Deadpool, philanthropy and interest rates.

[1960maaan]

Without doubt Ryan Reynolds & Rob McElhenney have done wonders for Wrexham since the £2m buyout. The profile has raised massively and they look nailed on to win the League this year and they have done brilliantly in the Cup, but just read something interesting. 
This seems odd, but one thing stand out of a piece by Keiran McGuire . 

"Wrexham lost £56,000 a week in 2021/22, but had cash in the bank at end of season due to share issues and owner loans from the new owners"

So far I get it.
Then he goes into the accounts a little. Something that is impressive is;

Wrexham revenue just short of £6m in 21/22, highest in NL and 90% of League Two (and some clubs in L1)

What I wondered about, and some of the financial wizards on here may be able to set me straight. 

Wrexham owed the owners £3.7m at end of 21/22. Interest at 3% over base rate, so currently 7.25%, is being charged

Is that normal ? 3% above the base level , seems high. Not like they need the money , Reynolds is worth £300m & Mcilhenny £50m. 
I guess they could write off the loans down the line, but charging interest at the moment . I did think, while watching the programme , that they were doing this for the Club and their love of the Sport not for profit. 

Maybe @Mr Popodopolous , @Hxj , @Davefevs or others might enlighten me as to wether this is normal.

 

[Port Said Red]

2 hours ago, 1960maaan said:

Without doubt Ryan Reynolds & Rob McElhenney have done wonders for Wrexham since the £2m buyout. The profile has raised massively and they look nailed on to win the League this year and they have done brilliantly in the Cup, but just read something interesting. 
This seems odd, but one thing stand out of a piece by Keiran McGuire . 

"Wrexham lost £56,000 a week in 2021/22, but had cash in the bank at end of season due to share issues and owner loans from the new owners"

So far I get it.
Then he goes into the accounts a little. Something that is impressive is;

Wrexham revenue just short of £6m in 21/22, highest in NL and 90% of League Two (and some clubs in L1)

What I wondered about, and some of the financial wizards on here may be able to set me straight. 

Wrexham owed the owners £3.7m at end of 21/22. Interest at 3% over base rate, so currently 7.25%, is being charged

Is that normal ? 3% above the base level , seems high. Not like they need the money , Reynolds is worth £300m & Mcilhenny £50m. 
I guess they could write off the loans down the line, but charging interest at the moment . I did think, while watching the programme , that they were doing this for the Club and their love of the Sport not for profit. 

Maybe @Mr Popodopolous , @Hxj , @Davefevs or others might enlighten me as to wether this is normal.

 

I think it depends on whether they are receiving interest only or whether the principal is being repaid as well. 

[bcfc01]

3 hours ago, 1960maaan said:

Without doubt Ryan Reynolds & Rob McElhenney have done wonders for Wrexham since the £2m buyout. The profile has raised massively and they look nailed on to win the League this year and they have done brilliantly in the Cup, but just read something interesting. 
This seems odd, but one thing stand out of a piece by Keiran McGuire . 

"Wrexham lost £56,000 a week in 2021/22, but had cash in the bank at end of season due to share issues and owner loans from the new owners"

So far I get it.
Then he goes into the accounts a little. Something that is impressive is;

Wrexham revenue just short of £6m in 21/22, highest in NL and 90% of League Two (and some clubs in L1)

What I wondered about, and some of the financial wizards on here may be able to set me straight. 

Wrexham owed the owners £3.7m at end of 21/22. Interest at 3% over base rate, so currently 7.25%, is being charged

Is that normal ? 3% above the base level , seems high. Not like they need the money , Reynolds is worth £300m & Mcilhenny £50m. 
I guess they could write off the loans down the line, but charging interest at the moment . I did think, while watching the programme , that they were doing this for the Club and their love of the Sport not for profit. 

Maybe @Mr Popodopolous , @Hxj , @Davefevs or others might enlighten me as to wether this is normal.

 

Sounds about right to me.

Where else could Wrexham get that sort of investment at that cost ?

[Rocking Red Cyril]

Surely if they are charging 3 % over base rate that's making a profit. So that's greed. Saving the football club is just a front for profit. 

[Hxj]

14 hours ago, Port Said Red said:

Is that normal ? 3% above the base level , seems high. Not like they need the money , Reynolds is worth £300m & Mcilhenny £50m. 

And they want to keep it that way!  Pula charges us base rate + 2, so you could argue Wrexham are getting a good deal.

[Hxj]

3 hours ago, Rocking Red Cyril said:

Surely if they are charging 3 % over base rate that's making a profit. So that's greed. Saving the football club is just a front for profit. 

I don't know what the owner's cost of capital is.  My view is that all clubs should be run as commercial profit making enterprises, it would be better for the game in the long run.

[Port Said Red]

11 minutes ago, Hxj said:

And they want to keep it that way!  Pula charges us base rate + 2, so you could argue Wrexham are getting a good deal.

That was weird, I had no memory of writing that and it turns out I didn't, you seem to have quoted @1960maaan but it's come through with my name on it? 

[beaverface]

4 hours ago, Rocking Red Cyril said:

Surely if they are charging 3 % over base rate that's making a profit. So that's greed. Saving the football club is just a front for profit. 

In this instance, isn't a win-win? Wrexham are top of the league on the cusp of going up, and the owners get a return on their money.

[Pezo]

4 hours ago, Rocking Red Cyril said:

Surely if they are charging 3 % over base rate that's making a profit. So that's greed. Saving the football club is just a front for profit. 

When you consider the opportunity cost for them (the time and effort they are putting in v what they could have made elsewhere with the same initial investment) I would suspect they could have made more money elsewhere.

I would like to understand your definition of "greed" a bit more, profit isn't greed, excessive profit maybe greed but it also depends how they use it.

[Rocking Red Cyril]

7 hours ago, Pezo said:

When you consider the opportunity cost for them (the time and effort they are putting in v what they could have made elsewhere with the same initial investment) I would suspect they could have made more money elsewhere.

I would like to understand your definition of "greed" a bit more, profit isn't greed, excessive profit maybe greed but it also depends how they use it.

I do not see football ownership as a for profit ownership model. And 3% over base rate is for profit therefore greed.

Simples

[Silvio Dante]

Bottom line is this.

A successful tenure of ownership leaves a club in a better place and more sustainable than it was when the owners took over.

Since Reynolds and Mclhenny took over they have (or are likely to)

- Redevelop the ground

- Increase the clubs profile exponentially with fans globally

- Likely promotion

- Improved the playing squad

- Improved community engagement 

If they sell Wrexham at one point in the future (and I do genuinely believe they’ve developed an affinity for the club), they may make money. But the club will be on a better footing, the fans will have had a hell of a ride, and they’ll be watching football in an engaged community with a better ground.

It’s not a case of “little old Wrexham”. But as owners go, my view would be that there could be far worse.

 

[bbew]

1 hour ago, Rocking Red Cyril said:

I do not see football ownership as a for profit ownership model. And 3% over base rate is for profit therefore greed.

Simples

If someone starts a charity, it is hugely sucessful and benefits thousands of people, and they pay themselves twice the minimum wage, is that greed?

Edited April 1, 2023 by bbew

[Silvio Dante]

29 minutes ago, bbew said:

If someone starts a charity, it is hugely sucessful and benefits thousands of people, and they pay themselves twice the minimum wage, is that greed?

Are you Captain Toms daughter?

[Davefevs]

1 hour ago, bbew said:

If someone starts a charity, it is hugely sucessful and benefits thousands of people, and they pay themselves twice the minimum wage, is that greed?

34 minutes ago, Silvio Dante said:

Are you Captain Toms daughter?

…and for info (I’m sure you’re aware of this) Captain Tom’s daughter set up a separate charity and people donated to that thinking it was the proper one…and then paid themselves a stupid amount out of the money, using very little of the money for charity - apart from the charity that seems to begin at home.

[Silvio Dante]

3 minutes ago, Davefevs said:

…and for info (I’m sure you’re aware of this) Captain Tom’s daughter set up a separate charity and people donated to that thinking it was the proper one…and then paid themselves a stupid amount out of the money, using very little of the money for charity - apart from the charity that seems to begin at home.

Totally off topic, I thought that arsehole family who tried to do musical theatre on BBC breakfast in the early days of lockdown must have hated Captain Tom. Their grift was strong. Toms families was stronger.

[Davefevs]

13 minutes ago, Silvio Dante said:

Totally off topic, I thought that arsehole family who tried to do musical theatre on BBC breakfast in the early days of lockdown must have hated Captain Tom. Their grift was strong. Toms families was stronger.

I didn’t see that…thankfully I guess.

[1960maaan]

1 hour ago, Silvio Dante said:

Bottom line is this.

A successful tenure of ownership leaves a club in a better place and more sustainable than it was when the owners took over.

Since Reynolds and Mclhenny took over they have (or are likely to)

- Redevelop the ground

- Increase the clubs profile exponentially with fans globally

- Likely promotion

- Improved the playing squad

- Improved community engagement 

If they sell Wrexham at one point in the future (and I do genuinely believe they’ve developed an affinity for the club), they may make money. But the club will be on a better footing, the fans will have had a hell of a ride, and they’ll be watching football in an engaged community with a better ground.

It’s not a case of “little old Wrexham”. But as owners go, my view would be that there could be far worse.

 

Agree and I think you're right about their genuine feelings for the Club, but it still seems odd. Not saying they are bad owners, they ain't the Oystons , but 3% (about £90k ) isn't a great deal to someone worth £350m. Even if they wanted the money back, they could have done an interest free loan. Like I said I don't know how these things normally go, there may be a reason but I thought it an interesting point.

[bbew]

1 hour ago, Silvio Dante said:

Are you Captain Toms daughter?

Your world must be very black and white, I am a little jealous!

Edited April 1, 2023 by bbew

[Rocking Red Cyril]

18 hours ago, bbew said:

If someone starts a charity, it is hugely sucessful and benefits thousands of people, and they pay themselves twice the minimum wage, is that greed?

Yes, why should they be paid twice the going rate. 

It is more to do with what is a fair wage for the job 

Edited April 2, 2023 by Rocking Red Cyril
Cause

[bbew]

23 hours ago, Rocking Red Cyril said:

Yes, why should they be paid twice the going rate. 

It is more to do with what is a fair wage for the job 

But the additional pay they are receiving is actually being donated to another charity, so is that still greedy?

 

[Spike]

I don't see it as greed, I see it as business which is what most football clubs are these days, businesses. As fans were obviously protective of our clubs but the simple fact is without the business side of it football wouldn't have stadiums for the fans to watch in, they wouldn't have so many players trying to make football their career and so I accept many of the business aspects of football and looking at what the owners have done for Wrexham and how big their profile is becoming now I think that percentage is fair. 

[Jim Davey]

funny as fnuk if they don't promoted .

[Rocking Red Cyril]

7 hours ago, bbew said:

But the additional pay they are receiving is actually being donated to another charity, so is that still greedy?

 

Well that seems very charitable. Greed for charity