The end of our "debt" ???

[Moomin]

I reckon we should all start cooking some Meth, use the profits to pay the debts off and get us some high class hookers to party with while listening to some funky music.

 

[Garrick]

In many cases it's a good thing for a business (and Everton is a business) to have debt, as long as you have a manageable amount at a low interest rate.

Having more debt means more liquidity. More cash sitting around to invest in transfers, stadium improvements, etc.

Given that debt is pretty "cheap" right now because interest rates are low, there are probably many different investments a club can make right now that will give a better return than paying off debt early.

If your loan is 5% and you can make an investment that will give you 10%, then you'll make more money by investing instead of paying off the loan.

 

[Pat's Van]

I reckon we should all start cooking some Meth, use the profits to pay the debts off and get us some high class hookers to party with while listening to some funky music.

hmmm maybe, what music you thinking ???

 

[lmurkder]

Ok, so I have been thinking about our financial situation. You may know better figures than I do but I believe our debt currently stands at about £45m? we also had PLUS £11m from the transfer dealings and possibly a small "kitty" plus the television income is going to be nuts this season £60m is it? Also if Baines goes in January for £20m does this mean we should be debt free at the end of this season or even be in credit? Only worry is Bill et al will put the asking price up for the club!

No. Paying the debt off early results in penalty clauses.

 

[Moomin]

hmmm maybe, what music you thinking ???

George Clinton.

 

[Gwladys St. Glory]

I don't know what school of economics some of you went to but not paying off debt is asinine, penalty or not. The fact that someone would put a penalty on you paying them back tells you all you need to know. Christ on a bike...

 

[Garrick]

I don't know what school of economics some of you went to but not paying off debt is asinine, penalty or not. The fact that someone would put a penalty on you paying them back tells you all you need to know. Christ on a bike...

Keynesian, not Austrian. Thanks for asking though!

 

[Essex Blue]

I don't know what school of economics some of you went to but not paying off debt is asinine, penalty or not. The fact that someone would put a penalty on you paying them back tells you all you need to know. Christ on a bike...

That's like saying it is utterly stupid to get into debt in the first place, just because you end up paying far more than what you borrowed. But that clearly isn't always the case, otherwise clever people would never borrow money. The same goes for debt repayment, if you come in to money then you can pay the debt off and it will save you money in the long run, but it will be at the expense of not being able to invest the large sum of money that you are using to pay the debt back with.

Investing 40million in the squad makes far more sense than paying off 40million pounds worth of debt just so you can reduce your costs by five million pound a season. Football is won on the pitch, which is why paying off debt should be of secondary importance to investing in the playing squad.

 

[Gwladys St. Glory]

Doubt it, thanks for replying though!

 

[bluestevon]

I don't know what school of economics some of you went to but not paying off debt is asinine, penalty or not. The fact that someone would put a penalty on you paying them back tells you all you need to know. Christ on a bike...

sorry mate im just a supporter, i like to see the best team we can out playing on a saturday avvie like, ofc i should be more worried with cost sheets etc and the relative valuation for everton shares which would increase with no debt, however when it comes to losing our better players or not bringing in good players in order to satisfy an economic model i draw a line

YES everton would be debt free but sadly it would com at the cost of any sense of enjoyment from watching good players as we sold em all and now have to watch gash and getting tonked every game

Just as a point, penalty clauses for paying off debt is relatively routine practice in many different markets in modern days, its designed to make it actually cost a more (or at least to ensure that the interest payments are recouped in the penalty clause thus meaning no saving for paying it off early) to become debt free than to simply pay off the debt over the course of the initial lending agreement, playing upon the perceived notion that this is some amazingly desirable goal for any company or individual, simple fact is being debt free in practice mainly matters when costing the overall market value of a company, and as everton isnt really for sale its meaningless and would only drive any future price for the club higher than with it is under the current 25-40m in debt version

 

[mezzrow]

I reckon we should all start cooking some Meth, use the profits to pay the debts off and get us some high class hookers to party with while listening to some funky music.

Only if it's blue meth, though. Quality, y'know.

"paging Mr. Pinkman! Mr. Pinkman!"

 

[Goat]

Im interested to know what happens when the debts paid off myself.

I mean what then?

 

[Gwladys St. Glory]

Im interested to know what happens when the debts paid off myself.

I mean what then?

There are more probable things to worry about, TBH...like the club not capitalizing on the current forward momentum.

 

[Elong]

Im interested to know what happens when the debts paid off myself.

I mean what then?

Kenwrong will value the club even higher.

 

[Goat]

Kenwrong will value the club even higher.

Thats the thing tho, the debt doesnt mean anything to a buyer, cos he can simply do what the OP is suggesting, sell the players worth money and wipe it clean.