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£3.5m Academy Fund - who's in?

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Buncey

When you''re next here can I also ask a question, if someone buys a bond, then dies in the 5 year period , will it be able to be transferred to their spouse or will the money just be lost

Thanks Diane

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[quote user="Diane"]Buncey

When you''re next here can I also ask a question, if someone buys a bond, then dies in the 5 year period , will it be able to be transferred to their spouse or will the money just be lost

Thanks Diane[/quote]I should imagine that it would simply be part of their estate and disbursement would follow as with the rest of their estateI cannot see how it could be otherwiseThe question I would be curious about is whether it would be saleable on the open market - given how any sale would not affect the bond''s return, and any transaction would be between the buyer and seller, subject to any transfer fee (if applicable)

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@GP''s Beard - you make some very good points. And its something I alluded to in my second post. The Club are looking at this bond issue because they need money. And they need money because they don''t have money. Now I''m not being facetious here, but if everything was hunky-dory and we were rolling in cash I doubt the club would want to spend all this money raising debt.

If the bond is subscribed enough, then the club will get a bunch of money. Which it will then spend on the academy leaving the club again with no money. Except in 5 years, they''ll need to pay the bond holders back their money.

So if you are going to invest in the bond, you need to believe the club is going to find someway to make money such that it has enough to pay you back in 5 years. The academy by itself isn''t going to make money - it doesn''t sell anything. As you point out, there''s only two real ways (that I can see) the club can make back the money needed: promotion or selling players.

This is part of the reason why this bond is a difficult investment to fully understand. I have no idea whether we will get promoted in the next 5 years. And whilst we have some quite marketable players right now we could sell, you can''t guarantee you are going to be able to sell them at a good price. I think a lot of people''s decisions will come down to how much you ''believe'' in the club.

I''m entirely speculating here, but this is my guess at why the club is doing this. The board have decided that our Academy facilities are vital to the sustainability of the club and that they need to be improved immediately. We don''t have the cash available now - but we will when we inevitably sell players in the summer. But using transfer receipts isn''t viable because: (1) the works need to be started asap, and we can''t wait to get the money in; and (2) the board are concerned it will look bad to the fans if sell, say, Josh Murphy and instead of reinvesting in the squad we build some new buildings with it. (even though, as you suggest, to pay back the bonds we may end up needing to sell players!)

I also agree on the 3% credit interest. I don''t like these types of thing, because they are confusing, tricky for tax purposes and you aren''t really getting money, just some money off in the club shop.

@Diane - You will be able to transfer the bond, the money won''t be lost.

If a bond holder dies then it would go into their estate for inheritance tax/probate. At that point the executors of the estate should contact the trustees (Tifosy), asking either to transfer the bond to a new person or to redeem. Usually, when you subscribe for the bond you''ll receive a bond certificate. Attached to the certificate will be a form which you fill in and send to the trustees when you want to redeem your bond. There is also usually a slip which you can use to update your details (change of address etc.). Some issues are now all electronic - you can do all of it online - you can also often call to arrange for amendments, but usually you must redeem via the certificate form. I''m looking at prospectus I have on my computer and there was term setting out what you have to do if a bondholder dies.

@Supermarket Sweep - usually the bonds are prohibited from being saleable on the open market. It will depend on the terms and conditions. For example, the bond prospectus I have on my computer says the following:

"The Bonds are not transferable and cannot be sold or traded. The Bonds may only be redeemed by the original Bondholder."

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Good post Buncey !

if you own a football club you have to find the money if not let someone else invest to me the board are saying they can not afford to run the club

now Delia and Husband are multimillionaire''s maybe on paper maybe invested i do not know but they had a lot of money Repaid to them over the years by the club why are they not reinvesting it back into the club ? for them to keep other investments or their money tied up elsewhere is selfish in my eyes

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As regards to where the money will come from to pay interest and the full money back at the end of the five year term, the club have said they will put money away year by year to do this.  As far as my rudimentary maths takes me, it means that at 5% interest the club has to find £175,000 to pay each year and at the end of the five years, the whole amount of £3.5m. So the whole cost of the loan to the club is therefore not much short of £4.5 million over the full term. That means the club has to put away around £900,000 away each year to ensure there is money to pay off the bonds at the end of it''s five years - not such a tall order in the scheme of things maybe, from player sales etc. But.....there could be a problem at the end of the five years if the club is unsuccessful on the field over the next few years, crowds drop and wages still outstrip income. It could then find it is in debt, unable to pay the bonds - and that would be a real crisis as so many fans would have trusted the club with their money.  At that point, there would be real trouble for the club - the instigators of the bonds scheme would HAVE to dig into their pockets to pay the bonds off or there would be open warfare on the club.  The owners would have a choice - pay off what is owed to the fans or walk away - basically that would mean the club would have to go into administration - unless a buyer could be found to stump up enough to cover all debts.Those are the two scenarios, a controlled saving the money up to pay back fans after five years, or downward spiral of the finances leading to a crisis at the end of the five years.  I can''t believe anyone at the club would want to see us go into administration in that worst case scenario, but it could go that way.  Most likely, imo, if the money wasn''t there to pay back fans, some kind of deal would be struck to cover the cost, either with the majority shareholders raising the money to cover the cost, or someone stepping in to bail us out. I''m still up for it, but anyone who puts money in has to go in with their eyes wide open.  The club could limp forwards with increasing debt if things don''t go how they hope and the crunch could come at the end of the five years - or - finances are kept under control, player sales enable enough money to be put away over a period of time and everyone is happy.....relatively. Of course things could go well, we get promoted and the 25% bonus kicks in, so at the end of the day it''s a punt - quite an attractive one actually - but there is a risk too.

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Finance and football are a bad mix.5% return is excellent but the element of risk is there should the club go into administration then all would be lost. The liklehood of administration may seem slim but 4 years on if the strategic changes go toes up the picture may look very different. No I will buy my season ticket and leave it at that

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Norfolk. What is this if it''s not letting other people invest. Or by invest did you mean find someone who''d hand over money for no return? Like we did with the academy donation. If it''s that it does say there are ways people can donate.

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[quote user="norfolkngood"]Good post Buncey !

if you own a football club you have to find the money if not let someone else invest to me the board are saying they can not afford to run the club

now Delia and Husband are multimillionaire''s maybe on paper maybe invested i do not know but they had a lot of money Repaid to them over the years by the club why are they not reinvesting it back into the club ? for them to keep other investments or their money tied up elsewhere is selfish in my eyes[/quote]I think most of the money Smith and Jones have put into the club has been by way of buying shares, including when one share offer fell short. Back in 2008 the loan outstanding to then was just under 200,000 pounds. They then put an extra 2m into the club because of the financial crisis (Foulger added 600,000 pounds). So the amount paid back to S&M over the last 10 years is only 2.1m pounds. Not a vast amont they could now put back in.But in any event the plan, whether fans like it or not, is for the club to be self-sustaining financially. You don''t achieve that by the owners covering up shortfalls, especially if they would quite soon run out of the money to do that.

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[quote user="PurpleCanary"][quote user="norfolkngood"]Good post Buncey !

if you own a football club you have to find the money if not let someone else invest to me the board are saying they can not afford to run the club

now Delia and Husband are multimillionaire''s maybe on paper maybe invested i do not know but they had a lot of money Repaid to them over the years by the club why are they not reinvesting it back into the club ? for them to keep other investments or their money tied up elsewhere is selfish in my eyes[/quote]I think most of the money Smith and Jones have put into the club has been by way of buying shares, including when one share offer fell short. Back in 2008 the loan outstanding to then was just under 200,000 pounds. They then put an extra 2m into the club because of the financial crisis (Foulger added 600,000 pounds). So the amount paid back to S&M over the last 10 years is only 2.1m pounds. Not a vast amont they could now put back in.But in any event the plan, whether fans like it or not, is for the club to be self-sustaining financially. You don''t achieve that by the owners covering up shortfalls, especially if they would quite soon run out of the money to do that.[/quote]
[Y]
I''m also not too sure how you can refer to Delia and co as ''selfish''.

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As I see it, there is obviously risk involved - there is in any unsecured investment - and I think that the club has been open about it - it is legally obliged to be so!It is possible to see nightmare scenarios, involving sharp decreases in revenue - the TV deal or sharp drops in attendance being the most plausible. Nevertheless, the total sum involved is not great compared to total revenue and provision for repayment approximately equates to the wages of a first-team squad player. Whether the risk is "worth it" depends very much upon your personal circumstances and the balance of risk in other investments. Bottom line, though is with any investment in shares etc - you have to accept that sometimes you lose, no matter how carefully you chose.

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I was about to ask, what are the reasons for doing it this way rather than a more standard bank loan?

There is a cynical part of me that wonders that fans might be seen as being easier to deal with if the club need to delay repayment for any reason.

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If the club wants supporters to take a gamble on losing their investment but are confident that within that 5 year period we will have the success that will repay that investment why don''t they put there money where their mouth is and take a gamble themselves by guaranteeing to repay the supporters their initial investment in the event that it fails.

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''That means the club has to put away around £900,000 away each year to

ensure there is money to pay off the bonds at the end of it''s five years

- not such a tall order in the scheme of things maybe, from player

sales etc''.Well as £900K does not appear to be such a tall order in the big scheme of things according to Lakey as we are continually told that we have recently had four years in The Premiership who should the finger be pointed at for Colney being neglected ? Please remember you cannot blame Delia and her board or The Man From Mulbarton. [;)]The state of our finances surely currently mean every £ is a prisoner so to dismiss £900K year upon year is plain nonsense.

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It amazes me how "the man from mulbarton" can be blamed for carrying out the wishes of the board chaired by the blameless Bowkett.

It''s a fit up.....

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TIL - 900,000 is not insignificant but putting it in proportion is about 2-3% of turnover (depending on transfer activity) and equivalent of one player''s wages.KC - your cynical side may well be correct on this occasion!

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[quote user="lake district canary"]the crunch could come at the end of the five years.....[/quote]Does it all have to be repaid after five years or can people leave their investment in collecting additional interest along the way? If so, the club wouldn''t be faced with repaying the full amount after five years.Also, I feel sure there will be some supporters who will invest yet never reclaim their investment simply because of their love for the club and can afford to do so. Going back, the associate directors did just that for little reward apart from a meaningless title. And then there were fans who didn''t collect their rebates...... If I''m correct, the club won''t have anything like the full amount to repay at the end of the period even in the worst case scenario.

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[quote user="nutty nigel"]It amazes me how "the man from mulbarton" can be blamed for carrying out the wishes of the board chaired by the blameless Bowkett.

It''s a fit up.....

☺[/quote]Bowkett resigned over two years ago so who carried the can since then ?

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[quote user="king canary"]I was about to ask, what are the reasons for doing it this way rather than a more standard bank loan?

There is a cynical part of me that wonders that fans might be seen as being easier to deal with if the club need to delay repayment for any reason.[/quote]

A bank loan would be difficult to achieve for a football club in the present climate and even if allowed would have hefty interest rates.  Un-cynically, this is an opportunity that should benefit all ("should" being the operative word) and if the club started playing around with fans'' money, it wouldn''t end well! 

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@LDC

I''m not sure I believe that- do banks not lend to Championship football clubs?

I agree it would be foolish of the club to play about with fans money and I don''t think there is any intention to do that. I do though wonder if a bunch of small ''loans'' from supporters (which is what this effectively is) might be preferable as supporters will be more sympathetic if the club is in a poor financial position.

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[quote user="lappinitup"][quote user="lake district canary"]the crunch could come at the end of the five years.....[/quote]Does it all have to be repaid after five years or can people leave their investment in collecting additional interest along the way? If so, the club wouldn''t be faced with repaying the full amount after five years.Also, I feel sure there will be some supporters who will invest yet never reclaim their investment simply because of their love for the club and can afford to do so. Going back, the associate directors did just that for little reward apart from a meaningless title. And then there were fans who didn''t collect their rebates...... If I''m correct, the club won''t have anything like the full amount to repay at the end of the period even in the worst case scenario.

[/quote]This has come like a still lit dog end to the tramps who ollow City hopeing for something to have a desperate puff on.The reality is that this work needs doing now. The club neither has the spare money or can raise it at the cost this will be.I suspect the work is tied up with retaining Cat 1 status, so needs addressing fairly quickly. I believe as things stands we will receive £12.5m in Cat 1 related grants over the period of the bond.If £3.5m of that is used as the money to ''redeem'' the bonds then it is still around £8m more than we would have, and retains our ability to recruit players from all over rather than the 90 mile limit.Some of us see this as the club dealing with where we are now. Others, as they make clear on here, see it as yet another stick to beat the club. A grudge born out of the club''s inability to deliver the fantasy they have come to demand s their right.I''m in. Many will want to be but are unable to for many varied reasons, but I''m certain many would if they could - and here are those who won''t, similarly for their own varied reasons.  However none of the above are greater or lesser City supporters.It is those who are clogging up this thread with their constant whines and back biting who should ask where their true loyalties lie.  The club or the bandwagon ?

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I didn''t think for once that our club is in a poor financial position?......Aren''t we supposed to be ''debt free''?......

......Shouldn''t we just leave the short-term financial assistance to affluent local business fan folk, like that one chap, who when we weren''t quite flush, helped us sign ''Jet heeled striker'' Daniel Hucklebury.......all those seasons ago?.....

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Frankly, there will be quite a lot of people who have some money put away in a building society earning less than 1% interest - and most of them will have thought at some stage they are getting a pittance of interest out of the system as a result, while banks and the like are still charging 8/9/10% plus.....so an opportunity such as this has a double appeal - not only helping their football club, but also bucking the system by getting a good amount of interest in a world that offers them practically nothing for their hard erned savings. I don''t know how much altruism is involved in this from the club''s side, but it must have been seen that it is a good opportunity for all.

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[quote user="Mello Yello"]Maybe ''desperate times.......require desperate measures''......?[/quote]For those needing to have something to attack the club with.............then yes

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