Championship 22-23 (20 Viewers)

[Colin Steins Smile]

Looking ahead to the teams in the Championship next season. We can once again expect the teams with parachute payments to be challenging to return to the PL.

There may be one exception .....Burnley. Under the terms of the buy out of the club, who's owners used a leverage process [similar to the Glaziers]. The cost of £65M has been placed on the club as a loan. Under the terms of the loan, which has an annual interest rate of Libor + 8% and is due to be repaid in December 2025 IF the club remained in the PL.

However, a clause in the loan terms state that if the club is relegated then the £65M is due for repayment during the year following their relegation. Therefore, if I understand this correctly, then the parachute payment of circa £45M could be used for repayment & we could expect a sell off of players.

This would not solve all their problems, as Burnley's wage bill will be significantly large and they'll have a big loss being incurred. The question for the owners is:
"Do they seek repayment of the loan now or do they gamble on getting promoted next season and seek to recoup the money and interest payments that way".

 

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[Evo1883]

I'd like us to push on , but it's a tough league and until I see what business we do , it's hard to gauge ..

 

[rexo87]

Hopefully Forest beat Huddersfield as I think we will do better than Huddersfield next season.

Really not sure whether Norwich will be as strong as they have been in recent championship seasons. Pukki is ageing and Cantwell is out of favour. No Beundia this time who was the best player in the league last time.

Watford weren't particularly good last time they got promoted. We were the better side against them at home and were 2-1 up away from home. Still expect them to be right up there.

I think Burnley will gamble next year and be up there. Could be in trouble with that loan if they don't get promoted next season.

Few good improvements and not selling more than one of our best players will be the key. Think we will get top 6

Sent from my SM-G991B using Tapatalk

 

[SkyblueDad]

Just listened to Simon Jordan on Talksport and it sounds as if Burnley could be right in the cart as said have to pay back over £45million to their owners, have nine players out of contract, apparently gone from having £50mill in the bank to a 100million debt and a high wage bill to boot and to be honest what I’ve seen from them the last month a poor outfit, they might be shocked with the championship and how tough it can be.

 

[SlowerThanPlatt]

Just listened to Simon Jordan on Talksport

My thoughts are with you

 

[KenilworthSkyBlue]

Burnley really are in a bit of a mess.

Sales might just about repay the loan but that'll probably be as far as they'll go as not only will relegation reduce the value of their saleable assets but clubs will be aware of Burnley's financial situation which will go against them in negotiations. Not ideal that Cornet has a clause in his contract either that states he can be purchased for £17.5m if the club are relegated. All sales will be paid in instalments as well - again not ideal when they need as much cash upfront as possible.

I'd imagine instalments on Collins, Weghorst and Cornet are probably also owed next season.

Their £86m wage bill will certainly be reduced massively given the number of players out of contract as well as the majority of their big earners will be moved on and relegation clauses being in the contracts of the remaining players, but it'll likely still be far above where it needs to be. More players may need to be moved on if possible but it's a question of who will realistically take them.

Whatever's outstanding on their £65m loan once a significant proportion of it has been repaid will still incur 8% interest I'd imagine as well.

 

[Terry Gibson's perm]

Burnley really are in a bit of a mess.

Sales might just about repay the loan but that'll probably be as far as they'll go as not only will relegation reduce the value of their saleable assets but clubs will be aware of Burnley's financial situation which will go against them in negotiations. Not ideal that Cornet has a clause in his contract either that states he can be purchased for £17.5m if the club are relegated. All sales will be paid in instalments as well - again not ideal when they need as much cash upfront as possible.

I'd imagine instalments on Collins, Weghorst and Cornet are probably also owed next season.

Their £86m wage bill will certainly be reduced massively given the number of players out of contract as well as the majority of their big earners will be moved on and relegation clauses being in the contracts of the remaining players, but it'll likely still be far above where it needs to be. More players may need to be moved on if possible but it's a question of who will realistically take them.

Whatever's outstanding on their £65m loan once a significant proportion of it has been repaid will still incur 8% interest I'd imagine as well.

Who do they have to sell the goalkeeper and Cornet will be the only two of much value and a lower prem team might take McNeil

 

[KenilworthSkyBlue]

Who do they have to sell the goalkeeper and Cornet will be the only two of much value and a lower prem team might take McNeil

Pope would attract a decent fee - although a percentage of that will have to be paid to Charlton - and it won't be anywhere near Burnley's asking price I'd imagine.

McNeil will have suitors in the PL and Cornet will likely receive interest.

No one else would really attract bids. Collins maybe, if Burnley put him out to market.

They may not get what's needed from the fees to cover whatever's outstanding from their loan but I'd imagine they'd do what they did with the Chris Wood deal and take out a loan on future instalments in order to tie them over.

 

[jimmyhillsfanclub]

Its fucking outrageous that these leveraged buy-outs are still allowed........ Burnley have gone from being a debt free club to a debt-ridden clusterfuck who even took as 12.5m loan to buy Chris wood.....what a fucking mess....

 

[Tommo1993]

I’m not expecting Burnley to compete. Sounds like they’re in really hot water. Especially if they do fail their first attempt at promotion.

They could go the same bouncy way as Norwich. They could also take the same path as Luton.

 

[SleepyGinger]

£80 million parachute payments, I think they will be OK.

 

[RegTheDonk]

Looking ahead to the teams in the Championship next season. We can once again expect the teams with parachute payments to be challenging to return to the PL.

There may be one exception .....Burnley. Under the terms of the buy out of the club, who's owners used a leverage process [similar to the Glaziers]. The cost of £65M has been placed on the club as a loan. Under the terms of the loan, which has an annual interest rate of Libor + 8% and is due to be repaid in December 2025 IF the club remained in the PL.

However, a clause in the loan terms state that if the club is relegated then the £65M is due for repayment during the year following their relegation. Therefore, if I understand this correctly, then the parachute payment of circa £45M could be used for repayment & we could expect a sell off of players.

This would not solve all their problems, as Burnley's wage bill will be significantly large and they'll have a big loss being incurred. The question for the owners is:
"Do they seek repayment of the loan now or do they gamble on getting promoted next season and seek to recoup the money and interest payments that way".

Thanks for the insight Colin. It's a crap situation for them and I think you live by the sword etc., but also a bit depressing for us. Again it seems if you want to progress you've got to break the bank (something we will not do under the owners, and quite rightly I guess) or have a lorra lorra luck with an exceptionally cheap but talented group of players. We've got a mananger who's worked a lot of magic, you live in hope he can perform a miracle.

 

[SleepyGinger]

It’s a very northern league next year with the addition of Burnley, Wigan, Rotherham and Sunderland.

 

[jimmyhillsfanclub]

£80 million parachute payments, I think they will be OK.

Err....65m to the owners due to relegation clause & 12.5m to clear the wood debt.....thats leaves 2.5m to cover some (but probably not all) of the interest......

They're fucked.

 

[Tommo1993]

£80 million parachute payments, I think they will be OK.

They’re over £100m in debt, I’m reading, with a big loan on top of that to pay off.

 

[SkyblueDad]

£80 million parachute payments, I think they will be OK.

Owners will grab that.

 

[It’sabatch87]

They could do a Sunderland I reckon next season, straight through to league one.
Burnley til I die anyone?

 

[Grendel]

They’re over £100m in debt, I’m reading, with a big loan on top of that to pay off.

The debt is a loan to the management company who own then who can decide to waiver the loan

They had 50 million in the bank in the last accounts

Stoke are well over £100 million In debt and financially secure. It’s clearly in the owners interest to use the year to try and recover the league status

 

[Colin Steins Smile]

The debt is a loan to the management company who own then who can decide to waiver the loan

They had 50 million in the bank in the last accounts

Stoke are well over £100 million In debt and financially secure. It’s clearly in the owners interest to use the year to try and recover the league status

Firstly, I'm not sure Burnley's owners are like the Coates family at Stoke, who finance the club by putting money in [at 0% interest] and reverting it to shares, so as to stay within FFP. The terms of the contract with libor + 8% paints a very different picture.

Secondly, those terms in the loan that the owners took out to leverage the takeover look like a "win - win" for them. If the club stays up until 2025 then they realise big interest payments and then can extract £65M. If they get relegated they can ask for immediate repayment having taken at least 1 year of 8+% interest......much better return than sticking the money in a bank.

It'll be interesting to see if they give Burnley a season to try to get promoted to the PL or if they seek the return now?

 

[Saddlebrains]

I'm not overly concerned by any of those that have come down

As discussed, Norwich aren't what they were, Watford are a bit meh and Burnley are fucked

I think for once the relegated teams will be trying to make the play offs, and the top 6 will be mainly Teams of the likes of us, Middlesbrough, Albion Swansea etc.

 

[KenilworthSkyBlue]

The debt is a loan to the management company who own then who can decide to waiver the loan

They had 50 million in the bank in the last accounts

Stoke are well over £100 million In debt and financially secure. It’s clearly in the owners interest to use the year to try and recover the league status

The loan in question was from MSD UK Holdings wasn't it, not ALK Capital?

 

[Deleted member 9744]

Pope would attract a decent fee - although a percentage of that will have to be paid to Charlton - and it won't be anywhere near Burnley's asking price I'd imagine.

McNeil will have suitors in the PL and Cornet will likely receive interest.

No one else would really attract bids. Collins maybe, if Burnley put him out to market.

They may not get what's needed from the fees to cover whatever's outstanding from their loan but I'd imagine they'd do what they did with the Chris Wood deal and take out a loan on future instalments in order to tie them over.

Tarkowski surely woukd attract interest and maybe Lowton too. Also Weighorst would presumably attract a fee back to Germany.

 

[KenilworthSkyBlue]

Tarkowski surely and maybe Lowton too. Also Weighorst would presumably attract a fee back to Germany.

Tarkowski is leaving on a free. Lowton is 33 in June.

Weghorst I'm not sure on. There is a rumour that he's another with a relegation get-out clause in his contract but that's very much speculation at the minute. In any case I don't think they'd attract a significant fee for him and would probably have to be loaned out.

 

[JulianDarbyFTW]

I agree with others here, they might plummet down another league or two now. But even with the debt issues and player contracts, I think Dyche would have brought them straight back up. Still think it was madness to sack him, even though their form improved without him - he's spent years trying to make a silk purse from a cow's ear, when even just a little more backing in the transfer market would have likely seen them safe.

 

[KenilworthSkyBlue]

Firstly, I'm not sure Burnley's owners are like the Coates family at Stoke, who finance the club by putting money in [at 0% interest] and reverting it to shares, so as to stay within FFP. The terms of the contract with libor + 8% paints a very different picture.

Secondly, those terms in the loan that the owners took out to leverage the takeover look like a "win - win" for them. If the club stays up until 2025 then they realise big interest payments and then can extract £65M. If they get relegated they can ask for immediate repayment having taken at least 1 year of 8+% interest......much better return than sticking the money in a bank.

It'll be interesting to see if they give Burnley a season to try to get promoted to the PL or if they seek the return now?

There's a reason why MSD put such a clause in the loan contract.

It's because they would've known that the first season post relegation would offer Burnley the best chance of repaying the majority of the loan - due to revenue being generated from the sale of players and them receiving parachute payments. Bouncing back to the PL is by means a guarantee and something they'd unlikely want to rely upon.

As beyond this year player sales are likely to dry up and parachute payments are reduced in the subsequent second and third year.

 

[Terry Gibson's perm]

Already taken the second £12.5 million for wood to keep them going they sound a real basket case and that they were struggling financially this year says a lot.

 

[SkyblueDad]

I’ve watched about four Burnley matches in the last month or so and even with the squad they have they are shite, a squad put together by this so called super manager Dyche.

 

[SlowerThanPlatt]

I’ve watched about four Burnley matches in the last month or so and even with the squad they have they are shite, a squad put together by this so called super manager Dyche.

I’ve never heard anyone call Sean Dyche a super manager. What are you on about?

 

[Evo1883]

I’ve watched about four Burnley matches in the last month or so and even with the squad they have they are shite, a squad put together by this so called super manager Dyche.

Net spend 50 million in the last 5 years , not bad really , and a club of Burnleys size would always eventually succumb again , it's a difficult job , he's done well there over the years to keep them up

 

[SkyblueDad]

I’ve never heard anyone call Sean Dyche a super manager. What are you on about?

I have my opinions prick and imo he’s overrated & his team crap route one football which has caught up with them.

 

[Terry Gibson's perm]

Adrian Durham on talksport is giving Burnley some stick saying he can see them dropping again.

 

[Terry Gibson's perm]

I’ve never heard anyone call Sean Dyche a super manager. What are you on about?

Never a super manager but the press would regularly say when a bigger job came up why not Dyche he was press linked with Everton and others, he is a bit one dimensional and even Burnley fans have said there was no plan b.

 

[Evo1883]

Adrian Durham on talksport is giving Burnley some stick saying he can see them dropping again.

I think there are financial problems yes .. be nice to see a side come down from the Premier league and NOT immediately have tens of millions to splash on fees or wages should they choose

 

[clint van damme]

Adrian Durham on talksport is giving Burnley some stick saying he can see them dropping again.

I hope someone drops Adrian Durham.

 

[Terry Gibson's perm]

I hope someone drops Adrian Durham.

I can’t say I am a fan either