £700m Manchester United debt will soon see them charged interest at a rate of 16.25%.

Fans fear that, despite the club's record of success on the pitch, the Glazers' leveraged buy-out of United has saddled the club with debt and that may mean that there is no spare money in the future to buy a new generation of star players.

Disappointed fans have launched the "green and gold" campaign that resurrects the original team colours in protest over the Glazers' ownership.

Their numbers have reached 158,000 and former United star David Beckham has signalled his support.

They point to the £80m sale of star striker Cristiano Ronaldo last year and note that he has not been replaced by a player of similar quality. Yet ticket prices have gone up by more than a third.

The club's management denies any lack of commitment to buying new talent and says that cash is available for Sir Alex Ferguson to buy players.

City analyst Andy Green, 37, is the disgruntled Manchester United supporter who first uncovered the extent of the Glazers' debts.

Mr Green said: "They borrowed more money at inflated valuations right at the top of the cycle.

Man United's detective super-fan "These are people who tell us not to worry about Manchester United debt because they are great businessmen. In their core business in the US they got it absolutely wrong."

The debt levels at the club are also drawing the attention of other prominent football figures.

Dave Whelan, Chairman of Wigan Athletic, told Panorama: "I don't think anybody can be satisfied with how Manchester United are being run... they have got somewhere in the order of three-quarters of a billion pounds worth of debt. That has got to be eliminated and eliminated quickly."

The Glazer family's main assets are the shopping centre business in America, First Allied Corporation, along with Manchester United and the Tampa Bay Buccaneers.

First Allied is a private business and its accounts are not publicly available. But Mr Green discovered that the Glazers' shopping mall mortgages had been bundled with other loans as Commercial Mortgage Backed Securities.

Those bundles are publicly traded and therefore require the Glazers to provide detailed information on all the mortgages, which are then publicly available in the US.

Mr Green found mortgages - confirmed by the BBC - on 63 of 64 First Allied shopping centres, totalling £388m ($570m).

Most of those were taken out with Lehman Brothers before the US investment banking giant went bankrupt, triggering the global banking crisis in 2008.

While Lehmans collapsed, the Glazers' mortgage debt lived on and many of those shopping centres are not generating enough income to keep up with interest payments.

With falling commercial property values, many are also now in negative equity.

Banks have put 28 of the shopping centres on a watch list, meaning they are worried about the loans.

Four shopping centres - one each in Ohio, New Mexico, Texas and Georgia - have already gone bankrupt.

When they bought Manchester United in 2005, the Glazer family borrowed £500m and paid the remaining £272 million in cash.

Mr Green found that the Glazers had remortgaged 25 of their shopping centres in the six months before the takeover.

He believes the family borrowed against their US properties to pay for United: "At the time when they had to present a huge amount of cash over here in the UK they borrowed a huge amount of extra money in the US and publicly they didn't buy anything else that year."

A spokesman for the family did not respond to questions about the mortgages taken out by First Allied.

But with properties now worth about £380m ($550m) but mortgages valued at £395m ($570m), the shopping mall company now appears to be worth next to nothing.

That financial picture has analyst Mr Green questioning how the Glazers will service their £1.1bn debt.

Fans are wearing green and gold in protest over the Glazers' ownership United chief executive, David Gill, has said: "We're very confident the business model we have in place will ensure the club can continue to compete at the top of football for many years to come.

"The owners have been true to their word since they took over the club in 2005. They've brought commercial expertise and commercial benefit to us in a numbers of areas, and we've seen our revenues grow significantly."

The Glazers' most troublesome debts are held by Red Football, the parent company that owns Manchester United.

They are payment in kind loans, or PIKs, worth £200m and the interest owing on them will soon rise to 16.25%.

Mr Gill told the BBC in January: "We don't worry about the PIK repayment. That's nothing to with the club."

A spokesman for Manchester United told the BBC last week that the club stands behind Mr Gill's assertion that the debts will be repaid without involving the club.

But sources close to the Glazers have confirmed that Red Football may use cash from Manchester United to pay off the PIKs in the future. The Glazers are said to be "comfortable" with the PIKs.

The situation at Manchester United reflects the wider issue within the Premier League, where clubs like Liverpool and West Ham are struggling with huge debts and FA Cup finalists Portsmouth barely staved off bankruptcy.

Both the Premier League and the FA declined requests for interviews on the subject of debt in football.

Panorama: Man United - Into the Red, BBC One, Tuesday, 8 June at 2235BST and then available on the BBC iPlayer .

[Thaumagurist*]

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[TFF]

Why?