Gibson's appointments

[indeedido]

I'm' not picking anything selectively. Sheff United showed with a 25m profit during a covid year that by not over spending you can make significant profit, while also increasing the saleable value of your players. That two seasons in the prem wiped out their debt issues and turned them from a a pauper into a championship powerhouse.

They spent 67m in that first prem season yet still posted 20m profit. Should we get up, we can try the Brentford model, They had 75m debts going into the prem, they wiped a third of that out first season by not over spending in the prem, and largely giving their promotion team a chance.

Clubs don't have to be in profit or debt free to be saleable. Very few clubs are debt free or in profit. Hull City for example were about 50m in debt when they were bought. We half our debt to somewhere around that in 2 prem years and the club is very saleable. Prem capable clubs are not often on the market, they're a rare commodity. First job is get up there and increase our revenue

Sheff U first season they did spend, Player licenses (Amortisation-Profit from sales) was just £15.9m and cautious. They enjoyed the revenue hike from media and sponsorship. They had a seven fold increase in turnover, doubled their wage bill, had comfortable player dealings, yet still only made a profit of £19m PBT after the loss the prior year of £21m alone in getting up.
Their nett transfer spend was double ours on promotion, yet still relatively modest in terms of amortisation charge. They did extraordinarily well to finish where they did that season, seriously hats off to Wilder.
Despite spending again the following summer, they bombed out, because they simply weren't good enough and by a long way. The owners did not invest and player dealings were financed by increasing debt in the form of a £30m bank loan.
Overall their foray into the PL saw no equity investment from the owners; a squad unable to last despite manageable net transfer spending of £110m, and they left having made £29.2m PBT. They also secured longer PP for staying up. It was a success.
They entered the PL with nett liabilities (negative book value) of -£25.1m, nothing like our perilous current state. They had £71m liabilities of which £43.5m was related to obligation to buy stadium/facilities from Group (offset by £44m prepayments in the books), again nothing like our current state.
They left the PL with nett assets/book value of £2m - a £27m turnaround reflecting the profit they made overall. They also had a firmer asset base, now owning their facilities which will have revaluation potential in the future (from a FFP perspective). They did however leave with £116m of debt, £45m up on their pre promotion level. This included that new £30m Bank loan.
They were in nothing like our current state when they went up, they had nothing like our debt. They spent miles more than we had done, made more profit, but still bombed out of the league with £45m more debt because they simply weren't good enough. They needed more invested, not borrowed - and of course to choose better recruitment.

Going up was great for Sheff U; it is crucial for us.
Staying up was fabulous for them and they are in decent shape, because they are not insolvent; they can carry their debt, but I bet they are currently hurting with that £30m Bank loan. They needed investment to survive up there and build the sort of value other PL clubs have generated. They didn't get it.

Please Mart do me a favour, I really do understand that clubs can make losses and be saleable. They can have high debt (most businesses have and all football clubs do) and be saleable. They can be both.
But the value they might have on the open market is based on the Nett Shareholder Value, the Market Value of assets above their book value and the confidence in the business model's ability to generate revenues to service debt and show it can be contained.

Middlesbrough have the 5th worst nett shareholder value in British football at -£117m- a very bad place to start.
The market value of our intangible assets (squad) ahead of their book value is something, but no longer massive as we have already sold Tav and Spence.
We have paltry revenues and operate at a loss every season in the Championship unless we sell our jewels (who is left?)
If we go up our revenue soars and we could make profit for a season, maybe two but it wouldn't address our unappealing shareholder value shortfall. If we have any hope of staying up the increase in wages and amortisation will reduce this profit to a trickle. That trickle will not make a dent in our debt, certainly not restore our nett value to positive. We wouldn't even be able to raise external funding in a state that remained technically insolvent.
We desperately need investment, equity injection as well as increasing debt in order to get up, stay up, make some profit, show we can stay in that revenue world and start to improve shareholder value.
With Gibson in charge it is clear he won't invest more, and it is clear nobody else will invest and leave him in charge.
If he writes off the debt, somebody else might be induced to give it a go, because as you say it is a club that is capable of being established PL and therefore potentially attractive.

The slow build won't work especially in our position, as good players move on quickly and you don't build squads gradually; Players' contracts and the revenue gulf to PP and PL teams dictates that.
Brentford had far higher player turnover than us across the 7 years they took to finally sneak up. Recruitment of just half a dozen class players - out of the legions they brought in - they sold for big bucks and funded those squad overhauls and they finally got lucky. The transfer profit also created, together with a £38m equity injection to 2017, their establishment of a positive shareholder value. Their operations in the PL are purely funded by rising debt to group. Crucially it is much lower than ours and set against confidence in PL revenues and sustainable debt. They are in great shape.

Sheff U got lucky, were cautious but couldn't last.
Brentford got investment, were managed brilliantly and are in transformed state from a nothing little club.
We need investment AND much better leadership, which I've been banging on about since 2016.
We are absolutely stuck in a downward spiral right now.

 

[BoroMart]

They had a seven fold increase in turnover, doubled their wage bill, had comfortable player dealings, yet still only made a profit of £19m PBT after the loss the prior year of £21m alone in getting up.

profit of 20m in a year with no crowds, plus they added significant value to their playing assets, guaranteed income via a second season and parachute payments also, which put them in a pretty healthy position going forward.

Despite spending again the following summer, they bombed out, because they simply weren't good enough and by a long way. The owners did not invest and player dealings were financed by increasing debt in the form of a £30m bank loan.

They strayed outside the business plan that got them up, and started throwing money on badly scouted players.

Middlesbrough have the 5th worst nett shareholder value in British football at -£117m- a very bad place to start.

Yup, but that would change significantly wouldn't it with one season in the prem? The income would be boosted for 4 seasons, the assets would likely boost in value and these would be above any incurred costs unless we went on a wild spending spree. Even Forest who have done that have added significant value to their playing assets. I agree we absolutely need promotion to reset the finances, ideally we need a couple of seasons. Which won't fix everything, but it will significantly change the attractiveness of the club.

We are absolutely stuck in a downward spiral right now.

We are, but, there are routes out but it needs the right results on the field to get us up. We aren't attractive as a championship club with no parachute payments and large debt.

 

[Cardiffdaffs]

profit of 20m in a year with no crowds, plus they added significant value to their playing assets, guaranteed income via a second season and parachute payments also, which put them in a pretty healthy position going forward.


They strayed outside the business plan that got them up, and started throwing money on badly scouted players.

Yup, but that would change significantly wouldn't it with one season in the prem? The income would be boosted for 4 seasons, the assets would likely boost in value and these would be above any incurred costs unless we went on a wild spending spree. Even Forest who have done that have added significant value to their playing assets. I agree we absolutely need promotion to reset the finances, ideally we need a couple of seasons. Which won't fix everything, but it will significantly change the attractiveness of the club.

We are, but, there are routes out but it needs the right results on the field to get us up. We aren't attractive as a championship club with no parachute payments and large debt.

We need to develop and improve our squad and quickly to get to a position where we can realistically look to getting promoted. Last season was a good chance but faded away at the end. And sadly we have sold our two most saleable assets in Tav and Spence.

It could take time to get up, time the Club, given its financial state, doesn't really have.

 

[BoroMart]

We need to develop and improve our squad and quickly to get to a position where we can realistically look to getting promoted. Last season was a good chance but faded away at the end. And sadly we have sold our two most saleable assets in Tav and Spence.

It could take time to get up, time the Club, given its financial state, doesn't really have.

agreed, things could get worse before better, but it only becomes terminal when Gibson decides he wants his cash back and I'm not sure if that will ever happen.

 

[indeedido]

profit of 20m in a year with no crowds

No they had the revenue in their first season, it was the second season they had no crowds and no crowd revenue, they didn't make the £19m PBT that next season. Then they weren't in it to make anything.

Yup, but that would change significantly wouldn't it with one season in the prem?

No it wouldn't for all the reasons I have taken the time to show you. I can explain it to you, but I can't make you understand.

They strayed outside the business plan that got them up, and started throwing money on badly scouted players.

They didn't stray outside any model, they simply bought spectacularly badly. They could easily afford what they spent, they just didn't buy enough and didn't buy quality.

You need investment like Brentford had and recruit enough quality like they did, from a position of very low debt and some shareholder value.
You need investment to get up and stay up. Debt will not fund it, especially from our position.

 

[BoroMart]

No they had the revenue in their first season, it was the second season they had no crowds and no crowd revenue, they didn't make the £19m PBT that next season. Then they weren't in it to make anything.

No it wouldn't for all the reasons I have taken the time to show you. I can explain it to you, but I can't make you understand.

No need for the arrogance mate, this is a debate, keep it civil and respectful.

So your position is we are FUBARed, well we might as all throw our tickets in and forget it then yes?

I'll stick with my viewpoint, that we are in a poor debt position, but well within FFP. So we can invest, should Gibson choose to do so, and if he can fund it. Should we get up and stay up for a season. We will be in a far healthier position, we won't wipe debts out, but we will either reduce our debts from that extra income, or increase assets through purchases, or a bit of both. Either way, the debt to asset ratio will change for the better. Revenue will increase 7 fold with promotion. 2 seasons of that will make us healthier than we are today, not healthy, but healthier.

As I've stated many times, good clubs don't become available very often. My opinion is that Gibson won't be looking to profit off a sale, simply wipe out debts. Derby are a great example of how desired clubs are, they were bought out with a debt of 60m, about half ours, ~BUT while plummeting into the third tier and with almost zero playing assets, mortgaged training ground etc. The idea that Boro couldn't attract a new owner with say 100m debts with a half decent squad in the prem doesn't really sit with me when you look at a club like Derby. We can be saleable, valuable, desirable given an improvement in our circumstances, and simply having a premier league place on it's own would be a massive incentive for buyers.

 

[indeedido]

No need for the arrogance mate, this is a debate, keep it civil and respectful.

So your position is we are FUBARed, well we might as all throw our tickets in and forget it then yes?

I'll stick with my viewpoint, that we are in a poor debt position, but well within FFP. So we can invest, should Gibson choose to do so, and if he can fund it. Should we get up and stay up for a season. We will be in a far healthier position, we won't wipe debts out, but we will either reduce our debts from that extra income, or increase assets through purchases, or a bit of both. Either way, the debt to asset ratio will change for the better. Revenue will increase 7 fold with promotion. 2 seasons of that will make us healthier than we are today, not healthy, but healthier.

As I've stated many times, good clubs don't become available very often. My opinion is that Gibson won't be looking to profit off a sale, simply wipe out debts. Derby are a great example of how desired clubs are, they were bought out with a debt of 60m, about half ours, ~BUT while plummeting into the third tier and with almost zero playing assets, mortgaged training ground etc. The idea that Boro couldn't attract a new owner with say 100m debts with a half decent squad in the prem doesn't really sit with me when you look at a club like Derby. We can be saleable, valuable, desirable given an improvement in our circumstances, and simply having a premier league place on it's own would be a massive incentive for buyers.

Only Gibson can invest, nobody else will provide finance, the club couldn't get a £30m Bank loan even if they wanted to. He has invested £8m since 2014. He is not going to invest.
He can bridge from the Group more, to cover spending and inevitable losses in the Championship, but the club shareholder value just goes further and further underwater. He has no option to do this other than folding.
Clubs can have much bigger debt than ours; our debt is not the only issue. It is the fact that this debt is so much bigger than assets, not the case with Sheff U or Brentford.
If there is no investment then the club becomes even more funded by debt.
Even if we got up, like Sheff U did and a £20m loss in doing so, then our debt and negative net value would be over £150m after last season's likely loss.
We would have to buy more than they did to stay up and struggle to make profit of over £10m as a result. Wages and amortisation would swallow up the extra revenue to stay up.

Sheff U and Brentford were/are both in the position where they could/can use debt to finance their operation safely without going underwater re shareholder value and while they built market value above book. This is because of their starting point of being solvent and low debt.
With low value assets, lots of existing debt and huge negative shareholder value and no market value, we simply can't.

The Club is not terminally ill yet, but Gibson can't nickel and dime his way up, stay up, reduce debt to himself and make this club saleable.
He has to either invest to go up and stay up, to have a chance of getting money back.
Or cut his losses, walk away and let somebody else in who will invest without the debt.

 

[BoroMart]

Only Gibson can invest, nobody else will provide finance, the club couldn't get a £30m Bank loan even if they wanted to.

that wasn't my point

He is not going to invest.

That's an opinion, only one that he can state absolutely

Clubs can have much bigger debt than ours; our debt is not the only issue. It is the fact that this debt is so much bigger than assets, not the case with Sheff U or Brentford.

I'm glad you've agreed that promotion to the prem, leads to better player asset values. That again was one of my key points about why the club could have value after a couple of years in the prem. Player values/assets would go up. Assets vs debt is always a key part of the value of an org.

Even if we got up, like Sheff U did and a £20m loss in doing so, then our debt and negative net value would be over £150m after last season's likely loss.

So 2 1/2 times Derby's debt, but with approx 10 times the revenue and 50 times the playing asset value of Derby. Interesting.

Sheff U and Brentford were/are both in the position where they could/can use debt to finance their operation safely without going underwater

You've gone this whole post without referencing Derby, purely focusing on two examples that suit your stance and ignoring the one that doesn't?

Or cut his losses, walk away and let somebody else in who will invest without the debt.

I thought you were saying the club isn't saleable, so does that not mean this isn't an option?

 

[indeedido]

I'm glad you've agreed that promotion to the prem, leads to better player asset values. That again was one of my key points about why the club could have value after a couple of years in the prem. Player values/assets would go up. Assets vs debt is always a key part of the value of an org.

You are just playing back what was in my first posts. We could create intangible asset value after sustained PL status. Sheff U's squad will not have massive value now. You can't build a squad with massive value AND reduce debt, without investment and great recruitment and management.

So 2 1/2 times Derby's debt, but with approx 10 times the revenue and 50 times the playing asset value of Derby. Interesting.

This really shows you don't know what you are talking about.
I don't know where to start.

You've gone this whole post without referencing Derby, purely focusing on two examples that suit your stance and ignoring the one that doesn't?

I focussed on Sheff U and Brentford because they were the 2 clubs YOU brought into the debate in post 54.
These clubs don't suit my stance, but they crucially both started in far better financial positions than we are in and did very well via different routes. You don't seem to be able to grasp the points I actually made.
Derby's finances are not in the public eye, the last published accounts are to 2018. Neither of us can talk about what happened there and what the new position actually is.

I thought you were saying the club isn't saleable, so does that not mean this isn't an option?

The club isn't saleable currently, that is a fact as nobody will take on something worth -£120m and pay for it, when it is a serial loss making, debt ridden Championship club .
It would be saleable if Gibson wrote the debt off, meaning he had actually put the money in that people think he has. This is what Lerner did at Villa. In those circumstances then another investor would take the club on and provide the investment that is crucial for us to progress.

 

[BoroMart]

You can't build a squad with massive value AND reduce debt, without investment and great recruitment and management.

I didn't say massive, I said player value increases though playing in teh prem, it's retained to a degree when you drop. I mean they've just sold Berge for 22m

This really shows you don't know what you are talking about.
I don't know where to start.

By seemingly avoiding the example of derby! The fact you are having to be so lacking in respect for other views and behaving with such disdain and lack of respect doesn't do you any favours. I've not personally insulted you once, but your attitude sucks. Nobody is saying we are in a good financial position, we are not. Nobody is saying we will be bought out, we probably won't because more than anything Gibson is unlikely to sell. But, if we were available, a club with a good academy setup, a history of prem football, it could attract interest, if we can get the finances moving in the right direction. We can argue about how much 'the right direction' needs to be to get that interest, but when teams like Hull, Derby and others are getting bought up despite financial failures, then it really isn't beyond the realms of possibility that if we right things enough, it could happen.

I focussed on Sheff U and Brentford because they were the 2 clubs YOU brought into the debate in post 54.

I also brought Derby in, and you ignored it

Derby's finances are not in the public eye, the last published accounts are to 2018.

It's been stated multiple times how much debt they had by various people that were interested in teh club. The playing asset value was pretty obvious too. They were close to going to the wall, a worse financial basket case than us. But still got bought out.

The club isn't saleable currently, that is a fact as nobody will take on something worth -£120m and pay for it, when it is a serial loss making, debt ridden Championship club .

As already stated, depends what losses Gibson is prepared to take. He didn't pay much to attain the club, it's not like he paid 50m, and lost another 150m. He paid next to nothing for the club.

Anyway, we'll leave it here as you've stopped being civil in this discussion, and I don't owe you a platform to be insulting.

 

[indeedido]

I didn't say massive, I said player value increases though playing in teh prem, it's retained to a degree when you drop. I mean they've just sold Berge for 22m

By seemingly avoiding the example of derby! The fact you are having to be so lacking in respect for other views and behaving with such disdain and lack of respect doesn't do you any favours. I've not personally insulted you once, but your attitude sucks. Nobody is saying we are in a good financial position, we are not. Nobody is saying we will be bought out, we probably won't because more than anything Gibson is unlikely to sell. But, if we were available, a club with a good academy setup, a history of prem football, it could attract interest, if we can get the finances moving in the right direction. We can argue about how much 'the right direction' needs to be to get that interest, but when teams like Hull, Derby and others are getting bought up despite financial failures, then it really isn't beyond the realms of possibility that if we right things enough, it could happen.


I also brought Derby in, and you ignored it

It's been stated multiple times how much debt they had by various people that were interested in teh club. The playing asset value was pretty obvious too. They were close to going to the wall, a worse financial basket case than us. But still got bought out.


As already stated, depends what losses Gibson is prepared to take. He didn't pay much to attain the club, it's not like he paid 50m, and lost another 150m. He paid next to nothing for the club.

Anyway, we'll leave it here as you've stopped being civil in this discussion, and I don't owe you a platform to be insulting.

Stomp off if you want, but you keep talking rubbish.
Don’t bring Derby into things when there is no financial info in the public domain.
Other clubs are bought or taken on when debts are reduced and there is something to buy.
Our starting point is so bleak that nobody will take us on unless Gibson walks away from the debt in the way Short and Lerner did.
Your core point was that one or two seasons in the PL would slash our debt, build club market value way higher than book value and easily make us saleable.
The truth as I have shown is that it certainly wouldn’t.
Ironically we both agree strongly that the club can be viable in the PL and therefore is conceptually attractive to other potential owners. I am just far more realistic about what would make an investor actually act.
Gibson needs to invest himself to create the conditions to eventually sell and recoup something.
He acquired the initial equity at cost for £1m, but has injected another £63m in equity up to 2016. He is owed a minimum of £120m in addition.
He would be walking away from the equity too.

 

[BoroMart]

Stomp off if you want, but you keep talking rubbish.

i'm not stomping of mate, ?I'm simply not going to engage with someone being rude and arrogant like this, bye