Administration

[P!ssed Off]

Obviously there was a confusion between the waste of space Drenthe (2 year contract, 1 left) and the waste of space Pogrebnyak (4 year contract, 2 left).
Easy to make that mistake.

[strap]

Now I don't know a whole lot about company administration, but look at it this way:

If JM can hold his nerve, get shot of the charlatan currently owning 49% of the club, and keep the Academy going as it is, in a few years we will be wondering what all this recent fuss has been about.

Apologies if this is all bollocks - it just seems to make sense to me!

You clearly do not know much about administration. AZ is the charlatan who owns 51% (not 49%) of the club.

Thanks for spotting the error, got my percentages swapped there! Of course, the unasked question is how can JM be in control now if he only has 49%? Maybe AZ sold him 2%? Not suggesting this is true, merely asking the question.

As for the rest of the post, still find it hard to accept that any of the major creditors would put the club into Administration just to get pence in the pound owed to them, rather than waiting for an opportunity of getting more when conditions are better. I suppose if they need the readies now and are prepared to accept to take a hit now to secure at least some of what's owed .....

[Royal Ginger]

the unasked question is how can JM be in control now if he only has 49%? Maybe AZ sold him 2%? Not suggesting this is true, merely asking the question.

I suspect that this has been taken out of context by many. Was the statement about Sir John being in control not just a reference to the fact that AZ's people aren't around to do the day to day stuff? Sir John is in "Control" of setting season ticket prices, number of stewards, signing off on merch etc. I'd be very surprised if we're talking about any sort of ownership scenario.

[Wimb]

the unasked question is how can JM be in control now if he only has 49%? Maybe AZ sold him 2%? Not suggesting this is true, merely asking the question.

I suspect that this has been taken out of context by many. Was the statement about Sir John being in control not just a reference to the fact that AZ's people aren't around to do the day to day stuff? Sir John is in "Control" of setting season ticket prices, number of stewards, signing off on merch etc. I'd be very surprised if we're talking about any sort of ownership scenario.

^^^ this

[Isaac Hunt]

With the parachute payments still to come

It has been strongly rumoured by some close to the board that those future parachute payments have already been borrowed against by AZ.

[Royalclapper]

Our finances must be in tatters - how the fcuk can't they be?

AZ did well to pinpoint RFC as his target to plunder, Heathrow only being half hour away for that all important quick getaway.

Buy a club by investing a nominal sum of false money, then promise even more false money, dupe the fans with a few sexy signings and quickly do one with the Prem money. £2m investment & do a runner with £20m = very profitable shitbagging...see ya'll!

Now we're left with wages and other expenses that could cascade nicely over the Angel Falls whilst trying to stem it with the good scout guide, a box of plasters and a ball of string.

[Hoop Blah]

What evidence or scenario is there that he's run off with money from the club?

Seems to me all he's done is buy half a club, get a bit excited and over commit it financially before running out of money and/or interest and leaving us in the lurch.

I'm not sure how he can have made any money out of it at the moment.

[Uke]

He over committed the club

He then disappeared

Leaving SJM at least doubly as overcommitted as before, which no one could afford.

And that is why KPMG or similar beckons

Andrew Andronikou is probably circling already

[Esteban]

This may be a stupid question, but as he only owns 51% of the club, how can he be entitled to 100% of the money? A majority owner he may be, but surely SJM still has some say in where the money goes?

[Royal Rother]

Our finances must be in tatters - how the fcuk can't they be?

AZ did well to pinpoint RFC as his target to plunder, Heathrow only being half hour away for that all important quick getaway.

Buy a club by investing a nominal sum of false money, then promise even more false money, dupe the fans with a few sexy signings and quickly do one with the Prem money. £2m investment & do a runner with £20m = very profitable shitbagging...see ya'll!

Now we're left with wages and other expenses that could cascade nicely over the Angel Falls whilst trying to stem it with the good scout guide, a box of plasters and a ball of string.

So, he paid SJM for 51% of the shares (sorry can't remember how much, but say £15m??) and has also injected loans so that he so that he is now owed £19m by the club) yet he has done a runner with £20m...?

How do you work that one out then?

[Uke]

This may be a stupid question, but as he only owns 51% of the club, how can he be entitled to 100% of the money? A majority owner he may be, but surely SJM still has some say in where the money goes?

AZ was the controlling interest via TSI

As owners, they had the say over club finances, developments and signing up to commitments. SJM was left in charge of operations, his signature was not needed on contracts.

[Sutekh]

Love all this pure speculation. We'll never know what has really been going on behind the scenes and why AZ decided to go or felt he could no longer contribute. All we're able to do is make 5 by adding spurious news headlines to a few points gleaned from accounts when they're posted and anything said (or not said) by the club.

All we know for sure is the club is looking for a new owner and finances are not good at the moment due to the lack of an owner and receiving reduced PL payments.

[RoyalBlue]

Now I don't know a whole lot about company administration, but look at it this way:

If JM can hold his nerve, get shot of the charlatan currently owning 49% of the club, and keep the Academy going as it is, in a few years we will be wondering what all this recent fuss has been about.

Apologies if this is all bollocks - it just seems to make sense to me!

You clearly do not know much about administration. AZ is the charlatan who owns 51% (not 49%) of the club.

Thanks for spotting the error, got my percentages swapped there! Of course, the unasked question is how can JM be in control now if he only has 49%? Maybe AZ sold him 2%? Not suggesting this is true, merely asking the question.

As for the rest of the post, still find it hard to accept that any of the major creditors would put the club into Administration just to get pence in the pound owed to them, rather than waiting for an opportunity of getting more when conditions are better. I suppose if they need the readies now and are prepared to accept to take a hit now to secure at least some of what's owed .....

The people most likely to put the club into administration, as we have seen with other clubs, are HMRC. So as long as we keep paying our tax bills we will probably be OK. If not, JM might have to try and call in a few favours from his Tory mates to get favourable settlement terms!

[Elm Park Pasty]

Now I don't know a whole lot about company administration, but look at it this way:

If a company goes into administration, it means it will try to pay off as much debt as possible from whatever means are available. You end up paying perhaps 25p in the £1 say, (ignoring the "first call" of secured creditors etc, we don't know if JM/AZ are first in the queue, although I suspect they might be).

Let's say JM is owed, what, £25M, (can't remember the last accounts or whether the impact of AZ's first payment tranche had any effect on the figure, so this could be total nonsense, but for the sake of argument, bear with me), and AZ is owed say £9M with the rest being this Vibrac thing that I must have missed.

If JM or indeed AZ forced the club in to Admin to get their loans back, it is highly likely they will only get a percentage of the original loan back. What sense would that make? Surely it is better to offload those players who could command a transfer fee, (I'm thinking of McCarthy, McCleary, Gunter, Williams, Guthrie, ALF and possibly Obita - and I'm assuming Pog/Drenthe would be immovable due to the size of their salaries, and Blackman/Akan because they're utter pants - and the likes of McAnuff/Leigertwood not having their contracts renewed), and then continue to run the club as we used to before AZ appeared.

Agreed, we would not be anywhere near the play-offs, and indeed would doubtless be fighting a relegation scrap, BUT - it would be an ideal opportunity to start to blood the U21's, and we would significantly reduce our squad numbers as well as wage bill.

I think a degree of reality does need to enter into the fans consciousness now. We have had a damn good last 10 years, (by our own relative historical standards), and it is clear we need to retrench for a few years. This is unpalatable to the "new" fan base, but in the long term must be seen to be a sensible approach. Controversially, I think this would make our Academy even more stronger, as, with the likelihood that progression into the 1st 18 squad is eminently achievable, we would be a more attractive team to join than say or local PL rivals. The key here of course is to retain our Grade 1 Academy status.

Clearly we wouldn't want to become a southern Crewe Alexandra, but with the likes of Eamon Dolan in the Academy, NA as manager (due to his proven record of blooding youth), we do seem to have the foundations for moving forward, albeit from a lower base. Why couldn't we be the next Southampton? (And who would have thought THAT sentence would have been written 5 years ago!!)

Again, being controversial, I am perhaps glad we missed the play-offs this year. It means we cannot paper over the cracks again this close season. If the above does indeed come to pass, we could at least see hungry, enthusiastic players, playing an attractive brand of football next season, without the pressures of being a recent ex-PL team, and expectations muted. I did enjoy the U18/U21 games this season on YouTube etc. If these lads were given a bit of time, I do believe they could take this club forward through the coming 2/3 leaner years.

You must remember that these last 10 years or so have been the best, by far, in the long history of this great club of ours. No-one has a divine right to stay at the top, or even near it - one only has to look at Liverpool for the last 20 odd years, and ManUre this season, not to mention Wolves, Birmingham, Leeds, Portsmouth and so many other clubs too numerous to mention, to accept that statement.

If JM can hold his nerve, get shot of the charlatan currently owning 51% of the club, and keep the Academy going as it is, in a few years we will be wondering what all this recent fuss has been about.

Apologies if this is all bollocks - it just seems to make sense to me!

I did correct the little faux pas above

This has to be the most sensible post on the whole subject I have seen. I don't pretend to know much about administration, but I always thought clubs' resale values diminished greatly upon the prospect of it. I am not saying administration is not something that is going to happen, but we are probably in the 'fortunate' position where the two debtors we owe the most (apparently!) to, are the same two people who will lose out the most if administration takes place. The issue of poor return on the debt owed, would be coupled with watching whatever money they could make by selling the club dwindling away. I have read elsewhere that BZ is putting money in to keep the club afloat but no more, and I suspect SJM has day to day running of the club because of that. The Zs seem to have reverted to a reluctant silent partner status, although I am wondering how SJM can dictate the terms of a takeover if he is not in total control of the club (such as keeping the hotel penthouse, stadium naming rights etc) as presumably the Zs could still force an offer through. We might start seeing something happen this summer, but I'm not expecting administration to be it (at least I am hoping it won't be!!!!).

[Hoop Blah]

The issue with administration will be if our month to month running costs are far exceeding the incoming revenue. I'm sure as a club we could continue in that way for a while, as every other club seems to do from time to time, but I'm not sure how long.

I've heard* that Madjeski was covering running costs to quite a considerable amount but wasn't able to go much further. Now we at towards the end of the season and new ST revenue should be coming in and the wage bill soon to reduce significantly I'm hoping that the threat of administration has passed for now. They probably would've wanted a losing run to to play off final to generate some much need additional income though.

* semi-plausible sources but all second or third hand, so I wouldn't like to put too much weight beding the rumours

[Reading4eva]

From what I understand the club is making a loss of around £500,000 per month, which over a season is £6 million. Now I can imagine that Zingarevich has borrowed against the parachute payments and then some, but what I think people forget is the every day running costs at the club such as stewarding, ticket office staff etc. The business must have around 100 employees and if you pay them £18,000 each for example, you straight away there have a £180,000 loss. Then you have the tax bills which must be paid above all others. Failure to pay that could result in a winding up order which could be terrible. Is Madejski or Zingarevich still calling the loans in on the club. My thought is maybe one is, maybe one isn't.

The club must shift the top 3 top earners who I understand to be Pogrebnyak, Drenthe and Guthrie. The fact is though, Pog is a 30 year old with 2 years left. Drenthe is a loose cannon. I could see someone picking up Guthrie fairly easily. Once mission number one is over, then see how much of the parachute payments that frees for the other areas. There is a big possibility the club might have to make redundancies at all levels.

We could do without those three players and still expect a top 6 finish next season.

Has no-one thought of the fans trying to raise enough money to grab the other 51% from Zingarevich? A fans consortium would make the club more attractive and will enable the fans with an opportunity to decide who we want in charge of our club moving forwards. If no one else offers I may look to head this movement

[Haag Royal]

I'd certainly be interested to support financially a fans consortium but have no idea how to get it off the ground nor the time to do it. Let's say we can find 100 fans who can invest £100.000. £10m straight away - and I am sure that there are that many in the Reading area willing to consider it.

Is that how it is done? or is it better to have 1,000 fans each investing £10,000. It would be interesting to know.

[Royal Monk]

Lmao.... Good luck in finding people for that, I don't know many people gagging to loose those sorts of levels of cash

[MouldyRoyal]

^this, and how would the consortium seek to fund the operating losses year on year?

[maffff]

^this, and how would the consortium seek to fund the operating losses year on year?

We ask those 100 fans to make a lifelong* commitment of £100k per year, plus inflation, plus VAT.

*lifelong is the life of the club, not the life of the individual, upon death the next of kin becomes liable for repayments.