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.
I think that boat has sailed! RD isn't going to sell anytime soon and Varney's interested parties aren't going to hang about forever. Real shame but I think that is the reality.
Katrien? I am 100% sure a Mortgage is a mortgage ,and they are Registered at Land Registry and Companies House look them up, it's public info. Do you think for one second 7 independent Directors each worth multi millions would not have paid legal fees to make sure they had there documents all in place? The bigger question is if Roly ever had any plan to asset strip why didn't he read through all the documents?
I've not looked into it so am not saying there are assets worth that amount but there are Assets to a value. The Valley & the training ground will have a value (I'd guess well into double figure millions but I'm not a surveyor), the players have a value.
Just as an example he could sell the training ground and rent it (or part of it) back if we are still a going concern.
If he wound the club up he could recoup a large proportion of his investment by selling assets.
But your point doesn't quite make sense then.
We know that the club "owe" him £38m, that's essentially what he's laid out on us I assume. Therefore if he can't raise £38m through selling the club or selling the club's assets (players, land etc) then he's suffering a loss. I think your figure of £8.5m being the true loss as it stands is is incorrect because it suggests that there are £29.5m worth of assets that can be liquified or that the club has a value of £29.5m and I don't think either is true.
And the first £7m goes to the old board in all such scenarios.
Very true.
The question about Katrien's salary remains, it's a very strange situation - I hope it's all above board from a tax perspective.
I hope it isn't! Now, looking for the HMRC report a tax evader web site.
Haa! Just looked there is a form but the silly sods won't let you submit it without your contact details.
Hoping it isn't above board was my first thought, but I reckon it's far more likely that she is working under IR35 or is paid directly by another part of the Evil Empire. It's obvious she knows sod all about football, but I don't reckon she is stupid enough to illegally dodge her taxes when there are plenty of legal loopholes she can exploit. I would imagine there would be repercussions on her ability to operate as a lawyer if she had convictions for tax fraud, so I'd be pretty confident that she has covered her backside with regards to that so that she doesn't cut off her Pinocchio-sized hooter to spite her face from an employment perspective.
What are the different avenues she could be employed under? I'm going to take a punt - albeit with the admission that I'm not the most clued up on the subject - and guess these are the three issues:
- Full Time, PAYE
Would be the obvious choice, she has a permanent appointment at The Club and presumably is entitled to the benefits given to a full time employee. (Private medical cover, phone and so on)
- Self Employed (i.e Sole Trader)
This offers very little in way of tax management as far as I know, but would make some sense as she presumably has multiple income streams; as demonstrated by her (presumably paid for) appearances at conferences.
Having an official appointment at Charlton would be an issue with IR35 though. However you look at it, as CEO she is a full time employee; she can't send someone to work in that capacity in her place.
- Self Employed, via Ltd Company
I'm going to say this is a no go, purely because she's not listed as a director of any other company.. in the UK at least. I don't think she is in Belgium either - but I could well be wrong. Furthermore, I have no idea how you could contract out the services of a CEO to a company - nor how that would fly with regards to IR35.
It's a long shot, but does Belgium have a system like Sweden where you can look up the amount of taxes paid by a citizen?
@calydon_road I'm pretty sure Mr Smith knows what he's talking about, trust me on that.
I am sure he does. I am not in any way digging out the view, it's not you I need to trust it's Staprix.and that's where I am struggling.
It's not conspricy, I am genuinely worried about RD, I think he is a crackpot. I don't know for certain but I have a hunch he is no good for our club. I've never exhibited my posts as anything over than opinion.
I just don't know how you guys can say with such certainty ANY contracts are certain. The thread is called "Charlton owe Staprix 38m, hence my worries
Am I the only one who thinks if PV has a mega wealthy investor lined up who genuinely wants to buy the club he should at least drop a few hints as to their identity/background etc
Would surely heap more pressure on RD if a few titbits about potential buyer were leaked to the media and fans?
The £38m in loans from Staprix - what were they to cover ? The club (however badly run) hasn't lost £38m in the two years of his tenure. Does it cover his initial outlay for the club plus the debt he inherited ?
I don't have the previous years' accounts to know the exact amounts, but the difference will be when he took over there were existing bank loans which he has repaid. He hasn't given all of the £38m in cash to the club, he paid off Barclays and the rest would have been to cover our losses and what he has spent on the pitch etc.. Staprix is acting like a banker to the club, it's his Bank of Dave that lends to his own businesses. Why would he pay interest to Barclays when he can pay it to Staprix. Also, the Bank had a charge over the assets which meant RD only had the equivalent of a second charge on anything he loaned the club, and couldn't sell the real estate to get back what he was owed.
The loans over the twelve months increased by about £9,400, i don't know how much he loaned in the previous year.
What has not been revealed are the terms of the loan which the Finance Director said was "quasi equity". The implication is that RD may not get all his money back if the club does poorly, or the interest rate goes down. So he has an interest in the club being profitable. The other side of the coin is that he cleans up if we start making a profit.
I guess what I should have said to avoid any confusion
If Naby Sarr cost Charlton >1.5m and Michael Morriston was sold for nothing, why should we owe Staprix 38 fucking million. Roly you are a thief
Ps..yann costs 400k Peter parsley costs 800k anyone want to deal?
RDs sporting business model is cross border dodgy accounting. Pretty unregulated so plenty of profit potential...in my opinion of course like the rest i don't know what's coming I just fear it.
I guess what I should have said to avoid any confusion
If Naby Sarr cost Charlton >1.5m and Michael Morriston was sold for nothing, why should we owe Staprix 38 fucking million. Roly you are a thief
Ps..yann costs 400k Peter parsley costs 800k anyone want to deal?
RDs sporting business model is cross border dodgy accounting. Pretty unregulated so plenty of profit potential...in my opinion of course like the rest i don't know what's coming I just fear it.
The £38m in loans from Staprix - what were they to cover ? The club (however badly run) hasn't lost £38m in the two years of his tenure. Does it cover his initial outlay for the club plus the debt he inherited ?
I don't have the previous years' accounts to know the exact amounts, but the difference will be when he took over there were existing bank loans which he has repaid. He hasn't given all of the £38m in cash to the club, he paid off Barclays and the rest would have been to cover our losses and what he has spent on the pitch etc.. Staprix is acting like a banker to the club, it's his Bank of Dave that lends to his own businesses. Why would he pay interest to Barclays when he can pay it to Staprix. Also, the Bank had a charge over the assets which meant RD only had the equivalent of a second charge on anything he loaned the club, and couldn't sell the real estate to get back what he was owed.
The loans over the twelve months increased by about £9,400, i don't know how much he loaned in the previous year.
What has not been revealed are the terms of the loan which the Finance Director said was "quasi equity". The implication is that RD may not get all his money back if the club does poorly, or the interest rate goes down. So he has an interest in the club being profitable. The other side of the coin is that he cleans up if we start making a profit.
He left the non-interest bearing loan from the spivs' BVI holding company on the books when he acquired the club, transferring it to Staprix and adding interest, so on paper at least he is charging the club interest on the money he used to buy it. That is a chunk of the £38m.
I agree re the bank, although the majority of that was the north stand mortgage. He has paid the fag-end of that off, so in effect the interest has moved from the bank to him.
The old board now have the first legal charge over the assets. RD has no charge, but I assume that's because he doesn't need one as the other debt - apart from day to day trading - is all to him.
Great stuff as always. Re the head coach salary, whilst I think you're correct re Powell I imagine since his departure the head coaches have received a fraction of that. Could settlements of disputes with previously departed senior managers/ execs be in that figure too? Or Dyer?
Also, at the last Fans Forum, David Joyes indicated the bank debt was now settled.
Re the loans, what surprises me more than the interest being charged is that it's being paid. All it does is increase the funding requirement, but is this a tax thing across his network (i.e. Staprix)?
The £38m in loans from Staprix - what were they to cover ? The club (however badly run) hasn't lost £38m in the two years of his tenure. Does it cover his initial outlay for the club plus the debt he inherited ?
I don't have the previous years' accounts to know the exact amounts, but the difference will be when he took over there were existing bank loans which he has repaid. He hasn't given all of the £38m in cash to the club, he paid off Barclays and the rest would have been to cover our losses and what he has spent on the pitch etc.. Staprix is acting like a banker to the club, it's his Bank of Dave that lends to his own businesses. Why would he pay interest to Barclays when he can pay it to Staprix. Also, the Bank had a charge over the assets which meant RD only had the equivalent of a second charge on anything he loaned the club, and couldn't sell the real estate to get back what he was owed.
The loans over the twelve months increased by about £9,400, i don't know how much he loaned in the previous year.
What has not been revealed are the terms of the loan which the Finance Director said was "quasi equity". The implication is that RD may not get all his money back if the club does poorly, or the interest rate goes down. So he has an interest in the club being profitable. The other side of the coin is that he cleans up if we start making a profit.
He left the non-interest bearing loan from the spivs' BVI holding company on the books when he acquired the club, transferring it to Staprix and adding interest, so on paper at least he is charging the club interest on the money he used to buy it. That is a chunk of the £38m.
I agree re the bank, although the majority of that was the north stand mortgage. He has paid the fag-end of that off, so in effect the interest has moved from the bank to him.
The old board now have the first legal charge over the assets. RD has no charge, but I assume that's because he doesn't need one as the other debt - apart from day to day trading - is all to him.
That makes sense. I agree RD doesn't need. a charge it was a lazy way of saying that, as long as assets not already subject to someone else's charge exceed debts, he is covered.
Will RD continue to make loans if net asset value starts falling below the debt to Staprix?
"The Sports Direct owner, who bought the club in 2007, has seen his time in charge filled with controversy, but he has backed investment in the squad and handed over a £129m interest-free loan, according to the last published club accounts."
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.
I think that boat has sailed! RD isn't going to sell anytime soon and Varney's interested parties aren't going to hang about forever. Real shame but I think that is the reality.
The 'debt' carries 3% interest, which is maybe a bit less than pure market rate. In order to actually pay the interest, the club needs positive cash flow which under this owner it will not have.
The interest could be paid in cash, if so, it requires an increase to the equity or the debt. Net of contributions or increasing the debt Roland gets nothing more than the tax benefit on the interest payments.
Really the interest point is a tax issue. It lowers the cost to Roland of owning the club but it has no other effect in his loss (or miraculously gain) when he sells.
It's a red herring except to the extent that Roland may have in his mind he wants X for the club on sale and includes the debt with the 3% interest in that calculation. £20m for the ground, £35m for the debt + interest, £30m for the players less £35m for the cost of their wages.
If and when he sells and hopefully soon, the price will be in total what someone wants to pay.
If it's less than the debt, he writes the debt off. If it's more, the debt and accrued interest is paid off and the rest goes through his shares.
Whether interest is charged on the debt or not is totally not important except to the extent he gets a tax benefit and reduced costs if the funding is by debt not pure equity.
Whether interest is charged on the debt or not is totally not important except to the extent he gets a tax benefit and reduced costs if the funding is by debt not pure equity.
No sure I agree.
Having an interest rate means it's accounted for each year in the R&A. Last year was around £1m no doubt will be more this year.
This immediately adds to the operating loss and will surely make up a proportion of what the club is allowed to lose before FFP become relevant. With much lower income next year this could effect how many players we can have and salaries, meaning probably a much worse caliber of player if that's possible!!
Whether interest is charged on the debt or not is totally not important except to the extent he gets a tax benefit and reduced costs if the funding is by debt not pure equity.
No sure I agree.
Having an interest rate means it's accounted for each year in the R&A. Last year was around £1m no doubt will be more this year.
This immediately adds to the operating loss and will surely make up a proportion of what the club is allowed to lose before FFP become relevant. With much lower income next year this could effect how many players we can have and salaries, meaning probably a much worse caliber of player if that's possible!!
According to this site, FFP (or SCMP as it is named) is different to the Championship. EG "In League 1 clubs can spend a maximum of 60% of their turnover on wages - in League 2, the limit is 55%. There are no restrictions (in themselves) on the amount a club can lose or spend on transfer fees."
According to this site, FFP (or SCMP as it is named) is different to the Championship. EG "In League 1 clubs can spend a maximum of 60% of their turnover on wages - in League 2, the limit is 55%. There are no restrictions (in themselves) on the amount a club can lose or spend on transfer fees."
Interesting stuff
From that site
"Relegated clubs
The rules apply to all clubs and there is no moratorium for clubs relegated from the Championship. However, Transitional Arrangements are in place whereby clubs are allowed to exclude the wage costs of all players that the club signed pre September of the relegation season, if they were signed on contracts in excess of 3 seasons.
Turnover definition
Under the SCMP rules, the definition of 'Turnover' is particularly important as Turnover is used to determine the maximum wage-spend. Within a traditional accounting perspective, there are usually only three elements of turnover:
Match-day Income Commercial Income (such as sponsorship) TV revenue (and any 'merit payments' based on league position) However the Football League use a is broader definition of Turnover. Crucially, the FL Turnover figure includes donations from the owners to the club and injections of equity. Loans from club owners are understandably not included in the Turnover figure as these would result in growing club debts. up club debts. In League 1 and League 2, a wealthy owner can therefore fund the club spending in a way that is not permitted in other divisions. Manchester City and Leicester for example seem set for punishment for their excessive losses (from UEFA and the Championship respectively) despite the fact that the owners have injected hard cash into the club to finance the spending.
- We have the 3rd lowest wage bill in the Championship - Our wages are currently 100% of turnover - When we are relegated, wages need to be reduced to 60% of turnover, but... - Turnover will be hugely reduced due to reduced ticket sales and TV money - So potentially our wage budget next season could be something like 30% of the current budget
Jesus, the squad next year has the potential to be awful. It just shows that getting out of League 1 really will depend on hand-picking a select group of players that have been overlooked by everyone else, but are good enough and hungry enough to fight our way back up. Much like the summer before our promotion with Powell.
In other words, to get back up we will need to be better at player recruitment next year than everyone else in League 1. Anybody think that will happen?
Interesting discussion, but "any profit made on player sales is included within turnover on a cash basis when the instalments are received".
Hence the sale of Lookman, Gudmundsson and some others is likely to offset the fall in traditional turnover in season one (plus the existing contracts rule will have an impact). The real issue is likely to be in a second season and onwards.
However, since equity injections are allowed anyway it just means RD has to stop putting the extra money in as loans.
Interesting discussion, but "any profit made on player sales is included within turnover on a cash basis when the instalments are received".
Hence the sale of Lookman, Gudmundsson and some others is likely to offset the fall in traditional turnover in season one (plus the existing contracts rule will have an impact). The real issue is likely to be in a second season and onwards.
However, since equity injections are allowed anyway it just means RD has to stop putting the extra money in as loans.
Thats the point isn't it? Far better he has to put in as equity and not a loan, in doing so the club doesn't owe him (Stadprix).
Despite how we all hate him the guy isn't a total idiot when it comes to money, all this trying to butter up the sponsors etc is because they are massively panicking about income. RD knows the shortfall is likely to have to come from his pocket as equity rather than a loan. Once it's in it's in, almost zero chance of selling and recouping.
He's going to find the vultures will circle looking for bargains, that'll annoy him even more! He may scrape through the season with just having to put 3-4 million in, but as you say year 2 will be whole different ball game. Here's hoping the sale happens before the end of next season......
Thats the point isn't it? Far better he has to put in as equity and not a loan, in doing so the club doesn't owe him (Stadprix).
Despite how we all hate him the guy isn't a total idiot when it comes to money, all this trying to butter up the sponsors etc is because they are massively panicking about income. RD knows the shortfall is likely to have to come from his pocket as equity rather than a loan. Once it's in it's in, almost zero chance of selling and recouping.
He's going to find the vultures will circle looking for bargains, that'll annoy him even more! He may scrape through the season with just having to put 3-4 million in, but as you say year 2 will be whole different ball game. Here's hoping the sale happens before the end of next week......
Comments
You could be right but the one thing I'm certain of is you can't be sure.
In a normal set of circumstances I would agree with you. With Staprix I don't give them the benefit of the doubt in any scenario.
- Full Time, PAYE
Would be the obvious choice, she has a permanent appointment at The Club and presumably is entitled to the benefits given to a full time employee. (Private medical cover, phone and so on)
- Self Employed (i.e Sole Trader)
This offers very little in way of tax management as far as I know, but would make some sense as she presumably has multiple income streams; as demonstrated by her (presumably paid for) appearances at conferences.
Having an official appointment at Charlton would be an issue with IR35 though. However you look at it, as CEO she is a full time employee; she can't send someone to work in that capacity in her place.
- Self Employed, via Ltd Company
I'm going to say this is a no go, purely because she's not listed as a director of any other company.. in the UK at least. I don't think she is in Belgium either - but I could well be wrong. Furthermore, I have no idea how you could contract out the services of a CEO to a company - nor how that would fly with regards to IR35.
It's a long shot, but does Belgium have a system like Sweden where you can look up the amount of taxes paid by a citizen?
It's not conspricy, I am genuinely worried about RD, I think he is a crackpot. I don't know for certain but I have a hunch he is no good for our club. I've never exhibited my posts as anything over than opinion.
I just don't know how you guys can say with such certainty ANY contracts are certain. The thread is called "Charlton owe Staprix 38m, hence my worries
Would surely heap more pressure on RD if a few titbits about potential buyer were leaked to the media and fans?
The loans over the twelve months increased by about £9,400, i don't know how much he loaned in the previous year.
What has not been revealed are the terms of the loan which the Finance Director said was "quasi equity". The implication is that RD may not get all his money back if the club does poorly, or the interest rate goes down. So he has an interest in the club being profitable. The other side of the coin is that he cleans up if we start making a profit.
If Naby Sarr cost Charlton >1.5m and Michael Morriston was sold for nothing, why should we owe Staprix 38 fucking million. Roly you are a thief
Ps..yann costs 400k Peter parsley costs 800k anyone want to deal?
RDs sporting business model is cross border dodgy accounting. Pretty unregulated so plenty of profit potential...in my opinion of course like the rest i don't know what's coming I just fear it.
A million plagues upon your house Staprix
I agree re the bank, although the majority of that was the north stand mortgage. He has paid the fag-end of that off, so in effect the interest has moved from the bank to him.
The old board now have the first legal charge over the assets. RD has no charge, but I assume that's because he doesn't need one as the other debt - apart from day to day trading - is all to him.
I did try having a look through what seems to be a Belgian version of Companies House - http://kbopub.economie.fgov.be/kbopub/toonondernemingps.html?ondernemingsnummer=470936285 - a little while back, but nothing leapt out and the reports don't seem as detailed as UK ones.
But I could have been looking in the wrong place.
http://newyorkaddick.blogspot.com/2016/03/flawed-execution.html#comments
Re the loans, what surprises me more than the interest being charged is that it's being paid. All it does is increase the funding requirement, but is this a tax thing across his network (i.e. Staprix)?
I agree RD doesn't need. a charge it was a lazy way of saying that, as long as assets not already subject to someone else's charge exceed debts, he is covered.
Will RD continue to make loans if net asset value starts falling below the debt to Staprix?
http://www.bbc.co.uk/sport/football/35865092
"The Sports Direct owner, who bought the club in 2007, has seen his time in charge filled with controversy, but he has backed investment in the squad and handed over a £129m interest-free loan, according to the last published club accounts."
The interest could be paid in cash, if so, it requires an increase to the equity or the debt. Net of contributions or increasing the debt Roland gets nothing more than the tax benefit on the interest payments.
Really the interest point is a tax issue. It lowers the cost to Roland of owning the club but it has no other effect in his loss (or miraculously gain) when he sells.
It's a red herring except to the extent that Roland may have in his mind he wants X for the club on sale and includes the debt with the 3% interest in that calculation. £20m for the ground, £35m for the debt + interest, £30m for the players less £35m for the cost of their wages.
If and when he sells and hopefully soon, the price will be in total what someone wants to pay.
If it's less than the debt, he writes the debt off. If it's more, the debt and accrued interest is paid off and the rest goes through his shares.
Whether interest is charged on the debt or not is totally not important except to the extent he gets a tax benefit and reduced costs if the funding is by debt not pure equity.
Having an interest rate means it's accounted for each year in the R&A. Last year was around £1m no doubt will be more this year.
This immediately adds to the operating loss and will surely make up a proportion of what the club is allowed to lose before FFP become relevant. With much lower income next year this could effect how many players we can have and salaries, meaning probably a much worse caliber of player if that's possible!!
From that site
"Relegated clubs
The rules apply to all clubs and there is no moratorium for clubs relegated from the Championship. However, Transitional Arrangements are in place whereby clubs are allowed to exclude the wage costs of all players that the club signed pre September of the relegation season, if they were signed on contracts in excess of 3 seasons.
Turnover definition
Under the SCMP rules, the definition of 'Turnover' is particularly important as Turnover is used to determine the maximum wage-spend. Within a traditional accounting perspective, there are usually only three elements of turnover:
Match-day Income
Commercial Income (such as sponsorship)
TV revenue (and any 'merit payments' based on league position)
However the Football League use a is broader definition of Turnover. Crucially, the FL Turnover figure includes donations from the owners to the club and injections of equity. Loans from club owners are understandably not included in the Turnover figure as these would result in growing club debts. up club debts. In League 1 and League 2, a wealthy owner can therefore fund the club spending in a way that is not permitted in other divisions. Manchester City and Leicester for example seem set for punishment for their excessive losses (from UEFA and the Championship respectively) despite the fact that the owners have injected hard cash into the club to finance the spending.
- We have the 3rd lowest wage bill in the Championship
- Our wages are currently 100% of turnover
- When we are relegated, wages need to be reduced to 60% of turnover, but...
- Turnover will be hugely reduced due to reduced ticket sales and TV money
- So potentially our wage budget next season could be something like 30% of the current budget
Jesus, the squad next year has the potential to be awful. It just shows that getting out of League 1 really will depend on hand-picking a select group of players that have been overlooked by everyone else, but are good enough and hungry enough to fight our way back up. Much like the summer before our promotion with Powell.
In other words, to get back up we will need to be better at player recruitment next year than everyone else in League 1. Anybody think that will happen?
Hence the sale of Lookman, Gudmundsson and some others is likely to offset the fall in traditional turnover in season one (plus the existing contracts rule will have an impact). The real issue is likely to be in a second season and onwards.
However, since equity injections are allowed anyway it just means RD has to stop putting the extra money in as loans.
Despite how we all hate him the guy isn't a total idiot when it comes to money, all this trying to butter up the sponsors etc is because they are massively panicking about income. RD knows the shortfall is likely to have to come from his pocket as equity rather than a loan. Once it's in it's in, almost zero chance of selling and recouping.
He's going to find the vultures will circle looking for bargains, that'll annoy him even more! He may scrape through the season with just having to put 3-4 million in, but as you say year 2 will be whole different ball game. Here's hoping the sale happens before the end of next season......