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Thread: Help - someone cleverer than me

  1. #1
    Join Date
    Jan 2017
    Posts
    194

    Help - someone cleverer than me

    Ok so 2 disclaimers -

    1 - I have limited business/financial background. Basics of running a small business I get but I used consultants for the hard bits!

    2 - I’m doomed right up at the moment which may be affecting my thought process

    I keep reading our accounts and there is one thing niggling at me constantly. This reduction in debt to £1.8 million.

    Historically, when we are talking about football club debt we are talking about bank debt, footballing debts (buying players etc) or any other “official” debt.

    What our club have continually done over the past few years is offer club assets as security against “sympathetic” or “soft” loans to “Utd minded” creditors. That has resulted in an asset striping of the club with Tannadice and various pieces of land being owned by these people.

    This recently culminated with the sale of Gussie park in order to service one of these “soft loans” and inject a bit of cash into the club, however all I can see we’ve done is replace one loan with another and regardless of the hardness or softness of a loan, debt, to me, is debt.

    For example the recent sale of Gussie looks on the balance sheet like a sale of an asset which provided income, however we know that MM sees it as a loan until the club is in a position to buy it back. That means we basically unofficially owe MM circa £1million for the GA which is not shown on the balance sheet. Whilst that is a slightly different arrangement to the other deals with security against Tannadice etc I am interested to know how they appear on the balance sheet.

    My query is this - does the £1.8 million debt figure bandied about (after years of claiming we were debt free incidentally) include all of the soft loans which exist with DUFC assets listed against them as security?

    If yes then the situation is as grim as it sounded after the press release - if no just how much debt are the club actually in. It only takes a shift in one of these creditors personal attitudes/financial circumstances for them to call the debt in and we then owe a shed load of cash or lose an asset in the process of satisfying that debt.

    Would appreciate any reassurance anyone can give here to be honest as the combination of this, the on field shambles and the ongoing circus at boardroom/management level is dragging me down.

  2. #2
    The club have never said it was debt free at any point. The sale of Gussie is just that, a sale. It's no longer a club asset so can't be considered to be a debt in any way. Of course the owners of the debt could call it in but I guess that was the point in having friendly folk lending the money. Ultimately the debt is what it says in the accounts, there is no getting round this.

  3. #3
    Join Date
    Apr 2016
    Posts
    812
    With Gussie sold it will no longer show as asset on next set of accounts .......and the the million will long gone too by then.

    Going to be a hell of a turn around in fortunes to make the million profit to buy it back at a later date.

  4. #4
    Join Date
    Jan 2017
    Posts
    194
    Quote Originally Posted by TerryTheTerror View Post
    The club have never said it was debt free at any point. The sale of Gussie is just that, a sale. It's no longer a club asset so can't be considered to be a debt in any way. Of course the owners of the debt could call it in but I guess that was the point in having friendly folk lending the money. Ultimately the debt is what it says in the accounts, there is no getting round this.
    The club peddled the debt free line for a long time

    http://www.bbc.co.uk/sport/football/26079931

    It was a disingenuous (why am I surprised) reporting of the status where they stated debt was cleared by sympathetic investors without mentioning that in fact we were securing club assets against it and in fact the debt wasn't cleared, but rather moved to other creditors.

    I and many other fans lapped this up and believed we were debt free (see - I told you I wasn't the brightest) when it's abundantly clear we have never been debt free.

    The £1.8m debt is reported for all to see but I'd be surprised if the loans as security against Tannadice are included in that figure - I'd expect that alone to be higher than £1.8m (again I could be wrong). Would be good to get a bit of transparency from MM as to the exact state the clubs finances are in.

    The financial statement was a start but it was clearly a soo's lug dressed up as a silk purse and didn't address the real issues.

  5. #5
    Join Date
    Jun 2012
    Posts
    3,698
    I suppose that article should probably have said with the support of sympathetic creditors instead of with the support of sympathetic investors

  6. #6
    Join Date
    Oct 2010
    Posts
    23,455
    I was about to give you chapter and verse on the subject but having read the thread title it would not be appropriate.

  7. #7
    A couple of things. It clearly says bank debt not totally debt and the are no quotes from anyone from the club in that article. I think you'll be struggling to find any such thing.

  8. #8
    Quote Originally Posted by TerryTheTerror View Post
    A couple of things. It clearly says bank debt not totally debt and the are no quotes from anyone from the club in that article. I think you'll be struggling to find any such thing.
    The article was written before we sold Robertson, Gauld, Soutar, Armstrong, GMS and Ciftci, so it's no surprise that when they did go, most United fans were under the impression that the club had to be debt free with the transfer figures quoted.

    It's clear that the money coming in for those sales was miles off the mark but no one at the club came forward to deny the figures because they wanted the fans to be under the impression that they were accurate to justify the mass sales and to alleviate pressure on the chairman.

  9. #9
    Join Date
    Sep 2009
    Posts
    16,058
    Quote Originally Posted by spikeontheright View Post
    The article was written before we sold Robertson, Gauld, Soutar, Armstrong, GMS and Ciftci, so it's no surprise that when they did go, most United fans were under the impression that the club had to be debt free with the transfer figures quoted.

    It's clear that the money coming in for those sales was miles off the mark but no one at the club came forward to deny the figures because they wanted the fans to be under the impression that they were accurate to justify the mass sales and to alleviate pressure on the chairman.
    This 100%

  10. #10
    That's your assumption about what the club were doing. However, I don't think I've ever seen the club comment on any transfer fee, ever. In fact I'd imagine there are confidentiality clauses in these transfers that would prevent them doing so even if they wanted to.

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