Sorry...another thread about the plan....

Quite a few posters pointed out that 'the plan' is long term and involves.....

A) buying young players, developing them and selling them on at profit (as per last 2 + 3 seasons). Fair enough! HOWEVER.... the plan then moves on to ..

B), supposedly re- investing that profit identifying and buying players who initially cost more but (potentially) capable of become even better than those they replaced as they are already playing to a higher standard.

Thi,process, claim the owners, is to be repeated year on year so we improve and move up the League

Unfortunately, this is where we have been 'sold a pup'. The evidence is that, with the exception of the head coach, the owners, bought cheap, sold on at a considerable profit (notwithstanding certain players wanted away - but that is a different argument re wage structure) but then, rather than following part B) of the plan acquired players even less experienced and showing no more potential than those they replaced.

My biggest concern though, is that, (and not sure if it is conjecture or fact - I am sure someone on here can confirm) but billionaire owners seem to have taken out loans against club assets to fund their project. This,, IMO suggest a lack of long term commitment to the cause, that and the sudden 'silence' coming from those on high.
Worrying times, even ignoring what is happening on the field

 

Conway spoke in the fan zone a week ago and Dane did big interviews last week with Sky and the Chronicle. They’re at every game. I understand the results are really bad so far but the reactions now are getting ridiculous.

 

I posted a thread a few weeks ago regarding the owners and the plan. I got some stick for being a moaning minnie/unrealistic. However, I'll stick to my view - the owners don't care a hoot for Barnsley people. They are here to make money. That is all. Defeats/relegations/wins/promotions are irrelevant as long as money can still be earned. The whole saga is disillusioning (if that's a word)

 

Surely the club has to be successful to make money?

What assets have they borrowed on ?

 

I thought those " better and more experienced"" were targeted but then wouldnt come And I agree that is a problem.

 

So you are a billionaire consortium and take out a contingency loan (dead money) costing x% interest rather than transfer funds from your own considerable resources into a contingency pot (earning interest). That makes absolutely no business sense. If you have available capital even (or rather especially) if it is earning a relatively low rate of return why would you borrow money from an external source which costs at a higher rate of interest) unless there is a possibility you may default on it and let the business take the hit? It may be "common practice amongst football clubs" but it is surely not common for most clubs to be owned by billionaires. .

 

Common practice.

you dont stick your own money in the pot.

Unless you can secure it against something.

 

What have they got to secure it on ? That’s my question ,
They only own half of ground etc so no ones gonna layout on that with the other half’s owners restrictions .
I just don’t know how this will work I think it’s unfounded speculation .

 

it'll be secured against future income, TV money, transfer fees that kind of thing. Regardless if the lender is a Bank or the director.

 

Can’t see that myself tbh , there’s no assets there if tv money fails or future transfers fail they end up with nothing .
Assets are things that can be seized if payment fails, these are only promises.

 

TV money is a fixed amount.

They can forecast potential season ticket sales.

And they know roughly what transfer instalments are due from players XYZ. on previously completed deals.

and thats the risk the lenders choose to take in order to return a profit.

 

It’s a fixed amount if you know which div your gonna be in year after year .
ITV digital makes this a big risk to secure loans imo as does future transfers .
I’d have thought large significant loans would be based on more secure assets tbh as if any of these fail there’s nothing .

 

A key question for me is what is meant by "taken out". I can understand a loan facility being arranged to cover medium/long term cash requirements, possibly the transfer needs mentioned in this thread. However, as I understand matters, we had transfer income from the sale of Lindsay, Pinnock and Moore. It seems unlikely that the outgoing transfer fees in the summer should have been significantly more than the income from those three sales. It may therefore be the case that the loan facility has not been drawn down. I always interpret the term "loan" as different to an overdraft, which should only really be a short term cash availability cover. Assuming the facility is a loan facility then I expect there would be some percentage of the value of the facility charged as an arrangement/facility fee. The interest rate for drawings of the loan would be a separate condition and should only bring about a need to pay interest if the facility is drawn on.

The other thing I'm not clear on is whether the loan facility (if such it is) is secured or unsecured. Obviously unsecured loans carry more expensive interest rates than secured ones. If unsecured, there may be a requirement for a guarantee to be provided - this would normally come from an interested party, such as the owners of the club (a guarantee would also be expected to reduce the cost of the loan facility). If the loan is secured then its cost should be lower than otherwise. Question is what is there to secure against. As many have stated, the only assets of the club are the players contracts (which are rather "volatile" assets as we've seen !). BFC doesn't own any real estate since Patrick Cryne's purchase of the club. The only other option seems, as has been mentioned by others, to take out loans against the future income stream: ticket sales and EFL payments. I haven't looked at any BFC accounts since administration so don't know how detailed they are as BFC is a very small company and might benefit from limited disclosure requirements. I've read on here where others have made reference to the accounts - does anyone who has done so know if BFC accounts disclose bank/loan facilites ?

 

They don't own any of the ground, do they? I wasn't aware they'd taken up the option on purchasing the stadium share?

 

Not sure tbh ,
I was on the understanding they’d bought 40% of the Cryne families share but not sure ,
Can’t understand if they’ve taken a loan out on monies owed from transfers when they could just use the money tbh.

 

Not disputing this but thats how clubs without a ground tend to get secured charges.

The repayments will be based on predicted revenues rather than anything else, as youve said these can fluctuate.

Unless its secured on Schmidt which is why we wont play him in case he gets injured.

 

I think we have realised!!