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."
So by having our CEO paid by Staprix rather than Charlton are we cheating FFP?
Running a Mid Corp. company the messages you send are important. They set the vibrancy/ culture of the business. After Duchatelets' (RD) rant, I will try to add some further context. We have RD a person of wealth, RD the corporate investor and CAFC under the corporate umbrella of Baton 2010 Ltd, to consider.
There is little to be gained in guessing RD's motivation for anything but we can seek a pattern to his industry activity and 27 senior Belgian football clubs have fallen defunct in 21yrs. Is the "RD does things his way" mantra just to keep clubs alive? RD brought his game plan to football. Investors of age rarely show any appetite for change. Meaningful words on learning from mistakes have been meaningless.
RD has invested in many clubs. Early deals are modest in support of youth development. It is not clear if such were personal or corporate [Staprix NV (SNV)] investment. Any financial benefit is unknown but on a larger scale with STVV his family secured/ secures financial returns.
With Standard Liege SNV secured/(allegedly) secures financial returns.
At Carl Zeiss Jena RD seeks to impose stringent financial controls but with local government funding will again invest in ground infrastructure.
At Ujpest the family met a world of pain by taking over without full due diligence. The troubles may be in the past but the 2015 Dmitrovic sale was reportedly needed to pay players.
I have no data on Alcorcon.
With no evidence of any largesse RD is intent on securing a return on his football investments. A "visionary" he will be convinced his strategy will achieve a return. Though he talks of his age he seems to set no "ROI" timeline.
Clubs, he will argue, benefit from his pursuit of a viable business model. His "social" contribution is his pursuit of an exercise in corporate economics not sporting achievement.
While former director loans, (secured by charge over fixed assets), repayable on reaching the Premier League (PL) remain SNV uplifted the previous owners and prevailing commercial debt onto their books. SNV extended the borrowing to meet operating losses from the capital spend on infrastructure and normal trading.
While the "RD Group" performs such funding presents no difficulty. With common ownership the debt appears "flexible" but will present a real problem at the point it is determined.
There is no evidence the key shareholder will not seek the debt repaid in full.
Baton 2010 Ltd Accounts bring into focus executive strategy & performance. Officials have a duty to act in the interest of the company they represent. The recent figures pose serious questions.
Officials state an aim of balancing the books. If so, how did they sanction the Baton 2010 Ltd current level of debt? How does the related cost serve the clubs ability to trade?
What are their policies, beyond the SNV open cheque book, to meet trading obligations?
What strategy will be implemented to repay such an outstanding liability?
On what basis; - did SNV impose 3% interest for its services? A blue chip risk yield for a debt to a company 100% controlled by SNV's key shareholder. RD is the debt risk. - does the CFO assert SNV debt is of no concern as it is "unrecoverable quasi equity"? - does the executive determine such debt manageable? - does the executive consider such debt serves the clubs' best interests?
The questions cannot be more basic - because everyone is doing it is not the answer! In truth not one official at the club can answer. There is not a decision maker among them. They/we are slave to the anonymous major corporate governance/interests from above.
Tinkering to the edges of the problems serves no one.
In 2014 the business needed to clear consolidated debt, undertake remedial action and secure working capital to set a sound positive operating discipline pending delivery of its revenue strategy. Mid Corp. finance needs to be structured to facilitate trading without burdening the P&L. Think "Dragons Den" with investment via an equity share and ROI from operating profit.
Yet 18 months into this regime our debt stands at £38mn. We can all work the numbers across purchase cost, non relegation clause, infrastructure, commercial debt, working capital but where in allowing this debt is there an ability to repay?
Is it just the development & sale of young players? Even with 2 sales (Gomez, Poyet earning circa £4.5mn) over 2yrs will this revenue stream ever deliver? (Other key sales (YK, DS, RW) have come from normal trading).
If key to clubs' future where is the drive to secure the new academy pipe line? Why were earlier academy plans cast aside along with their external funding? How did this serve the clubs finances?
What are the projected losses for 2016/ 2017/2018?
When is the new academy forecast to generate sufficient revenue to meet annual trading losses?
All before the unplanned relegation revenue loss circa £6mn p.a., the new academy Cat. 1 development cost and the related increase in operating costs of circa£3mn p.a.
Where is there a shred of a coherent strategy to meet these costs? Corporate tax considerations in comparison are meaningless?
Can this financial merry go round be built around just one escape plan? Is it based on one purple patch in Liege where circa €28mn was generated by the sale of 4/ 5 players?
Did SNV complete full UK industry diligence before buying Baton 2010 Ltd? Has it repeated the Ujpest blunder? Due diligence will have shown we operate in a different market. With Liege at the top of their national market the player skills sets whilst technically superior are not subject to the protracted intensity of UK football.
Meaning 1. The "lead in" for player acquisition, development and sale is notably different 2. The size of buyer market for the "end product" is exponentially different.
A successful player in a top Belgian side can be sold as a proven contributor to buyers across Europe & the Middle East. The technical bias lends itself to a player acclimatising across such leagues.
The UK offers less technical skills but a greater playing intensity. The acclimatising process of "recycling" players from/to leagues in other markets for profit will always be problematic. How many PL clubs profitably sell players to Europe & the Middle East? How many English players even play abroad?
Step down to the Championship (CL) and buyers are dealing with an unproven commodity for which they will not pay top prices. When a player has barely stepped out of the academy the risk/ reward is based solely on potential. Buying UK potential is fine but is expensive and faces bigger technical adjustment against cheaper options in mainland Europe.
The "SNV player product" market is then limited to PL & top CL clubs but SNV is still selling potential where pricing will be set against options available in Europe & beyond. You can add appearance, international & sell on clauses but all are a) subject the "growth" of a player not under your control b) not binding on subsequent sales.
With current annual losses and the cost of a Cat1 Academy to balance the P&L the club will need to sell 3 (Gomez quality) players to this limited market - year on year on year, even before relegation to League 1. All in the face of a market where FFP controls have collapsed and the Liege player subsidy has gone.
Which still leaves funding of a £38mn debt and the Academy development capital expenditure to find.
The conclusion is simple unless the club invests in the right people and senior squad to enable players of potential to develop to be a proven contributor to a successful competitive side at a Championship level the business model will not work and we are on the road to oblivion.
In Jan 2014 this opportunity was staring this regime in the face. In their ignorance they threw it away.
@Grapevine49 - Excellent summary. How long before Roly realises his project is doomed and he reaches a tipping point where he has to bail out? Relegation or midway through next season in League One when the next bunch of sub-standard players are showing no real chance of going back up?
@Grapevine49 - Excellent summary. How long before Roly realises his project is doomed and he reaches a tipping point where he has to bail out? Relegation or midway through next season in League One when the next bunch of sub-standard players are showing no real chance of going back up?
It's great stuff. I think we already know that their response to relegation will be to point at the training ground scheme, but as Grapevine shows it's no answer at all. The difficulty is getting that across to everyone, including the media.
It has been put to a few of us as recently as yesterday that the club hierarchy are living in a Never Never Land of self delusion.
They think they are 'well run'. They think that all protests would've dissipated if (and they still believe when!) results pick up. They believe the scale of the impact of the protests can be explained by the majority being led by the nose by a minority. They believe that pointing to the pitch (ha ha) and the training ground development that they can say the club is a success. They believe the parent club is the main force and energy driving the Community Trust (this bit of delusion is especially hard for those of us who know, to swallow). They make statements, promote kids events, and ask for season ticket sales as if everything is normal and chugging along nicely. They believe that they are managing to organise the football side of things well, ha bloody ha to that, but the recent deployment of Lookman indicates where they feel they can buy time and establish some kind of holding position.
I know, and maybe everybody else knows, that all of the above is by every measure wrong.
They believe all of the above is right, they really do.
Grapevines brilliant post above is seated in the madness of the numbers. No rational being can establish a 'business' case for what has happened and will happen next. Interesting that Roland had political ambitions, he has obviously never heeded Abraham Lincoln's advice that the first rule of politics is you have to know how to count. Roland is supposed to be a mathematical genius, but he looks like he knows twice the square root of feck all.
So in this Narnia of self delusion, while everybody massages everybody's ego, whilst Jo, or Tracey, or Mandy, or whoever say it is all really about sexism, and that this club for old men can't accept change, there is a culture not just of self delusion, but mutual delusion too.
It is evident from Grapevine49's post that this thing is simply not sustainable, unless we have a model of the rich businessman deliberately not getting into football to subsidise ambition and success, but to deliberately subsidise footballing failure at his whim. If Financial Fair Play has been the unexpected fly in the ointment of the plan, then Roland should recognise his plan has no chance any more, rather than plough on regardless. FFP could still be his face saving get out strategy.
So you have to wonder why it is as it is.
I am beginning to believe more and more that Katrien and Cojones are misleading Roland about the reality, revealing some bits hiding others. This degree of deception is evident when you hear that Bob from the Data company was not left out of the sponsors event because of the Pinocchio stunt, oh no, but because Ravi tells him he is special, and will get some kind of special attention. What a chite idea to cover up the fact that the local regime were simply pissed off with the Pinocchio stunt, and they want to get rid of the Data sponsorship because they weren't respected enough.
It is truly Orwellian, we will all love and believe Big Brother even if he says failure is success. Indeed the attempt to twist and mangle language is enshrined in Orwellian doublespeak, I suggest we all revisit 1984 as part of our summer reading.
So we are more or less in cult territory, a visionary leader, surrounded by delusional sycophants, with no idea of reality. Exploiting the innocent as in players are units or pieces of meat to shift around, and fans are fecking customers.
For me there is no choice but to keep up the fight. no erosion of trust here, but a complete and unsolvable breakdown.
@Grapevine49 asks the questions to which we seek the answers.
I think RD believed he could combine an investment with proving a theory on how to run football clubs.
I'm therefore sure, like anyone buying a small business as an investment, he had an exit plan. Exit plans are how you get your capital investment back with a profit and you don't get your investment back from revenue.
Businesses are valued, and so sold, on the basis of either future profits or the value of assets. Forget about making a profit from football in the Championship. RD can only have been looking at an exit plan based on increasing asset value.
Making a loss, in accounting terms, means reducing the asset value so it is entirely logical for RD to focus on running the "business" without making a loss. What happens on the field is irrelevant as long as it does not contribute to making a loss.
His big mistake was to equate customers of football with customers of microelectronic gadgets.
He underestimated the relevance of the spirit of the club to stability; the relevance of stability to its customers; the relevance of customers to the very existence of the club.
"Breaking even", the one common recurring theme, means he doesn't have to target promotion. Promotion would just be a very profitable fortuitous windfall and advance his exit plan.
All the time we are not breaking even the loan interest is simply paid back out of his pocket as more loans or equity.
Continually making a loss blows RD's plans out of the water. We do everything we can to make sure CAFC runs st a loss. Every cash injection he makes that is not increasing asset value is messing up his exit plan.
At some stage he will have to cut and run when he knows his exit plan is below water and he cannit recover his initial investment, let alone the unplanned loans to cover operating losses.
Player sales were always going to be key to his plans, he isn't mad enough to think it's possible to break even from match day revenue. Player sales in League 1 will not cover operating losses and he must know it.
He is panicking because relegation is far worse for him than it will be for fans.
He is not a football fan, like some owners who are in for the long haul. He is a cold blooded tight fisted businessman and cannot see him sticking around once he sees Charlton as a hole in his pocket that he can't sew up.
For the sake of the long term, we keep up a relentless attack on every aspect of club revenue and suffer the short term pain as fans.
What would happen if Roland stopped the Staprix funding but still owed the club. Would we go in to admin? Would that put us in to even more trouble? Maybe I shouldn't be giving out these ideas to RD...
You would have thought that, even for this weird 'visionary' the penny would have dropped by now! Oh actually just reading through this years P&L, quite a few seem to have.....
When relegation is confirmed, that's the next two year end losses (Jun 2016 & Jun 2017) pretty much guaranteed, the scale probably much larger even after the best players are offloaded, probably at knock down prices in the close season fire sale/giveaway.
What would happen if Roland stopped the Staprix funding but still owed the club. Would we go in to admin? Would that put us in to even more trouble? Maybe I shouldn't be giving out these ideas to RD...
Admin would get rid of RD, not many could be worse owners, although I accept it's possible we could end up worse, I doubt it though.
What would happen if Roland stopped the Staprix funding but still owed the club. Would we go in to admin? Would that put us in to even more trouble? Maybe I shouldn't be giving out these ideas to RD...
Admin would get rid of RD, not many could be worse owners, although I accept it's possible we could end up worse, I doubt it though.
Portsmouth said that and ended up with a succession of dodgy owners.
Admin is good as it clears debts and leaves a blank slate.
It's bad as it means assets can get sold (players, stadiums, training grounds), people lose jobs and businesses get knocked.
As nearly all the debt is to Roland taking the club into Admin hurts him more than anyone else.
Excellent post by Grapevine. Perhaps the most telling phrase is 'His "social" contribution is his pursuit of an exercise in corporate economics not sporting achievement.' This sums up Roly's philosophy and his aims for CAFC. One only has to watch, again, Nightmeire's Dublin interview to confirm this. She laughed at the idea of Roly putting money into the first team.
Roly's head nearly exploded when he found out the size of the losses he'd make in League 1. Still, he saved money on doctors' bills with the careful use of some gaffer tape.
What would happen if Roland stopped the Staprix funding but still owed the club. Would we go in to admin? Would that put us in to even more trouble? Maybe I shouldn't be giving out these ideas to RD...
Firstly for RD to go down the Admin route the club has to be in a position of no longer being able to meet it's current liabilities as they fall due and being pressed by an aggressive creditor. This would most likely to be HMRC, should RD / Staprix pull the plug on covering operating losses.
Admin allows a company breathing space to find a solution and control of it, if agreed by the courts, passes to an Administrator who will explore all avenues to satisfy creditors either by realising what assets he can or by finding a buyer for the business. There would be an immediate problem with realising the property assets short term not least of all the charge over them by the former directors who are owed £7m. Depending on the amount owed player sale(s) would be the next source of funds.
The legal and Administration fees associated with such a course of action would reduce residue asset sales left for RD/Staprix further not to mention the stigma for RD such a course of action would bring in the event of a subsequent winding up. His best option therefore would be to negotiate his own way out with a new owner to minimise his losses as much as possible.
Give Peter Varney a ring now RD, you know it makes sense!
Great recent posts which suggest relegation and more losses are best for the future of the club as it will force him to sell. So anything other than a full match boycott ie no support for the team and no money paid over, is benefiting him.
Apologies if mentioned previously, but, playing devils advocate, when we boycott stuff at The Valley, {programmes, shop, drink...etc} are we not shooting ourselves in our foot ? All he will do is put more debt onto "Staprix", not out of his own pockets.
Apologies if mentioned previously, but, playing devils advocate, when we boycott stuff at The Valley, {programmes, shop, drink...etc} are we not shooting ourselves in our foot ? All he will do is put more debt onto "Staprix", not out of his own pockets.
Yes, that is true this season but he will only be able to get back what someone is willing to pay, not what he owes. Next season it will be out of his pocket.
I just read the very good analysis of the CAFC accounts by New York Addict & Grapevine 49, strikes me these are fella's that knows there way around a balance sheet.
I'm happy to believe that between NYA, Grapevine 49, others on this forum and my own opinion, the current regime’s business model is indeed now totally and fatally flawed, consequentially doomed to failure.( hopefully, by the middle of next year if not sooner). “The Emperor’s New Clothes” is an analogy I can’t help but make!
The “Management” (although I feel the word flatters their abilities) at CAFC are suffering from Fear, Delusion and Good news culture.
From personal experience I know that when a project screws up or is on the way to screwing up, the first person to point out the problem usually gets blamed or landed with responsibility for fixing it. A message that is thousands of years old “Don’t shoot the messenger”.
If someone in this “management” team actually speaks up and tells the deluded Belgian twat(s) the truth, it’s most likely to prove instantly “career limiting”. As I suspect it already has for many of the folks that used to work at the club but have now moved on!
The regime simple can’t cope with the reality of the failed business plan, (the reasons for this failure are mute), in the real world, change happens and you adapt and cope, this lot are so badly led and miss-managed that to adapt has not been a consideration and we've all witnessed their coping mechanisms.
(Sadly it’s very common with older folks (Hi Roly) to loose self-belief and become change adverse). Maybe increase the Prozac?
MY CONCLUSIONS:
The following factors are now in play for Rat and Kat:
Relegation - League and TV money – Loss of revenues
Relegation – Ticket/ Season ticket sales plummet – Loss of revenues
Disastrous Public Relations – Loss of Fan Base, Sponsors – Loss of Revenues
Players with Long term well paid contracts – Cost money to change – Loss of revenues
There’s definitely a theme developing!
What can Emperor Roly do?
Nothing much, he will be forced into a position where the losses become untenable, he will have to “fire sell” and receive back a factor of what he has spent.
Providing the real owners of our club (the Fans) with a very tidy Cat 1 Academy and a nicely refurbished ground to commence rebuilding with hopefully a sympathetic owner and perhaps that nice Mr Powell as manager!
He will be banished into the depths of forgotten deluded old men with more money than sense and be living proof of that old footballing adage;
How do you make a small fortune at Football……………………….
Apologies it all got a bit ranty and personal but that is to be expected!
When Bob from Data spoke to us protestors last Thursday he said that the club despising and alienating the fan base was utter foolishness because as he said it is one of the few areas you can grow. Everybody says hit Roland in the pocket, but I am not sure if he cares about money in relation to us
When Bob from Data spoke to us protestors last Thursday he said that the club despising and alienating the fan base was utter foolishness because as he said it is one of the fewcareas you can grow. Everybody says hit Roland in the pocket, but I am not sure if he cares about money in relation to us
This whole deluded project is about money, I can tell you now that is his drive, the more we harm his earnings, the more irritable he will become.
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."
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.
.... Maybe this is why there are quite a few contracts at Charlton of longer duration ? Duchatelet and Meire have made some preparation for return to league one ?
It's NOT about money, primarily. It's about his legacy.
In essence, he's building a monument to himself. He's happy to spend money on that, so long as it reflects well on him.
It doesn't.
I think the thing he fears most is being associated with failure. When we are relegated, he will blame everyone but himself.
CARD need to get their press releases ready, to emphasise the number of inadequate coaches he has appointed over the past two seasons. Most football journalists will recognise the madness of six coaches over two seasons and the number of players used over that period of time, will never result in success. Failure needs to be placed squarely at his door.
I make that an excellent point from Tutt Tutt. When we are relegated the more we indicate the (seemingly quite deliberate) foul ups that Roland has made the better. In his recent visit to London he said we are a well run club, we have to counter that in emphatic terms. You know it still irritates me that lazy football people repeat that we drove Curbishley away, it is now an almost accepted and believed myth. With Roland Duchatelet his failure is a reality and it must be made clear to those interested or other myths might be created. The real success at Charlton Athletic over the last two years have been the fans, for all their division and argument, the abject failures have been Duchatelet, Meire, Murray, Keohane, Joynes and others with less well known names.
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."
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.
.... Maybe this is why there are quite a few contracts at Charlton of longer duration ? Duchatelet and Meire have made some preparation for return to league one ?
I know it was bit of a long shot @Henry Irving presuming that Duchatelet or Meire have any kind of coherent plan in mind for the future.
(On the plus note your LOL got my count to a nice round 700)
After relegation, CAFC will become a black hole draining money. He could asset strip and get money out of staprix and close it down legitimately, that would close his exposure to even more serious losses over time. What are the implications for him to close CAFC putting 2 fingers up at fans ?
Comments
Running a Mid Corp. company the messages you send are important. They set the vibrancy/ culture of the business. After Duchatelets' (RD) rant, I will try to add some further context. We have RD a person of wealth, RD the corporate investor and CAFC under the corporate umbrella of Baton 2010 Ltd, to consider.
There is little to be gained in guessing RD's motivation for anything but we can seek a pattern to his industry activity and 27 senior Belgian football clubs have fallen defunct in 21yrs. Is the "RD does things his way" mantra just to keep clubs alive? RD brought his game plan to football. Investors of age rarely show any appetite for change. Meaningful words on learning from mistakes have been meaningless.
RD has invested in many clubs. Early deals are modest in support of youth development. It is not clear if such were personal or corporate [Staprix NV (SNV)] investment. Any financial benefit is unknown but on a larger scale with STVV his family secured/ secures financial returns.
With Standard Liege SNV secured/(allegedly) secures financial returns.
At Carl Zeiss Jena RD seeks to impose stringent financial controls but with local government funding will again invest in ground infrastructure.
At Ujpest the family met a world of pain by taking over without full due diligence. The troubles may be in the past but the 2015 Dmitrovic sale was reportedly needed to pay players.
I have no data on Alcorcon.
With no evidence of any largesse RD is intent on securing a return on his football investments. A "visionary" he will be convinced his strategy will achieve a return. Though he talks of his age he seems to set no "ROI" timeline.
Clubs, he will argue, benefit from his pursuit of a viable business model. His "social" contribution is his pursuit of an exercise in corporate economics not sporting achievement.
While former director loans, (secured by charge over fixed assets), repayable on reaching the Premier League (PL) remain SNV uplifted the previous owners and prevailing commercial debt onto their books. SNV extended the borrowing to meet operating losses from the capital spend on infrastructure and normal trading.
While the "RD Group" performs such funding presents no difficulty. With common ownership the debt appears "flexible" but will present a real problem at the point it is determined.
There is no evidence the key shareholder will not seek the debt repaid in full.
Baton 2010 Ltd Accounts bring into focus executive strategy & performance. Officials have a duty to act in the interest of the company they represent. The recent figures pose serious questions.
Officials state an aim of balancing the books. If so, how did they sanction the Baton 2010 Ltd current level of debt? How does the related cost serve the clubs ability to trade?
What are their policies, beyond the SNV open cheque book, to meet trading obligations?
What strategy will be implemented to repay such an outstanding liability?
On what basis;
- did SNV impose 3% interest for its services? A blue chip risk yield for a debt to a company 100% controlled by SNV's key shareholder. RD is the debt risk.
- does the CFO assert SNV debt is of no concern as it is "unrecoverable quasi equity"?
- does the executive determine such debt manageable?
- does the executive consider such debt serves the clubs' best interests?
The questions cannot be more basic - because everyone is doing it is not the answer! In truth not one official at the club can answer. There is not a decision maker among them. They/we are slave to the anonymous major corporate governance/interests from above.
Tinkering to the edges of the problems serves no one.
In 2014 the business needed to clear consolidated debt, undertake remedial action and secure working capital to set a sound positive operating discipline pending delivery of its revenue strategy. Mid Corp. finance needs to be structured to facilitate trading without burdening the P&L. Think "Dragons Den" with investment via an equity share and ROI from operating profit.
Yet 18 months into this regime our debt stands at £38mn. We can all work the numbers across purchase cost, non relegation clause, infrastructure, commercial debt, working capital but where in allowing this debt is there an ability to repay?
Is it just the development & sale of young players? Even with 2 sales (Gomez, Poyet earning circa £4.5mn) over 2yrs will this revenue stream ever deliver? (Other key sales (YK, DS, RW) have come from normal trading).
If key to clubs' future where is the drive to secure the new academy pipe line? Why were earlier academy plans cast aside along with their external funding? How did this serve the clubs finances?
What are the projected losses for 2016/ 2017/2018?
When is the new academy forecast to generate sufficient revenue to meet annual trading losses?
All before the unplanned relegation revenue loss circa £6mn p.a., the new academy Cat. 1 development cost and the related increase in operating costs of circa£3mn p.a.
Where is there a shred of a coherent strategy to meet these costs? Corporate tax considerations in comparison are meaningless?
Can this financial merry go round be built around just one escape plan? Is it based on one purple patch in Liege where circa €28mn was generated by the sale of 4/ 5 players?
Did SNV complete full UK industry diligence before buying Baton 2010 Ltd? Has it repeated the Ujpest blunder? Due diligence will have shown we operate in a different market. With Liege at the top of their national market the player skills sets whilst technically superior are not subject to the protracted intensity of UK football.
Meaning 1. The "lead in" for player acquisition, development and sale is notably different 2. The size of buyer market for the "end product" is exponentially different.
A successful player in a top Belgian side can be sold as a proven contributor to buyers across Europe & the Middle East. The technical bias lends itself to a player acclimatising across such leagues.
The UK offers less technical skills but a greater playing intensity. The acclimatising process of "recycling" players from/to leagues in other markets for profit will always be problematic. How many PL clubs profitably sell players to Europe & the Middle East? How many English players even play abroad?
Step down to the Championship (CL) and buyers are dealing with an unproven commodity for which they will not pay top prices. When a player has barely stepped out of the academy the risk/ reward is based solely on potential. Buying UK potential is fine but is expensive and faces bigger technical adjustment against cheaper options in mainland Europe.
The "SNV player product" market is then limited to PL & top CL clubs but SNV is still selling potential where pricing will be set against options available in Europe & beyond. You can add appearance, international & sell on clauses but all are a) subject the "growth" of a player not under your control b) not binding on subsequent sales.
With current annual losses and the cost of a Cat1 Academy to balance the P&L the club will need to sell 3 (Gomez quality) players to this limited market - year on year on year, even before relegation to League 1. All in the face of a market where FFP controls have collapsed and the Liege player subsidy has gone.
Which still leaves funding of a £38mn debt and the Academy development capital expenditure to find.
The conclusion is simple unless the club invests in the right people and senior squad to enable players of potential to develop to be a proven contributor to a successful competitive side at a Championship level the business model will not work and we are on the road to oblivion.
In Jan 2014 this opportunity was staring this regime in the face. In their ignorance they threw it away.
They think they are 'well run'.
They think that all protests would've dissipated if (and they still believe when!) results pick up.
They believe the scale of the impact of the protests can be explained by the majority being led by the nose by a minority.
They believe that pointing to the pitch (ha ha) and the training ground development that they can say the club is a success.
They believe the parent club is the main force and energy driving the Community Trust (this bit of delusion is especially hard for those of us who know, to swallow).
They make statements, promote kids events, and ask for season ticket sales as if everything is normal and chugging along nicely.
They believe that they are managing to organise the football side of things well, ha bloody ha to that, but the recent deployment of Lookman indicates where they feel they can buy time and establish some kind of holding position.
I know, and maybe everybody else knows, that all of the above is by every measure wrong.
They believe all of the above is right, they really do.
Grapevines brilliant post above is seated in the madness of the numbers. No rational being can establish a 'business' case for what has happened and will happen next.
Interesting that Roland had political ambitions, he has obviously never heeded Abraham Lincoln's advice that the first rule of politics is you have to know how to count. Roland is supposed to be a mathematical genius, but he looks like he knows twice the square root of feck all.
So in this Narnia of self delusion, while everybody massages everybody's ego, whilst Jo, or Tracey, or Mandy, or whoever say it is all really about sexism, and that this club for old men can't accept change, there is a culture not just of self delusion, but mutual delusion too.
It is evident from Grapevine49's post that this thing is simply not sustainable, unless we have a model of the rich businessman deliberately not getting into football to subsidise ambition and success, but to deliberately subsidise footballing failure at his whim. If Financial Fair Play has been the unexpected fly in the ointment of the plan, then Roland should recognise his plan has no chance any more, rather than plough on regardless. FFP could still be his face saving get out strategy.
So you have to wonder why it is as it is.
I am beginning to believe more and more that Katrien and Cojones are misleading Roland about the reality, revealing some bits hiding others. This degree of deception is evident when you hear that Bob from the Data company was not left out of the sponsors event because of the Pinocchio stunt, oh no, but because Ravi tells him he is special, and will get some kind of special attention. What a chite idea to cover up the fact that the local regime were simply pissed off with the Pinocchio stunt, and they want to get rid of the Data sponsorship because they weren't respected enough.
It is truly Orwellian, we will all love and believe Big Brother even if he says failure is success. Indeed the attempt to twist and mangle language is enshrined in Orwellian doublespeak, I suggest we all revisit 1984 as part of our summer reading.
So we are more or less in cult territory, a visionary leader, surrounded by delusional sycophants, with no idea of reality. Exploiting the innocent as in players are units or pieces of meat to shift around, and fans are fecking customers.
For me there is no choice but to keep up the fight. no erosion of trust here, but a complete and unsolvable breakdown.
I think RD believed he could combine an investment with proving a theory on how to run football clubs.
I'm therefore sure, like anyone buying a small business as an investment, he had an exit plan. Exit plans are how you get your capital investment back with a profit and you don't get your investment back from revenue.
Businesses are valued, and so sold, on the basis of either future profits or the value of assets. Forget about making a profit from football in the Championship. RD can only have been looking at an exit plan based on increasing asset value.
Making a loss, in accounting terms, means reducing the asset value so it is entirely logical for RD to focus on running the "business" without making a loss. What happens on the field is irrelevant as long as it does not contribute to making a loss.
His big mistake was to equate customers of football with customers of microelectronic gadgets.
He underestimated the relevance of the spirit of the club to stability; the relevance of stability to its customers; the relevance of customers to the very existence of the club.
"Breaking even", the one common recurring theme, means he doesn't have to target promotion. Promotion would just be a very profitable fortuitous windfall and advance his exit plan.
All the time we are not breaking even the loan interest is simply paid back out of his pocket as more loans or equity.
Continually making a loss blows RD's plans out of the water. We do everything we can to make sure CAFC runs st a loss. Every cash injection he makes that is not increasing asset value is messing up his exit plan.
At some stage he will have to cut and run when he knows his exit plan is below water and he cannit recover his initial investment, let alone the unplanned loans to cover operating losses.
Player sales were always going to be key to his plans, he isn't mad enough to think it's possible to break even from match day revenue. Player sales in League 1 will not cover operating losses and he must know it.
He is panicking because relegation is far worse for him than it will be for fans.
He is not a football fan, like some owners who are in for the long haul. He is a cold blooded tight fisted businessman and cannot see him sticking around once he sees Charlton as a hole in his pocket that he can't sew up.
For the sake of the long term, we keep up a relentless attack on every aspect of club revenue and suffer the short term pain as fans.
When relegation is confirmed, that's the next two year end losses (Jun 2016 & Jun 2017) pretty much guaranteed, the scale probably much larger even after the best players are offloaded, probably at knock down prices in the close season fire sale/giveaway.
Admin is good as it clears debts and leaves a blank slate.
It's bad as it means assets can get sold (players, stadiums, training grounds), people lose jobs and businesses get knocked.
As nearly all the debt is to Roland taking the club into Admin hurts him more than anyone else.
Admin allows a company breathing space to find a solution and control of it, if agreed by the courts, passes to an Administrator who will explore all avenues to satisfy creditors either by realising what assets he can or by finding a buyer for the business. There would be an immediate problem with realising the property assets short term not least of all the charge over them by the former directors who are owed £7m. Depending on the amount owed player sale(s) would be the next source of funds.
The legal and Administration fees associated with such a course of action would reduce residue asset sales left for RD/Staprix further not to mention the stigma for RD such a course of action would bring in the event of a subsequent winding up. His best option therefore would be to negotiate his own way out with a new owner to minimise his losses as much as possible.
Give Peter Varney a ring now RD, you know it makes sense!
I just wish my gut feeling was that RD is on the run. I really don't think he is.
All he will do is put more debt onto "Staprix", not out of his own pockets.
I'm happy to believe that between NYA, Grapevine 49, others on this forum and my own opinion, the current regime’s business model is indeed now totally and fatally flawed, consequentially doomed to failure.( hopefully, by the middle of next year if not sooner).
“The Emperor’s New Clothes” is an analogy I can’t help but make!
The “Management” (although I feel the word flatters their abilities) at CAFC are suffering from Fear, Delusion and Good news culture.
From personal experience I know that when a project screws up or is on the way to screwing up, the first person to point out the problem usually gets blamed or landed with responsibility for fixing it. A message that is thousands of years old “Don’t shoot the messenger”.
If someone in this “management” team actually speaks up and tells the deluded Belgian twat(s) the truth, it’s most likely to prove instantly “career limiting”. As I suspect it already has for many of the folks that used to work at the club but have now moved on!
The regime simple can’t cope with the reality of the failed business plan, (the reasons for this failure are mute), in the real world, change happens and you adapt and cope, this lot are so badly led and miss-managed that to adapt has not been a consideration and we've all witnessed their coping mechanisms.
(Sadly it’s very common with older folks (Hi Roly) to loose self-belief and become change adverse). Maybe increase the Prozac?
MY CONCLUSIONS:
The following factors are now in play for Rat and Kat:
Relegation - League and TV money – Loss of revenues
Relegation – Ticket/ Season ticket sales plummet – Loss of revenues
Disastrous Public Relations – Loss of Fan Base, Sponsors – Loss of Revenues
Players with Long term well paid contracts – Cost money to change – Loss of revenues
There’s definitely a theme developing!
What can Emperor Roly do?
Nothing much, he will be forced into a position where the losses become untenable, he will have to “fire sell” and receive back a factor of what he has spent.
Providing the real owners of our club (the Fans) with a very tidy Cat 1 Academy and a nicely refurbished ground to commence rebuilding with hopefully a sympathetic owner and perhaps that nice Mr Powell as manager!
He will be banished into the depths of forgotten deluded old men with more money than sense and be living proof of that old footballing adage;
How do you make a small fortune at Football……………………….
Apologies it all got a bit ranty and personal but that is to be expected!
P.S. ROLLY YOU ARE NAKED!
Everybody says hit Roland in the pocket, but I am not sure if he cares about money in relation to us
In essence, he's building a monument to himself. He's happy to spend money on that, so long as it reflects well on him.
It doesn't.
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.
.... Maybe this is why there are quite a few contracts at Charlton of longer duration ? Duchatelet and Meire have made some preparation for return to league one ?
CARD need to get their press releases ready, to emphasise the number of inadequate coaches he has appointed over the past two seasons. Most football journalists will recognise the madness of six coaches over two seasons and the number of players used over that period of time, will never result in success. Failure needs to be placed squarely at his door.
In his recent visit to London he said we are a well run club, we have to counter that in emphatic terms.
You know it still irritates me that lazy football people repeat that we drove Curbishley away, it is now an almost accepted and believed myth. With Roland Duchatelet his failure is a reality and it must be made clear to those interested or other myths might be created.
The real success at Charlton Athletic over the last two years have been the fans, for all their division and argument, the abject failures have been Duchatelet, Meire, Murray, Keohane, Joynes and others with less well known names.
(On the plus note your LOL got my count to a nice round 700)