You are right, we have problems all over the club. https://www.barnsleyfc.co.uk/ifollow/latest-videos/ If you listen to the six minutes thirty-six post-match with Poya. whoevers asking Poya Ashbagi the questions can't even speak properly by the sounds. He's stumbling words left right and centre. Poya speaking what I presume third language speaking fine. we are a laughing stock.
Luton & Coventry seem to spend wisely. A couple of seasons ago they were fellow strugglers. For me it should be about our academy, plus an experienced pro, like a Solbauer to be around the kids on the training pitch & field. Kane & Wolfe would be a decent partnership in L1. Kitching & Moon should be OK CB's, with Halme as an option in both positions. Morris is the one we need to keep for me. His injury record may mean offers are more limited, unless someone fancies a punt. I'm resigned to losing Helik, Andersen, Collins & Woodrow. We have too many squad players on the missing list, like Schmidt, Thomas, Oulare that are pulling up no trees at their loan clubs.
Serious question Red Rain. Can the club compete at League One level? Given the size of some of the clubs in that division, we will definitely not be the biggest fish in that particular pond.
I honestly do not know. There will be a big adjustment as we cut our budgets across the board to meet the new conditions, with lots of players leaving and lots of new players coming in on lower wages. There will be players promoted from the U18 and U23 teams, and some of those players may not be ready. We took out a big loan from the EFL to see us through COVID. That loan has to be repaid over 2 years, so the second year will still be outstanding. When I looked at the Accounts, it looked like we might need a cash injection from our owners, but as we know, they are very reluctant to do that sort of thing. All that seems very negative, and I do not want to paint a negative picture when I really do not have enough information to paint a picture, one way or another. All I will say is that I will be surprised if we are promoted at the first time of asking.
My concern is not that we won't get promoted first time. Rather, I honestly believe that Administration, sooner or later, is almost inevitable. The operation runs at a loss. Balance sheet cash has been used up. We are in debt (even discounting the £2.5m relating to the £750K issue), and we are just about to lose a very significant amount of income. Despite what some people think (or hope) I do not perceive there to be saleable value within the current squad that would make a significant difference (which is, after all, the principle objective of the 'model'). Any attempt to address immediate cash issues, through incurring more debt, has the obvious disadvantage that this would have to be serviced at a time of falling revenues. Investment from the owners? Forget it. In short, we are in a holy mess, yet without having done any of the stupid things you consistently point out that a number of Championship clubs have done.
And just to compound the misery, if the owners do not provide an equity injection i think any debt available would be at a penal rate at best and most likely not forthcoming. Lenders are not falling over themselves to lend money to a business with a failing operating model and minimal assets to secure debt against. The statement by Khaled that there is a further £2.75m to come form the club to fund the purchase makes the likelihood of any lender willing to take a punt on BFC at any rate highly unlikely.
I think that you are correct in your analysis of our situation in every aspect but one. PMG invested about £8m to buy the business. If the club goes into Administration, all of that is lost. Their money has been thrown away. I do not doubt that it will be a difficult decision for them, but they do potentially have a decision to make. Do we write off our investment, or do we loan the club sufficient monies to keep it solvent and operational and try to recoup our investment plus loan by selling it. It will not be the first time that the board has had these discussions. Almost all of the teams in the Championship are living beyond their means, and the owners of almost every club are having to loan the club money to enable it to continue in business and compete. Will it require a larger loan investment to keep the team competitive for player wages and salaries in the Championship, or will it require a larger loan to drop a league, face a huge drop in revenues, and change the structure of the club to more closely match that reduced revenue. If you look at the losses of clubs playing in the Championship, and compare them to the losses of clubs playing in League One, you will find that in most cases, the losses are lower for League One clubs. In spite of the higher Revenues, clubs in the Championship spend all of that and more on player wages. It is a nonsense that climbing a league and increasing your turnover makes the club worse off financially, but the evidence is that that is so, and until the owners of clubs in the Championship agree new and enforceable FFP rules, it will remain so.
Did they actually pay £8m for the club though or is that the total amount if they ever do pay the £2.5m they're withholding? That's not a loaded question by the way, I don't know the answer.
Initial amount paid was £7.4m. This is shown in Oakwell Holdings accounts for year ending 2018. I think the argument of whether they invest further depends on their long term view of value and how they wish to operate. Just because an investor has put £7.4m in to an investment doesn’t mean to say that the logical answer is to always put more money in if there is no obvious longer term value. Unlike other owners, the BFC board, in the main, have no emotional attachment with the club. The alternative if a seller can’t be found is to liquidate any value and pay the proceeds up to BFC investments. That is the worst case scenario.
To be honest, I do not know the answer either. I know that £8m was the figure quoted, but it was not made clear if that was the figure paid, or whether some of it was based upon performance.
Is it true that they invested £8m? There is an argument that at least some of that was offset by cash and the positive balance of creditors v debtors. The fact that they then proceeded to fritter much of it away on a series of ill-judged purchases is absolutely down to their mis-management.
It is the amount of money that they paid to the Cryne familly for the shares in the business, or at least 80% of those shares. The company was cash rich at the time, and all of that money is now gone, but that has been spent in running the business. Well most of it has. We all know about the £750k don't we.
Very subjective, a typical business valuation would be a multiple of EBITDA with a net debt adjustment. The value of the deal back in 2017 was £7.4m and a further £4m paid in annual instalments of £1m pa for 80% of the club. Given there was circa £5m cash on balance sheet it would suggest 80% of the club cost around £6.5m. The actual mechanics saw the club become 100% owned by BFC investments and Oakwell Holdings taking a 20% holding in BFC investments and receiving the cash payment. The assets are mainly intangible in the form of player registrations and the perceived value of the football league membership. Any future transaction price will be very subjective and very dependent on views rather than tangible asset value.
