KENWRIGHT HAS TO GO.

[Bruce Wayne]

Bruce a question mate if you dont mind, what do you think the long term implications are for the club if the move to the new stadium doent happen? Is it pretty much as was and we will be in the situation we find oursleves is for the forseeable and perhaps long term future?

It doesn't look good at all. Last year we lost some £9.5m after player trading, down slightly from the £10m loss the year before that. If you take out player trading we're still losing money, allbeit not so much at £0.5m. We can't keep going like this. Last year we paid nearly £3m in interest, which is around 5.5% of turnover.

I did some analysis a while back on our gearing etc.

The traditional ratio for measuring liquidity is the current ratio (assets/liabilities). Creditors generally prefer a high rating as it means they are likely to be paid back. Shareholders generally prefer a lower rating so more of the capital is employed in making money. Obviously you don't want to be too low that you can't meet your obligations however.

As it stands our ratio is 0.14. Pretty poop. Also when you're talking about liquidity it's better to have cash in hand rather than debtors or other less liquid assets. We have no cash in the bank according to the reports.

To determine the long term solvency you can use the debt ratio (total debt/total assets). Unlike liquidity ratios that are concerned with short-term assets and liabilities, debt ratios measure the extent to which the firm is using long term debt.

Our figure stands at 1.30 (roughly). Basically anything over 1 means you have more debt than assets.

Our finances aren't good. Obviously it's hard to say how long we can continue as is but we can't be too attractive to lenders right now, especially in the current climate. I dare say a reasonably high level of lending is possible because with Sky and relatively stable attendances you have a pretty predictable level of income. It will be interesting to see what Sky do when the contract is up for renewal. Whilst on one hand it seems implausible that they'll up the bid again, in an increasingly fragmented tv market sport does offer one of the surest ways for broadcasters to deliver mass audiences to advertisers.

Kenwright has said that we need an investor, and it appears we need one pretty desperately. Getting Kirkby resolved would appear the best way to get an investor in the short-term.

I don't really but the concern over attendances. Of course they're not selling out Goodison at the moment but there are many reasons for that. The performances on the pitch are undoubtably one but personally I don't think it's the main one.

The credit crunch is looming large and is undoubtably playing a massive part in how people spend their money.

Finally you have the facilities. I dare say for many in the Sky generation paying through the nose to sit in a shitty stadium takes a fair bit of dedication. If you go to a modern stadium the facilities swamp what we can offer. If we want to charge comparable ticket prices we need to offer comparable prices.

 

[chicoazul]

What about Davek said about putting ourselves in loads of immediate debt though, thats a really bad thing no?

 

[Goat]

*hides* cos Bruce is talking figures and facts.

Doesnt make good reading tho, the facts are we can ignore the ever increasing credit crunch only for so long, in my view after christmas, when everyone spends far more than they have got, we are gonna be slap bang in the middle of a major recession. Im pretty sure then none of us will have much interest in a takeover.

 

[chicoazul]

Bruce, in some way, is the anti-Davek.

Its like some old western "fact off".

 

[Neiler]

*hides* cos Bruce is talking figures and facts.

Doesnt make good reading tho, the facts are we can ignore the ever increasing credit crunch only for so long, in my view after christmas, when everyone spends far more than they have got, we are gonna be slap bang in the middle of a major recession. Im pretty sure then none of us will have much interest in a takeover.

But Kenwirght out!

The sad thing is this will probably be met with thunderous applause by most.

 

[Goat]

But Kenwirght out!

The sad thing is this will probably be met with thunderous applause by most.

Well i was more getting at the fact that most of us will be wondering how to keep our house rather than whos in charge of the club.

But clearly KENWRONG out always.

 

[chicoazul]

Well i was more getting at the fact that most of us will be wondering how to keep our house rather than whos in charge of the club.

But clearly KENWRONG out always.

Thats what makes me think its a bit bang on ruling out a stadium share.

 

[Goat]

Thats what makes me think its a bit bang on ruling out a stadium share.

I didnt rule it out, im all for it.

 

[chicoazul]

Not you lid, those mentalists who say stuff.

 

[Goat]

Not you lid, those mentalists who say stuff.

k buddy just making you aware of my stance, we ride together we die together homie.

 

[Bruce Wayne]

What about Davek said about putting ourselves in loads of immediate debt though, thats a really bad thing no?

It's a valid concern. As mentioned in the thread I linked to, the size of debt doesn't matter as much as the ability to pay it off. For instance homeowners typically have a mortgage several times annual 'turnover'. Likewise Arsenal and Man Utd have huge debts but have the revenue to support the debts and still turn a large profit.

The problem for me seems to be two fold.

Firstly there will be a period of time when the stadium is being built where the debts will grow faster than the revenues intended to support them. Clubs typically finance this stage of development by selling naming rights, , advanced sales of boxes, concessions etc. and debentures based on the expected income tied to the new stadium.

Secondly the stadium probably won't generate the kind of cash seen at Old Trafford or the Emirates. The revenue estimates published by the club are somewhat underwhelming but perhaps not surprising given the lag in ticket prices between us and the rest of the PL elite. Maybe this is what was meant when the city wasn't particularly investor worthy.

Of course you have to look at the alternatives and at this stage I don't really see many. It's hard to say a great deal more without knowing the mechanations behind any takeover talks. Keith Harris has said a few things in public but we don't know the details of discussions he's had with potential bidders and any objections they've had etc. If the planning consent for a new stadium is required prior to takeover then it takes on added importance.

 

[chicoazul]

Nice one Bruce.

 

[Seamus Colemole]

So where do we stand in relation to other Premier league clubs in terms of debts/having no money?

Are we in the biggest mess compared to others or are doing ok compared to others?

 

[Goat]

Well, im not sure, its clear there are worse run clubs than us, but i think in some respect BK has done a decent job, hes kept us bobbing along, hes broke the transfer record 3 times, its not easy to do that, thats the 1 thing we should thank him for, thankfully Leeds is an example to every1, it could have been anyone.

 

[chicoazul]

Moyes does that blag thing every year where he moans about us being skint to stop other clubs ripping us off. We've got a few grand under the floor boards I reckon.