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Rogue Baboon

Building Our Future - 08/03/2018

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I actually didn’t mind buying overpriced shares as a donation, or a brick for the new stand.

I find this one hard to stomach though - especially as we continue to contribute to the pay of Wildschutt, Naismith and Martin for no benefit to the club.

This is a mess of the Boards making, and I haven’t seen anything to make me think Webber is anything more than another large redundancy payment waiting to happen.

Was the value of the Academy infrastructure correctly reduced in the accounts over this period? Surely gradual investment should have been made over the years. Is the ground being adequately maintained.

Rank incompetence which reflects very badly on the owners and especially Steve Stone.

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5% interest annually is more than you’ll get for most bonds or ISAs on the market currently. Obviously the fact it is ‘unsecured’ means there is more risk - but whether the club would take the bold move of stiffing 1000s of fans out of a chunk of cash is questionable. Would only happen should the club fall into administration, even then most would see some return.

The 25% bonus for promotion means that if you genuinely believe Norwich have a good chance of promotion in the next 5 years then this could be a very good investment.

My fag packet sums suggest a £1,000 investment would be worth roughly £1,500 in 5 years should the club be promoted. You aren’t going to get that kind of return on any high street savings products.

I’ll almost certainly be investing personally.

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[quote user="Bagster"]I quite like this idea, what investment doesn''t come with risk. As long as you can afford to lose the money I can''t see any problem.

The stock market is currently over valued and I can''t see you getting a 5% return on the housing market for the next 5 years.

What better way to invest your money, than in something that you love ;)[/quote]

Considering Delia claims to love it, you wouldn’t catch her doing anything like that

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''If the club were a real "community club" with the fans having a genuine and meaningful stake in its ownership then i think i would feel different but when it comes to ownership and control its treated as "their club" yet when it suits them or it comes to funding things we are a "community club."

This echoes my feelings exactly Jim.

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[quote user="The gut"]I’m not sure what the problem is with this. Either you want to be involved or not. I am sure there are plenty who go to Carrow Rd who could easily invest if they choose to.

Although the issue is very different I see a similarity between this and those who did not take their “Grant Holt Rebate”.

Those who are prepared to lose money for the possible greater good of the club and those who are not but feel that other people should.[/quote]

Don;t get me started on the rebate. Still considering writing to the club asking for my rebate "loan" to be repaid.

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Hi Bethnal. Impressed with your calculations, and I certainly no expert, but with a very uncertain economy any reasonable rise in inflation will cut any return.

Indications are that interest rates will rise over the coming years as well.

I think the club is expecting interest rates to rise, hence financing the scheme using this option.

Good on you if you choose to go for it though, and I certainly hope you get the promotion bonus.

Laid up recovering from an operation at the moment - so spending more time on this board than usual.

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My limited fag packet accountancy suggests that it will take £175,000 to service this £3.5 million for each and every year of the 5 year term so may i ask where from within our annual budget this will come from ?

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[quote user="Indy"]Just been through the lonk, didn’t realise it’s a five year gamble, it’s a no from me, I’ll leave my money in aldermore gathering interest without any gamble.[/quote]A five year account at Aldermore only returns 2.25% pa, but it is secure, backed by FSCS I presume. It also compounds I imagine? As ever to get a better return you have to risk your capital stake. If I have understood it correctly £1000 would return £250 (£50 x 5) + £30 "club credits" p.a. It will be interesting to see what these can be spent on, but this could raise the return to £400, assuming the credits are on things that you would normally buy. Plus of course there''s the promotion bonus of £250*  [:D] bringing it to £650 over 5 years. I think that would equate to 13% pa assuming promotion but it''s less than this if you want compound interest (which you should, but I''ve forgotten how to do it - still must be over 10%)For the pessimists, a £400 return over 5 years = 8% or 6-7% compound.Be interested if other fag-packet accountants have done the sums the same way? It''s quite possible that I''ve missed something, but from what I''ve seen so far, looks interesting but of course runs the risk of losing your original investment if the club becomes insolvent, as I know some on here want.

*Perhaps I can prevent the inevitable derisory comments on this by saying that anybody making them is being totally predictable?

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[quote user="TIL 1010"]My limited fag packet accountancy suggests that it will take £175,000 to service this £3.5 million for each and every year of the 5 year term so may i ask where from within our annual budget this will come from ?[/quote]Revenue of course, as with any loan[:O]

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So suggesting some on here want the club to become insolvent is not a derisory comment then Badger ?

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[quote user="TIL 1010"]So suggesting some on here want the club to become insolvent is not a derisory comment then Badger ? [/quote]It is simply reporting what some have said. I find it very disappointing but the regular poster was most emphatic about it and repeated it when challenged - doesn''t like Delia, so it would be worth it in his/ her opinion for us to go bankrupt so she is hurt. [:(]Guess it takes all sorts...

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[quote user=" Badger"][quote user="TIL 1010"]My limited fag packet accountancy suggests that it will take £175,000 to service this £3.5 million for each and every year of the 5 year term so may i ask where from within our annual budget this will come from ?[/quote]Revenue of course, as with any loan[:O][/quote]Our revenue in the Championship is diminishing year upon year so is this really good business sense ?

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If you watch the interviews with Webber/ Stone you’ll notice they currently spend £100k on renting the portakabins, this is where some of it will come from, although they obviously still need to use them while the building is being completed

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The obvious risk, as many have said, is that if the club went into receivership during the next 5 years we would almost certainly lose our money. In practice even if we headed back to League One I don''t think this is very likely given the relative lack of debt on the balance sheet.

There is another, more likely, scenario. If at the end of the 5 years things aren''t going as well as hoped, i.e. no promotion, they might seek to defer repayment (with interest continuing to accrue of course). That would need h the agreement of those who had invested, As the Directors are likely to be the biggest investors 1) such approval would be easy enough to achieve but 2) they also have the biggest incentive to avoid this happening.

In practice the gamble the Board are taking is on getting us promoted to the PL within 5 years. Do that and repaying the bond and the extra interest becomes petty cash.

Obviously the Board must genuinely believe they can achieve promotion in that time.

So do I and shall put a small amount in.

If you think they can, and have some available funds, then invest. Unless you regularly back 2/1 winners you''re unlikely to get a better return in the current climate.

Obviously if you think we''re stuck where we are, or worse, for years to come, this probably isn''t for you.

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£175,000 is a relatively small amount of money, when compared to individual players being on £1m to £2m and an annual turnover of say £30 to £50 million - between 0.35% to 0.6% of turnover. It is a very moderate investment and produces tangible assets. Whether it is successful or not depends upon how well it works - i.e. does it produce players. The downside risk is very small

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Absent friend, I agree with much of what you say, but I don''t think that the board can defer payment (insolvency accepted) without the permission of the individual bondholder. They might ask me or any other bondholder to defer repayment but I don''t think that they can take a group decision on behalf of all bondholders. I''m pretty sure that they are legally obliged to repay in all circumstances other than insolvency. Accountants on here can correct me, but I think this is the case.the other thing is that the next upward direction of interest rates is likely to be upwards but personally I doubt that they will reach 5%+.On what I know now, I will invest but I want more information before committing!

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Do you really think if this "investment" was so great Delia and co would be offering it up to fans?

They''d quite happily find the funds if they thought they could really get a 5% return, but that would mean risking their own money and why do that when someone else can fit the bill for continued bad decisions and cluelessness of running a football club?

Come on clappers dip your hands in your pockets

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[quote user="Jim Smith"]I also have mixed feelings. On the one hand:

1. Its a form of investment into the club and an area of the club that will be important;

2. Its not compulsory for any fan or business;

3. The rate of return as an investment is reasonable even if it is unsecured and thus there is a degree of risk.

However, when it comes to who owns/controls the club its clear its them, its their club and they will do with it what they want with it even if "the fans won''t like it." Yet when it comes to the cost of running the club its once again clear those owners are unable to sustain it and/or not willing to pick up the tab anymore.

I cannot just accept the continued "yes we made mistakes in the past" line and "move on" unquestionably. 1) Same board pretty much as when we were in the prem and it is a massive, massive error that these improvements were not done then when this sum of money could have been found easily.

Ultimately our owners have been repaid all their interest free loans (as they are entitled to be - although interesting these were not converted to shares like previous loans) and we will have replaced that funding with £3.5m of external money which the club needs to pay interest on. Again its entirely their preprogative but most owners of championshop football clubs have funded infrastructure or would just make the loan themselves.

I also think the fact we are having to resort to this raises questions about our ability to raise finance through other means.  2)

If the club were a real "community club" with the fans having a genuine and meaningful stake in its ownership then i think i would feel different
but when it comes to ownership and control its treated as "their club" yet when it suits them or it comes to funding things we are a "community club."

For that reason i won''t be investing.[/quote]1) Really, Jim? At the expense of the playing squad? There would have been howls of anger if the club had done that. Nor is the board the same, if you factor on not just Balls but Stone and Webber as ex offico members.2) How many clubs in English professional football are run like that? It looked as if Swansea were, but that turned out to be an illusion. And I very much doubt that the kind of new owner you want to see - one who could pick up the tab for this - would remotely contemplate as much community involvement as there is at the moment.I don''t seen any contradiction in Smith and Jones running the club the way they do but also offering fans this chance to make some money in this fashion.

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Please spare me the obvious "hilarious" comments, but do any of our gambling comrades know what odds you are likely to get from a bookmaker for City getting promoted at any time in the next 5 years?

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Badger, I am (or was) a company Accountant actually, but I''m not totally sure myself, and I''ve definitely forgotten more law in this sort of area than I remember! You have to treat all shareholders within the same class the same way - but these aren''t shares.

I would expect some provision that says everyone must be treated the same so if the majority were willing to defer - a collective agreement effectively - then I think it would be binding.

It no doubt depends on the small print - not read it yet.

I did have some preference shares in an ex-employer about 20 years ago (not a PLC) where there was a request to delay the repayment schedule, but I can''t remember exactly where we would have stood had we individually refused. Fortunately we got paid in the end.

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Absent friend as an ex-company accountant, I am very wary of contradicting you [:D]. However, I thought that bonds counted as external debt, whereas preference shares were equity?

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KC, Jim - Whilst also agreeing with Purple''s point that many fans would have complained about it, I agree that this should have been done in the Premier League years.Seems like Ed Balls is knocking them into shape[:D] [;)] [;)]

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Could somebody explain that if this bond is described as "high risk" are there any other circumstances, aside from the club going into administration, under which the original sum invested would not be repaid?

If the capital is safe other than this (unlikely) event, then I can''t see a downside.

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[quote user=" Badger"]KC, Jim - Whilst also agreeing with Purple''s point that many fans would have complained about it, I agree that this should have been done in the Premier League years.Seems like Ed Balls is knocking them into shape[:D] [;)] [;)][/quote]It might have been feasible, IF we had done what Burnley apparently did, which was not to try to stay in the Premier League.  It would have been fun to watch this message-board if we had adopted that tactic.I certainly agree, Badger, that getting Ed Balls as chairman looks like an inspired decision.

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@Purple

Not really- £3.5m would hardly have been the biggest dent in our transfer budget.

That is basically no Matt Jarvis on a permanent deal- hardly ''not trying to stay in the Premier League.''

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[quote user="Fuzzar"]Could somebody explain that if this bond is described as "high risk" are there any other circumstances, aside from the club going into administration, under which the original sum invested would not be repaid?

If the capital is safe other than this (unlikely) event, then I can''t see a downside.[/quote]I can''t see a down side either.  We are a debt free club and have player assets and the club is supposed to put some money away each year to cover the whole amount, so it does look fairly safe.  The upside is the club get the money without breaking into the player budget, fans get a return on their money and more of a connection with the club and we get a great facility for the future at Colney. My question would be, is the money given to the finance firm who then invest it on the stock market?  They give money to the club under a different title, thus not involving the club in any risk, but our money is invested in the stock market, so therefore is more at risk?  Or is it more straightforward and the risk is taken on by the club?

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On the face of it, it is far better than the ISA''s I currently have our savings in.

I am very tempted. And it will be doing the club a favour as well.

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On the Ed Balls involvement, is it of relevance that his younger brother Andrew is a very prominent and successful City businessman. Might he have been consulted on this proposal?

Has it been done elsewhere in football?

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As a cautious investor I am staying clear

Generally if an investment opportunity seems to good to be true then generally it is.

I put all my money in my company''s saye scheme which I have a secure and generous return.

This is high risk investment as the email from the club states

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