3rd winding up order due

[Beefy]

What would admin achieve? Our debts at the moment are, no matter how you describe them, minimal in comparison to what they have been and we'd be exchanging 10 points to resolve little debt. RM would still hold the cards to our future and we'd be no better off for it. The time for administration has been and gone.

Administration would be a step into the unknown. I'd be cautious before stating as fact what would happen to us in that instance. It could be the best thing that could happen, although on the face of it I think it would only have the effect of wiping out some paper debt to RM and one month's tax. It wouldn't solve our cashflow problems and, as our largest creditor, the Adminsitrators would be obliged to run the club to maximise the return to Ron Martin.

On the other hand I guess the writing off of debts to Martin Dawn and RHL could potentially force those two businesses into Administration which I guess would then open up the possibility of someone else swooping in and snatching up the whole lot.

 

[Cricko]

It's dawned on me that football is ****ed. The wage budget is apparently just over £1.3m this year. For me that's too high. I'd have it a lot

I still find this figure hard to believe, we would need an average of 25 players on 50k a year for it to amount to that figure.

 

[EastStandBlue]

It may unravel the web of companies and if the administrator can prove deliberate wrong doing on RM"s part we could possibly get rid of him once and for all ?

Do you consider him a fit and proper person to be running our club or any business for that matter ?

And what if he couldn't prove deliberate wrong doing? What if the administrator waltzed in, axed the youth development programme to cut costs, sold our assets to settle the outstanding HMRC bill and then Martin, a la Ken Bates, retained control of the club given the x years of outstanding rent that hasn't been paid. I've voiced my opinions about RM on here before, I think we (RM and the Club) have shared interests in getting us to FF and he's ballsed up some major decisions, but none more so than anybody else would have given the circumstances. I don't believe he's intentionally screwing the club over and I don't believe he's deliberately taking us to the brink. If he was, he's doing a shoddy job.

Administration would be a step into the unknown. I'd be cautious before stating as fact what would happen to us in that instance. It could be the best thing that could happen, although on the face of it I think it would only have the effect of wiping out some paper debt to RM and one month's tax. It wouldn't solve our cashflow problems and, as our largest creditor, the Adminsitrators would be obliged to run the club to maximise the return to Ron Martin.

On the other hand I guess the writing off of debts to Martin Dawn and RHL could potentially force those two businesses into Administration which I guess would then open up the possibility of someone else swooping in and snatching up the whole lot.

I'd definitely agree that the outcome of MD is more interesting and probably pertinent to our current predicament... MtS brought up a great point in another thread last week.

 

[Cricko]

Good point.

Also what will happen if Martin Dawn go to the wall this time ? If they don't how will they get out of it ?

Will some of OUR CLUBS money (sainsbury's) be used to bail them out ?

This will be very interesting, if RM manages to settle Martin Dawns debt why can't he put another £30k into SUFC to prevent HMRC taking us to court ? Is he down to his last £30k or so ?

Keep a very close eye on this one because i'd love to know where the money is coming from for Martin Dawn this time.

I am sure some of the Sainsbury's money will be used to make sure they don't and appear in the books as a debt repaid by SUFC to MD.

 

[Cricko]

In no way am I standing up for RM in this debate, but having no home matches at all in December must of shot any budget he had to pieces.

 

[Neil 15GB]

I think you will find that RM has not put a single penny of his own money into the club. He is using the club to service debt and the assets to generate huge development profits for Roots Hall Limited. Who are the only shareholders in RHL ? RM and Geoffrey King. What are they doing at Fossetts ? setting up another development company that owns all the assets. Who are the shareholders in that company? would you believe it RM and GK !

There is a simple question nobody seems to ask. If the club can not generate enough revenue from Roots Hall to pay players, staff, VAT and most importantly rent on the lease with RHL HOW will it generate enough revenue by moving to a bigger stadium with increased running costs ?

 

[Beefy]

I still find this figure hard to believe, we would need an average of 25 players on 50k a year for it to amount to that figure.

It's a lot more than I'd pay, to be honest, but it doesn't strike me as that unbelievable. Twenty players earning an average of £67k per year. I'm sure we've got some players on a lot less than that but Paterson, Spencer, Barker, Coughlan, Easton and Grant were likely all on a fair bit more than that. If the youth team players are included in that wage budget then that reduces the average for the first team squad as well. They may only earn £80 a week or something but if we've got 30 of them then that adds up (again, I have no idea if the money for the kids comes from the wage budget, I'm just speculating).

 

[Beefy]

In no way am I standing up for RM .

I think that goes without saying :smile:

 

[Beefy]

There is a simple question nobody seems to ask. If the club can not generate enough revenue from Roots Hall to pay players, staff, VAT and most importantly rent on the lease with RHL HOW will it generate enough revenue by moving to a bigger stadium with increased running costs ?

Running costs should be decreased after the move. Roots Hall is an old ground which costs a lot of money to maintain. Moving isn't a magic solution because we'd still need additional revenue streams to survive but staying at Roots Hall isn't a solution either and, in theory, the Club should find it more achievable to attract investment once building starts. No one in their right mind would put a penny into this Club right now because they would have no chance of seeing it again.

 

[Norfolkshrimp]

On the other hand I guess the writing off of debts to Martin Dawn and RHL could potentially force those two businesses into Administration which I guess would then open up the possibility of someone else swooping in and snatching up the whole lot.

Possibly yes, who knows but I cannot see how admin would make things better for RM in any way shape or form, if it's the last straw that forces him out i'd take it.

 

[Cricko]

It's a lot more than I'd pay, to be honest, but it doesn't strike me as that unbelievable. Twenty players earning an average of £67k per year. I'm sure we've got some players on a lot less than that but Paterson, Spencer, Barker, Coughlan, Easton and Grant were likely all on a fair bit more than that. If the youth team players are included in that wage budget then that reduces the average for the first team squad as well. They may only earn £80 a week or something but if we've got 30 of them then that adds up (again, I have no idea if the money for the kids comes from the wage budget, I'm just speculating).

Nope there was a budget of 600k in the figures in the Echo the other day for the youth set-up..The biggest earners were Paterson and Spencer on 1500k a month none of the current 1st team squad I doubt are anywhere near that figure....although I think it includes costs for part time staff such as doctors/ goalkeeping coach etc etc.. etc..but it is being used as the convenient figure which matches 60% of our turnover.Whether it includes PS's wages and that of the scout etc I have no idea.

 

[Norfolkshrimp]

No one in their right mind would put a penny into this Club right now because they would have no chance of seeing it again.

True but very few people invest in football clubs expecting a return. I'm sure the 11 people at Torquay expect no return but the burden is shared which makes a huge difference.

 

[Cricko]

I think you will find that RM has not put a single penny of his own money into the club. He is using the club to service debt and the assets to generate huge development profits for Roots Hall Limited. Who are the only shareholders in RHL ? RM and Geoffrey King. What are they doing at Fossetts ? setting up another development company that owns all the assets. Who are the shareholders in that company? would you believe it RM and GK !

There is a simple question nobody seems to ask. If the club can not generate enough revenue from Roots Hall to pay players, staff, VAT and most importantly rent on the lease with RHL HOW will it generate enough revenue by moving to a bigger stadium with increased running costs ?

I have been asking that question all week..The club say that they hope to build the hotel and 4th stand in tandem with the rest of the ground....but what happens if it does take 5 years to find somebody..Hopefully this will not happen with the shopping complex that RM is putting up ( and do not forget nothing from this complex goes to the club) it will attract the funding and make it all happen..If not, will RM once he has us out of RH want to continue funding the losses?

I think not and he will then vanish faster than Lord Lucan.

 

[TravellingBlue]

It's a lot more than I'd pay, to be honest, but it doesn't strike me as that unbelievable. Twenty players earning an average of £67k per year. I'm sure we've got some players on a lot less than that but Paterson, Spencer, Barker, Coughlan, Easton and Grant were likely all on a fair bit more than that. If the youth team players are included in that wage budget then that reduces the average for the first team squad as well. They may only earn £80 a week or something but if we've got 30 of them then that adds up (again, I have no idea if the money for the kids comes from the wage budget, I'm just speculating).

I no longer think it matters who is paid what or how much. I do not think SUFC generates anything like the required amount of money needed to sustain the club as a viable business. I believe we are in so much debt that without the Sainsbury's milestone payments we, as a club, are non existant - bankrupt.

The one simple question. If we didn't have Sainsbury's money would we be able to stand on our own two feet, answer no.

We seem to be living day by day from whatever drips Sainsbury's give us - regardless of who does or does not get paid. HMRC, players, staff, contractors - we owe just about everybody - how can this go on - and how can the people who run this business continue to grind out another day at our club?

I have thought long and hard about Administration - I just have never seen it as a viable option, but now I believe we may have to take it just to affect our creditors and debtors and start again.

Really wish I hadn't got into this topic!!

 

[Norfolkshrimp]

I no longer think it matters who is paid what or how much. I do not think SUFC generates anything like the required amount of money needed to sustain the club as a viable business. I believe we are in so much debt that without the Sainsbury's milestone payments we, as a club, are non existant - bankrupt.

The one simple question. If we didn't have Sainsbury's money would we be able to stand on our own two feet, answer no.

We seem to be living day by day from whatever drips Sainsbury's give us - regardless of who does or does not get paid. HMRC, players, staff, contractors - we owe just about everybody - how can this go on - and how can the people who run this business continue to grind out another day at our club?

I have thought long and hard about Administration - I just have never seen it as a viable option, but now I believe we may have to take it just to affect our creditors and debtors and start again.

Really wish I hadn't got into this topic!!

Great post and sadly I agree.

As disappointed as I was to see Tilson go and i'm on record for criticising PS for the manner in which he took the man's job before Tilson had actually gone I have to say PS has done a great job and I think we should be very grateful for the points he has accumulated this season. We could probably take admin and not go down now.

 

[Beefy]

I no longer think it matters who is paid what or how much. I do not think SUFC generates anything like the required amount of money needed to sustain the club as a viable business. I believe we are in so much debt that without the Sainsbury's milestone payments we, as a club, are non existant - bankrupt.

The one simple question. If we didn't have Sainsbury's money would we be able to stand on our own two feet, answer no.

We seem to be living day by day from whatever drips Sainsbury's give us - regardless of who does or does not get paid. HMRC, players, staff, contractors - we owe just about everybody - how can this go on - and how can the people who run this business continue to grind out another day at our club?

I have thought long and hard about Administration - I just have never seen it as a viable option, but now I believe we may have to take it just to affect our creditors and debtors and start again.

Really wish I hadn't got into this topic!!

The thing is that we have a lot of debts (ie bills which need paying) but not much significant debt. Administration would wipe out the paper debt, but wouldn't leave us any more capable of paying our next wagebill or next VAT bill.

 

[Neil 15GB]

RM runs all his business interests through a complex web of operating companies with interdependancies and cross financing. They are all limited companies which protect his personal assets. The one company which is doing very well indeed is based in the British Virgin Isles............... so it's not only SUFC which does not pay the tax man.

 

[Norfolkshrimp]

We need him struck off as a director once and for all and my hope is that the administrator may uncover enough evidence to achieve this if he has done anything illegal. Of course Mr Martin may be entirely innocent of any wrong doing.

 

[TravellingBlue]

I have been asking that question all week..The club say that they hope to build the hotel and 4th stand in tandem with the rest of the ground....but what happens if it does take 5 years to find somebody..Hopefully this will not happen with the shopping complex that RM is putting up ( and do not forget nothing from this complex goes to the club) it will attract the funding and make it all happen..If not, will RM once he has us out of RH want to continue funding the losses?

I think not and he will then vanish faster than Lord Lucan.

The 4th stand is a major concern - will RM ever build it? It would be solely his responsibiity - I just cannot see it.

Great post and sadly I agree.

As disappointed as I was to see Tilson go and i'm on record for criticising PS for the manner in which he took the man's job before Tilson had actually gone I have to say PS has done a great job and I think we should be very grateful for the points he has accumulated this season. We could probably take admin and not go down now.

For me the Tilson days are long gone - I haven't taken to PS but no one can say he hasn't done a stunning job to get us to where we are now. Put us into Administration and I also believe that we have enough points to stay up - providing we can find sustainable income/buyer during our time in Administration.

The thing is that we have a lot of debts (ie bills which need paying) but not much significant debt. Administration would wipe out the paper debt, but wouldn't leave us any more capable of paying our next wagebill or next VAT bill.

In business ALL debt is significant. Administration would mean an independant audit of accounts and an 'auditor' placed at the forefront to lead the club forward. The first thing any club does in administration is ensure payment to HMRC - everyone else is after the taxman! Still would hate it to happen to us, but can we carry on the way we are?

 

[Yorkshire Blue]

No one is sticking up for Martin.

The "small bill" that they wanted was still several hundred thousand from what I recall. And we'd still have been more than £1.5m in arrears even if that had been paid. But it couldn't be paid because we didn't have the cash.

The tax bill shouldn't have got into that state and obviously should have been paid every month when due. But the reason why hundreds of businesses are wound up every week and why 60 Clubs now have gone into Administration since 1997 is because when a company is struggling for cash the tax money is there as a pool of working capital which is difficult to resist. Football Clubs in particular are prone to this problem because the penalty for running up a massive tax bill which you then can't pay (ten points) is nowhere near sufficient. Essentially the lack of a decent punishment actively discourages Clubs from living within their means because honest, decent Clubs are being asked to compete on the field with Clubs who spend money that they don't have.

It would appear that we stopped paying tax upon relegation to League One. That season we finished third from bottom but it later came out that several of the sides who finished above us (Coventry, Ipswich, Southampton, Cardiff off the top of my head - I'm sure there were others too) all had major financial problems the next season and either went into Adminsitration to wipe out their tax bill or had to get new owners to pay the accrued amount. Had any one of those Clubs not been using these financial steroids then maybe we would have finished the one place higher that we needed in order to stay up. Had we not bothered to pay the £1m or whatever our total tax bill that year was, maybe we could have signed another few players or had a bigger wage budget to enable us to attract better players.

Ron Martin is a product of a rotten system.

We would have finished second from bottom if someone hadn't have had 10 points deducted for......

....... their financial difficulties.

I truly believe that we are solely dependant on the milestone payments from Sainsburys. We have obviously missed milestone payments to our players, staff and the HMRC all over the place. My biggest worry is that for whatever reason Sainsbury's withhold the due milestone payment and we have absoluely no cash to pay the outstanding debts or service the winding up order from the HRMC.

The transfer embargo won't matter then because we won't have a club anymore!

Agree we are dependent upon the milestone payments, but my considered opinion is that we won't get wound-up because Sainsburys missed a payment as the Courts would give us more time until they paid. We'd got wound-up because we need to borrow more than Sainsburys were due to pay under the agreement, or we'd failed to meet our targets.

I still find this figure hard to believe, we would need an average of 25 players on 50k a year for it to amount to that figure.

Is that £1.3m basic salary, or does it include things like NI, bonuses, signing-on fees, appearance money etc? Is it just players, or does that include management as well?

Even if we take an average squad size of 22, £1.3m works out at an average of about £1,100 a week. That doesn't seem that excessive. There will be a few (Easton, Grant, Barker, Corr?) who I'd expect to be on more like £1,400 a week and a few (Prosser, Hall, Mohsni?) who'll be on more like £800 a week.

In no way am I standing up for RM in this debate, but having no home matches at all in December must of shot any budget he had to pieces.

Our attendances have seemingly tailed off as well. I thought we were getting 5 and a half at the start of the season, that now seems to be down to 4 and a half, despite results improving. That's going to be difficult to budget for.