Club accounts - 'expert' help needeb

[lake district canary 4,531]

4 minutes ago, essex canary said:

In response to Lake District why should the clubs most loyal supporters, the Away supporters be obliged to make up shortfalls arising from home casuals and other teams away supporters?

I don't agree with the way the memberships were set up either, but I was merely suggesting that rather than the bond scheme causing some kind of shortall, it was more likely any perceived shortfall would have been from the reduction of tickets to £30 for casuals and away clubs' fans.

The bond scheme worked brilliantly for the club - a total win win project. The club got better facilities without having to resort to expensive loans and fans got the benefit of a decent rate of interest on any savings they put into it - and  the one year 5% interest plus the bonus payout was still much better for the club than if they had got a bank loan over five years at some ridiculous borrowing rate.

 

[Badger 2,405]

13 minutes ago, essex canary said:

In response to Badger furloughing is clearly vital to organisations with low and medium earners. It will eventually cost the government and taxpayer millions and risk a severe economic depression which is why I believe those organisations or industries that could potentially have scope to avoid it should take a socially responsible decision to do so. 

It will cost the govt billions but the aim is to prevent severe economic depression - not cause one! The socially responsible decision is to take the furlough scheme if your employees and can't work full time and if you can afford it, make up the 20%.

If businesses are severely affected by coronavirus there is a clear hierarchy of the responsible thing to do:

1. Most responsible action - take govt's furlough scheme and make up the 20%

2. Second most responsible - just take the furlough scheme.

3. Third most responsible - pay staff out of retained profits.

4. Lay staff off.

Firms that lay off staff are the ones being most irresponsible, followed by those that pay the staff out of retained profit (I don't how sustainable that is - it is the second most irresponsible!) and then those that take the furlough money without making up the difference.

Govts around the world, of all political persuasions, are trying to prevent the medical disaster turning into a huge economic crisis by taking extreme economic action. 

 

[essex canary 492]

In response to Lake District the most responsible thing to have done would have been to have anticipated the need and put £1 million aside for say each of 5 years to meet ongoing Premises needs. £1 million less on Players wages each year is likely to have minimal impact on performance. 

To Badger I broadly agree but perhaps I would go for an option zero -  rearrange your business or industry outgoings from high earners to low earners and know that you have a plan in place to avoid furlough. A cap on footballer wages at £1 million a year would probably suffice. No roofs overhead or food on table would be threatened either in the short term or long term. 

 

 

 

[Badger 2,405]

2 minutes ago, essex canary said:

A cap on footballer wages at £1 million a year would probably suffice. No roofs overhead or food on table would be threatened either in the short term or long term. 

Personally, I wouldn't oppose a pay cap on everybody of one million pounds pa - not just limited to football - but it's never going to happen - and those to the right of me politically believe that it would be hugely damaging to the economy in general and British football in particular (TVB said as much in a recent post).

In the particular case of football, it could only be implemented at the end of players current contracts, which in NCFC's case is often in 2022 or 2023. It won't happen in football anyway, whether or not some might consider it a good thing. 

[TIL 1010 4,722]

2 hours ago, essex canary said:

To Lake District and TIL. Yes shareholders did sign up for no cash dividend.

So why are you ' more than a little bit peeved ' that you did not get a payout upon promotion ?

[essex canary 492]

To Badger. Keynesian Economics which was the foundation of the post war boom promotes exactly the opposite that putting more money in to the hands of the less well off encourages spending as opposed to saving which therefore protects the economy better. Now we are seeing the true value of medics, care workers etc. hopefully we are going back there. 

[essex canary 492]

To TIL. 18 years ago the Club excluding Board member investment the Club raised nearly £2 million from the share issue. Following a 17 month investment it then distributes nearly £2 million in interest to bondholders. As a shareholder I never signed up for a transfer of wealth on that basis. The maximum reinvestment in the Club argument is supported by my response to Lake District above. 

[TIL 1010 4,722]

6 minutes ago, essex canary said:

To TIL. 18 years ago the Club excluding Board member investment the Club raised nearly £2 million from the share issue. Following a 17 month investment it then distributes nearly £2 million in interest to bondholders. As a shareholder I never signed up for a transfer of wealth on that basis. The maximum reinvestment in the Club argument is supported by my response to Lake District above. 

You are comparing apples with pears. You knew from the outset that purchasing shares in 2002 would not pay a dividend but the recent Bond issue clearly stated that there would be a return on that investment.

[Badger 2,405]

45 minutes ago, essex canary said:

putting more money in to the hands of the less well off encourages spending as opposed to saving which therefore protects the economy better. Now we are seeing the true value of medics, care workers etc. hopefully we are going back there.

Yes, I would certainly agree with that - its one of the reasons why the current furlough scheme is so important and why businesses must take it up.

Your general point about Keynesian economics promoting growth is also correct. Keynesian economics secured a period of sustained economic growth with encouraged by relatively high levels of govt expenditure, which also saw a big drop in national debt. This went out of fashion in the 70s and from then on we have tended to have governments that wanted to have a reduced role in the economy and national debt has started rising as a consequence.

The history of the last 100 years tends to show higher levels of government expenditure leads to lower govt debt and vice versa. I know it seems counter intuitive to some, but is clearly explained in Keynesian economics.

[essex canary 492]

Would it not be the case that if governments support businesses with average salaries of £200k they would later have to recover that debt through taxation that may hit people,  amongst others, with only £20k annual income which as a consequence would slow down potential recovery further down the line and risk a depression oriented spiral especially given that people on low income have high propensity to spend? 

[nutty nigel 7,510]

Essex, being a shareholder since 2002 doesn't give you any special rights or make you any more important than any other shareholders. Anyway the bond issue was open to all, not just shareholders. All were invited to pre register under no obligation and then a couple of weeks later those who were pre registered had the opportunity to buy. What were they supposed to do? Make everyone wait for you because you brought shares in 2002? (poet🙃)

The terms of the bond including the possible promotion bonus were clear before any were sold. If you look back at the thread on here people who wanted nothing to do with the bond were declaring that the bonus was pie in the sky and would never be paid. The bonds were unsecured and that put many off. However there was a clause for them to be repaid if the ownership of the club changed during the bond lifetime. It was that clause that made my mind up to search for the £500 in the back of Mrs Nutty's wardrobe...

To my knowledge there's never been a bonus or a dividend paid on ordinary shares. I've had mine since 1980 and there certainly hasn't been in the 40 years since then.Surely there being no dividend or bonus paid was in the terms when you purchased your shares in 2002?

Edited April 18, 2020 by nutty nigel
Hidden talents

[Badger 2,405]

17 minutes ago, essex canary said:

Would it not be the case that if governments support businesses with average salaries of £200k they would later have to recover that debt through taxation that may hit people,  amongst others, with only £20k annual income which as a consequence would slow down potential recovery further down the line and risk a depression oriented spiral especially given that people on low income have high propensity to spend? 

If they have got any sense they won't try and recover the debt any time soon. That's why we ended up borrowing so much money in the previous decade - i.e. by trying to pay it back too early. This had the consequence of stifling growth which has been very low ever since as well as very low levels of productivity growth in recent years.

The sensible thing would be to wait until economic recovery has fully settled in and we have consistent growth of 2%+ which is the trend rate over decades (not the last one!) and then just make sure that growth is greater than any rise in public expenditure. Recent borrowing is at very low interest rates (possibly negative in real terms) and we are still at relatively low levels. Trying to pay money back too early is the biggest risk and could cost trillions over time. I hope that Johnson is less ideological about it than Cameron was - my guess is that he will be - it seemed to be the direction he was going in before the Corona virus, and he has tried to be radical economically in his response so far. 

[essex canary 492]

To Nigel. Point taken though the share offer operated to a fixed deadline and as such if oversubscribed would presumably  have been scaled down accordingly. Therefore puzzling as to why the Bond didn't operate on the same principle? I didn't attend the Carrow Road meeting and therefore may not have been fully familiar with process. That was never a problem with the Share Offer that I believe was far more professional in execution. 

To Badger. I guess we have to hope that that is the case. It is inevitable that at some point in time we get a government that acquires an obsession with the National Debt even if most of it belongs to its own citizens. 

[nutty nigel 7,510]

The bond and the shares are two totally different things. They are not comparable like that.

The share issues are another reason that Delia and Michael have so many. In order for the issue to be made it has to be underwritten. So if all the shares aren't taken the underwriters have to buy them. I think that's how it works but I'm just a bog cleaner and you accountant types will know.

So when you asked about the shareholdings it's really self explanatory from the history. Geoffrey Watling got no acceptable offers and chose to sell Chase's shares and his own to Delia and Michael. There were then share issues that D&M underwrote. So you can see that they got most of their shares because no one else wanted them. The rest came from conversion of loans. For the club's benefit and not theirs. As always it's after the event that people claim they would have invested.

I'm sure proper FPAs will correct anything I got wrong but that's how I remember it.

Edited April 18, 2020 by nutty nigel
I'm not too bright..

[Herman 9,717]

11 hours ago, essex canary said:

To Nigel. Point taken though the share offer operated to a fixed deadline and as such if oversubscribed would presumably  have been scaled down accordingly. Therefore puzzling as to why the Bond didn't operate on the same principle? I didn't attend the Carrow Road meeting and therefore may not have been fully familiar with process. That was never a problem with the Share Offer that I believe was far more professional in execution. 

To Badger. I guess we have to hope that that is the case. It is inevitable that at some point in time we get a government that acquires an obsession with the National Debt even if most of it belongs to its own citizens. 

The bond issue was for a set sum. It raised it very quickly. People like me dithered too long and missed out. That's life.

The share issue didn't have a fixed sum but a deadline so people like me knew how long we had to get our money in.

As the others have said they were different scenarios, apples and oranges.

[Van wink 2,994]

The bond offer was a great deal for us, those that invested, and for the club. Excellent job all round. 

[Mello Yello 2,281]

43 minutes ago, Van wink said:

The bond offer was a great deal for us, those that invested, and for the club. Excellent job all round. 

I wonder if any of the club hierarchy invested in the bond and also got a great deal?..... 

[Van wink 2,994]

4 minutes ago, Mello Yello said:

I wonder if any of the club hierarchy invested in the bond and also got a great deal?..... 

Don’t live in ignorance, give  Delia a ring and ask her 😀

[essex canary 492]

The 2018 Accounts page 35 lists Board Directors who did. This means they were involved both in approving a 'great deal' and personally benefitting from it. Hmmm. Whilst of course the point about no-one expecting us to get promotion last season is true that doesn't necessarily mean that 25% is a reasonable rate for a promotion bonus. Preference share holders got such a bonus in 2004 but only at 5%. The whiteboard in reception at Colney lists all contributors including executive team members also. In the first instance they may have felt they were leading by example but in the end they only crowded out more ordinary fans and in my opinion everyone got a far better deal than they ought to have done. That said I don't blame any genuine fan who took what was on offer and the early bird catches the worm etc

[Mello Yello 2,281]

35 minutes ago, Van wink said:

Don’t live in ignorance, give  Delia a ring and ask her 😀

You don't happen to have the dialing code for Stowmarket do you?......

[TIL 1010 4,722]

11 hours ago, nutty nigel said:

The bond and the shares are two totally different things. They are not comparable like that.

 

As i told him Nutty in my earlier post he is comparing apples and pears.

[TIL 1010 4,722]

Stefan Philips £25,000

Steve Stone £20,000

Tom Smith £15,000

Ed Balls £5,000.

 

[PurpleCanary 5,554]

On 18/04/2020 at 10:13, PurpleCanary said:

I cannot have been paying attention, essex. Who and what and when and how much?

Essex, you been answering everyone else's questions but not this one, which asked for specifics on this director:

The club currently has a director whom I believe has never bought any significant shares with his own money but then puts the same amount of money in bonds for 17 months compared to my 17 years and draws this huge return whilst the bond scheme gets closed unexpectedly and prematurely. This same director then makes negative judgements upon significant shareholders entitlements. To my mind that is not right but it falls on deaf ears at NCFC. 

Who is the director and exactly how much has he or she spent on shares and exactly how much did he or she invest in the bond scheme, and so how much was their return on that investment, and what were the negative comments. I am not necessarily making a point. I am just interested to know the details on which you have based your point.

[TIL 1010 4,722]

9 minutes ago, PurpleCanary said:

Essex, you been answering everyone else's questions but not this one, which asked for specifics on this director:

The club currently has a director whom I believe has never bought any significant shares with his own money but then puts the same amount of money in bonds for 17 months compared to my 17 years and draws this huge return whilst the bond scheme gets closed unexpectedly and prematurely. This same director then makes negative judgements upon significant shareholders entitlements. To my mind that is not right but it falls on deaf ears at NCFC. 

Who is the director and exactly how much has he or she spent on shares and exactly how much did he or she invest in the bond scheme, and so how much was their return on that investment, and what were the negative comments. I am not necessarily making a point. I am just interested to know the details on which you have based your point.

Of those i listed Purple Tom Smith and Stefan Philips only hold 104 and 100 ordinary shares respectively so this surely is what essex is on about ? I have not taken into account Ed Balls or Steve Stone as they are no longer on the board, however they also at that time only held 100 ordinary shares each.

Edited April 19, 2020 by TIL 1010

[PurpleCanary 5,554]

18 minutes ago, TIL 1010 said:

Of those i listed Purple Tom Smith and Stefan Philips only hold 104 and 100 ordinary shares respectively so this surely is what essex is on about ?

Thanks. I hadn't seen that list. i am guessing then that Tom Smith is the target. A few points The bond was announced on March 8 with a launch date of March 28. So 'ordinary' fans had at least 20 days in which to decide whether to invest and if so to get the money together. And the original target was £3.5m, rising to £5m. I think everyone was taken by surprise by the demand. And those four directors put in only £65;000, leaving £4.935m for fans.

PS. In fact the offer was closed a day before the March 28 date, because the £5m target had been reached, with many fans  having had time to decide to invest and to submit their applications before the offer was made available to the general public.

Edited April 19, 2020 by PurpleCanary

[wcorkcanary 4,329]

Two completely different 'contracts'. Not comparable. Only commonalities are NCFC and money. Always going to upset someone. 

Better make some wine vinegar ....cos those grapes are sour.

[ricardo 7,348]

2 hours ago, Herman said:

The bond issue was for a set sum. It raised it very quickly. People like me dithered too long and missed out. That's life.

 

As one who also dithered too long I wish to express my moral outrage that some people have profitted from this scheme.

Surely they should now be called upon to use this dirty money to finance the funding of furloughed staff.

Signed

Virtue Signaller from the River End.

[essex canary 492]

The penny is beginning to drop with some of you. Phillips and T Smith acquired those 100 shares a piece at the nominal price of £1 per share. I paid £25 per share for my 1,000 shares. The 4 directors including 2 now ex directors have received £21,000 in interest from this scheme. That does not include the  2 Webber who also subscribed or presumably Phillips partner who likewise participated. In my opinion the very least they can do when claiming to have made donations to the NHS is to have made contributions from their own pocket beyond whatever they received. 

[essex canary 492]

The negative judgement issue concerns whether an inheritor of 1,000 shares should get a better deal than the inheritor of 1 share in relation to non cash benefits? 

[Badger 2,405]

1 hour ago, essex canary said:

In my opinion the very least they can do when claiming to have made donations to the NHS is to have made contributions from their own pocket beyond whatever they received. 

Why?

I don't understand why we should expect any individual to just give away money to the NHS? As an electorate we have decided for years not to fund the NHS properly and now some seem to be identifying random individuals who should donate money.

If we want the NHS to be properly funded and its staff and other essential workers to be paid properly, we should vote for it, rather than expect a series of random individuals to make voluntary contributions for reasons that remain unclear to me. We ultimately have the choice.