It wouldnt surprise me if Dai had put another thing up for sale that t&c/planning permissions/the day of the week mean that he’s actually tying to sell something that’s completely useless to anyone but the incumbent. Again.
Who knows, you could be absolutely right in all those outcomes, except AC Milan, maybe. As it stands, the news is better than we have had for quite a while. We can only hope that things will turn out better than what they have been all season. For things to become clearer it will be a long wait, I'm afraid.
It’s an eye watering deal for anyone who wants a 3rd division football club. 88 million in debt and a football pyramid that is totally unsustainable. If it’s an investor I wonder where they see value. If it’s philanthropy then maybe
They almost certainly wont be £88 million in debt post deal, I would have thought.
If you want to get involved in football, I can see the attractions of Reading - good stadium, good sized fanbase and catchment, close to Heathrow. Not sure how you make money out of it, but if the deal
The only way of not being 88 million in debt is for someone to pay off the debt, the current owner to right off the debt or administration and a debt re-structure. Who knows.
The list of expensive players ready to sign in the summer will be drawn up as soon as the new people have their feet under the table
Of course. In any purchase of a company, the buyer will have in his mind how much he believes the asset is worth debt free. The seller wants to get as much cash for his asset as he can.
I don't know what the figures are but to illustrate the point, lets assume that the buy values Reading debt free at £30m. The debt breaks down as £10m to third parties and £78m to seller.
The buyer will then say to the seller "OK my offer to buy the asset is now £20m as I have to pay £10m third party debt off as soon as I owe the company. Either you need to write off the full £78m of parent company debt, in which case I will pay you £20m for your shares OR you need to write off £58m of your debt leaving £20m outstanding and I will pay you £1 for your shares and repay the remaining £20m of your debt."
The seller then has a choice of whether to take £20m against his shares and debt and sell the club or walk away from the sale and remain owner.
There is no way the buyer would take over the club paying the seller money for the shares but leave a large debt to the seller on the balance sheet.
We will not to sign expensive players this summer. The EFL embargo we are under until at least next year only allows us to sign free transfers or free agents.
Most, if not all, the debt is owed to Dai himself, so hopefully he will take a loss and sell the club to get it off his hands as he appears to be in difficulties in China.
I am somewhat puzzled by this comment. I appreciate you are not allowed to use transfer fees but all the players you signed in the summer were 3 year deals, apart from Savage who was 4. A 3 year deal for us is unheard of, but we only have a shed to train in so who would want to sign for us for 3 years? When you sign a player for 3 years you are committed to paying their wages for 3 years even if they are sh1t or you get relegated. It's a debt that you owe to add to the pile that you are already in. It doesn't scream fiscal responsibility it screams sticking your head in the sand and it will be ok in the end. IMHO
Interesting times indeed and although I hope you do acquire a responsible owner and move forward, some of your fans seem to believe the new people will come in and immediately bankroll a promotion push. Doesn’t seem to me that many of them have learnt their lessons at all.
Derby signed a bunch of expensive players on free contracts and high wages. They are back to posting eight figure losses just a couple of years after screwing over creditors local and national. One imagines they will be gaming the system to the max once more when the chickens come home to roost again. Hopefully Reading can come out much cleaner and stay cleaner in the future.
As others have noted, the transfer fee embargo is irrelevant. Derby just picked up quality players whose contracts were up by offering big wages. And carried on posting the losses.
Surely the wages are not a debt until they are due to be paid, is it? Yes, I see that the club agreed to pay the player a certain amount for three years, but they can be sold on and Reading would not owe them anything, unless the club hadn't paid them in full up to the date of the transfer. The players who we signed in the summer signed for us partly because of promises made which has not always been fulfilled.
Actually I would have thought it highly likely that anyone going to the trouble of buying a biggish club like Reading would indeed initially invest seeking early promotion.
@DevC would know better than me, but I feel like a player contract with 2 years remaining would still be considered debt to a buyer. It’s not like either party can cancel that contract without financial penalty. It’s definitely committed spending at the very least.
You sign a player on a 3 year deal and he turns out to be a lazy sh1t with no interest in playing you are on the hook for 3 years money. Unless you have relegation clauses you are on the hook til someone takes them off your hands.
The EFL are inept at enforcing financial fair play as Derby show. The fact you are under controls and still sign high (by our standards) earning players like Wing on a 3 year deal show you can navigate around them. He’s worked out. Many don’t.
Just cos you can pay the fees you will want to attract talent another way and that’s with contract length. Throwing around 3 year deals is debt, big debt.
Lewis Wing's partner has said on social media that he took a pay CUT to go to Reading, However he was assured things which have not turned out correct, so is quite rightly, unhappy with Dai Yongge. I hope for his sake and other players that is rectified soon. I expect a three year deal also helped to seal the deal.
Persuaded to take a a pay cut to join a club with a record of not paying their players on a three year deal!!! Rob needs to get that negotiator into Adams Park!
Comments
It wouldnt surprise me if Dai had put another thing up for sale that t&c/planning permissions/the day of the week mean that he’s actually tying to sell something that’s completely useless to anyone but the incumbent. Again.
Who knows, you could be absolutely right in all those outcomes, except AC Milan, maybe. As it stands, the news is better than we have had for quite a while. We can only hope that things will turn out better than what they have been all season. For things to become clearer it will be a long wait, I'm afraid.
Rob Couhig said on Thursday that he was trying to encourage a new American group to enter the frame, could this be the result of his efforts?
Getting the Reading fans to believe this should get the Second and Third Tiers opened by tomorrow.
It’s an eye watering deal for anyone who wants a 3rd division football club. 88 million in debt and a football pyramid that is totally unsustainable. If it’s an investor I wonder where they see value. If it’s philanthropy then maybe
88 million wow!!!
They almost certainly wont be £88 million in debt post deal, I would have thought.
If you want to get involved in football, I can see the attractions of Reading - good stadium, good sized fanbase and catchment, close to Heathrow. Not sure how you make money out of it, but if the deal
They can immediately start to make their money back by selling stickers that say "I stuck a sticker on Adams Park".
perhaps with their love of writing on bedsheets they could get a new stadium sponsor and rename it Dunelm park.
The only way of not being 88 million in debt is for someone to pay off the debt, the current owner to right off the debt or administration and a debt re-structure. Who knows.
The list of expensive players ready to sign in the summer will be drawn up as soon as the new people have their feet under the table
Of course. In any purchase of a company, the buyer will have in his mind how much he believes the asset is worth debt free. The seller wants to get as much cash for his asset as he can.
I don't know what the figures are but to illustrate the point, lets assume that the buy values Reading debt free at £30m. The debt breaks down as £10m to third parties and £78m to seller.
The buyer will then say to the seller "OK my offer to buy the asset is now £20m as I have to pay £10m third party debt off as soon as I owe the company. Either you need to write off the full £78m of parent company debt, in which case I will pay you £20m for your shares OR you need to write off £58m of your debt leaving £20m outstanding and I will pay you £1 for your shares and repay the remaining £20m of your debt."
The seller then has a choice of whether to take £20m against his shares and debt and sell the club or walk away from the sale and remain owner.
There is no way the buyer would take over the club paying the seller money for the shares but leave a large debt to the seller on the balance sheet.
We will not to sign expensive players this summer. The EFL embargo we are under until at least next year only allows us to sign free transfers or free agents.
Most, if not all, the debt is owed to Dai himself, so hopefully he will take a loss and sell the club to get it off his hands as he appears to be in difficulties in China.
I am somewhat puzzled by this comment. I appreciate you are not allowed to use transfer fees but all the players you signed in the summer were 3 year deals, apart from Savage who was 4. A 3 year deal for us is unheard of, but we only have a shed to train in so who would want to sign for us for 3 years? When you sign a player for 3 years you are committed to paying their wages for 3 years even if they are sh1t or you get relegated. It's a debt that you owe to add to the pile that you are already in. It doesn't scream fiscal responsibility it screams sticking your head in the sand and it will be ok in the end. IMHO
Interesting times indeed and although I hope you do acquire a responsible owner and move forward, some of your fans seem to believe the new people will come in and immediately bankroll a promotion push. Doesn’t seem to me that many of them have learnt their lessons at all.
Derby signed a bunch of expensive players on free contracts and high wages. They are back to posting eight figure losses just a couple of years after screwing over creditors local and national. One imagines they will be gaming the system to the max once more when the chickens come home to roost again. Hopefully Reading can come out much cleaner and stay cleaner in the future.
As others have noted, the transfer fee embargo is irrelevant. Derby just picked up quality players whose contracts were up by offering big wages. And carried on posting the losses.
Surely the wages are not a debt until they are due to be paid, is it? Yes, I see that the club agreed to pay the player a certain amount for three years, but they can be sold on and Reading would not owe them anything, unless the club hadn't paid them in full up to the date of the transfer. The players who we signed in the summer signed for us partly because of promises made which has not always been fulfilled.
in my view those fans are idiots and from the younger generation I should think.
At least we won't be able to pay high wages as our embargo prevents it. The EFL has set us a budget and we cannot exceed it.
You seem a very sensible person @theRoyalBiscuit and let us hope all turns out well for your club👍.
Actually I would have thought it highly likely that anyone going to the trouble of buying a biggish club like Reading would indeed initially invest seeking early promotion.
Thanks. I've been called a lot of things in my lifetime, not usually sensible though!
In the land of the blind men, the one eyed man is king 👍
@DevC would know better than me, but I feel like a player contract with 2 years remaining would still be considered debt to a buyer. It’s not like either party can cancel that contract without financial penalty. It’s definitely committed spending at the very least.
Didn't we sign D'Mani Mellor on a three year deal?
Jack Young I think
Some of the fans on their forum are very excited that a billionaire they have never heard of might save them from a billionaire they'd never heard of.
Yes, I realise that this post might come back sometime and maul me to death.
You sign a player on a 3 year deal and he turns out to be a lazy sh1t with no interest in playing you are on the hook for 3 years money. Unless you have relegation clauses you are on the hook til someone takes them off your hands.
The EFL are inept at enforcing financial fair play as Derby show. The fact you are under controls and still sign high (by our standards) earning players like Wing on a 3 year deal show you can navigate around them. He’s worked out. Many don’t.
Just cos you can pay the fees you will want to attract talent another way and that’s with contract length. Throwing around 3 year deals is debt, big debt.
Or it could result in a subsequent transfer windfall as we received with Anis?
Lewis Wing's partner has said on social media that he took a pay CUT to go to Reading, However he was assured things which have not turned out correct, so is quite rightly, unhappy with Dai Yongge. I hope for his sake and other players that is rectified soon. I expect a three year deal also helped to seal the deal.
Persuaded to take a a pay cut to join a club with a record of not paying their players on a three year deal!!! Rob needs to get that negotiator into Adams Park!