Madejski being booed yesterday

[Dirk Gently]

id prefer he coverted loans to shares though
surely everyone would
loans involve him taking cash out of the club on a regular basis
the other involves him turning it into shares in a football club he already owns, only to be converted to cash upon selling up.
which depends totally on our continued success
if we were to be relegated this season those shares would be worth little

im unsure as to why anyone would frown on this

but then i have no idea why people frown on him wanting to recoup his losses at all on here
very strange attitude to have.

They also somehow have convinced themselves that the Abramoviches, Glazers, the Gilletts and the Dubai Royal family are all investing solely to give money away with no return on investment too!

How does that work then? How do they get a return on their investments when the club is debt to the tune of hundreds of millions of pounds? I just assumed football clubs were a rich man's play thing and they just recouped their money when they sold up, not before.

I don't doubt you, btw. I just don't know how these things work.

There's all sorts of speculation about their motives. Some say they're playing the long game, to a time when there is no relegation from the PL and so their investment is a lot safer. Also possibilities of European or world leagues, and some kind of salary-capping (which would require agreement between clubs) but would mean massive profits could be made. Of course, the whole business of foreign matches abroad also dovetails with this as a way to increase revenue.

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.

[Sarah Star]

Sadly, I've always had a sneaking suspicion that the latter motive was the case in a fair few cases, though I can't say I've ever thought JM would do that.

[Uke]

They also somehow have convinced themselves that the Abramoviches, Glazers, the Gilletts and the Dubai Royal family are all investing solely to give money away with no return on investment too!

How does that work then? How do they get a return on their investments when the club is debt to the tune of hundreds of millions of pounds? I just assumed football clubs were a rich man's play thing and they just recouped their money when they sold up, not before.

I don't doubt you, btw. I just don't know how these things work.

As Brendy says they sell it for more than they bought it, the debts are 're-structured' but still remain

Funny how none of these super rich millinaires actually wipe the debts clean isn't it?

Chelski only are in debt to the tune of £736m and United £764m as of May this year!
http://www.guardian.co.uk/football/2008 ... ue.chelsea

Not even a multi-billionaire like Abramovich will write that off!

Also how about this from the same article?

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.

However, with Abramovich's £578m loan, introduced to sign players and pay wages since he bought the club in 2003, plus general amounts owed, taxes and some categories listed among creditors for formal accounting purposes, Chelsea's creditors stood at £736m in total

Of course that doesn't fit in with the 'facts' we keep getting repeated here does it?

[brendywendy]

hands up who would rather madejski running us properly
to ambovich putting us in debt to that ammount

[chandog]

hands up who would rather madejski running us properly
to ambovich putting us in debt to that ammount

well i would be happy if madejski would run the club properly
but at the moment i dont think he is
selling key players and not really attempting to replace them and constantly saying he wants to sell the club - in my book that doesn't count as running the club properly

[papereyes]

Sorry, but being in debt to your owner is hardly anything to get worried about.

United, on the other hand, had Glazer buy them out using loans so their profits merely cover their loan repayments. Which is why the United fans protested so long and hard about the deal going through.

Two significantly different cases, but I thought everyone knew that.

[RoyalBlue]

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! )

[Northern Git]

Sorry, but being in debt to your owner is hardly anything to get worried about.

United, on the other hand, had Glazer buy them out using loans so their profits merely cover their loan repayments. Which is why the United fans protested so long and hard about the deal going through.

Two significantly different cases, but I thought everyone knew that.

It is if he calls that debt in. In finance terms a debt is debt.

I have had more finance proposals turned down for high value capital equipment purchases because of companies debt to principles (directors) than almost anything else bar consistant loss making (and we have been doing that untill recently)

It only becomes not a problem if he agrees not to call the debt in, and I could not see him doing that.

[Royal Rother]

In JM's case most of the original debt has been converted to shares so is no longer owed to him.

[Royal With Cheese]

Let me give you a number of facts that ought to help in this debate ....

1. John Madejski (and his companies) have taken absolutely no money out of Reading Football Club - including in the form of loan repayments.

2. John Madejski has never turned down a request for transfer funds that has been made to him.

3. In the 16 years since the PL was formed, well over 60% of Football League clubs have been forced to go into administration.

4. For a significant number of Football League clubs, "the Reading model" is now the acknowledged best model of financial management for FL clubs.

If that is the case, where has all the money gone? I'm just curious you understand. You seem to know a fair bit more than the average Reading fan. By all means Dodd me as frankly I'm too lazy to go look through HobNob for the answer.

[Northern Git]

In JM's case most of the original debt has been converted to shares so is no longer owed to him.

RR I know some of it was according to the last Report and Accounts - has the rest of it? There was still a considerable amount still on the books as a loan to JM. Cannot remember exactly how much, but I think it was still the bulk of the debt - BW had the exact figure.

[Uke]

Sorry, but being in debt to your owner is hardly anything to get worried about.

United, on the other hand, had Glazer buy them out using loans so their profits merely cover their loan repayments. Which is why the United fans protested so long and hard about the deal going through.

Two significantly different cases, but I thought everyone knew that.

It is if he calls that debt in. In finance terms a debt is debt.

I have had more finance proposals turned down for high value capital equipment purchases because of companies debt to principles (directors) than almost anything else bar consistant loss making (and we have been doing that untill recently)

It only becomes not a problem if he agrees not to call the debt in, and I could not see him doing that.

You are correct, Git

Until 'written off' by the owner it remains a debt

LOL at people who think a million or two (or in Abramovich's case a half billion) is a small amount!

No way can those owners afford to write off the debts like Papereyes implies. Especially with 'turbulent financial waters' ahead.

[Southbank Old Boy]

In JM's case most of the original debt has been converted to shares so is no longer owed to him.

RR I know some of it was according to the last Report and Accounts - has the rest of it? There was still a considerable amount still on the books as a loan to JM. Cannot remember exactly how much, but I think it was still the bulk of the debt - BW had the exact figure.

The charimans loan in the last accounts was £25m

RR how much did you think had been converted?

[Arch]

Let me give you a number of facts that ought to help in this debate ....

1. John Madejski (and his companies) have taken absolutely no money out of Reading Football Club - including in the form of loan repayments.

2. John Madejski has never turned down a request for transfer funds that has been made to him.

3. In the 16 years since the PL was formed, well over 60% of Football League clubs have been forced to go into administration.

4. For a significant number of Football League clubs, "the Reading model" is now the acknowledged best model of financial management for FL clubs.

If that is the case, where has all the money gone? I'm just curious you understand. You seem to know a fair bit more than the average Reading fan. By all means Dodd me as frankly I'm too lazy to go look through HobNob for the answer.

It's all covered in club accounts. 6m profit in 06-07 went to cover a similar loss for the previous season. Profit for 07-08 is unlikely to be more since we spent more on players and had a significantly higher wage bill with several high profile contract renegotiations. As for this year, income from sales of Kitson, Shorey and Sonko will be part of operating budget for this year, with 11m parachute payment and 8-10m gate receipts being the other major factors. Wage bill is likely to be 15-18m, there are operating costs obviously, but for the moment projected income is likely to exceed projected costs by a few million - around 5 maybe? However, long-term, income will be a lot less than this year barring instant promotion. Some planning for that with current money is essential.

[papereyes]

Sorry, but being in debt to your owner is hardly anything to get worried about.

United, on the other hand, had Glazer buy them out using loans so their profits merely cover their loan repayments. Which is why the United fans protested so long and hard about the deal going through.

Two significantly different cases, but I thought everyone knew that.

It is if he calls that debt in. In finance terms a debt is debt.

I have had more finance proposals turned down for high value capital equipment purchases because of companies debt to principles (directors) than almost anything else bar consistant loss making (and we have been doing that untill recently)

It only becomes not a problem if he agrees not to call the debt in, and I could not see him doing that.

You are correct, Git

Until 'written off' by the owner it remains a debt

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.

[papereyes]

Let me give you a number of facts that ought to help in this debate ....

1. John Madejski (and his companies) have taken absolutely no money out of Reading Football Club - including in the form of loan repayments.

2. John Madejski has never turned down a request for transfer funds that has been made to him.

3. In the 16 years since the PL was formed, well over 60% of Football League clubs have been forced to go into administration.

4. For a significant number of Football League clubs, "the Reading model" is now the acknowledged best model of financial management for FL clubs.

If that is the case, where has all the money gone? I'm just curious you understand. You seem to know a fair bit more than the average Reading fan. By all means Dodd me as frankly I'm too lazy to go look through HobNob for the answer.

It's all covered in club accounts. 6m profit in 06-07 went to cover a similar loss for the previous season.

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.

[Arch]

If that is the case, where has all the money gone? I'm just curious you understand. You seem to know a fair bit more than the average Reading fan. By all means Dodd me as frankly I'm too lazy to go look through HobNob for the answer.

It's all covered in club accounts. 6m profit in 06-07 went to cover a similar loss for the previous season.

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.

[Uke]

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.

[papereyes]

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?

[Platypuss]

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