Bolton and Bury games likely to be suspended....latest update, what a mess.

[a123]

They do flout the rules though.

Our opponents tonight openly stated that they deliberately broke ffp rules in a gamble to get promoted. They knew the penalties but were happy to take the risk. I
Several clubs have done the same thing.

A few clubs are now using a loophole to get round ffp as it relates to maximum losses allowed.
These clubs include Sheffield Wednesday.
They have sold the stadium, to a group controlled by their chairman, for £60 million and the profit on the sale reduces the clubs losses over a 3 year period to within the permitted losses. Obviously this loophole can only be used once.
In the latest accounts the chairman has loaned the club £40 million - increasing the club's debt to him to £77 million.
This is necessary because the club's wage bill was £42 million. Income was £25 million.

The rules for the Championship and League 1 and 2 are substantially different.

In league 1 you only need to be in danger of breaching the threshold of spending 60% of your turnover on player wages in a single season to risk an embargo.

The Championship sees it fit to allow clubs to amass losses of £45m over 3 seasons chasing the Premier**** dream.

Wednesday chose to do that big style hence the losses they are suffering and the transfer embargo’s they have been under.

It is utterly pointless clubs like the Millers getting in the Championship while the rules are so heavily weighted to encourage clubs to gamble everything chasing the Premier**** rather than running sustainable businesses.

[WanChaiMiller]

Bury did not go because their owners went bust. That's S Dale,s version of events. What actually happened is well documented on the internet and I would imagine is now attracting the interest of some govt depts

Of course Bury went bust because of Stewart Days business failure. How else do you explain it and how else could Dale have got his hands on the club for a quid? Day was offloading and Dale was the mug punter. But admit its not this simplistic.

Prior to Dale taking over Day had mortgaged Gigg Lane and the clubs Social Club to a third party called Capital Bridging Finance who are owed £3.7m - not all the cash came into the club as 40% went to an un-named third party.* Capital in turn sold the mortgage on to a company in Malta whose own lenders are based in British Virgin Isles. The repayments of these loans were pushed on to the club.

Having bought the club in Dec 2018, Dale paid a tax bill in Feb 19 to avoid a winding up order. Problems re-emerge in April were he is late paying the wages.* Mid April a former coach issued a winding up order along with HMRC, adjourned till after the end of the season. They see the season out. At the end of April Dale admits problems at the club are bigger than he at first thought and puts the club up for sale.

The July 19 hearing is adjourned until 31st July to allow Dale time to find a buyer. In the interim period he places the club in a CVA. The 31st July winding up order is dismissed.

Dale sells a £7m debt owed to Merderco (a company of the previous owner Day) to a company owned by the partner of his daughter. This gives sufficient voting rights to allow the CVA to be approved.

Early August the EFL require Dale to provide financial evidence how he will satisfy the CVA and of the ability to finance the club till the end of the 2019/20 season. On Aug 8th Bury are given 14 days to privide proof of the financial package. This is extended an extra week when it seemed like a takeover is likely.

In effect the club is a basket case. No one in their right mind would buy it.

The whole process of events was triggered by the failure of Days company.

[WanChaiMiller]

Then I don’t get your previous post.

I’m sure there’s a finance cap but not a player cap

Like I said, a wage cap currently exists.

[WanChaiMiller]

You can’t flout it otherwise you will become the subject of a transfer embargo.

Also if the Chairman decides to inject funds to prevent breaching the 60% cap it has to be in the form of sponsorship or an injection of equity i.e. not repayable, loans from the Chairman are discounted from the calculation because they are simply increasing the debt burden of the club.

Ultimately you need to have more money than sense to take on a football club, because the chance of showing a profit on your investment are slim.

Completely agree. I made a longer explanation in an earlier post.

Artificially pumping up income through sponsorship or equity is to disregard of the spirit of the rule in that it still allows richer owners with a will to spend their cash an unfair advantage (which is why I used the word flout).

[wrinkly]

Dale sells a £7m debt owed to Merderco (a company of the previous owner Day) to a company owned by the partner of his daughter. This gives sufficient voting rights to allow the CVA to be approved.

Not quite correct.
Dale didn't/couldn't sell the debt.
If only it were possible to sell debts owed by you (rather than to you) to someone else.

It was Merderco who sold the debt to Dale's daughter's boyfriend - who had set up a company RCR holdings specifically to buy that debt.

As you say , this gave RCR the voting clout, as a creditor, to get the CVA sorted.

On the face of it this stinks as well.

What was in it for Merderco (Day's company) to sell a debt of £7 million for £70,000?
Had the CVA gone through RCR (Dale's daughter's bloke - or perhaps Dale himself?) would have pocketed £1.75million for the £70,000 outlay.
Merderco has gone the way of Day's other companies, in administration. Are there creditors other than Day? Would those creditors have preferred a share of £1.75 million rather than £70,000
Has there been an upturn in the sale of brown paper envelopes in Bury?

[WanChaiMiller]

Not quite correct.
Dale didn't/couldn't sell the debt.
If only it were possible to sell debts owed by you (rather than to you) to someone else.

It was Merderco who sold the debt to Dale's daughter's boyfriend - who had set up a company RCR holdings specifically to buy that debt.

As you say , this gave RCR the voting clout, as a creditor, to get the CVA sorted.

On the face of it this stinks as well.

What was in it for Merderco (Day's company) to sell a debt of £7 million for £70,000?
Had the CVA gone through RCR (Dale's daughter's bloke - or perhaps Dale himself?) would have pocketed £1.75million for the £70,000 outlay.
Merderco has gone the way of Day's other companies, in administration. Are there creditors other than Day? Would those creditors have preferred a share of £1.75 million rather than £70,000
Has there been an upturn in the sale of brown paper envelopes in Bury?

Thanks Wrinkly. I struggled to understand it the way it was written in the article I read. I dont know who benefits except it allowed the cva to pass.

Did it happen before Merderco fell into liquidation? Maybe Day pocketed £70k knowing hed get nothing via Merderco from the cva (because that money is owed to Merdercos creditors after it eent bust). If so Day must be working with Dale. The Administrator for Merderco seemed to think it was all above board.

[flourbasher]

Wan. The way you and Winkly describe it is more or less how in understand it.
But at the end of the day money was taken out of the football club after loans were made to it without Bury actually receiving the money plus huge arrangement fees were paid whereby no one knows who the recipient was. Reports in the press suggest this was £400k and Bury were also left to pay these

The owners business may have gone bust but not before money was still siphoned out of the club with Bury having to pay off the loans.
It is because Bury are left carrying the can that no other investors will touch them and not because someone's business empire has collapsed.

[WanChaiMiller]

Wan. The way you and Winkly describe it is more or less how in understand it.
But at the end of the day money was taken out of the football club after loans were made to it without Bury actually receiving the money plus huge arrangement fees were paid whereby no one knows who the recipient was. Reports in the press suggest this was £400k and Bury were also left to pay these

The owners business may have gone bust but not before money was still siphoned out of the club with Bury having to pay off the loans.
It is because Bury are left carrying the can that no other investors will touch them and not because someone's business empire has collapsed.

Actually this article by David Conn sheds more light on it than my speculation. It seems like Day pumped investors money from his own companies into the football club. This article says they are attempting to get it back.

https://www.theguardian.com/football...-petition-debt

Im speculating that some loans were made via the football to prop up his ailing busineeses. If his businesses pulled through he could paid off the loan. When is own companies failed it left the full burden on the football club.

[WanChaiMiller]

Another interesting insight.

https://www.change.org/p/serious-fra...mpire-collapse

[WanChaiMiller]

This FT article links the collapse of p2p lender Lendy with Day.

https://www.ft.com/content/15a23a48-...c-fac8325aaa04