I'd agree with most of that, my point was never that it would kill a club, that's usually owner greed, insanity or both. But it's not ideal or completely irrelevant for a number of reasons as listed above, and if it came down to scaring off a potential buyer and they were the only one left on the table then maybe it would.
This is a question that I should know the answer to, but does our 10% stop the Couhigs moving the club to another stadium? Perhaps a Booker development job or similar?
He is too busy advising Todd Boehly on how to sabotage Chelsea as expensively as possible. Which, when you think about it, means that James Corden actually has done something that deserves a comedy award!
Thing is though @StrongestTeam there would be no reason for shareholder debt to scare off a prospective buyer as it is extremely unlikely to survive the deal and therefore ever be repaid. Third party debt yes shareholder debt no.
Any buyer will form an opinion on the value of the club ex debt and that is the most he will pay. Let’s say that is £1.5m. Let’s assume there is no third party debt. If there is no shareholder debt he pays £1.5m for the shares. If there is £600k shareholder debt, he pays £900k for the shares and pays off the shareholder debt -£1.5m in total, if there is £3m shareholder debt, he pays off £1.5m debt and buys the shares for £1 with the remaining shareholder debt being written off.
in each case, regardless of whether the seller has invested his cash as debt or equity, on exit he receives £1.5m in cash (making a loss of £1.5m on his investment.)
Football clubs owing large amounts of money to their shareholders is especially relevant, especially if they look to extract value from the club. How much of a hit they take is irrelevant to me as a supporter of the club, though the actions they take to mitigate the losses most definitely affects me.
You may wish to cast your mind back to 2009 when Wycombe Wanderers was threatened with administration by one of the 25% shareholders to whom large debts were racked up. After threatening to call in the loans, they managed to convince the other shareholders to accept a deal that would convert the creditor's debt into 100% equity. After which they attempted to sell AP and then make WWFC pay them rent to play at a new ground. Far worse has happened at other clubs in a similar situation that I'm sure you don't need to be reminded about.
With the rumblings of discontent from the present majority shareholders about not owning AP, it's extremely prudent to be very vigilant that WWFC is not put in a similar, if not the same position that lead to the club being put into administration in 2012 (before WWST cancelled the administration and purchased the club). The attitude that shareholders are a limitless source of money to cover deficits is, to put it politely, naive in the extreme.
The situation with debt owed to shareholders with less than 25% control is very different to the situation where the owner owns an overwhelming majority interest - such as we have now.
I agree that shareholders are not a limitless perpetual source of funds. It is highly likely if not inevitable the Couhigs will sooner or later wish to leave and new owners found.
I agree that it would be better if football’s finances were structured in such a way that clubs could exist sustainably off their own income. That isn’t sadly the world we live in and the trust pretty quickly recognised that it would be impossible for the club to survive at any worthwhile level without outside “shareholder funding”.
so the question is - does it matter whether that funding is injected as debt or equity to which the answer I believe is no - unless you or someone can explain to me why it does.
you use the example that Couhig may seek to blackmail the Trust to sell him the stadium by threatening to put the club into administration over debts owed to them. That would be a pretty dumb move as they risk losing control of the shares but even if they went down that road they wouldn’t need shareholder debt to do it - they own the club they can liquidate it tomorrow if they choose to whether or not cash previously invested by them was in the form of debt or equity.
I alluded to this hypothetical earlier which @ReadingMarginalista expands on. I'm not sure the Couhigs would see gaining control over the ground as a "dumb move" @DevC.
Let's say we overspend on running costs by £3m again next season, something that doesn't seem beyond the realm of possibilities given the contract renewals so far. At some point the Couhigs announce that they can no longer afford cashflow - nor can the Trust given we're no longer just talking £100k to tide us over. The situation is dire. Players won't be paid. Points will be deducted. There's only one option left... Give the Couhigs the ground so they can raise emergency equity by taking out a fresh mortgage.
If they told the Trust that they would put the club into administration unless the Trust handed over Adams Park then the Trust would be left with two options: call the Couhigs' bluff, reasoning that they would never do that as they would then lose the chance of selling on for a profit, and demand the Couhigs put the club up for sale on the open market immediately. Or grumble a bit then acquiesce in order not to see the club go bust.
Given the way the Trust just handed over 15% of the club in return for nothing more than a sheet of empty promises and pie-in-the-sky commitments that the Couhigs will never deliver on, I can't imagine the Couhigs won't try to wring the ground out of the Trust before too long, fully expecting them to fold without a fight once more.
I would hope the Trust would call their bluff this time, though history suggests that's not the most likely option.
I of course didn’t say what you suggest I did in your first paragraph @aloysius .
In the (frankly unlikely but let’s run with it) scenario you outline, it would make no difference whatsoever whether cash they previously had put in were accounted for as debt or equity
I actually don't disagree with what you've said on debt, the "dumb move" I was referencing was your wider scenario of the Couhigs threatening to put the club into administration unless they were given the stadium.
But I suspect you knew that.
We can agree to disagree over whether the scenario I've outlined is unlikely or not though I would once again point to the fact that the club required an emergency loan for cashflow this season, doesn't yet appear to be cutting costs in a hugely significant way, and doesn't seem to have owners willing to stump up cash themselves.
Jonathan Liew concluded an article thus yesterday:
"But there would be a kind of tragic nostalgia at work there, an invocation of a world that no longer exists. For all its appeals to community, beneficence and common joy, this sport now belongs to the despots and the cretins, the speculators and the sovereign wealth funds. There is a kind of endgame moment brewing here. Some of us are going to have to pick a side. And if the sordid saga of the United sale serves any purpose, it is to bring that moment of reckoning a few notches closer."
Surely a third option would be for the Trust to do nothing and let the club go bust. Couhig loses out financially big time, but the Trust (we) can create a phoenix club in OUR stadium albeit at the bottom of the pyramid. Not ideal obviously, but I would prefer this to losing ownership of Adams Park.
Does anyone know how effectively the club is selling its conference facilities on non matchdays?
The Vere Suite has capacity for up to 400 people, with 200 in the Woodlands Lounge, and smaller numbers in other rooms.
A company I was working for a few years ago, held a conference, a quiz night, and a Christmas party at Adams Park, all excellent events with top class food and drink supplied by the club caterers.
This should be a continuous stream of revenue for the club, keeping the cash flowing in 7 days a week.
I think it's in the enshrined rights bit, fairly sure it would need a members vote, good job there's no history of our fans waving stuff through enthusiastically regardless of potential impact.
It's interesting that we often talk about the Trust as if it were a third party. The Trust is US the Trust members, WE were the ones who relinquished 15% of our holdings in the football club.
If the time ever came when the choice was to allow the football club to fall into administration or relinquish our ownership of AP there really is only one answer.
It's one of the main reasons, if not the main reason, why the Trust exists.
I did a search on the Land Registry, and the freeholder of Adams Park is not the football club or the Trust, it is a company called Frank Adams Legacy Limited.
This is why people were disappointed the last change was presented as a done deal rather than something to be discussed or negotiated. Inevitable perhaps with elected representatives and large numbers of members but the meetings weren't handled well at all.
A company I was working for a few years ago, held a conference, a quiz night, and a Christmas party at Adams Park, all excellent events with top class food and drink supplied by the club caterers.
Good lord. Imagine turning up to a xmas party and having food options of a massively over-priced burger or a massively over-priced burger, and having to go on a ten minute walk to buy a bottle of water.
This wasn't the usual matchday swill they sell to the plebs, it was a proper xmas turkey with all the trimmings, or beef wellington, or salmon en croute. I don't remember much water being drunk either, there was wine and port on the tables, and the bar open for beers and spirits.
I’ve never met a chairman who didn’t take the odd pop at supporters. Brian Lee, Ivor Beeks and Steve Hayes all managed it. And in some cases, so did their fellow Board members.
Wycombe Wanderers Trust Limited (company no. 05190371) has a separate Companies House entry to FALL (company no. 07884604), and they have different registered addresses. Only one person, Alan Cecil, is a director of both.
So in the eyes of the law, they are two distinct and separate legal entities, and any contractual agreement entered into by one company would not be binding on the other.
Comments
Don't bother, he'll just disregard your answers and replace them with his copy and paste block.
I'd agree with most of that, my point was never that it would kill a club, that's usually owner greed, insanity or both. But it's not ideal or completely irrelevant for a number of reasons as listed above, and if it came down to scaring off a potential buyer and they were the only one left on the table then maybe it would.
This is a question that I should know the answer to, but does our 10% stop the Couhigs moving the club to another stadium? Perhaps a Booker development job or similar?
@StrongestTeam answer Dev's question pal come on. Immediately!
Do you mean dump the toilets?
He is too busy advising Todd Boehly on how to sabotage Chelsea as expensively as possible. Which, when you think about it, means that James Corden actually has done something that deserves a comedy award!
Thing is though @StrongestTeam there would be no reason for shareholder debt to scare off a prospective buyer as it is extremely unlikely to survive the deal and therefore ever be repaid. Third party debt yes shareholder debt no.
Any buyer will form an opinion on the value of the club ex debt and that is the most he will pay. Let’s say that is £1.5m. Let’s assume there is no third party debt. If there is no shareholder debt he pays £1.5m for the shares. If there is £600k shareholder debt, he pays £900k for the shares and pays off the shareholder debt -£1.5m in total, if there is £3m shareholder debt, he pays off £1.5m debt and buys the shares for £1 with the remaining shareholder debt being written off.
in each case, regardless of whether the seller has invested his cash as debt or equity, on exit he receives £1.5m in cash (making a loss of £1.5m on his investment.)
which is why shareholder debt is irrelevant.
Football clubs owing large amounts of money to their shareholders is especially relevant, especially if they look to extract value from the club. How much of a hit they take is irrelevant to me as a supporter of the club, though the actions they take to mitigate the losses most definitely affects me.
You may wish to cast your mind back to 2009 when Wycombe Wanderers was threatened with administration by one of the 25% shareholders to whom large debts were racked up. After threatening to call in the loans, they managed to convince the other shareholders to accept a deal that would convert the creditor's debt into 100% equity. After which they attempted to sell AP and then make WWFC pay them rent to play at a new ground. Far worse has happened at other clubs in a similar situation that I'm sure you don't need to be reminded about.
With the rumblings of discontent from the present majority shareholders about not owning AP, it's extremely prudent to be very vigilant that WWFC is not put in a similar, if not the same position that lead to the club being put into administration in 2012 (before WWST cancelled the administration and purchased the club). The attitude that shareholders are a limitless source of money to cover deficits is, to put it politely, naive in the extreme.
The situation with debt owed to shareholders with less than 25% control is very different to the situation where the owner owns an overwhelming majority interest - such as we have now.
I agree that shareholders are not a limitless perpetual source of funds. It is highly likely if not inevitable the Couhigs will sooner or later wish to leave and new owners found.
I agree that it would be better if football’s finances were structured in such a way that clubs could exist sustainably off their own income. That isn’t sadly the world we live in and the trust pretty quickly recognised that it would be impossible for the club to survive at any worthwhile level without outside “shareholder funding”.
so the question is - does it matter whether that funding is injected as debt or equity to which the answer I believe is no - unless you or someone can explain to me why it does.
you use the example that Couhig may seek to blackmail the Trust to sell him the stadium by threatening to put the club into administration over debts owed to them. That would be a pretty dumb move as they risk losing control of the shares but even if they went down that road they wouldn’t need shareholder debt to do it - they own the club they can liquidate it tomorrow if they choose to whether or not cash previously invested by them was in the form of debt or equity.
I alluded to this hypothetical earlier which @ReadingMarginalista expands on. I'm not sure the Couhigs would see gaining control over the ground as a "dumb move" @DevC.
Let's say we overspend on running costs by £3m again next season, something that doesn't seem beyond the realm of possibilities given the contract renewals so far. At some point the Couhigs announce that they can no longer afford cashflow - nor can the Trust given we're no longer just talking £100k to tide us over. The situation is dire. Players won't be paid. Points will be deducted. There's only one option left... Give the Couhigs the ground so they can raise emergency equity by taking out a fresh mortgage.
If they told the Trust that they would put the club into administration unless the Trust handed over Adams Park then the Trust would be left with two options: call the Couhigs' bluff, reasoning that they would never do that as they would then lose the chance of selling on for a profit, and demand the Couhigs put the club up for sale on the open market immediately. Or grumble a bit then acquiesce in order not to see the club go bust.
Given the way the Trust just handed over 15% of the club in return for nothing more than a sheet of empty promises and pie-in-the-sky commitments that the Couhigs will never deliver on, I can't imagine the Couhigs won't try to wring the ground out of the Trust before too long, fully expecting them to fold without a fight once more.
I would hope the Trust would call their bluff this time, though history suggests that's not the most likely option.
I of course didn’t say what you suggest I did in your first paragraph @aloysius .
In the (frankly unlikely but let’s run with it) scenario you outline, it would make no difference whatsoever whether cash they previously had put in were accounted for as debt or equity
I really, really should know better than to read through threads like this.
I could have mapped it all out from the second comment.
Roll on AI…
I actually don't disagree with what you've said on debt, the "dumb move" I was referencing was your wider scenario of the Couhigs threatening to put the club into administration unless they were given the stadium.
But I suspect you knew that.
We can agree to disagree over whether the scenario I've outlined is unlikely or not though I would once again point to the fact that the club required an emergency loan for cashflow this season, doesn't yet appear to be cutting costs in a hugely significant way, and doesn't seem to have owners willing to stump up cash themselves.
Jonathan Liew concluded an article thus yesterday:
"But there would be a kind of tragic nostalgia at work there, an invocation of a world that no longer exists. For all its appeals to community, beneficence and common joy, this sport now belongs to the despots and the cretins, the speculators and the sovereign wealth funds. There is a kind of endgame moment brewing here. Some of us are going to have to pick a side. And if the sordid saga of the United sale serves any purpose, it is to bring that moment of reckoning a few notches closer."
Seems fair enough to me!
Surely a third option would be for the Trust to do nothing and let the club go bust. Couhig loses out financially big time, but the Trust (we) can create a phoenix club in OUR stadium albeit at the bottom of the pyramid. Not ideal obviously, but I would prefer this to losing ownership of Adams Park.
Liew should take up permanent residency in Pseud's Corner
Does anyone know how effectively the club is selling its conference facilities on non matchdays?
The Vere Suite has capacity for up to 400 people, with 200 in the Woodlands Lounge, and smaller numbers in other rooms.
A company I was working for a few years ago, held a conference, a quiz night, and a Christmas party at Adams Park, all excellent events with top class food and drink supplied by the club caterers.
This should be a continuous stream of revenue for the club, keeping the cash flowing in 7 days a week.
He's just signed a 50year lease with the Trust for AP so ...
I think it's in the enshrined rights bit, fairly sure it would need a members vote, good job there's no history of our fans waving stuff through enthusiastically regardless of potential impact.
It's interesting that we often talk about the Trust as if it were a third party. The Trust is US the Trust members, WE were the ones who relinquished 15% of our holdings in the football club.
If the time ever came when the choice was to allow the football club to fall into administration or relinquish our ownership of AP there really is only one answer.
It's one of the main reasons, if not the main reason, why the Trust exists.
I did a search on the Land Registry, and the freeholder of Adams Park is not the football club or the Trust, it is a company called Frank Adams Legacy Limited.
FRANK ADAMS LEGACY LIMITED overview - Find and update company information - GOV.UK (company-information.service.gov.uk)
Yeah, we all know that one
This is why people were disappointed the last change was presented as a done deal rather than something to be discussed or negotiated. Inevitable perhaps with elected representatives and large numbers of members but the meetings weren't handled well at all.
A company I was working for a few years ago, held a conference, a quiz night, and a Christmas party at Adams Park, all excellent events with top class food and drink supplied by the club caterers.
Good lord. Imagine turning up to a xmas party and having food options of a massively over-priced burger or a massively over-priced burger, and having to go on a ten minute walk to buy a bottle of water.
This wasn't the usual matchday swill they sell to the plebs, it was a proper xmas turkey with all the trimmings, or beef wellington, or salmon en croute. I don't remember much water being drunk either, there was wine and port on the tables, and the bar open for beers and spirits.
FALL is a subsidiary of WWFC Trust.
I’ve never met a chairman who didn’t take the odd pop at supporters. Brian Lee, Ivor Beeks and Steve Hayes all managed it. And in some cases, so did their fellow Board members.
Not sure that's strictly true. legally.
Wycombe Wanderers Trust Limited (company no. 05190371) has a separate Companies House entry to FALL (company no. 07884604), and they have different registered addresses. Only one person, Alan Cecil, is a director of both.
So in the eyes of the law, they are two distinct and separate legal entities, and any contractual agreement entered into by one company would not be binding on the other.
Well @AlanCecil is on here so perhaps he could clarify?
FALL is indeed a separate legal entity but it is owned 100% by Wycombe Wanderers Supporters Group Limited which is what we know as the Trust.
Wycombe Wanderers Trust Limited that you refer to was another company that doesn't now exist.
Nothing to see here.