14million debt written off by SL in shares

[CyderInACan]

6 minutes ago, Dredd said:

Personally I am extremely grateful to him for every penny he has poured into the club, players, stadium, training ground, academy etc etc, but that doesn’t make him above scrutiny and I think he knows and accepts that with good humility

There wasn't much of that famous humility on show when he said (along the lines of) "it's my club, I'll do what I want with it" a few years ago mind. 

[Hxj]

The transaction has one purpose only and that is to comply with FFP.  The capital contribution simply enables the club to access the higher £13 million loss limit a year rather than the restricted loss limit of £5 million a year.

As to scrutiny it has to be a two way track, good things should be recognised and bad things should be recognised equally.  

 

[lenred]

9 minutes ago, Dredd said:

I can’t see SL getting back anything like the money he’s poured into the club over the last 20 odd years. 
Personally I am extremely grateful to him for every penny he has poured into the club, players, stadium, training ground, academy etc etc, but that doesn’t make him above scrutiny and I think he knows and accepts that with good humility. Despite taking a step back a few years ago when things get tough it’s always him who steps out of the shadows and gives a message, or goes on Twentyman etc and I’d much rather hear from him as someone who is obviously emotionally invested in the club than a suit like Ashton. 

Hmmmm, not sure how much ‘humility’ he shows.  What about the infamous comment about us ‘fans having the right when they put as much money in as me’ (I’m paraphrasing).  And as for stepping out of the shadows - he had to. The bloke he entrusted our club with lock stock and barrel went behind his back and shafted him and his son, the other option, was in Bermuda! 

[Ziderarmy]

1 hour ago, CodeRed said:

It's not "written off" though, despite Gregor's expression.

He has converted Debt to equity, so he owns more shares. When he sells the club one day he will sell those shares and get what they are worth (to someone who wishes to purchase the club).   If (big IF right now)  the club reaches the PL the value of those shares will increase massively.

It's good news but it's not a gift.

He has said Jon doesn't want to be involved "going forward", so one day the club WILL be sold.

 

When did he say that? I’ve not seen that reported. 

[Davefevs]

Could the footballing accounting side move from £129m to £156m highlight that our losses might be in the region of £27m for 20/21.  Two txns today, the £14m Holding Company change, and a £26.6m for BCFC Ltd.

[Supersonic Robin]

Part of me feels a bit sorry for SL. Absolutely feel he's tried to do what's best for the club during his time here, and has written off debts like this time and time again, but has obviously never achieved Premier League football.

There seem to be some much less wise owners who have achieved far more.

I'm not too clued-up on the way things are run at the top end of other football clubs. Is there anything notable that other owners have done to achieve success at their respective clubs, which SL hasn't done with City? 

[BigTone]

2 hours ago, CodeRed said:

It's not "written off" though, despite Gregor's expression.

He has converted Debt to equity, so he owns more shares. When he sells the club one day he will sell those shares and get what they are worth (to someone who wishes to purchase the club).   If (big IF right now)  the club reaches the PL the value of those shares will increase massively.

It's good news but it's not a gift.

He has said Jon doesn't want to be involved "going forward", so one day the club WILL be sold.

 

He sold them to me for £10 each

[Sturny]

Did we finally agree to Famara's wage demands or something? 

[The Hustler]

Usually means something's afoot...

[BigTone]

1 minute ago, Supersonic Robin said:

Part of me feels a bit sorry for SL. Absolutely feel he's tried to do what's best for the club during his time here, and has written off debts like this time and time again, but has obviously never achieved Premier League football.

There seem to be some much less wise owners who have achieved far more.

I'm not too clued-up on the way things are run at the top end of other football clubs. Is there anything notable that other owners have done to achieve success at their respective clubs, which SL hasn't done with City? 

Please see Derby County

[Supersonic Robin]

15 minutes ago, BigTone said:

Please see Derby County

I might be missing something here, but assuming you're talking about the Mel Morris era, I wouldn't say Morris has helped Derby to achieve any real success? 

A few play-off involvements, but no promotion and now looking in a dreadful state.

[CodeRed]

30 minutes ago, BigTone said:

Please see Derby County

 

32 minutes ago, Supersonic Robin said:

 

There seem to be some much less wise owners who have achieved far more.

 

Or alternatively Norwich City

I know the old girl got a lot of ridicule when she'd been on the Chardonnay (and TBF - we all like a drink!) but Delia does knock out a decent pie and surprisingly under her stewardship they have appointed, recruited, and performed quite well. And she's not in SL's league financially.

[CodeRed]

4 minutes ago, Supersonic Robin said:

I might be missing something here, but assuming you're talking about the Mel Morris era, I wouldn't say Morris has helped Derby to achieve any real success? 

A few play-off involvements, but no promotion and now looking in a dreadful state.

Whoosh

[lenred]

1 hour ago, CyderInACan said:

There wasn't much of that famous humility on show when he said (along the lines of) "it's my club, I'll do what I want with it" a few years ago mind. 

Put far more eloquently than my attempt!  But that comment and tone of that interview has really stuck in my craw ever since. Rightly or wrongly I just thought it showed utter contempt for us as supporters. If it’s what he believes then that’s up to him but to come out and publicly say it, well a lot of good faith was lost that day, from me and others I know.  

[Major Isewater]

41 minutes ago, The Hustler said:

Usually means something's afoot...

No but it’s a good ten inches.

[Supersonic Robin]

12 minutes ago, CodeRed said:

Whoosh

haha, my bad - I thought it may have just been a crap attempt at a joke but worth making sure 

[Jerseybean]

1 hour ago, ziderheadarmy said:

When did he say that? I’ve not seen that reported. 

https://www.bristolpost.co.uk/sport/football/bristol-city-steve-lansdown-debt-5483153

[Mr Popodopolous]

First as @Hxj says, it enables us to go to the Upper rather than the Lower Loss limit- that has to be a positive.

Secondly, it basically means we owe him £14m less in debt, assume it's historic debt- debt to equity. Improves a balance sheet, owners can put in as much as they like, but only (if a perennial Championship club) £24m counts towards P&S in any 3 year period- we're now at that point. Without it the Upper Loss Limit I guess would be £25m, if none at all it'd be £15m (plus Allowable Costs).

Could also help to improve the picture for any a) Prospective buyers or b) Make it look better for any prospective investors. In terms of further impact on the P&L, could it help reduce future Interest payments, if indeed there is any to SL? ie Interest of 2% on £50m loan would be £1m...reduce debt by £14m, 2% on £36m? Saving of £280k. (Not saying this is the picture, just a possible illustrative example).

Months since I've looked at our Accounts tbh.

As for SL himself, I've long had him in a certain bracket of ownership- albeit with less on-field success. Same category as Gibson at Middlesbrough and the Coates family at Stoke- Wealthy, all fairly local, all fairly reliable custodians, likely to keep a club afloat etc- fit a certain model basically (albeit the last of these could be moving into FFP breach territory-  but at the same time, I wouldn't expect them to put the clubs actual future at risk).

Mel Morris- not at all now but until the Stadium debacle and the rest he could have been in this bracket. Arguably was until 2018.

[smpAWP]

I'm not very clued up on matters of football finance - but is this the exact same thing that the club down the road did? 

 

Wael was lauded by the gas, but criticised on here.

[Mr Popodopolous]

Yep, our underlying loss without Profit on Transfers was between £30-35m- but most clubs losses will look fairly horrendous in 2020/21.

Another metric is Loss Before Transfers which the P&L Account helpfully lists- would be nice to think that this would be closer to the underlying loss in 2020/21, but likely won't be.

There will be some cost savings too- costs of putting on matches ready for the Public, costs of matchday staff, Policing and the like- but these will be far outweighed by a) The underlying loss pre disposal of Players and b) The universal Costs of Covid.

Reckon we made £2-3m in Profit on Disposal on Players season just gone- am estimating a loss of £30-35m before Covid costs which will pile it up again. Have we deferred PAYE like a lot of Championship clubs? That could eat into future expenditure if so. If not, that could put us at a comparative advantage. I remember saying at the time that if at all possible, it should be avoided- unless the arrangements have changed, the PAYE loans are repayable by Summer 2024, taken out of Parachute (for those lucky few) Payments or Solidarity Payments. ie Borrow £6m from the Facility, PAYE paid down- but £6m less between 2021/22 and 2023/24 coming out of Parachute/Solidarity Payments.

Otoh, if the £14m was tied to this, it is a bit of a silver lining. I remember referring to it back in January...the loans replaced loans that fell due now and were 2% above the Barclay's Base rate, balance due start of May 2040. If that £14m is tied into that then that is 20% lopped off.

Secured through Fixed and Floating Charges...all to Pula/the Lansdowns though.

 

[Davefevs]

24 minutes ago, Mr Popodopolous said:

Yep, our underlying loss without Profit on Transfers was between £30-35m- but most clubs losses will look fairly horrendous in 2020/21.

Another metric is Loss Before Transfers which the P&L Account helpfully lists- would be nice to think that this would be closer to the underlying loss in 2020/21, but likely won't be.

There will be some cost savings too- costs of putting on matches ready for the Public, costs of matchday staff, Policing and the like- but these will be far outweighed by a) The underlying loss pre disposal of Players and b) The universal Costs of Covid.

Reckon we made £2-3m in Profit on Disposal on Players season just gone- am estimating a loss of £30-35m before Covid costs which will pile it up again. Have we deferred PAYE like a lot of Championship clubs? That could eat into future expenditure if so. If not, that could put us at a comparative advantage. I remember saying at the time that if at all possible, it should be avoided- unless the arrangements have changed, the PAYE loans are repayable by Summer 2024, taken out of Parachute (for those lucky few) Payments or Solidarity Payments.

Otoh, if the £14m was tied to this, it is a bit of a silver lining. I remember referring to it back in January...the loans replaced loans that fell due now and were 2% above the Barclay's Base rate, balance due start of May 2040. If that £14m is tied into that then that is 20% lopped off.

Secured through Fixed and Floating Charges...all to Pula/the Lansdowns though.

 

£2.8m transfer profit in my xls!

Only Williams commanded a fee last summer, so small increase in amortisation each year.

[Mr Popodopolous]

3 minutes ago, Davefevs said:

£2.8m transfer profit in my xls!

Only Williams commanded a fee last summer, so small increase in amortisation each year.

Yep, agree with that. Does that also include the Cost Saving from Eliasson- ie the Amortisation cancelling out on the final year.

It's Fee-NBV=Profit or Loss on Disposal, however if in final year the remaining NBV and Amortisation cancel each other out, so it's Fee-NBV-remaining Amortisation=True Profit/Cost Saving.

[Davefevs]

5 minutes ago, Mr Popodopolous said:

Yep, agree with that. Does that also include the Cost Saving from Eliasson- ie the Amortisation cancelling out on the final year.

It's Fee-NBV=Profit or Loss on Disposal, however if in final year the remaining NBV and Amortisation cancel each other out, so it's Fee-NBV-remaining Amortisation=True Profit/Cost Saving.

DMd you

[BigTone]

2 hours ago, Supersonic Robin said:

I might be missing something here, but assuming you're talking about the Mel Morris era, I wouldn't say Morris has helped Derby to achieve any real success? 

A few play-off involvements, but no promotion and now looking in a dreadful state.

Maybe I am confused but I mean the exact opposite

[Simon79]

5 hours ago, CodeRed said:

It's not "written off" though, despite Gregor's expression.

He has converted Debt to equity, so he owns more shares. When he sells the club one day he will sell those shares and get what they are worth (to someone who wishes to purchase the club).   If (big IF right now)  the club reaches the PL the value of those shares will increase massively.

It's good news but it's not a gift.

He has said Jon doesn't want to be involved "going forward", so one day the club WILL be sold.

 

Has he? When did he say this? COYR 

[havanatopia]

6 hours ago, Eddie Hitler said:

 

It's a bit more nuanced than that IMO.

The new share issuance may have increased the Lansdowns' holding by 1% (say) but as 1% of the club isn't worth £14m, which would value the club at £1.4bn, they're not really gaining anything from the increase in holding.

They are, however, in converting this debt to equity, increasing the net assets of the club, and hence its value, by £14m.  In that respect they're not actually losing anything as they own the club and see this benefit.

Though that isn't tax efficient as a repayment of debt is tax free whereas profit on sale is subject to Capital Gains Tax.

Where it is of benefit to the club is that the Lansdowns are showing themselves not to be shyster owners like the Glazers who are happy to pour a debt burden, and a debt interest burden, onto the club to line their own pockets and make it an unattractive prospect to new investors or a buyer.

 

On balance it is a good thing for the club which comes at a cost to its owners. I would rather that they did this than didn't do it.

Could they simply not be diluting the value of each share? I am pre supposing they have A shares and B shares so Joe Blogs B shares remain the same 'nominal' value? It is simply an accounting procedure or neutral value effect. 

[ExiledAjax]

4 minutes ago, havanatopia said:

Could they simply not be diluting the value of each share? I am pre supposing they have A shares and B shares so Joe Blogs B shares remain the same 'nominal' value? It is simply an accounting procedure or neutral value effect. 

It's a new issue of shares, so the par value of each share should be consistent with the existing class that Pula own. That does mean that this effectively adds £14m (assuming it's £14m of par value that he's gotten - I doubt Gregor has distinguished between par and premium, and the SH01 as published doesn't need to iirc) to the value of the club. 

Presumably the loan was in the form of a convertible loan note and so Pula has simply converted the Notes into shares. If so the conversion price may have been fixed at the time the Notes were issued, or it might have been calculated recently. It's unlikely to be simple par value though, as that probably wouldn't be considered an "arm's length" transaction. 

Either way, the rub is that ultimately this is useful to the club from an accounting perspective, and really doesn't change the real "value" of the club or Pula/SL's holding in it, although most investors would rather equity over debt.

And yeh there's no way in hell Pula own the same class of shares as those issued to fans. One day I'll read the articles of the company, but not this day.

[havanatopia]

OK so almost right... A paper exercise. 14 million additional in share value. Do we know the value of each share?

[TonyTonyTony]

7 hours ago, Kid in the Riot said:

"We're so lucky to have him as our owner" etc etc 

You could also be grateful? It’s clear from your posts on here you want a new owner, and that is fine, but it’s not that hard to show a bit of respect. Writing off 14 Million isn’t insignificant - particularly in the current climate. 

[Kid in the Riot]

8 minutes ago, TonyTonyTony said:

You could also be grateful? It’s clear from your posts on here you want a new owner, and that is fine, but it’s not that hard to show a bit of respect. Writing off 14 Million isn’t insignificant - particularly in the current climate. 

The current climate has been very tough for us ordinary folk. It hasn't been tough for billionaires like Steve. In fact the number of UK billionaires has increased over the past 12 months. Steve's wealth has increased.

Steve authorises the spending of the football club which he owns in its near entirety (99%). He his paying some of that debt off, which he has authorised because he knows he can comfortably afford it, and put into shares in the club. The one he owns. 

Bristol City FC has been a wonderful asset to him over the years, that's why billionaires from all over the club buy football clubs. It's doubtless opened many doors and been good for his family and other business interests. 

I'm not feeling particularly "grateful" towards him right now as he has fallen asleep at the wheel of running the FC, again. 

We are currently closer to L1 than we are the Premier League, as the almighty Brentford, become the 50th club in English football to play in the Prem. We are the biggest club in England not to have played in it after being owned by Steve for 20 years in which time he has spent circa £150m.

On the footballing side he's made too many mistakes, and repeated them. I've said before, that if he was in a position where his "job" of being in charge was subject to a performance review of sorts (like the first team manager), he'd have been sacked many years ago. 

So, in conclusion the £14m of accounting is fairly insignificant to Steve and no I am not feeling "grateful" in the round.