Question HMRC Winding Up Order

[EastStandBlue]

completely agree with the recession buisness however the spending stopped before that and i have said previously i believe we have good support and gates are great so compared to 4 or 5 years ago when we were getting 5k or lower we should be better off.

legal costs for the stadium which have been going on for years and years yet have got us no where. i guess i havn't got a lot of faith in the stadium tbh however i do want us to get one as i feel we simply have to.

however rons the missing link for me spoken to him several times and just not convinced at all.

people will say im being negative i say its realistic. not sure what it will take for some people to be the same.

A recession has been looming for some time... The financial cycle is pretty predictable and I was certainly taught in my A-Level Business Studies to expect a recession in the near future, and that was 4 years ago now. Spending has slowly declined, but we still spent a reasonable amount four years ago, bringing in the likes of Peter Clarke and *spit* Richie Foran on sizeable fees with high wages. Gates might be bigger than they were 4/5 years ago, but the wages we pay are too.

I'm not saying Ron Martin is the Messiah and he'll lead us to the promised land... All I'm saying is that some people on here are up in arms demanding to see where the Many Millions have gone, when it's quite clear if you look deeply enough just where our money has been spent.

 

[Bielzibubz]

Well, we hired a QC for the majority of the work who don't come cheap at all... Then we have the costs of contracts with the council, amended plans to house the Casino and Health Club, written contracts for each of the Retail Outlet's that have been leased... This is without the upcoming CPO's which will cost a great deal.

As I've said before, CPO's aren't an option imo. Yes they are there if needed but typically they take between 12 to 15 months to complete from being served to eviction once all the appeals processes have been exhausted. That sort of delay would undoubtedly put the kybosh on any plans that have already been approved and I very much doubt that we could afford to even go down that route bearing in mind the costs involved in retaining the legal team, contractors etc etc. CPO's are a great bargaining tool when used as a minor threat to whatever obstacle is in your way and usually do the trick because don't forget that should a CPO be enforced the owner will only get the agreed market value of the building at the time of enforcement and no where near what he's holding out for, what the property is worth after that 12 to 15 months of appeals or what he would have been initially offered by the person or company serving the CPO, which is usually somewhere in the region of 20-25% above the current market value.

All comes down to who's got the biggest nads and who blinks first. My monies on RM

 

[TJC]

What is the actual date we are due back in court? It must be just days away now.
Not sure what silence from the club means. Can only be one of two things:

1) Its not news and non issue - just a formality
2) Keeping quite until we go booooom!

With the talksport mention of our plight this morning (over in the chit chat forum) the nerves are being to jangle!
Will we ever play a home game again???

 

[Smiffy]

What is the actual date we are due back in court? It must be just days away now.
Not sure what silence from the club means. Can only be one of two things:

1) Its not news and non issue - just a formality
2) Keeping quite until we go booooom!

With the talksport mention of our plight this morning (over in the chit chat forum) the nerves are being to jangle!
Will we ever play a home game again???

Next Wednesday (28th Oct)

Unless it's been changed...

 

[turkishm]

Sorry if this seems a bit simplistic, but the money that is owed to the Inland Revenue is tax stopped at source by the club on the players wages, that the club are having trouble coming up with now.Is this the money that is owed, or have i got that wrong.

 

[Mad Cyril]

I'm not a businessman but is this 'wind up' in the Jeremy Beadle sense or is it something we should be worried about?

 

[OldBlueLady]

Half term........is anyone allowed to go?

 

[Smiffy]

Half term........is anyone allowed to go?

I think anyone can go. But I'm sure you need to give written notice prior to the hearing.

Best speak to the court themselves.

 

[Jam_Man]

Will we ever play a home game again???

I dont get this foreboding doom that the club is going to disappear.

How many clubs has that ever happened to?

The owners are not going to let that happen. We are in a bit of poop but I bet my house that come August next year we will still be here.....

 

[Rob Noxious]

I dont get this foreboding doom that the club is going to disappear.

How many clubs has that ever happened to?

The owners are not going to let that happen. We are in a bit of poop but I bet my house that come August next year we will still be here.....

Fingers crossed for the club and your house, JM ... as Pete Wylie once said, "you've got to hope for the best, it's the best you can hope for..."

(Wah - 'The Story Of The Blues, parts 1 & 2)

 

[canveyshrimper]

I dont get this foreboding doom that the club is going to disappear.

How many clubs has that ever happened to?

The owners are not going to let that happen. We are in a bit of poop but I bet my house that come August next year we will still be here.....

Accrington & Maidstone are two that I can remember, but there's been many more.

I've said it before, I truly believe there are some members of this board who want the club to go tits up in order to say "I told you so" about Ron Martin.

And Jam Man I'll bet your house that we'll still be in business come next August.

 

[blue shrimp]

Accrington & Maidstone are two that I can remember, but there's been many more.

I've said it before, I truly believe there are some members of this board who want the club to go tits up in order to say "I told you so" about Ron Martin.

And Jam Man I'll bet your house that we'll still be in business come next August.

Why would any fan want the club to close? Just so they could say "i told you so"......I 100% disagree completely...Currently the club are days away from shutting up shop...The money will we all hope be paid or at least some deal will be struck...At the very best its poor financial management.

 

[Maldon Blues]

Accrington & Maidstone are two that I can remember, but there's been many more.
.

Aldershot.

 

[steveo]

...At the very best its poor financial management.

Or a complete lack of money. Ron hasnt got any money, ive been saying so for years but it doesnt seem to register on here.

People moan that he doesnt spend, but he cant afford to, which is not his fault. He has done more than the rest of us to keep the club going.

If people dont like it, they could always buy the Club off him.

 

[leeblue]

I caught a brief snip on the radio this morn that the club are struggling to come up with the money, hope I misheard

 

[ElstreeBlue]

Or a complete lack of money. Ron hasnt got any money, ive been saying so for years but it doesnt seem to register on here.

People moan that he doesnt spend, but he cant afford to, which is not his fault. He has done more than the rest of us to keep the club going.

If people dont like it, they could always buy the Club off him.

Whether he personally doesn't have the money is, I don't think, the issue. Even if he personally doesn't have enough money, he has been able to use his charm weapon so the club could borrow money - otherwise how could the club have survived with its debt and such few assets?

What's been more concerning, though, has been the financial mismanagement. How could the club be losing such vast sums of money? An annual loss of £2m is huge by any club's standards at this level and is unsustainable. Ron Martin should rightly not be spending money like there's no tomorrow just to appease certain fans' demands, but with our recent successes on the pitch and small squad where on earth has that sort of money been leaking?? Were League One players on Championship wages - ie no financial planning for the likely relegation when we went up to the Championship? That must surely only be part of the loss - where else have such big losses have been incurred?

That sort of annual loss would be unsustainable at any lower division club bar clubs the size of Leeds. If all clubs had been losing as much money as we have been, there wouldn't be any lower leagues left.

Even IF we clear the HMRC debt, what happens next? How can we afford to pay the next debt if we're losing such vast sums of money?

 

[steveo]

Whether he personally doesn't have the money is, I don't think, the issue. Even if he personally doesn't have enough money, he has been able to use his charm weapon so the club could borrow money - otherwise how could the club have survived with its debt and such few assets?

What's been more concerning, though, has been the financial mismanagement. How could the club be losing such vast sums of money? An annual loss of £2m is huge by any club's standards at this level and is unsustainable. Ron Martin should rightly not be spending money like there's no tomorrow just to appease certain fans' demands, but with our recent successes on the pitch and small squad where on earth has that sort of money been leaking?? Were League One players on Championship wages - ie no financial planning for the likely relegation when we went up to the Championship? That must surely only be part of the loss - where else have such big losses have been incurred?

That sort of annual loss would be unsustainable at any lower division club bar clubs the size of Leeds. If all clubs had been losing as much money as we have been, there wouldn't be any lower leagues left.

Even IF we clear the HMRC debt, what happens next? How can we afford to pay the next debt if we're losing such vast sums of money?

First and foremost I would imagine Ron puts his own interests before those of the club, cant blame him for that. With regard to borrowing money, you can only get so much before people just wont lend it anymore, especially the way the banks have panicked this year.

If the Club are running at such a large operating loss, the options to increase revenue are to get more fans in, find a rich benefactor or new sponsor or reduce the wage bill dramatically. The first two are not likely to happen. The only way the third one will, would be to sell players and replace them with players who will be happy to earn a fraction of the wages which would be a quick route to non league footy.

If Ron was taking 10 million quid a year in wages it would be different, but he isnt, although wages and salaries for accounts filed in July were £7120386 for the year.

I have no idea what a Southend player earns but if you had a squad of 20 averaging £150K per year thats 3 million quid which leaves over 4 million for everyone else who works there.

 

[BrettieAngell]

Whether he personally doesn't have the money is, I don't think, the issue. Even if he personally doesn't have enough money, he has been able to use his charm weapon so the club could borrow money - otherwise how could the club have survived with its debt and such few assets?

What's been more concerning, though, has been the financial mismanagement. How could the club be losing such vast sums of money? An annual loss of £2m is huge by any club's standards at this level and is unsustainable. Ron Martin should rightly not be spending money like there's no tomorrow just to appease certain fans' demands, but with our recent successes on the pitch and small squad where on earth has that sort of money been leaking?? Were League One players on Championship wages - ie no financial planning for the likely relegation when we went up to the Championship? That must surely only be part of the loss - where else have such big losses have been incurred?

That sort of annual loss would be unsustainable at any lower division club bar clubs the size of Leeds. If all clubs had been losing as much money as we have been, there wouldn't be any lower leagues left.

Even IF we clear the HMRC debt, what happens next? How can we afford to pay the next debt if we're losing such vast sums of money?

I believe we didn't factor in relegation clauses into contracts when we were in the Championship.

 

[ElstreeBlue]

First and foremost I would imagine Ron puts his own interests before those of the club, cant blame him for that. With regard to borrowing money, you can only get so much before people just wont lend it anymore, especially the way the banks have panicked this year.

If the Club are running at such a large operating loss, the options to increase revenue are to get more fans in, find a rich benefactor or new sponsor or reduce the wage bill dramatically. The first two are not likely to happen. The only way the third one will, would be to sell players and replace them with players who will be happy to earn a fraction of the wages which would be a quick route to non league footy.

If Ron was taking 10 million quid a year in wages it would be different, but he isnt, although wages and salaries for accounts filed in July were £7120386 for the year.

I have no idea what a Southend player earns but if you had a squad of 20 averaging £150K per year thats 3 million quid which leaves over 4 million for everyone else who works there.

Whether the business is a small baker's shop or Vodafone, Leeds Utd or Darlington, the business has to do whatever necessary to balance its books. It has to live within its own means, whatever its own projected revenues and costs are for that particular business. Otherwise, with continued relative big losses, in the long-term it can't continue - assuming of course that no rich benefactor comes forward to the rescue and bank-roll the business just for the love of it.

If the average player's wage at the club really is £3k as your figures would suggest, that would be where a big part of the problem lies (although I'd still question whether a club of our size can still afford to pay out another £4m on other costs). If we can't afford those wages, we shouldn't be paying at those levels. The same with our other costs. Otherwise, if the club does not live within its means in a sustainable way, sooner or later it would cease to exist. If that means we have to go down a division - that's fine by me as long as we still have a club to support. But are other clubs of our size paying £3k per player per week on average in wages?

Ultimately, wherever the losses have been incurred, I don't know. I don't have the detail of the figures, and the accounts don't help to pinpoint the failure. But the buck stops with Ron Martin. Whether or not he has the money personally to pay off historic debts and whether or not he wants the club to succeed (why would he not want it to succeed so that it could pay rent at the new stadium?) is not the point. I also have no problem with him looking after his own interests, but as a director he owes duties to promote the club's interests too.

The crucial point is: he should be ensuring that year-to-year the club lives within its means and is able to continue. I find the recent losses staggering. No wonder we're in trouble and there is a winding-up hearing less than a week away. If nothing else, I'd like to know what the board are planning to do about redressing things so that we break even, but all we hear is "wait for the new stadium" - and that's a business model for the club that still hasn't been properly explained yet.

 

[ElstreeBlue]

I believe we didn't factor in relegation clauses into contracts when we were in the Championship.

If that's the case, that's not particularly good financial management when there was a fair chance that we would have gone down from the Championship! As a business, we should plan ahead. You can't expect to plan for the unknowns, but you can at least expect to plan for the likely eventualities. Similarly, I'd hope that we factor into current contracts the possibility that we may go down again (although of course the chance of relegation is slimmer than when we were playing in the Championship).