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Do we need a £8.33m Interest Free Loan?

https://www.bbc.co.uk/sport/football/55172426

Repaid by June 2024
My feeling is that Wycombe won't take up to the cap, if we take any.
Proud to be a supporter. Very pleased that we are a Championship club this year.

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Comments

  • What happens if any club isn't able to repay loan?

  • If its interest and strings free, take the money. Always better in your account than others. If you can find a deposit account giving 0.1%, that's £8k per year free money.

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  • @mooneyman said:
    What happens if any club isn't able to repay loan?

    That is a seriously good question.

    One facetious answer is - perhaps it will work on 'ppp' - deducted points per pound.

    👍 👎 ( 1 )
  • @railwaysteve said:

    @mooneyman said:
    What happens if any club isn't able to repay loan?

    That is a seriously good question.

    One facetious answer is - perhaps it will work on 'ppp' - deducted points per pound.

    Could be interesting as people get promoted and relegated. You could have clubs in the championship having contributed to clubs that are by then in the Prem.

    In reality the Prem out of central funds are chipping in about £15m to help the EFL get a loan for their clubs so you'd think commercial agreements will be in place and either the EFL or the borrowing club will be up before a judge if they don't repay.

    Agree with @railwaysteve we are better off staying clear if we can and not being sucked into spending money we don't have and burden later. Seems we missed out on £375k free for going up but the TV money should outweigh that. Would have been very welcome if we didn't go up.

  • Rough calculation suggests we would have got an automatic grant of c. £625k had we not been promoted . Sunderland will be getting around £2m.

  • I would say if we don't need it (which I suspect we don't), then we don't touch it

  • @Tom said:
    I would say if we don't need it (which I suspect we don't), then we don't touch it

    My concern is if some teams (e.g. Derby) take the loan and blow the lot on transfers in January and avoid relegation.

  • @mooneyman said:

    @Tom said:
    I would say if we don't need it (which I suspect we don't), then we don't touch it

    My concern is if some teams (e.g. Derby) take the loan and blow the lot on transfers in January and avoid relegation.

    We'll lose them in the Championship when they get their points deductions in years to come

  • I've asked Mrs W and I can confirm we are quite keen on an £8 million pound interest free loan.

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  • I'm assuming that the Championship clubs are being treated differently from Lg1 (loan v grant) in part because the Champ clubs have such larger TV revenues from which the league believes it is reasonable and practical to repay the emergency cash requirement.

    It does beg the question what happens to clubs currently in Champ (and hence getting a loan) who subsequently get relegated to Lg1 hence losing the TV money from which to repay the emergency cash. Would they get some of that loan converted to grant?

    Which is why frankly I would grab the cash, put it in a special untouched if at all possible bank account and see if I jump on bandwagon and take advantage of other clubs negotiating this now or down the road

  • Cant we borrow the money, and then immediately loan some of it to the PNL at Sharky Hayes type loan rates ?
    Although unsure whether there Garden fence can be used as security for the loan.

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  • @DevC said:
    I'm assuming that the Championship clubs are being treated differently from Lg1 (loan v grant) in part because the Champ clubs have such larger TV revenues from which the league believes it is reasonable and practical to repay the emergency cash requirement.

    It does beg the question what happens to clubs currently in Champ (and hence getting a loan) who subsequently get relegated to Lg1 hence losing the TV money from which to repay the emergency cash. Would they get some of that loan converted to grant?

    Which is why frankly I would grab the cash, put it in a special untouched if at all possible bank account and see if I jump on bandwagon and take advantage of other clubs negotiating this now or down the road

    The Champ / L1/2 split is partly because the smaller clubs in the Prem objected to spending any money at all "helping out" similar sized clubs in the championship who could potentially be in better shape and soon be competitors, but it's a one off for covid, it's unlikely there will be another one anytime soon or any conversion.

    Apart from the human side of knowing there's money you've got easy access to if anything comes up and temptation to be dipping into it when you probably ought not I'd imagine there are some drawbacks in terms of gaining any other funding or help. Think you'd become a magnet for speculators too.

    I remember people being advised to do the same sort of thing with student loans as the rate was so low, wonder if anyone was able to invest it and make returns, seems pretty unlikely.

  • Seems madness to me. It’s a temptation for someone to roll the dice to chase the dream of reaching the promised land. Then 4 years down the line someone else is picking up the pieces.
    Ill thought out. Poorly planned. As usual shows the Premier elite don’t give too boots about the rest of the pyramid.

    Anyway. Last night was great wasn’t it

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  • Depending on what happens if not repaid by June 2024, it would seem like madness to me not to take it and use to improve match day revenue - which has always been the plan - rather than for players and wages.

    One of those things will all but garauntee it all needed to be found to pay back, the other one will hopefully pay for itself.

  • I guess one speculate to accumulate scenario would be to take 1 million. Sign our two loanees. Sell them in 3 years for more than 1 million. ££££££

  • I like the sound of that @TheAndyGrahamFanClub.

  • In my opinion, we'd be crazy not to take the full amount and invest it wisely, to ensure we can pay it back and pocket any value appreciation.

  • Both @TheAndyGrahamFanClub and @Rolo plans only work if you are certain your "investment" would be successful. Its fine to hope that your two loanees that you have signed for £1m will be worth £2m in three years time but what happens if they each break a leg and are worth nothing. How do you repay the loan. Same goes for revenue enhancing stadium improvements - what happens if extra punters dont come.

    Old gambling rule applies - never gamble with money you cant afford to lose.

    👍 👎 ( -2 )
  • @Rolo said:
    In my opinion, we'd be crazy not to take the full amount and invest it wisely, to ensure we can pay it back and pocket any value appreciation.

    I can't imagine the FA would just dish money out for you to whack it in some account and not use it but instead just pocket the interest!
    They're not that foolish surely?! There has to be a few hoops to jump through which would surely involve an audit of why and what you're doing with it.

  • You have more faith in the FA than I do @Malone!

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  • Surely within seconds of it arriving in our bank account the Gasroom would light up with 'Where's the 8 Million gone?' 'Why aren't they spending the 8 million?' 'Did we spend 8 million on this?' 'Did anyone see Trevor Stroud's got a new car....' etc etc etc

  • 8 million could get us the 15-goals-a-season striker that we miss out on every window...

  • @DevC said:
    Both @TheAndyGrahamFanClub and @Rolo plans only work if you are certain your "investment" would be successful. Its fine to hope that your two loanees that you have signed for £1m will be worth £2m in three years time but what happens if they each break a leg and are worth nothing. How do you repay the loan. Same goes for revenue enhancing stadium improvements - what happens if extra punters dont come.

    Old gambling rule applies - never gamble with money you cant afford to lose.

    My tongue was firmly placed in my cheek. However you can bet there are many teams and managers running through the same scenario. 4 years is a lifetime away and it will be someone else’s sh1t to clear up by then will be the mantra

  • I know Andy.

    I think we are looking at this through the prism of our revenue and cost base and thinking what a big number that is. And of course it is for us.

    For an average Champ team its relatively much smaller. A team losing 15 home fixture games with a gate of 20,000 paying £20 per head will have lost £6m in revenue with only minor cost savings as a result. For most this loan just plugs that short term gap and spreads it over a number of seasons instead giving the clubs time to reduce salary expenditure to meet cost from TV money and repay the loan.

    👍 👎 ( -2 )
  • @Wendoverman said:
    Surely within seconds of it arriving in our bank account the Gasroom would light up with 'Where's the 8 Million gone?' 'Why aren't they spending the 8 million?' 'Did we spend 8 million on this?' 'Did anyone see Trevor Stroud's got a new car....' etc etc etc

    Better or worse than endless posts parsing out the definition and morality of diving?

    👍 👎 ( 1 )
  • Didn't I read somewhere that " the loan to Championship clubs can only be used to cover any PAYE debt (ie income tax and national insurance) " ?

    I am hoping that we don't have any PAYE debt beyond the current period.

    👍 👎 ( 1 )
  • @DevC said:
    Both @TheAndyGrahamFanClub and @Rolo plans only work if you are certain your "investment" would be successful. Its fine to hope that your two loanees that you have signed for £1m will be worth £2m in three years time but what happens if they each break a leg and are worth nothing. How do you repay the loan. Same goes for revenue enhancing stadium improvements - what happens if extra punters dont come.

    Old gambling rule applies - never gamble with money you cant afford to lose.

    The key to good investing is to never place all your eggs in one basket. Neither scenario you give was suggested by me. I don't really know the details of the rules of this loan but to give a few examples, I was thinking of investing in properties around the town, for instance more houses for the development squad, maybe a commercial property in the town to reopen a club shop. Do we own the training ground? Are there improvements that could be made there so that it is suitable for use as a conference facility etc and generate some additional revenue?

    There's always an element of risk to investments and I'm sure the Couhigs would take all the care they need to but I personally think that if they are not looking at the opportunites this loan may afford us, then they are nowhere near as ambitious as we all thought.

  • @Rolo said:

    @DevC said:
    Both @TheAndyGrahamFanClub and @Rolo plans only work if you are certain your "investment" would be successful. Its fine to hope that your two loanees that you have signed for £1m will be worth £2m in three years time but what happens if they each break a leg and are worth nothing. How do you repay the loan. Same goes for revenue enhancing stadium improvements - what happens if extra punters dont come.

    Old gambling rule applies - never gamble with money you cant afford to lose.

    The key to good investing is to never place all your eggs in one basket. Neither scenario you give was suggested by me. I don't really know the details of the rules of this loan but to give a few examples, I was thinking of investing in properties around the town, for instance more houses for the development squad, maybe a commercial property in the town to reopen a club shop. Do we own the training ground? Are there improvements that could be made there so that it is suitable for use as a conference facility etc and generate some additional revenue?

    There's always an element of risk to investments and I'm sure the Couhigs would take all the care they need to but I personally think that if they are not looking at the opportunites this loan may afford us, then they are nowhere near as ambitious as we all thought.

    Crazy idea to borrow money and spend it on things that have mostly been ruled out as not economically sensible, for example the training ground owners would see you coming and raise the price, with a bit of luck you could turn a profit, but any kind of downturn and we'd have no chance of repaying the loan.

  • @StrongestTeam said:

    @Rolo said:

    @DevC said:
    Both @TheAndyGrahamFanClub and @Rolo plans only work if you are certain your "investment" would be successful. Its fine to hope that your two loanees that you have signed for £1m will be worth £2m in three years time but what happens if they each break a leg and are worth nothing. How do you repay the loan. Same goes for revenue enhancing stadium improvements - what happens if extra punters dont come.

    Old gambling rule applies - never gamble with money you cant afford to lose.

    The key to good investing is to never place all your eggs in one basket. Neither scenario you give was suggested by me. I don't really know the details of the rules of this loan but to give a few examples, I was thinking of investing in properties around the town, for instance more houses for the development squad, maybe a commercial property in the town to reopen a club shop. Do we own the training ground? Are there improvements that could be made there so that it is suitable for use as a conference facility etc and generate some additional revenue?

    There's always an element of risk to investments and I'm sure the Couhigs would take all the care they need to but I personally think that if they are not looking at the opportunites this loan may afford us, then they are nowhere near as ambitious as we all thought.

    Crazy idea to borrow money and spend it on things that have mostly been ruled out as not economically sensible, for example the training ground owners would see you coming and raise the price, with a bit of luck you could turn a profit, but any kind of downturn and we'd have no chance of repaying the loan.

    It's lucky I'm not running the club but I'm sure those that are will be seriously looking at the possibilities.

  • @Rolo said:

    @StrongestTeam said:

    @Rolo said:

    @DevC said:
    Both @TheAndyGrahamFanClub and @Rolo plans only work if you are certain your "investment" would be successful. Its fine to hope that your two loanees that you have signed for £1m will be worth £2m in three years time but what happens if they each break a leg and are worth nothing. How do you repay the loan. Same goes for revenue enhancing stadium improvements - what happens if extra punters dont come.

    Old gambling rule applies - never gamble with money you cant afford to lose.

    The key to good investing is to never place all your eggs in one basket. Neither scenario you give was suggested by me. I don't really know the details of the rules of this loan but to give a few examples, I was thinking of investing in properties around the town, for instance more houses for the development squad, maybe a commercial property in the town to reopen a club shop. Do we own the training ground? Are there improvements that could be made there so that it is suitable for use as a conference facility etc and generate some additional revenue?

    There's always an element of risk to investments and I'm sure the Couhigs would take all the care they need to but I personally think that if they are not looking at the opportunites this loan may afford us, then they are nowhere near as ambitious as we all thought.

    Crazy idea to borrow money and spend it on things that have mostly been ruled out as not economically sensible, for example the training ground owners would see you coming and raise the price, with a bit of luck you could turn a profit, but any kind of downturn and we'd have no chance of repaying the loan.

    It's lucky I'm not running the club but I'm sure those that are will be seriously looking at the possibilities.

    I'd hope not as they have made a huge deal of us being debt free, not leveraged and making improvements gradually alongside the trust. Remember this would need to be repayable in 4 years. Capital expenditure is unlikely to see returns in that time, and we don't have the kind of turnover that would see us able to make repayments easily without hugely increasing income.

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