Is the holdup Hoffman, not SISU? (4 Viewers)

[dadgad]

This has been talked about before. Supposedly it gives them a higher book value and hence the club a higher value

mmmmmm, if I were to buy ccfc I'd take into account future liabilities - and that would include ridiculous contracts. The contracts given to Bell and McSheffers would therefore make the club a less attractive proposition.

 

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[Jack Griffin]

mmmmmm, if I were to buy ccfc I'd take into account future liabilities - and that would include ridiculous contracts. The contracts given to Bell and McSheffers would therefore make the club a less attractive proposition.

The club statement when KD left said....

"Player contract extensions with flexible terms have been put in place"

I surmise this to mean that they ain't gonna be paid as much in League One..

 

[oldskyblue58]

I wouldn't think they have written off the loans as investment. It would not make much sense as the loans are not defaulted. If they wrote that investment off one of they directors would stand to lose out some bonus money, and if they are all gready bastárds (as most think on here) then that would be against their nature.

Anyway - you are quite comfortable with an acabus and have access to the filed accounts.
If you look at the cost side, it seems like we are down to bleeding £2-2.5mil cashflow wise per year. Should we get relegated we will need to reduce wages to around 55% of turnover. Hopefully most fans will stay with the team as we battle for promotion(!) so matchday income shouldn't drop more than 20%. Sponsor contracts may drop a bit but some will be long term and stay the same.
What amount of cash in your estimate will it take to get through one year in league 1? Assume we already have the cash for the rest of this season ... would selling Cranie and Clingan this window get enough money to run next season?

In any team there will always be a standout performer - when that player leaves another step up like Juke did when King left. I wouldn't be surprised if Thomas, Cristie or even one of our strikers will become the next standout performer. This player will raise in value and if selling Cranie and Clingan is not enough to raise the cash for next season ... selling the new star might get us there.

But you're the mathematician ...

For investment review purposes it would be prudent given the financial info SISU have about CCFC to value the investment to report to their investors as £nil. If it were a company sales debtor there would be a strong arguement for making a doubtful debt provision. I am not talking about what the value is in the financials of SBSL Group. The point i am making is that the investment report given to their investors may well show it at nil value - that doesnt stop it being a legal debt in the accounts of SBS&L. If that is the case the SISU mindset is not minimising the loss but maximising anything they might get from it - the position is not so weak or uncomfortable as might be assumed. If they have already bitten the investment loss bullet the only way is up from that point

Sure you have your own abacus...... but

sales in 2010 were £9m wages costs were £10m overheads £4m

say sales were £7m in league 1 ( i think that is being generous) that means wages at 55% would need to be £3.85m. overheads & other costs approx £4m. Player contract write downs £0.5m. thats a loss of £1.35m. Expect that to be covered by player sales. Theory is fine but how do we get a competitive title challenging team for under £4m in wages ? Is it possible to drop from £10m in 2010 wages to under £4m in 2013 ?

Am not a mathematician .......

 

[Brighton Sky Blue]

Sorry, maybe we're talking at crossed purposes.

I was assuming that any cash paid for CCFC would be nominal, the real negotiation happens around the repayment of the loan from SISU.

As I see it the only valid exit strategy for SISU and their investors is to negotiate the best deal possible on the debt. IIRC the original Hoffman offer was quite a poor one (repayment deferred until we went up and if that didn't happen in 3 years it was written off). SISU will want more than that, probably something up front and some more over time, maybe as well as clauses related to club performance.

Hoffman's group will want to pay as little of the debt as possible. The bigger that debt gets and the less CCFC are bringing in, the more twitchy SISU and their investors will get about never seeing any cash again and the more likely they are to accept a lower amount, or less preferential terms on the repayment.

That's what I mean by it being worth Hoffman's while to wait it out. The debt may be bigger at the end of the season, but chances are SISU will be more willing to write some of it off.

EDIT: Interesting you say SISU won't grow the loan. How are we paying the bills at the moment then? Surely it's in SISU's interests to be the sole creditor as then they are the only ones who can put the club into admin. Otherwise (as I understand it, please correct if wrong) some CCFC fan florist owed a tenner could call in admin with the express aim of forcing SISU out.

As I understand it, the law enables you to issue a winding-up petition for any amount of money owed, provided it's at least £650, and that you have the proof it has been unpaid for a given amount of time, with no sign of it being paid otherwise.

 

[Jack Griffin]

Is it possible to drop from £10m in 2010 wages to under £4m in 2013 ?

Isn't that what the SISU strategy has been, at the end of this year when we go down I reckon only Wood, Hussey, Deegan and Keogh will be on a Championship salary (and Hussey/Deegan will not be so expensive), the other senior players who have signed extensions are on 'flexible terms' or are relatively young players who won't be on an awful lot.

.. there are several young players who will be worth money in the transfer market Cameron, Bigi, Christie & Thomas to make up any shortfall and the fair play rules allow a deviation from the 55% figure. For a few years to come it will be unrealistic to expect relegated clubs to drop salary overheads just like that, but I'd bet that in future all contracts will contain provisions such that relegated clubs pay lower salaries in lower divisions & vice versa!

Next year, I'd expect any dissatisfied senior player to move if they can get a decent contract with a Championship club. That may well happen if the team are not in the promotion chase, on the other hand if they are the decent league one players will be very interested in coming here.

 

[Godiva]

sales in 2010 were £9m wages costs were £10m overheads £4m

say sales were £7m in league 1 ( i think that is being generous) that means wages at 55% would need to be £3.85m. overheads & other costs approx £4m. Player contract write downs £0.5m. thats a loss of £1.35m. Expect that to be covered by player sales. Theory is fine but how do we get a competitive title challenging team for under £4m in wages ? Is it possible to drop from £10m in 2010 wages to under £4m in 2013 ?

So, if we indeed have secured finances for the rest of this season, then a combined sale of Clingan and Cranie resulting in around £1-1.5m cash should secure finances for next season.

The team as I see it looks decent for league 1 even without those two who could be replaced with cheaper and younger players.

Looks like a viable strategy to me.
In addition, should the club get into positive figures next season (for the first time in decades), then the club may finally start building instead of being in constant turmoil.

Anyway, looking at the figures, why should sisu be in any hurry to sell?

 

[oldskyblue58]

I dont think they are in a hurry that is what I have been saying, they are not under as much pressure as some might hope - time will tell as to whether it is their strategy or if it could be successful in League 1. The key to it all is turnover, always has been and that is going to be under great pressure for the rest of 2012

 

[Nonleagueherewecome]

As I understand it, the law enables you to issue a winding-up petition for any amount of money owed, provided it's at least £650, and that you have the proof it has been unpaid for a given amount of time, with no sign of it being paid otherwise.

Bollocks, my brother only owes me £500. It's been 7 or 8 years now..can I claim inflation takes it over £650 d'yer reckon?

 

[Jack Griffin]

Bollocks, my brother only owes me £500. It's been 7 or 8 years now..can I claim inflation takes it over £650 d'yer reckon?

If it was a Wonga contract he'd owe you £68,523.25p

 

[shmmeee]

So, if we indeed have secured finances for the rest of this season, then a combined sale of Clingan and Cranie resulting in around £1-1.5m cash should secure finances for next season.

The team as I see it looks decent for league 1 even without those two who could be replaced with cheaper and younger players.

Looks like a viable strategy to me.
In addition, should the club get into positive figures next season (for the first time in decades), then the club may finally start building instead of being in constant turmoil.

Anyway, looking at the figures, why should sisu be in any hurry to sell?

Honest question, as you know far more about this stuff than me: Why do you think we'll be in positive figures next season?

I don't understand how a club that posted a loss of £5.7m last season (after £4.7m of player sales) will break even when losing £4-6m in income and not having £4.7m worth of players left, let alone that it can afford to sell.

Our wage bill was £12m last year, as OSB says FFP rules will expect us yo be closer to say £4m (to be generous). Where will £152k/week of wage savings come from?