cheshire_red Posted February 10, 2009 Report Share Posted February 10, 2009 Charlton's Chairman has admitted that HSBC have called in the overdraft facility amounting to around £6m. This could seriously snowball as other banks reign in their bad debts. If they take the admin route they must do so before 23rd March to have their 10 point deduction this season (they could be relegated by then anyways so would make sense. However if the points deduction would make no difference to a relegation scenario those points would be deducted next season (ie if they are relegated by more than 10 points). Other clubs may have no choice but to take the same route even if they are riding high in the table. Fingers crossed Cardiff are one of these....... Link to comment Share on other sites More sharing options...
bully Posted February 10, 2009 Report Share Posted February 10, 2009 Charlton's Chairman has admitted that HSBC have called in the overdraft facility amounting to around £6m. This could seriously snowball as other banks reign in their bad debts. If they take the admin route they must do so before 23rd March to have their 10 point deduction this season (they could be relegated by then anyways so would make sense. However if the points deduction would make no difference to a relegation scenario those points would be deducted next season (ie if they are relegated by more than 10 points). Other clubs may have no choice but to take the same route even if they are riding high in the table. Fingers crossed Cardiff are one of these....... Amen to Cardiff. Link to comment Share on other sites More sharing options...
cheese Posted February 10, 2009 Report Share Posted February 10, 2009 Ain't that just great. If banks sold umbrellas they'd only sell them to you when it's sunny and, when it started to rain, they'd ask for them back. Shoot the lot of 'em. (metaphorically speaking of course). Link to comment Share on other sites More sharing options...
milo1111 Posted February 10, 2009 Report Share Posted February 10, 2009 Charlton's Chairman has admitted that HSBC have called in the overdraft facility amounting to around £6m. This could seriously snowball as other banks reign in their bad debts. If they take the admin route they must do so before 23rd March to have their 10 point deduction this season (they could be relegated by then anyways so would make sense. However if the points deduction would make no difference to a relegation scenario those points would be deducted next season (ie if they are relegated by more than 10 points). Other clubs may have no choice but to take the same route even if they are riding high in the table. Fingers crossed Cardiff are one of these....... Nah, I'm sure the Welsh FA would step in and see their little cherubs alright!!! Link to comment Share on other sites More sharing options...
chinapig Posted February 10, 2009 Report Share Posted February 10, 2009 This was bound to happen sooner or later, though football likes to pretend it is somehow immune. It used to be said there was no way banks would put football clubs out of business as it would be bad for their image. As their image could not be worse than it is now that is no longer an issue I reckon. What price the likes of Soton, Watford and other ex-Prem clubs who failed to manage their finances sensibly when relegated (unlike say West Brom)? And when will a Prem club be similarly hit? As to Cardiff, I seem to remember repayment of their debt was deferred to 2011 after their court case, but I could be wrong. Time for everybody to wake up and smell the coffee (or possibly cider). More grateful than ever for Steve Lansdown personally. Link to comment Share on other sites More sharing options...
Nibor Posted February 10, 2009 Report Share Posted February 10, 2009 Ain't that just great. If banks sold umbrellas they'd only sell them to you when it's sunny and, when it started to rain, they'd ask for them back. Shoot the lot of 'em. (metaphorically speaking of course). Why's the bank to blame? Surely the business running in the overdraft which is usually a very expensive means of borrowing which can be removed at any time is at fault here? Banks only really call in an overdraft when they're concerned that it will not be repaid otherwise and it's usually a means of encouraging the account holder to refinance their debt to be more manageable. I'd be surprised if this on it's own resulted in the downfall of the club because ultimately the creditors want it to live as long as there's a chance of repayment and the debt isn't continually growing. They just need to start spending within their means pretty quickly. Link to comment Share on other sites More sharing options...
cheese Posted February 10, 2009 Report Share Posted February 10, 2009 Why's the bank to blame? Surely the business running in the overdraft which is usually a very expensive means of borrowing which can be removed at any time is at fault here? Banks only really call in an overdraft when they're concerned that it will not be repaid otherwise and it's usually a means of encouraging the account holder to refinance their debt to be more manageable. I'd be surprised if this on it's own resulted in the downfall of the club because ultimately the creditors want it to live as long as there's a chance of repayment and the debt isn't continually growing. They just need to start spending within their means pretty quickly. Why's the bank to blame? I'll tell you why. When money was cheap and easy to obtain they buried their heads in the sand and would lend willy nilly. I've noticed since last summer that the number of pre-filled credit applications dropping through my door have disappeared - my finances are the same as they always were (fortunately - so far). Having previously worked in banking for the best part of 11 years I know what they're like - when you don't need 'em they're all over you like a rash and when you do - they're like the tightfisted tightwad who disappears when it's his round at the bar. Link to comment Share on other sites More sharing options...
chinapig Posted February 10, 2009 Report Share Posted February 10, 2009 I see that Charlton fans are saying that their total debt is £21m but £15m is owed to the Directors so everything is fine. Presumably they assume the Directors will pay off the other £6m as well. But what happens if and when they go down? I noticed recently that it was reported that Leicester lost over £14m last season alone for instance. Given the recession will the Charlton Directors be able to hand over more so-called soft loans in the light of increasing losses? Or will they use Administration the way Leeds did to shaft their creditors and sell the club to undisclosed owners in some tax haven? Link to comment Share on other sites More sharing options...
sephjnr Posted February 10, 2009 Report Share Posted February 10, 2009 I see that Charlton fans are saying that their total debt is £21m but £15m is owed to the Directors so everything is fine. Presumably they assume the Directors will pay off the other £6m as well. But what happens if and when they go down? I noticed recently that it was reported that Leicester lost over £14m last season alone for instance. Given the recession will the Charlton Directors be able to hand over more so-called soft loans in the light of increasing losses? Or will they use Administration the way Leeds did to shaft their creditors and sell the club to undisclosed owners in some tax haven? Before angrily demanding to buy it back and threatening anyone else who was interested; you forgot that bit I haven't heard if the Charlton board are as twattish as K** B****, so there's no way of telling. Link to comment Share on other sites More sharing options...
chinapig Posted February 10, 2009 Report Share Posted February 10, 2009 Before angrily demanding to buy it back and threatening anyone else who was interested; you forgot that bit I haven't heard if the Charlton board are as twattish as K** B****, so there's no way of telling. I wouldn't suggest Murray and his Board are like the hideous Bates but the League's rules on Administration (e.g. requiring clubs to pay so-called football creditors in full first) positively encourage clubs to do this sort of thing. Link to comment Share on other sites More sharing options...
cheshire_red Posted February 10, 2009 Author Report Share Posted February 10, 2009 I wouldn't suggest Murray and his Board are like the hideous Bates but the League's rules on Administration (e.g. requiring clubs to pay so-called football creditors in full first) positively encourage clubs to do this sort of thing. The Government are currently challenging this rule through the Courts, I have no doubts they will win. Link to comment Share on other sites More sharing options...
Red_Mat Posted February 10, 2009 Report Share Posted February 10, 2009 More grateful than ever for Steve Lansdown personally. It certainly does make you grateful that we have a chairman who's not just prepared to run the club properly, but will only allow debts to run up that are owed to him. Look at the Charlton situation: they actually owe over £20 million, however £15 million (about a quarter) of that is owed to their board - probably similar to the percentage of debt we have. However, ours is much smaller. Lansdown is not prepared to take out huge loans from financial institutions, although will this change with the building of the stadium? Remember, a lot of those other clubs who are also in trouble (Southampton, Cardiff, Leicester, Derby, etc) are there because they built huge modern stadiums to compete in the top division, then couldn't stay there. It's ok to have nice modern facilities, so long as you're not stretching yourself too much in the process. Will us building a 30-40,000 seat stadium be doing just that? And will we be capable of paying that debt off, as opposed to letting it build up? And will be able to continue buying and selling players in the same manner we are doing at the moment with a debt round our neck?! Time will tell... Link to comment Share on other sites More sharing options...
chinapig Posted February 10, 2009 Report Share Posted February 10, 2009 The Government are currently challenging this rule through the Courts, I have no doubts they will win. Interesting. HMRC presumably, who would normally be the preferential creditor? Link to comment Share on other sites More sharing options...
Fodbarmyarmy Posted February 10, 2009 Report Share Posted February 10, 2009 Why's the bank to blame? I'll tell you why. When money was cheap and easy to obtain they buried their heads in the sand and would lend willy nilly. I've noticed since last summer that the number of pre-filled credit applications dropping through my door have disappeared - my finances are the same as they always were (fortunately - so far). Having previously worked in banking for the best part of 11 years I know what they're like - when you don't need 'em they're all over you like a rash and when you do - they're like the tightfisted tightwad who disappears when it's his round at the bar. Here, Here.......I still don't understand how the govt can bail them out of trouble with billions of OUR money and then banks can still announce profits to their shareholders And while we are on the subject......why couldn't this govt money be made available for our Health & education systems several years ago? How many hospitals / medical centres or new schools / further education places could this have provided? And why has not one MP asked this type of question in the house? As soon as the banks wanted it...it was there for them......fork all of em...I encourage everyone to draw all their cash from the banks right now and watch them go crashing down the drain then we can start a new model banking system based on barter and goods for everyone rather than profit for a minority Come on everyone the revolution is almost upon us Link to comment Share on other sites More sharing options...
Red Cloud Posted February 10, 2009 Report Share Posted February 10, 2009 Fingers crossed Cardiff are one of these....... no hope, the last time they were under threat the PFA gave them a special loan so as to avoid administration with which not only did they have money to pay all their over paid players but they even signed more players using it! - absolutely despicable! Wrexham and Rotherham weren't so special and had to play by the real rules and cop 10 points deduction! Bardiff are immune to any debt problems, look at the money the still pay for players despite £30+ million debt! Link to comment Share on other sites More sharing options...
Red_Mat Posted February 10, 2009 Report Share Posted February 10, 2009 we can start a new model banking system based on barter and goods for everyone rather than profit for a minority What, you mean like a Building Society?! Link to comment Share on other sites More sharing options...
Nibor Posted February 10, 2009 Report Share Posted February 10, 2009 Why's the bank to blame? I'll tell you why. When money was cheap and easy to obtain they buried their heads in the sand and would lend willy nilly. I've noticed since last summer that the number of pre-filled credit applications dropping through my door have disappeared - my finances are the same as they always were (fortunately - so far). Having previously worked in banking for the best part of 11 years I know what they're like - when you don't need 'em they're all over you like a rash and when you do - they're like the tightfisted tightwad who disappears when it's his round at the bar. Well of course the banks will lend freely when times are good and tighten up when they're bad, I doubt they knocked on Charlton's door and asked if they'd like a £6m overdraft. The responsibility is still with the borrower to make sure they can afford it. I do disagree with many of the practises the banks were involved in for personal finance like sending out credit card cheques before Xmas (I got send a dozen in December) and spamming everyone with finance offers but business finance has never been like that. The bottom line is that the club overspent, gambling on getting back into the Premier League quickly by paying out large transfer fees and maintaining a large wage budget instead of cutting back significantly enough. That's their fault and nobody else's, it's fashionable to blame banks at the moment but businesses and individuals alike have to take responsibility for their own borrowing. Link to comment Share on other sites More sharing options...
edson Posted February 10, 2009 Report Share Posted February 10, 2009 Well of course the banks will lend freely when times are good and tighten up when they're bad, I doubt they knocked on Charlton's door and asked if they'd like a £6m overdraft. The responsibility is still with the borrower to make sure they can afford it. I do disagree with many of the practises the banks were involved in for personal finance like sending out credit card cheques before Xmas (I got send a dozen in December) and spamming everyone with finance offers but business finance has never been like that. The bottom line is that the club overspent, gambling on getting back into the Premier League quickly by paying out large transfer fees and maintaining a large wage budget instead of cutting back significantly enough. That's their fault and nobody else's, it's fashionable to blame banks at the moment but businesses and individuals alike have to take responsibility for their own borrowing. Whilst I agree with you that the borrower must take a share of responsibility, there should also be a level of responsibility on the lender. When we moved house in 2000, we were offered 5 times our income by some lenders. We knew we couldn't afford the repayments and went with what we could afford. However, there are plenty of people and businesses out there who are foolish or desperate enough to take up such irresponsible lending. Some lenders were even offering 10 times income on mortgages in recent years, which is patently irresponsible and should have been policed and stopped. Link to comment Share on other sites More sharing options...
slartibartfast Posted February 10, 2009 Report Share Posted February 10, 2009 The word is the others are Norwich, Sheff Wed and the aformentioned Bluebirds! Link to comment Share on other sites More sharing options...
Percy Parrot Posted February 10, 2009 Report Share Posted February 10, 2009 Really don't know what has happened to Charlton in recent years but I hope they are ok. Nothing against them as a club. Link to comment Share on other sites More sharing options...
Nibor Posted February 10, 2009 Report Share Posted February 10, 2009 Whilst I agree with you that the borrower must take a share of responsibility, there should also be a level of responsibility on the lender. When we moved house in 2000, we were offered 5 times our income by some lenders. We knew we couldn't afford the repayments and went with what we could afford. However, there are plenty of people and businesses out there who are foolish or desperate enough to take up such irresponsible lending. Some lenders were even offering 10 times income on mortgages in recent years, which is patently irresponsible and should have been policed and stopped. I agree that there's been some morally reprehensible lending for personal finance but the reality is that like any company the banks are responsible only to their shareholders, it's only bad lending if it ends up not making them money. The moral view is the government's responsibility and they needed more foresight than they showed in order to regulate more thoroughly, presumably they will do so now. I'd say you prove my point - you took responsibility for your own borrowing and make a sensible decision. Why should other people's inability to do so be the bank's fault? You can't borrow before you're 18, you're meant to be an adult and able to vote, join the army and get married at that point - surely it's not too much to ask for people to be able to make vaguely sensible decisions? Perhaps it's one of those things where education hasn't moved fast enough and kids in school should be learning more about credit. Link to comment Share on other sites More sharing options...
the frampton balti Posted February 10, 2009 Report Share Posted February 10, 2009 The word is the others are Norwich, Sheff Wed and the aformentioned Bluebirds! oh s**t! bluebirds,canaries,owls,....robins!!!!!....... The banks must have somesort of gigantic aviary! Link to comment Share on other sites More sharing options...
cheese Posted February 10, 2009 Report Share Posted February 10, 2009 Well of course the banks will lend freely when times are good and tighten up when they're bad, I doubt they knocked on Charlton's door and asked if they'd like a £6m overdraft. The responsibility is still with the borrower to make sure they can afford it. I do disagree with many of the practises the banks were involved in for personal finance like sending out credit card cheques before Xmas (I got send a dozen in December) and spamming everyone with finance offers but business finance has never been like that. The bottom line is that the club overspent, gambling on getting back into the Premier League quickly by paying out large transfer fees and maintaining a large wage budget instead of cutting back significantly enough. That's their fault and nobody else's, it's fashionable to blame banks at the moment but businesses and individuals alike have to take responsibility for their own borrowing. I can assure you business finance has been like that for a number of years. My business gets the same number of "finance offers" from both banks and finance houses and is one of the reasons I left banking more than 20 years ago. Link to comment Share on other sites More sharing options...
edson Posted February 10, 2009 Report Share Posted February 10, 2009 I agree that there's been some morally reprehensible lending for personal finance but the reality is that like any company the banks are responsible only to their shareholders, it's only bad lending if it ends up not making them money. The moral view is the government's responsibility and they needed more foresight than they showed in order to regulate more thoroughly, presumably they will do so now. I'd say you prove my point - you took responsibility for your own borrowing and make a sensible decision. Why should other people's inability to do so be the bank's fault? You can't borrow before you're 18, you're meant to be an adult and able to vote, join the army and get married at that point - surely it's not too much to ask for people to be able to make vaguely sensible decisions? Perhaps it's one of those things where education hasn't moved fast enough and kids in school should be learning more about credit. Absolutely. However, clearly people and businesses aren't capable of taking such responsibility across the board, so it should have been checked, in my view. Much like the vast majority of us know stealing cars is wrong, but we still buy them with locks, alarms and immobilisers. Link to comment Share on other sites More sharing options...
cheshire_red Posted February 10, 2009 Author Report Share Posted February 10, 2009 Absolutely. However, clearly people and businesses aren't capable of taking such responsibility across the board, so it should have been checked, in my view. Much like the vast majority of us know stealing cars is wrong, but we still buy them with locks, alarms and immobilisers. I leave my car unlocked and the key in the ignition but no bugger will nick it. To have been allowed to go £6m overdrawn without guarantees is unlikely. However, with the recession those guarantees are probably not worth as much as they will have been hence no doubt why they have been called in. Link to comment Share on other sites More sharing options...
Nibor Posted February 10, 2009 Report Share Posted February 10, 2009 I can assure you business finance has been like that for a number of years. My business gets the same number of "finance offers" from both banks and finance houses and is one of the reasons I left banking more than 20 years ago. Well having gone through the process of setting up business accounts with overdrafts and taking business loans and raising VC funding over the past 5 or 6 years my experiences have been very different - all of the that was pretty rigorously assessed and the ongoing running was monitored quite closely. I really don't think HSBC just gave out a £6m overdraft on a whim nor called it in on one. Link to comment Share on other sites More sharing options...
BCFC_Dan Posted February 10, 2009 Report Share Posted February 10, 2009 Really don't know what has happened to Charlton in recent years but I hope they are ok. Nothing against them as a club. It's only a few years ago that they were held up as a model of a well-run football club and the sort that a club like City should be aspiring to emulate. Did they go badly wrong or is it simply impossible to sustain success at a medium-sized club? Link to comment Share on other sites More sharing options...
Percy Parrot Posted February 10, 2009 Report Share Posted February 10, 2009 It's only a few years ago that they were held up as a model of a well-run football club and the sort that a club like City should be aspiring to emulate. Did they go badly wrong or is it simply impossible to sustain success at a medium-sized club? I don't know and I doubt many do. But if anything it should sound a warning to many fans and chairmen not to be too smug about things. Fortunes in football can turn in a moment and that includes us. I believe that we are a well run ship and that if something bad happens (loss of a sponsor, money pull out, bad results on the pitch, stadium set-back) we will be secure but you never ever know in football. Link to comment Share on other sites More sharing options...
Nibor Posted February 10, 2009 Report Share Posted February 10, 2009 I don't know and I doubt many do. But if anything it should sound a warning to many fans and chairmen not to be too smug about things. Fortunes in football can turn in a moment and that includes us. I believe that we are a well run ship and that if something bad happens (loss of a sponsor, money pull out, bad results on the pitch, stadium set-back) we will be secure but you never ever know in football. Depends how you look at it. In lots of respects we aren't a well run ship when compared to a normal business. We're only well run in comparison to other clubs but that's not much to write home about! We made a large loss last year despite an unexpectedly high income thanks to Wembley. We've run at a loss for a long time despite fairly significant exceptional income for transfer fees. We generally spend beyond our means. Each year our liabilities increase and we rely on SteveL's largesse to reset them every so often through investment. The saving graces are that we have a backer who we trust to not leave us high and dry and that although we overspend we do so in a way that can be cut back fairly easily, by not spending on transfers and not renewing contracts when they expire. We are also increasing our revenue year on year and probably at least cover our footballing wage bill from football income. We also have a longer term plan (the stadium) to significantly increase it in the future. I'm not worried but if I didn't trust SteveL I would be, but we definitely shouldn't gloat. Link to comment Share on other sites More sharing options...
cheese Posted February 10, 2009 Report Share Posted February 10, 2009 Well having gone through the process of setting up business accounts with overdrafts and taking business loans and raising VC funding over the past 5 or 6 years my experiences have been very different - all of the that was pretty rigorously assessed and the ongoing running was monitored quite closely. I really don't think HSBC just gave out a £6m overdraft on a whim nor called it in on one. Perhaps it's your reputation!! Link to comment Share on other sites More sharing options...
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