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Post by Deleted on Apr 16, 2014 14:20:54 GMT
Has I.L invested 6 to 7 million in the club as some would suggest or are they just his OUFC business losses. ? Discuss.
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Post by scotters on Apr 16, 2014 14:26:18 GMT
Well 'investment' is a generous word for him to use, as I don't imagine he ever expects to get much of it back.
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Post by kassamatemyhamster on Apr 16, 2014 14:35:13 GMT
OR it's the minimum figure that he's be prepared to sell the club for
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Post by ZeroTheHero on Apr 16, 2014 14:59:31 GMT
The old joke goes:
How do you make a small fortune out of owning a football club? Start with a large fortune.
Even more true if the club in question is in a lower division with (compared to other, international 'brands') small crowds and fan base, no ground and precious few assets.
Since IL's stated intention was to run the club on a break even basis and we are still losing money - I'd say that a substantial proportion of that figure is business losses rather than investment.
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Post by foley on Apr 16, 2014 15:10:53 GMT
OR it's the minimum figure that he's be prepared to sell the club for I would very much doubt if he will get anywhere near that amount for the club. it is certainly not worth it. So my suspicion is that he will have to be prepared to write off quite a lot of that if he ever wants to sell it (and there will be more to come in this year)
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Post by barmyarmy on Apr 16, 2014 16:15:53 GMT
Has I.L invested 6 to 7 million in the club as some would suggest or are they just his OUFC business losses. ? Discuss. Whats the difference? Lets for arguements sake say they are business losses, Will that mean you and the rest that cant go a week without having a pop at the owner stop the endless call for more investment?
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Post by pooshooter on Apr 16, 2014 22:03:27 GMT
Can't you just be happy we have a benefactor who keeps the club going?
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Post by pottersrightboot on Apr 16, 2014 22:09:11 GMT
I've ben told that Lenagan's sports performance software gets sold to many FL and Prem. clubs. And being on the 'inside' as owner of OUFC helps quite considerably in selling the product.
Maybe the overall financial burden to Lenagan and his family of owning OUFC isn't quite as bad as people like to make out.
Just a thought...
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Post by uptheus on Apr 17, 2014 7:07:35 GMT
I've ben told that Lenagan's sports performance software gets sold to many FL and Prem. clubs. And being on the 'inside' as owner of OUFC helps quite considerably in selling the product. Maybe the overall financial burden to Lenagan and his family of owning OUFC isn't quite as bad as people like to make out. Just a thought... And the reason why he's also the owner of Wigan Warriors! I suppose it helps to have you foot in both doorways!
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Post by foley on Apr 17, 2014 9:01:08 GMT
I've ben told that Lenagan's sports performance software gets sold to many FL and Prem. clubs. And being on the 'inside' as owner of OUFC helps quite considerably in selling the product. Maybe the overall financial burden to Lenagan and his family of owning OUFC isn't quite as bad as people like to make out. Just a thought... Very interesting and pretty good news in some ways.
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Post by Deleted on Apr 17, 2014 10:30:23 GMT
I've ben told that Lenagan's sports performance software gets sold to many FL and Prem. clubs. And being on the 'inside' as owner of OUFC helps quite considerably in selling the product. Maybe the overall financial burden to Lenagan and his family of owning OUFC isn't quite as bad as people like to make out. Just a thought... I'd heard that somewhere as well. (Probably from you come to think of it!) Whatever the Lenagans' motives for owning OUFC, they are a clear improvement on the previous regime and it's in their interest for OUFC to do well, so I'm happy with their continued tenure. Don't really see the point of this thread though. We all know the millions IL has put in to OUFC are his personal debt, not the club's. So long as they stay off the books and any future buyer doesn't have to take them on, it shouldn't hamper a future sale.
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Post by tomoufc on Apr 17, 2014 10:45:21 GMT
I've ben told that Lenagan's sports performance software gets sold to many FL and Prem. clubs. And being on the 'inside' as owner of OUFC helps quite considerably in selling the product. Maybe the overall financial burden to Lenagan and his family of owning OUFC isn't quite as bad as people like to make out. Just a thought... I'd heard that somewhere as well. (Probably from you come to think of it!) Whatever the Lenagans' motives for owning OUFC, they are a clear improvement on the previous regime and it's in their interest for OUFC to do well, so I'm happy with their continued tenure. Don't really see the point of this thread though. We all know the millions IL has put in to OUFC are his personal debt, not the club's. So long as they stay off the books and any future buyer doesn't have to take them on, it shouldn't hamper a future sale. It's the club's debt, unfortunately. At any time he could demand the money back from the club, or start charging interest. We really need to at least get to Wembley, for the money if nothing else.
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Post by Deleted on Apr 17, 2014 10:47:12 GMT
I'd heard that somewhere as well. (Probably from you come to think of it!) Whatever the Lenagans' motives for owning OUFC, they are a clear improvement on the previous regime and it's in their interest for OUFC to do well, so I'm happy with their continued tenure. Don't really see the point of this thread though. We all know the millions IL has put in to OUFC are his personal debt, not the club's. So long as they stay off the books and any future buyer doesn't have to take them on, it shouldn't hamper a future sale. It's the club's debt, unfortunately. At any time he could demand the money back from the club, or start charging interest. We really need to at least get to Wembley, for the money if nothing else. OK, thanks. My grasp of accountancy procedure is not great. So the term "soft debt" actually has no meaning, and is just debt or potential debt?
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Post by ZeroTheHero on Apr 17, 2014 10:53:12 GMT
'he could demand the money back from the club'?
As the owner and finance provider he would be demanding it back from himself. He knows exactly what assets the club has or hasn't got, and if he demanded his money back the club would fold and he'd get peanuts. The only way he is going to get any decent proportion of his money back is to get the club on an even keel and preferably promoted (twice?) and then he could sell it for reasonable money, if that's what he wants to do.
Which is why it's 'soft debt'. There's no point in him asking for it back.
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Post by scotters on Apr 17, 2014 10:57:32 GMT
OK, thanks. My grasp of accountancy procedure is not great. So the term "soft debt" actually has no meaning, and is just debt or potential debt? Sot debt just means he's charging a rate of interest below the market rate (in this case zero). It's still legally owed to him by the club in full. That said, it's not quite as bad as tomoufc is implying, with him able to drop the axe at any time. The club hasn't got any assets worth speaking of, and those that it does are owned by IL anyway. The only way he can make his cash back is by creating a club that makes money.
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Post by foley on Apr 17, 2014 11:22:21 GMT
Well he couldn't demand the cash back as there isn't any! In my view unless the Club suddenly become much more successful on and off the pitch there is no way that IL will get his money back. he will get some back but will lose much of it. He is also sensible enough tom realise that (but as PRB has suggested maybe he is getting extra value from owning OUFC). From the club's perspective whether the loan is £6M, £8M or £10m it hardly makes any difference. They will never be able to pay that back to IL.
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Post by undisputed on Apr 17, 2014 12:16:50 GMT
Correct me if I am wrong, but this is in the form of interest free loans from Woodstock Partners?
If thats the case then Lenegan really has ultimate discretion as to how much of the loans he expects to be paid off. This isnt club debt in the traditional form (loaned from banks) and so he may agree to a cut in the debt owed in order to offload the club, which is effectively what he is going to have to do if he wants to sell.
The club is worth a £1 and no more as it doesnt actually have any assets. Its what the club was brought for from Kassam. £1 plus £2.5m in agreed debt, which was supposedly quite a large cut from what Kassam originally had lent the club in the 24 months up to his selling. It was that period where he went from writing off the clubs debts with "investment" to calling the money "director loans" and making an account of them so that he could get them covered in the event of a sale.
Perhaps someone with some better accounting knowledge could shed some more light on that.
Was interesting to read that the club gets approached quite regularly with offers to buy, but few of them seem to be concrete offers.
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Post by Matt D on Apr 17, 2014 12:28:34 GMT
as others have said, the loan is from IL to the club, so he either needs to make OUFC profitable enough to pay him back, find a buyer for the club who is also willing to pay him back, continue to live with that loan, or write it off. so it's not a business loss for the club, although you might have a discussion about whether it is for IL (if someone is putting a lot of money in somewhere with little chance of seeing it again, you'd think there's a reason for this: love of a club, local pride, or it provides a business benefit as PRB suggests above. any or all of those things).
what i think hasn't been addressed on this thread that i think comes into the question of a difference between investment and loss is what has the money gone towards. if it's improving Us as a club, i would argue that you clearly talk about investment. so the money that's spent on the youth development set up, or a new contract for ryan clarke, for instance, i would say is definitely an investment.
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Post by tomoufc on Apr 17, 2014 15:09:20 GMT
It's a interesting point: if you loan someone money that you know they can't give you back because they have no assets that they could sell in order to do so, haven't you effectively just given them money? Why not just hand the money over? I suppose the idea is that were he ever to sell the club he could offload some of the debt onto a new owner. Perhaps there's some tax reasons too.
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Post by m on Apr 18, 2014 6:50:27 GMT
Has I.L invested 6 to 7 million in the club as some would suggest or are they just his OUFC business losses. ? Discuss. Sorry yellowwood, but could you please explain the difference for those 'hard of thinking' among us?
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Post by DevonYellow on Apr 18, 2014 20:42:57 GMT
How would it stand under FFP rules if a chunk of debt was written off? That's effectively a gift to the club. Can't remember how far down the pyramid the new rules go
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Post by bazzer9461 on Apr 18, 2014 21:02:49 GMT
How would it stand under FFP rules if a chunk of debt was written off? That's effectively a gift to the club. Can't remember how far down the pyramid the new rules go I am sure if IL turned it into a donation then it wouldn't come under scrutiny from the ffp prospective.
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Post by Millman on Apr 22, 2014 14:11:11 GMT
Surely the difference between an investment and a loss is with hindsight what value it has added to the club. I agree with Matt d the money spent on the youth setup is a potential investment. Or it will be if the youth players make it into the first team and onwards to be sold for a good profit. Money spent on the squad in the promotion year and Wilder's initial appointment was a definite investment as the club is worth more as a league club. Beyond that the rest of the cash (I think that covers the majority of it) must be seen as losses. Its either money spent on reasons like sports science and the pitch which you can't quantify any success of. Or is money extremely poorly spent like 200k of useless loans in one season.
IL might not have been in direct charge when the cash was frittered away but he did let it all happen so I feel the buck has to stop with him (and it does). I get the feeling IL is getting bored of putting endless money into the club and would love to get his money back and leave. Unfortunately he has been woefully unable to bring success to the club and is still some way from getting it to break even. I think he will need to invest more money into the club if he wants success. this time however he will have to be careful that it is an investment and not just covering further losses. I am not sure he wants to do this to the required level. Plus after a another disappointing season where zero progression was made the fans are beginning to become disillusioned. They no longer buy into his five year pipe dreams and awkward questions are starting to be asked.
I think next season will be critical for the club. We have to see on field improvement otherwise the club and its finances could be in trouble.
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Post by undisputed on Apr 22, 2014 23:16:44 GMT
I dont know enough about it at, but has there been an investment in the youth setup?
Did this entail new facilities etc?
I ask because the only change I can see to the youth setup at the club is the introduction of the development squad and if we are being honest with ourselves that money has come from the first team budget rather than as an investment from Lenegan.
The current losses at the club will only be sustainable for so long, and what worries me is the plan that Lenegan told us all about seems to be failing massively.
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Post by Millman on Apr 23, 2014 7:52:23 GMT
The youth setup itself costs the club a lot to run each year. We have quite a comprehensive setup so the cost is higher. Many other clubs to save cash have paired back or scrapped their setups. Thankfully at our club we not only have kept the youth system but have expanded it.
The dev squad is meant to be the pay off from this investment. It probably does come from the first team budget but the players will be cheap and if the youth system is good they will be good. For the club it is hoped to become a cheap way of obtaining good players, that then can be sold for profit. Thus funding itself and beyond that the club. Will it work? Only time will tell although the signs look promising that we are starting to see players who are good enough for the first team.
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