Question Fix the North Bank now?

[* ORM *]

You know as well as I do that declaring profit to the tax man is the biggest avoidance act of most businesses; and that includes football clubs.
If equipment is bought, facilities up rated, wages swollen off to the owners, all to get to a net balance or sustainable deficit at the end of a trading year, then the goal is met.
It may not read as impressive as posting £££ profits but that only works (largely) for share holder dividends/ bonus payments or selling the company.

Proving solvency and tax avoidance are two entirely different matters. Banks globally are now regulated to ensure both short term and long term liquidity targets are met and with liquid assets, not guarantees or promises of funds to make a shortfall good. It wouldn’t be beyond the stretch of regulation to do that for football.

 

[BoyWonder2]

Not every single player but how many have we done it with this far? If none then maybe we need to reflect. We need to commit to an approach perhaps

To be fair, in this instance, it’s a 17 year old kid who has scored 4 goals in senior football. Imagine the uproar. Look at the stuff said about Bim Pepple, and those same people are either very quiet, or going back and deleting old posts.

As I stated, in this instance, we don’t have the place for him. There are others we’ve looked at who have been good, but either aren’t ready, haven’t developed enough, we want to see in different scenarios etc.

This guy might be the next Freddy Eastwood, and we may miss out, alternatively, he maybe the next Brendon Goodship or Mark Salter…

We’ve taken gambles on players before, and we’ve side stepped a few. There is no exact science, and even with everything we do, and all the scouting we do, we will still sign players that don’t work out for whatever reason. Just as we will sign some players that do very well for us.

 

[WestyReturns]

What........ Have you been on this board after we lose a game. IMO Rigsby is correct, you are incorrect.

Prove me wrong then. Tell me 20 posters don't want COSU!! Bet you £20 you can't. Winnings donated to Shrimperzone.

Plus I'm talking about real people who I know and meet who go to games. I haven't spoken to one person who isn't grateful to COSU. As I said it's a huge huge majority in favour of them and delighted what they've done so far.

 

[Massimo Giovanni]

Proving solvency and tax avoidance are two entirely different matters. Banks globally are now regulated to ensure both short term and long term liquidity targets are met and with liquid assets, not guarantees or promises of funds to make a shortfall good. It wouldn’t be beyond the stretch of regulation to do that for football.

My first real recognition of what was being fiscally manipulated was learning of the Glazers take over of Manure and how they did it by using the purchase £300+ million as a loan which they then charged back at greatly inflated interest rates so that the "loan" never shrinks and every year they get a huge, tax free payout. I am sure there is more to it than those simple steps but not much.

 

[Holy Joe]

My first real recognition of what was being fiscally manipulated was learning of the Glazers take over of Manure and how they did it by using the purchase £300+ million as a loan which they then charged back at greatly inflated interest rates so that the "loan" never shrinks and every year they get a huge, tax free payout. I am sure there is more to it than those simple steps but not much.

Interest paid is a tax deductible business expense so is commonly used by businesses as a cheaper form of funding than equity. But the underlying business does need to be profitable to be able to pay the interest. And of course that interest goes into another company where profits maybe taxed albeit if offshore at a lower tax rate.

Ron stuck loans into SUFC but I don't think he ever collected any interest (it was accrued in the accounts). I suspect much of COSU funding will also be loans but will likely need to wait for accounts to confirm - again interest is likely to be accrued but not paid.

The loading of debt onto a company being purchased, by the purchaser is very common in private equity. The Asda purchase by the Issa brothers is another one.

My gut feel would still be there aren't many football clubs massaging their accounts to lower profitability.

 

[* ORM *]

Again, profitability and tax are wholly different from liquidity. Short term liquidity means you have to prove you have liquid unencumbered assets to meet the next 30 days obligations and such assets need to be cash and high grade bonds. Long term liquidity is similar over a 12 month horizon. The first measure would be ideal for football and would cut ridiculous transfer fees at top level massively.

 

[Napster]

Again, profitability and tax are wholly different from liquidity. Short term liquidity means you have to prove you have liquid unencumbered assets to meet the next 30 days obligations and such assets need to be cash and high grade bonds. Long term liquidity is similar over a 12 month horizon. The first measure would be ideal for football and would cut ridiculous transfer fees at top level massively.

You’re such a socialist

 

[Gt Yarmouth Shrimper]

Prove me wrong then. Tell me 20 posters don't want COSU!! Bet you £20 you can't. Winnings donated to Shrimperzone.

Plus I'm talking about real people who I know and meet who go to games. I haven't spoken to one person who isn't grateful to COSU. As I said it's a huge huge majority in favour of them and delighted what they've done so far.

And breathe........ Relax, you're winding yourself up.

 

[WestyReturns]

And breathe........ Relax, you're winding yourself up.

Haha I'll never let anyone with clearly inferior knowledge wind me up. £20 in the kitty loser!

 

[bazzashrimper]

I don't think COSU are fully factoring EFL money into their projections of breakeven.

I think you'll probably find that the vast, vast majority of the current operating deficit is anticipated to be closed through revenue generated by a new east stand, and a fully-functional facility at the new training ground.

You would think that those can and will be built whatever division the club is in, and even if they don't fully close the gap, they would come remarkably close. Relying on regaining league status for an income model is dangerous and short-termist. The improvements that we make off the pitch would be long-term, and would help the club to generate much more income so that it can better support further expenditure without relying on the gift of owners who might be willing to lose money.

I also think some people's projections of £1m-£2m more coming in just by getting promoted to the EFL is a bit of a stretch, but I'm happy to be proven wrong. And even if it were accurate, it might cover our current operating losses, but then more money will need to be spent on fees and wages to construct a squad that can stay up in League 2, so then we're losing money again........and then there will be supporters who can't stand being mid-table in League 2 and want to go for promotion, so then the losses grow again. It turns into a vicious cycle.

For the above, and several other reasons, I just don't think the bit of your post that I've put in bold is true. Promotion back to the EFL is not the financial saviour that people think it will be, and relying on more away fans is back to living week-to-week. We need the club's infrastructure invested in so that bigger away followings at Roots Hall are an added bonus, rather than relying on them.

Maybe self-sufficiency is too broad a stroke, because outgoings would have to increase if the club moved up a level or two in order to be competitive, and who knows whether the revenue-generating elements our new facilities (if completed then) could keep up?

But closing the current operating loss as much as possible is an absolute must.

If it gets back to breakeven, it's then up to the owner to decide whether they'd like to review how much of their own money they're putting in. An extra £500k per year on the playing budget from a breakeven position would see them losing £500k per year, as opposed to an extra £500k per year on the playing budget now, which would swell their losses to £2m per year.

Im gonna take a guess at some figures here, but don’t get hung on the numbers they are probably way out - but can help illustrate this point.

If we get the artificial training pitches ready to go then we’d probably bring in £3-6k a week 52 weeks a year. A new stand with conference & wedding facilities - maybe £10k a week. Say it does achieve £15k for 52 weeks… how much is Paul McCallum on?

This is the Barnet model and is why they are up there on 2000 gates. Imagine this model with another 5000 on the gates… and better facilities to get burger and beer money on those 7000. COSU can probably reduce their annual deficit and we’d still have the biggest budget in the league.