I can see that is a possibility. But do you think the Player Farm would work? Who would let their Kid go to the Rats mad laboratory, when they could go to the Academy of one of the other properly run London clubs?
Very interesting. I started a thread a while back about the money we owe to Staprix, at 3% interest. The repiles that I got were generally that the loan could be regarded as a sort of quasi-equity, and not a big issue. As my knowledge of finances is cloudy to say the least, I left it there, but this has been something I've been thinking about for a while. While Riga, Mak and Poyet may come and go, this money is snowballing, and I still see no reason why RD cannot stick it to the club in order to keep his other operation solvent. My memories of the spokesman who took over Standard Liege afte Roland sold up are that he said RD left them with every bit of money available drained, and that they are planning a year or two of austerity to recover from the disaster that is Roland Rat and his accountancy plans. And the twat has the nerve to pop up in the SLP and say that a takeover would destabalise the club. And what exactly is running up a huge unpayable debt going to do. Maybe that Murray bloke who sang so highly in praise of RD could explain how this plan is to the advantage of the club he supposedly loves.
I think everyone is over complicating this, as supporters we are so emotionally involved due to our love and connection with the club that we are adding 2+2 and coming up with 5 along with many theories. Hotels etc are very wide of the mark. If he really wanted housing, hotel, retail etc there were far better places and far cheaper ways of doing so.
Before anyone starts shooting me down I like 98% of supporters want him out as soon as possible, but for 2 minutes try not to see this as our beloved Charlton but purely from a numbers perspective and the overall football network 'business' he owns and I think you'll understand more the potential motives, however like me you still won't agree they are right for Charlton and will still want him out! Plus he's failed even by his own plan as he made the cardinal sin of assuming Football was like any other business and could be run as such, in too many ways it is not.
Rolands 'network model' is one used by businesses all over the world, economies of scale and sharing resource. What he's yet to realise is that, in the main, due to the uniqueness of football it simply doesn't work.
As an example If you own one company with say 150 staff you may need, 2 HR staff, 8 Finance, 4 project managers etc etc. Grow that company 5 fold or indeed own 5 companies each with 150 staff doesn't mean you need 10 HR staff, 40 Finance, 20 project managers etc, so you will get the economies of scale. On supplier management you will also obtain better pricing as spending more, all normal busines practices.
Roland's football experiment goes one step further due to the staff element (players) often having a value, so he saw this, particularly with Charlton, the academy but also the players Charlton had on their books.
Cast your minds back to when he bought Charlton and the comments to Powell. Roland said in rough words;
'he had better players on his books than Yann, Wiggins, Stephens, Solly, Morrision' etc etc.
I don't for one moment think he actually believed that. What he was rely saying was;
'I have players that I already own and am paying that are surplus to requirements, therefore I can cash in on some players like Yann, Wiggins, Stephens, Solly, Morrison' etc. In doing so he also saves on their wages. Even players brought in from non network clubs will be considerable cheaper in the salary stakes.
So he sells those players and brings in 'x' amount of money and sends in replacements for free (ok sometimes we paid a fee but Roland was simply paying himself at least some of the time! Be interesting to know how much of the £9m he paid to himself effectively).
Take Tony Watt, we paid over £1m for him which was really Roland paying himself, although he was paying himself with a loan he had given and that he earns interest on.........
So he loans money to say Charlton which in turn he often pays himself (by paying players he owns elsewhere or fee's to his other clubs) and in turn gets interest on it. Is it any surprise that not one player sold has gone to another Network club, yet so many incoming were from the network? I think he also saw Charlton being a good shop window to realise the best price for players he owns elsewhere in the network, he just underestimated quite how poor the quality of those players were bar the odd exception.
Using my company example above thats what you would do, buy another company, make say one HR staff redundant, 2 finance, 1 project manager etc and you are diluting your costs and therefore increase profit. What he saw with Charlton is that he didn't need to make staff redundant (players) he could actually get money for getting rid of them! He probably couldn't believe his luck and thought 'why has no one else thought of this', in no other business would you get that value in staff leaving.
Managers are another example, often they have been people already on the payroll so in the overall 'network' are free to him, the others have just been very cheap! Cheap is his middle name!
So in many businesses his model does and would work and no doubt has in his non football business activities. However it doesn't work in Football as we all know. I think the main failure of his plan is that he assumed he was buying an income from fans and that with normal business marketing that income (fan base) would grow, he didn't appreciate that it would actually shrink and therefore so would the income. He didn't also account for relegation and the other income that will reduce and dry up from TV money to sponsorship etc and also suspected a trip to the premier league at some point and the £'s that would bring.
I really do think it's as simple as that, so as I say, look at his football business as a whole, it's a bit of a game/experiment for him to prove to the wider world that he is right, sadly, for us, it isn't working nor will it ever work.
The more worrying part for us is I don't think relegation or lowering attendances will bother him too much, if his revenue goes down by 'x' amount he'll simply try to reduce his expenses by a similar amount. Therefore next year expect more incoming network players and managers and also the fielding of a lot more youngsters, after all he already owns them. Plus he'll certainly sell anyone with a value who just happen to be the higher salaried players as well.........
So lets keep it up and get this man out of OUR club!
Shouldn't kid ourselves that the Valley isn't a possible site for housing - interesting article in the Standard the other night about how London's sporting stadiums are being transformed into new homes.
You could flatten The Valley. Build as many dwellings as allowed by local planning restrictions and Roland still won't get his money back.
But would that money made on the housing development be enough to build an out-of-town stvv style stadium that holds whatever crowds we are getting in a couple of seasons.
No, because he wouldn't recoup the money he's already spent on CAFC.
Does anyone think it possible, that when the Rat is face with a club that cannot be managed because its supporters have just been pushed too far, no sponsors,very little match day income, spiralling debts etc, It might decide that it will get more of its money back by closing the club down altogether, and liquidating all its assets. The Rat might go down that line because a League 1 club with a tiny attendance, no sponsors, and a shite squad is worth next to nothing, whereas liquidation would probably give it several million pounds of its money back.
Why do that when someone somewhere will offer him something. Who I don't know but the "golden share" ie the membership of the football league, assuming we are still in the league has a value as does the "brand".
The problem he has is that what assets can he liquidate. The two pieces of land are worth very little without planning permission for housing and he is unlikely to get such permission. Even if he did it would take years of appeals etc and then more years to build the houses.
Even knocking the Valley down would cost £ms
The Valley is worth more as a stadium and the club is worth more as a football league member.
A some point he will suddenly decide he's had enough and sell the club. Our problem is that could be tomorrow or it could be in 10 years time.
I think everyone is over complicating this, as supporters we are so emotionally involved due to our love and connection with the club that we are adding 2+2 and coming up with 5 along with many theories. Hotels etc are very wide of the mark. If he really wanted housing, hotel, retail etc there were far better places and far cheaper ways of doing so.
Before anyone starts shooting me down I like 98% of supporters want him out as soon as possible, but for 2 minutes try not to see this as our beloved Charlton but purely from a numbers perspective and the overall football network 'business' he owns and I think you'll understand more the potential motives, however like me you still won't agree they are right for Charlton and will still want him out! Plus he's failed even by his own plan as he made the cardinal sin of assuming Football was like any other business and could be run as such, in too many ways it is not.
Rolands 'network model' is one used by businesses all over the world, economies of scale and sharing resource. What he's yet to realise is that, in the main, due to the uniqueness of football it simply doesn't work.
As an example If you own one company with say 150 staff you may need, 2 HR staff, 8 Finance, 4 project managers etc etc. Grow that company 5 fold or indeed own 5 companies each with 150 staff doesn't mean you need 10 HR staff, 40 Finance, 20 project managers etc, so you will get the economies of scale. On supplier management you will also obtain better pricing as spending more, all normal busines practices.
Roland's football experiment goes one step further due to the staff element (players) often having a value, so he saw this, particularly with Charlton, the academy but also the players Charlton had on their books.
Cast your minds back to when he bought Charlton and the comments to Powell. Roland said in rough words;
'he had better players on his books than Yann, Wiggins, Stephens, Solly, Morrision' etc etc.
I don't for one moment think he actually believed that. What he was rely saying was;
'I have players that I already own and am paying that are surplus to requirements, therefore I can cash in on some players like Yann, Wiggins, Stephens, Solly, Morrison' etc. In doing so he also saves on their wages. Even players brought in from non network clubs will be considerable cheaper in the salary stakes.
So he sells those players and brings in 'x' amount of money and sends in replacements for free (ok sometimes we paid a fee but Roland was simply paying himself at least some of the time! Be interesting to know how much of the £9m he paid to himself effectively).
Take Tony Watt, we paid over £1m for him which was really Roland paying himself, although he was paying himself with a loan he had given and that he earns interest on.........
So he loans money to say Charlton which in turn he often pays himself (by paying players he owns elsewhere or fee's to his other clubs) and in turn gets interest on it. Is it any surprise that not one player sold has gone to another Network club, yet so many incoming were from the network? I think he also saw Charlton being a good shop window to realise the best price for players he owns elsewhere in the network, he just underestimated quite how poor the quality of those players were bar the odd exception.
Using my company example above thats what you would do, buy another company, make say one HR staff redundant, 2 finance, 1 project manager etc and you are diluting your costs and therefore increase profit. What he saw with Charlton is that he didn't need to make staff redundant (players) he could actually get money for getting rid of them! He probably couldn't believe his luck and thought 'why has no one else thought of this', in no other business would you get that value in staff leaving.
Managers are another example, often they have been people already on the payroll so in the overall 'network' are free to him, the others have just been very cheap! Cheap is his middle name!
So in many businesses his model does and would work and no doubt has in his non football business activities. However it doesn't work in Football as we all know. I think the main failure of his plan is that he assumed he was buying an income from fans and that with normal business marketing that income (fan base) would grow, he didn't appreciate that it would actually shrink and therefore so would the income. He didn't also account for relegation and the other income that will reduce and dry up from TV money to sponsorship etc and also suspected a trip to the premier league at some point and the £'s that would bring.
I really do think it's as simple as that, so as I say, look at his football business as a whole, it's a bit of a game/experiment for him to prove to the wider world that he is right, sadly, for us, it isn't working nor will it ever work.
The more worrying part for us is I don't think relegation or lowering attendances will bother him too much, if his revenue goes down by 'x' amount he'll simply try to reduce his expenses by a similar amount. Therefore next year expect more incoming network players and managers and also the fielding of a lot more youngsters, after all he already owns them. Plus he'll certainly sell anyone with a value who just happen to be the higher salaried players as well.........
So lets keep it up and get this man out of OUR club!
What is odd about that is that surely you would use the biggest part of your business to drive the economies, not the smallest. Promotion to the Premier League would finance your entire network model.
Why would you downsize in the area of greatest potential?
What is odd about that is that surely you would use the biggest part of your business to drive the economies, not the smallest. Promotion to the Premier League would finance your entire network model.
Why would you downsize in the area of greatest potential?
But that wasn't part of his plan (to get relegated or indeed downsize). The one 'statement' that they have said and I do believe, is they had underestimated the level of the Championship, they will never say it but I believe they also underestimated us, the Supporters. They expected attendances to increase, remember the constant throwing out there of 'the match day experience' or 'Target 20k' etc, they truly believed that and sadly I think to an extent they still do.
I believe they also thought that through this model within 5-7 years they would 'find themselves' in the Premiership. Remember Richard Murray's comments of conversations he'd had with Roland in that if in January we had potential to go up he may well invest further in the squad......... as he realises that doesn't happen often/every year.
Roland is used to being a top quartile performer, he thought he'd do the same in football as on paper in many instances it is no different to his other businesses aside from the fact he can sell staff in football! But he hasn't understood that running a football club isn't like running an electronics business or selling a physical product. His product is the football, he still doesn't get it that the match day experience is watching the 11 men in red shirts give there all and give supporters something to be proud of.
If he'd actually of understood that at the start he may well of had some success. Sadly 2 years on he still doesn't have a clue......
There is a huge misreading of the conclusion to these accounts in my opinion. I will look at in detail when I have a bit more time. However the fact is there is a debt to Starprix of £38m at June last year. There was over £4m of profit on player sales so I expect it did include Gomez sale. Therefore the loss of before that is over £6m so it wouldn't be unreasonable for it to £44m now and with a possible £10m loss next year it is likely to be over £50m in a years time. He hasn't got a cat in hell's chance of recovering this money. He will soon realise this. It may be when he gets a realistic budget for next year or when he sees season ticket sales are minimal. He will realise his most sensible course is to cut his losses. This will be speeded up the more we can embarrass him - particularly when in happens in Belgium.
When he decides to sell a new owner will NOT have to pay £50m. They will negotiate. In the same way Bolton owners did and many before them (including Palace and Southampton).
The bigger his debt and the biggest his losses the better. The interest situation will be totally irrelevant.
A lot of this information is probably new to most of us, but would Peter Varney not have a rough idea of the financial situation? If he has put together a group of possible buyers then surely he must have given them an idea of how much it would cost to acquire the club, and they appear to have not been deterred by that.
From what Varney implies in his interviews, it's that the wealth of the individual who wants to buy the club is such that the immediate losses aren't much of a concern. Since the plan would be for the club to become a premier league (and thus sustainable) club.
And Duchatelet is preventing this. We have gone lightly on him so far, haven't we?
Could someone more knowledgeable than me about this type of finance, and perhaps more knowledgeable about football finance in general try throwing this all together and sending it to The Swiss Ramble? He's based in Switzerland (hence the name), and has done loads of exposes and interpretations of football finances down the years. I'd be really curious to see what he makes of it.
I suspect, though cannot be certain, that we are not the only club at this level carrying this amount of debt, not even by a long shot.
Hundreds of M debts or similar for Arsenal is the equivalent of a couple of mill to us, the TV money and CL money they get alone could wipe debts instantly forgetting player wages etc. For a League One side to wipe over 50M is virtually impossible, player sales will barely cover wages, ticket sales will barely cover running costs, everything else contributes a huge loss so the debt will only gain in size.
We have been run so well in the past, now the entire backbone that was put in place has been torn out. I knew it would be bad but at a slower speed than is happening, the speed this is happening could seriously stick us in a position such as Portsmouths.
Smart thinking, @Rob7Lee. I reckon you are pretty much right there, in so far as anyone can understand the guy and his plans. Plenty of intelligent Belgians don't.
Is there an end game for Roland where he sells the ground, plonks flats on it and we cease to exist? Sorry this has probably been covered before but I'm confused with how bad this could get?
Does anyone think it possible, that when the Rat is face with a club that cannot be managed because its supporters have just been pushed too far, no sponsors,very little match day income, spiralling debts etc, It might decide that it will get more of its money back by closing the club down altogether, and liquidating all its assets. The Rat might go down that line because a League 1 club with a tiny attendance, no sponsors, and a shite squad is worth next to nothing, whereas liquidation would probably give it several million pounds of its money back.
Why do that when someone somewhere will offer him something. Who I don't know but the "golden share" ie the membership of the football league, assuming we are still in the league has a value as does the "brand".
The problem he has is that what assets can he liquidate. The two pieces of land are worth very little without planning permission for housing and he is unlikely to get such permission. Even if he did it would take years of appeals etc and then more years to build the houses.
Even knocking the Valley down would cost £ms
The Valley is worth more as a stadium and the club is worth more as a football league member.
A some point he will suddenly decide he's had enough and sell the club. Our problem is that could be tomorrow or it could be in 10 years time.
The real estate and players are shown as having a value of about £45m. But how much would you pay for this real estate with liabilities of £50m and the club making an operating loss of over £7m p.a.
If the objective is to break even there will still be a deficit on the balance sheet of £26m from accumulated losses which never gets paid off and loans of £44m that never get paid off.
My fear is that he is happy to break even simply because the interest he is earning on his loans isn't wiped out by the cash he needs to inject to cover operating losses. His hobby/experiment would be self financing. He's not fussed about getting his money out unless it's to realise a profit when in the Premier League, he would just have the hassle of finding somewhere else to invest it.
If he is losing £5m a year he might just sit tight hoping we get lucky and get promotion. If we don't make profits on player sales he needs to put in nearer £10m, but everything gears down as we fall down the Leagues.
Perhaps we should have our own target that makes RD want to cut his losses- target £10m losses.
I can't help but think of the old restaurant comparison..
Can you imagine hearing a restaurant owner saying - "I bought some gone off milk the other day, the guy who sold it to me was pretty adament that I took it, I guess it was worth a punt.."? This is, in essence, his player recruitment strategy.
Then, can you imagine chatting with the same restaurant owner and hearing him say - "Remember that guy that flogged me the gone off milk? He's only gone and popped 3% on the invoice! I wouldn't mind, but he's my business partner... cheeky bastard!".
This is pretty much what Roland's doing, he's taking a punt and throwing money at people in the hope that he'll uncover a rough diamond - players, managers, executives - they're all gambles. However, he doesn't seem able to grasp that the money spent in doing this has most likely outweighed the costs incurred had he employed simple common sense and followed a proven recruitment strategy.
The true ridiculousness of this situation is demonstrated by the fact he's now able to draw a salary off of these failings. By balancing the books, he's able to charge interest on the fruits of his own flawed plan - his own mistakes pay him very well.
It's a barmy business, it really is. It's made me realise how money in business quite often doesn't exist.. that £38,000,000 is money Roland spent via CAFC, which CAFC now owes him. CAFC never had that cash, and Roland never really spent it - he's basically put it in a savings account at 3% per year.
A return of £1,140,000 per annum (based on last years figures remember.) is utterly crazy - he's essentially making a very good salary out of his lack of football knowledge!
I think people are still missing the point and underestimating his business acumen, we may all hate him for what he is doing to OUR club, he may be misguided he may be an evil man, he may have no place in football, but stupid financially he is not. Just look at the math, it's there in print if you care to look and dig;
He's lending himself money and paying himself a rate of interest that he wouldn't get anywhere else (not easily or without capital risk anyway). You could argue his capital is at risk, but in reality it's not really (again think of this as a business not simply the team you support). So yes he's on paper lost money but he has received back over £1.3m in interest, that will be greater this year of course and no rout increase further next.
He has a squad of players, there may be a few gems in there (Lookman say £5m - Gomez of course was £3.5m with additional payments potentially to come, maybe another youngster coming through), despite the dismal football we have seen the squad has a value. The valley has a value, whether thats as part of the football club or simply as land. Of course there is the training ground as well.
So he's made a loss, but how much has he saved or made elsewhere by sending in players (or managers come to that) he's already paying or 'Charlton' have paid him a fee for? Lets not forget, he's spent £9m on players which is roughly the two years of loss (about £10m). However he's also payed himself £1.3m in interest, this year will be, I suspect, more than that. I'd guarantee if the previous owners were still here we'd have spent less on players and made a bigger loss (although would probably still be in the Championship quite comfortably).
So before relegation he was probably down around £8.5m, If Lookman goes for say £5m and all of a sudden the loss is down to £3.5m or 'one more Gomez'. I suspect Henderson, Motta, Vetokele, JBG, Bauer, Teixeira, Cousins and maybe one or two others will easily cover that, and some, and can in his eyes easily be replaced by others for nothing/small fee from the network and elsewhere and their salaries will be lower as well of course. they'll also blood more youngsters (who seem to be doing quite well ;-)).
He hadn't planned on relegation and it does scupper his plans a bit but don't believe what he and the big nosed one say, they will have been planning since before Karel went. To him relegation will simply be like a 'recession'.
As well as those above many will be released, Jackson, Diarra, Ba, Reza (please god) and of course Riga and a certain Ujpest coach will arrive.
Outside of relegation a lot of this is all part of the plan, remember the comment that their choice of managers has been as much around being able to work with the youngsters as anything else.
From a financial point of view he's going nowhere anytime soon, those who think he'll sell up and disappear just because season ticket sales and attendances dramatically reduce are very wide of the mark IMHO. He'll simply cut back further, if you think the football was bad this year the real dross is yet to come......
Sadly, as it stands, it will take us to be bottom of the football league with no players left to sell before he goes, at that point he'll dispose of all other assets he can (Think bolton - car parks, training ground etc) and recoup the vast majority of his money, I wouldn't put it past him to wind the club up.
On a slightly different note, the accounts show that KM did not earn a salary from Baton, so we assume she is not simply working for free but RD is paying her from some other company or similar....... I hope she's paying her UK taxes.......... Calling HMRC.........
If Roland sells, someone will pay an amount the club is worth at that time.
If I think it's worth £20m and he's prepared to sell at that price, he gets £20m for his debt and equity and the rest is written off.
While he gets 3% interest, he also has to put that back in to finance the club. It's not a profit, it's not a savings bank. It generates a tax benefit for him because the interest gets knocked off the tax profits of his other uk companies but whatever he takes out, he also has to put back in because he is funding all the expenses including this interest expense.
He is not making money out of owning the club, it is costing him money. The bigger the protests and the more he loses, has to pay, the more it costs him.
If Roland sells, someone will pay an amount the club is worth at that time.
If I think it's worth £20m and he's prepared to sell at that price, he gets £20m for his debt and equity and the rest is written off.
While he gets 3% interest, he also has to put that back in to finance the club. It's not a profit, it's not a savings bank. It generates a tax benefit for him because the interest gets knocked off the tax profits of his other uk companies but whatever he takes out, he also has to put back in because he is funding all the expenses including this interest expense.
He is not making money out of owning the club, it is costing him money. The bigger the protests and the more he loses, has to pay, the more it costs him.
See my post above.... however ".......and the rest is written off." Is this what some of the previous directors did then, or did they come to a deal where at some point they may get their money back? What happened when Noades sold Palarce?
It's possible it could happen, however I think he's more likely to asset strip, remember he's not interested in our future once he's gone. If the offer on the table at that point is he loses £25m or he asset strips and loses £5m what do you think he'd do? People generally don't get to where he's got to without a fairly ruthless streak in them.
I think people are still missing the point and underestimating his business acumen, we may all hate him for what he is doing to OUR club, he may be misguided he may be an evil man, he may have no place in football, but stupid financially he is not. Just look at the math, it's there in print if you care to look and dig;
He's lending himself money and paying himself a rate of interest that he wouldn't get anywhere else (not easily or without capital risk anyway). You could argue his capital is at risk, but in reality it's not really (again think of this as a business not simply the team you support). So yes he's on paper lost money but he has received back over £1.3m in interest, that will be greater this year of course and no rout increase further next.
He has a squad of players, there may be a few gems in there (Lookman say £5m - Gomez of course was £3.5m with additional payments potentially to come, maybe another youngster coming through), despite the dismal football we have seen the squad has a value. The valley has a value, whether thats as part of the football club or simply as land. Of course there is the training ground as well.
So he's made a loss, but how much has he saved or made elsewhere by sending in players (or managers come to that) he's already paying or 'Charlton' have paid him a fee for? Lets not forget, he's spent £9m on players which is roughly the two years of loss (about £10m). However he's also payed himself £1.3m in interest, this year will be, I suspect, more than that. I'd guarantee if the previous owners were still here we'd have spent less on players and made a bigger loss (although would probably still be in the Championship quite comfortably).
So before relegation he was probably down around £8.5m, If Lookman goes for say £5m and all of a sudden the loss is down to £3.5m or 'one more Gomez'. I suspect Henderson, Motta, Vetokele, JBG, Bauer, Teixeira, Cousins and maybe one or two others will easily cover that, and some, and can in his eyes easily be replaced by others for nothing/small fee from the network and elsewhere and their salaries will be lower as well of course. they'll also blood more youngsters (who seem to be doing quite well ;-)).
He hadn't planned on relegation and it does scupper his plans a bit but don't believe what he and the big nosed one say, they will have been planning since before Karel went. To him relegation will simply be like a 'recession'.
As well as those above many will be released, Jackson, Diarra, Ba, Reza (please god) and of course Riga and a certain Ujpest coach will arrive.
Outside of relegation a lot of this is all part of the plan, remember the comment that their choice of managers has been as much around being able to work with the youngsters as anything else.
From a financial point of view he's going nowhere anytime soon, those who think he'll sell up and disappear just because season ticket sales and attendances dramatically reduce are very wide of the mark IMHO. He'll simply cut back further, if you think the football was bad this year the real dross is yet to come......
Sadly, as it stands, it will take us to be bottom of the football league with no players left to sell before he goes, at that point he'll dispose of all other assets he can (Think bolton - car parks, training ground etc) and recoup the vast majority of his money, I wouldn't put it past him to wind the club up.
On a slightly different note, the accounts show that KM did not earn a salary from Baton, so we assume she is not simply working for free but RD is paying her from some other company or similar....... I hope she's paying her UK taxes.......... Calling HMRC.........
This sounds like Roland's plan to me. How utterly appalling is that.
If Roland sells, someone will pay an amount the club is worth at that time.
If I think it's worth £20m and he's prepared to sell at that price, he gets £20m for his debt and equity and the rest is written off.
While he gets 3% interest, he also has to put that back in to finance the club. It's not a profit, it's not a savings bank. It generates a tax benefit for him because the interest gets knocked off the tax profits of his other uk companies but whatever he takes out, he also has to put back in because he is funding all the expenses including this interest expense.
He is not making money out of owning the club, it is costing him money. The bigger the protests and the more he loses, has to pay, the more it costs him.
i understand the point, but in your scenario "the rest" is about £20m - no way on earth is he going to take that sort of hit to his fortune, he's a rich man but that's about 5% of his net worth which would be an even more significant percentage in terms of his actual liquidity.
I think people are still missing the point and underestimating his business acumen, we may all hate him for what he is doing to OUR club, he may be misguided he may be an evil man, he may have no place in football, but stupid financially he is not. Just look at the math, it's there in print if you care to look and dig;
He's lending himself money and paying himself a rate of interest that he wouldn't get anywhere else (not easily or without capital risk anyway). You could argue his capital is at risk, but in reality it's not really (again think of this as a business not simply the team you support). So yes he's on paper lost money but he has received back over £1.3m in interest, that will be greater this year of course and no rout increase further next.
He has a squad of players, there may be a few gems in there (Lookman say £5m - Gomez of course was £3.5m with additional payments potentially to come, maybe another youngster coming through), despite the dismal football we have seen the squad has a value. The valley has a value, whether thats as part of the football club or simply as land. Of course there is the training ground as well.
So he's made a loss, but how much has he saved or made elsewhere by sending in players (or managers come to that) he's already paying or 'Charlton' have paid him a fee for? Lets not forget, he's spent £9m on players which is roughly the two years of loss (about £10m). However he's also payed himself £1.3m in interest, this year will be, I suspect, more than that. I'd guarantee if the previous owners were still here we'd have spent less on players and made a bigger loss (although would probably still be in the Championship quite comfortably).
So before relegation he was probably down around £8.5m, If Lookman goes for say £5m and all of a sudden the loss is down to £3.5m or 'one more Gomez'. I suspect Henderson, Motta, Vetokele, JBG, Bauer, Teixeira, Cousins and maybe one or two others will easily cover that, and some, and can in his eyes easily be replaced by others for nothing/small fee from the network and elsewhere and their salaries will be lower as well of course. they'll also blood more youngsters (who seem to be doing quite well ;-)).
He hadn't planned on relegation and it does scupper his plans a bit but don't believe what he and the big nosed one say, they will have been planning since before Karel went. To him relegation will simply be like a 'recession'.
As well as those above many will be released, Jackson, Diarra, Ba, Reza (please god) and of course Riga and a certain Ujpest coach will arrive.
Outside of relegation a lot of this is all part of the plan, remember the comment that their choice of managers has been as much around being able to work with the youngsters as anything else.
From a financial point of view he's going nowhere anytime soon, those who think he'll sell up and disappear just because season ticket sales and attendances dramatically reduce are very wide of the mark IMHO. He'll simply cut back further, if you think the football was bad this year the real dross is yet to come......
Sadly, as it stands, it will take us to be bottom of the football league with no players left to sell before he goes, at that point he'll dispose of all other assets he can (Think bolton - car parks, training ground etc) and recoup the vast majority of his money, I wouldn't put it past him to wind the club up.
On a slightly different note, the accounts show that KM did not earn a salary from Baton, so we assume she is not simply working for free but RD is paying her from some other company or similar....... I hope she's paying her UK taxes.......... Calling HMRC.........
How do you calculate that he's only down £8.5m ? Surely the correct figure is £38m (the value of the "loans" from Staprix) ?
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Before anyone starts shooting me down I like 98% of supporters want him out as soon as possible, but for 2 minutes try not to see this as our beloved Charlton but purely from a numbers perspective and the overall football network 'business' he owns and I think you'll understand more the potential motives, however like me you still won't agree they are right for Charlton and will still want him out! Plus he's failed even by his own plan as he made the cardinal sin of assuming Football was like any other business and could be run as such, in too many ways it is not.
Rolands 'network model' is one used by businesses all over the world, economies of scale and sharing resource. What he's yet to realise is that, in the main, due to the uniqueness of football it simply doesn't work.
As an example If you own one company with say 150 staff you may need, 2 HR staff, 8 Finance, 4 project managers etc etc. Grow that company 5 fold or indeed own 5 companies each with 150 staff doesn't mean you need 10 HR staff, 40 Finance, 20 project managers etc, so you will get the economies of scale. On supplier management you will also obtain better pricing as spending more, all normal busines practices.
Roland's football experiment goes one step further due to the staff element (players) often having a value, so he saw this, particularly with Charlton, the academy but also the players Charlton had on their books.
Cast your minds back to when he bought Charlton and the comments to Powell. Roland said in rough words;
'he had better players on his books than Yann, Wiggins, Stephens, Solly, Morrision' etc etc.
I don't for one moment think he actually believed that. What he was rely saying was;
'I have players that I already own and am paying that are surplus to requirements, therefore I can cash in on some players like Yann, Wiggins, Stephens, Solly, Morrison' etc. In doing so he also saves on their wages. Even players brought in from non network clubs will be considerable cheaper in the salary stakes.
So he sells those players and brings in 'x' amount of money and sends in replacements for free (ok sometimes we paid a fee but Roland was simply paying himself at least some of the time! Be interesting to know how much of the £9m he paid to himself effectively).
Take Tony Watt, we paid over £1m for him which was really Roland paying himself, although he was paying himself with a loan he had given and that he earns interest on.........
So he loans money to say Charlton which in turn he often pays himself (by paying players he owns elsewhere or fee's to his other clubs) and in turn gets interest on it. Is it any surprise that not one player sold has gone to another Network club, yet so many incoming were from the network? I think he also saw Charlton being a good shop window to realise the best price for players he owns elsewhere in the network, he just underestimated quite how poor the quality of those players were bar the odd exception.
Using my company example above thats what you would do, buy another company, make say one HR staff redundant, 2 finance, 1 project manager etc and you are diluting your costs and therefore increase profit. What he saw with Charlton is that he didn't need to make staff redundant (players) he could actually get money for getting rid of them! He probably couldn't believe his luck and thought 'why has no one else thought of this', in no other business would you get that value in staff leaving.
Managers are another example, often they have been people already on the payroll so in the overall 'network' are free to him, the others have just been very cheap! Cheap is his middle name!
So in many businesses his model does and would work and no doubt has in his non football business activities. However it doesn't work in Football as we all know. I think the main failure of his plan is that he assumed he was buying an income from fans and that with normal business marketing that income (fan base) would grow, he didn't appreciate that it would actually shrink and therefore so would the income. He didn't also account for relegation and the other income that will reduce and dry up from TV money to sponsorship etc and also suspected a trip to the premier league at some point and the £'s that would bring.
I really do think it's as simple as that, so as I say, look at his football business as a whole, it's a bit of a game/experiment for him to prove to the wider world that he is right, sadly, for us, it isn't working nor will it ever work.
The more worrying part for us is I don't think relegation or lowering attendances will bother him too much, if his revenue goes down by 'x' amount he'll simply try to reduce his expenses by a similar amount. Therefore next year expect more incoming network players and managers and also the fielding of a lot more youngsters, after all he already owns them. Plus he'll certainly sell anyone with a value who just happen to be the higher salaried players as well.........
So lets keep it up and get this man out of OUR club!
The problem he has is that what assets can he liquidate. The two pieces of land are worth very little without planning permission for housing and he is unlikely to get such permission. Even if he did it would take years of appeals etc and then more years to build the houses.
Even knocking the Valley down would cost £ms
The Valley is worth more as a stadium and the club is worth more as a football league member.
A some point he will suddenly decide he's had enough and sell the club. Our problem is that could be tomorrow or it could be in 10 years time.
Why would you downsize in the area of greatest potential?
I believe they also thought that through this model within 5-7 years they would 'find themselves' in the Premiership. Remember Richard Murray's comments of conversations he'd had with Roland in that if in January we had potential to go up he may well invest further in the squad......... as he realises that doesn't happen often/every year.
Roland is used to being a top quartile performer, he thought he'd do the same in football as on paper in many instances it is no different to his other businesses aside from the fact he can sell staff in football! But he hasn't understood that running a football club isn't like running an electronics business or selling a physical product. His product is the football, he still doesn't get it that the match day experience is watching the 11 men in red shirts give there all and give supporters something to be proud of.
If he'd actually of understood that at the start he may well of had some success. Sadly 2 years on he still doesn't have a clue......
I suspect, though cannot be certain, that we are not the only club at this level carrying this amount of debt, not even by a long shot.
http://swissramble.blogspot.com
We have been run so well in the past, now the entire backbone that was put in place has been torn out. I knew it would be bad but at a slower speed than is happening, the speed this is happening could seriously stick us in a position such as Portsmouths.
If the objective is to break even there will still be a deficit on the balance sheet of £26m from accumulated losses which never gets paid off and loans of £44m that never get paid off.
My fear is that he is happy to break even simply because the interest he is earning on his loans isn't wiped out by the cash he needs to inject to cover operating losses. His hobby/experiment would be self financing. He's not fussed about getting his money out unless it's to realise a profit when in the Premier League, he would just have the hassle of finding somewhere else to invest it.
If he is losing £5m a year he might just sit tight hoping we get lucky and get promotion. If we don't make profits on player sales he needs to put in nearer £10m, but everything gears down as we fall down the Leagues.
Perhaps we should have our own target that makes RD want to cut his losses- target £10m losses.
Can you imagine hearing a restaurant owner saying - "I bought some gone off milk the other day, the guy who sold it to me was pretty adament that I took it, I guess it was worth a punt.."? This is, in essence, his player recruitment strategy.
Then, can you imagine chatting with the same restaurant owner and hearing him say - "Remember that guy that flogged me the gone off milk? He's only gone and popped 3% on the invoice! I wouldn't mind, but he's my business partner... cheeky bastard!".
This is pretty much what Roland's doing, he's taking a punt and throwing money at people in the hope that he'll uncover a rough diamond - players, managers, executives - they're all gambles. However, he doesn't seem able to grasp that the money spent in doing this has most likely outweighed the costs incurred had he employed simple common sense and followed a proven recruitment strategy.
The true ridiculousness of this situation is demonstrated by the fact he's now able to draw a salary off of these failings. By balancing the books, he's able to charge interest on the fruits of his own flawed plan - his own mistakes pay him very well.
It's a barmy business, it really is. It's made me realise how money in business quite often doesn't exist.. that £38,000,000 is money Roland spent via CAFC, which CAFC now owes him. CAFC never had that cash, and Roland never really spent it - he's basically put it in a savings account at 3% per year.
A return of £1,140,000 per annum (based on last years figures remember.) is utterly crazy - he's essentially making a very good salary out of his lack of football knowledge!
He's lending himself money and paying himself a rate of interest that he wouldn't get anywhere else (not easily or without capital risk anyway). You could argue his capital is at risk, but in reality it's not really (again think of this as a business not simply the team you support). So yes he's on paper lost money but he has received back over £1.3m in interest, that will be greater this year of course and no rout increase further next.
He has a squad of players, there may be a few gems in there (Lookman say £5m - Gomez of course was £3.5m with additional payments potentially to come, maybe another youngster coming through), despite the dismal football we have seen the squad has a value. The valley has a value, whether thats as part of the football club or simply as land. Of course there is the training ground as well.
So he's made a loss, but how much has he saved or made elsewhere by sending in players (or managers come to that) he's already paying or 'Charlton' have paid him a fee for? Lets not forget, he's spent £9m on players which is roughly the two years of loss (about £10m). However he's also payed himself £1.3m in interest, this year will be, I suspect, more than that. I'd guarantee if the previous owners were still here we'd have spent less on players and made a bigger loss (although would probably still be in the Championship quite comfortably).
So before relegation he was probably down around £8.5m, If Lookman goes for say £5m and all of a sudden the loss is down to £3.5m or 'one more Gomez'. I suspect Henderson, Motta, Vetokele, JBG, Bauer, Teixeira, Cousins and maybe one or two others will easily cover that, and some, and can in his eyes easily be replaced by others for nothing/small fee from the network and elsewhere and their salaries will be lower as well of course. they'll also blood more youngsters (who seem to be doing quite well ;-)).
He hadn't planned on relegation and it does scupper his plans a bit but don't believe what he and the big nosed one say, they will have been planning since before Karel went. To him relegation will simply be like a 'recession'.
As well as those above many will be released, Jackson, Diarra, Ba, Reza (please god) and of course Riga and a certain Ujpest coach will arrive.
Outside of relegation a lot of this is all part of the plan, remember the comment that their choice of managers has been as much around being able to work with the youngsters as anything else.
From a financial point of view he's going nowhere anytime soon, those who think he'll sell up and disappear just because season ticket sales and attendances dramatically reduce are very wide of the mark IMHO. He'll simply cut back further, if you think the football was bad this year the real dross is yet to come......
Sadly, as it stands, it will take us to be bottom of the football league with no players left to sell before he goes, at that point he'll dispose of all other assets he can (Think bolton - car parks, training ground etc) and recoup the vast majority of his money, I wouldn't put it past him to wind the club up.
On a slightly different note, the accounts show that KM did not earn a salary from Baton, so we assume she is not simply working for free but RD is paying her from some other company or similar....... I hope she's paying her UK taxes.......... Calling HMRC.........
The loans are not worth their principal value.
If Roland sells, someone will pay an amount the club is worth at that time.
If I think it's worth £20m and he's prepared to sell at that price, he gets £20m for his debt and equity and the rest is written off.
While he gets 3% interest, he also has to put that back in to finance the club. It's not a profit, it's not a savings bank. It generates a tax benefit for him because the interest gets knocked off the tax profits of his other uk companies but whatever he takes out, he also has to put back in because he is funding all the expenses including this interest expense.
He is not making money out of owning the club, it is costing him money. The bigger the protests and the more he loses, has to pay, the more it costs him.
It's possible it could happen, however I think he's more likely to asset strip, remember he's not interested in our future once he's gone. If the offer on the table at that point is he loses £25m or he asset strips and loses £5m what do you think he'd do? People generally don't get to where he's got to without a fairly ruthless streak in them.
Although, if as @Rob7Lee says, he clearly is a financial whizz, what i dont get is what was his idea/plan when he bought us? What was he thinking?