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Bury

Brendan Bradley

Vital Squad Member
What definition? I don't see anyone mentioning definitions of debt.
And what debt? (of LCFC)
In a previous post it was mentioned that FC Barcelona's debt is 888m euros, but that figure bandied about in the press (who don't understand finance) is meaningless, because all it does is add up what the company owes to anyone at one point in time. It doesn't take account of any of their assets, such as cash or debtors let alone the value of their players.

I was trying to make the point that it's meaningless as to all intents and purposes LCFC has no debt at all, but if you add up the value of all the club's creditors in the last published accounts you get to over £4m, which sounds disastrous.
 
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Deleted member 10554

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In a previous post it was mentioned that FC Barcelona's debt is 888m euros, but that figure bandied about in the press (who don't understand finance) is meaningless, because all it does is add up what the company owes to anyone at one point in time. It doesn't take account of any of their assets, such as cash or debtors let alone the value of their players.

I was trying to make the point that it's meaningless as to all intents and purposes LCFC has no debt at all, but if you add up the value of all the club's creditors in the last published accounts you get to over £4m, which sounds disastrous.
Well it is disastrous if it's called in. It took £250k to almost sink the club.
 
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Deleted member 10554

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And as we've seen at bury, a player only remains an asset if he's under contract. Breach that contract by, say, not paying him, and he walks away for nothing.
 

Brendan Bradley

Vital Squad Member
Well it is disastrous if it's called in. It took £250k to almost sink the club.
I seem to be having some difficulty explaining why gross debt means so little.

To re-iterate it doesn't take account of the club's assets. Included in the "debt" of the 4.2 million I mentioned was £2.3m of "deferred income" which is basically money paid for season tickets.

So no chance of it being "called in"
 

Barney Imp

Vital Football Hero
The problem with money and financial law is that it is hugely complex. Which is why accountants and solicitors charge an absolute fortune. Which is why only the rich can afford to pay them to avoid taxes...

I think LCFC are in a better state than many clubs - especially regarding the board...

Come on you Imps!!!!
 
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Deleted member 10554

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I seem to be having some difficulty explaining why gross debt means so little.

To re-iterate it doesn't take account of the club's assets. Included in the "debt" of the 4.2 million I mentioned was £2.3m of "deferred income" which is basically money paid for season tickets.

So no chance of it being "called in"
So only £2m in debt then. Or is that also magic money?

£250,000 was all it took to almost kill us.
 

buckielugger

Vital 1st Team Regular
All makes sense, Brendan.
All businesses have creditors they owe money to.
Cash flow is what really matters most.
And if a business borrows money with the aim of generating a higher level of turnover & ultimately profit, then that is worth doing so long as the borrowing can be funded.
So new machinery might be bought or vehicles or in a football club's situation - new players signed or new seating added. If the club gets it right, then they do better in the longer term.

Problems happen when clubs get it wrong, and the compulsion to gamble more and more, with the hope of reaching the riches of the Premier League, then more of those gambles will fail.

We took a gamble of signing more players in January (having done the same in the summer). The gamble was we'd get promoted. Correctly our board judged the gambles right - Danny's proven track record makes those decisions well worth taking.
 

cherryexile

Vital Squad Member
Just to try to link a number of elements of this thread together in some philosophical musings,

We live in a world where debt has become less meaningful than it was in the past, primarily (in my opinion) because of two things,

1) the much easier access to, and low cost of, credit, which can be used to service debt, and,
2) the continuation of regular increases in the value of assets to secure that credit against (in the case of the world, this is population growth, in the case of the UK it is growth in the economy - UK debt is invariably measured as a percentage of GDP, and that total UK debt has continued to rise, it is only falling when measured as a percentage of GDP. GDP growth disguises and minimises the importance of actual debt- , in UK households it is the growth in house prices and wage inflation, and in the case of football clubs it is TV money).

When any of these things changes, slows down, or even stops growing at all, then the paradigm shifts and countries, households and football clubs go bust.

Basically, we are all operating on a series of Pyramid Schemes which, while they are in the growth phase, are very pleasant places to be. When the Pyramid becomes so large that the Pyramid can no longer fuel the creation of a new base layer it starts to fall apart.

The Bury and Bolton Pyramids are falling apart. The question is whether they are isolated examples relating to their own Pyramids, or whether they are symptoms of a systemic problem with the EFL, which will eventually have to lead to a new Paradigm if it is to continue to operate successfully. I don't think we can argue that it is a problem with football as a whole, since the Premier League Pyramid continues to be a in a growth phase, I think it is a problem with distribution of wealth where the EFL clubs will find it increasingly difficult to compete with the top dozen or so Premier League clubs and they will eventually form their own League with the EFL shrinking to 2 Leagues and the fourth tier becoming regionalised along with the NFL.

For 5 marks and a gold start critique the observations above.
 

brisimp

Vital Squad Member
Cant see bury surviving in their present format will resurrect maybe as a phoenix club well down the football pyramid. Bolton may survive on a last minute takeover but will take a strong entity to take over and bring back to life. Obviously the Efl have a lot of work to do ensuring this doesnt happen again however without micro managing each and every club thats near impossible .
 
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Deleted member 10554

Guest
Just to try to link a number of elements of this thread together in some philosophical musings,

We live in a world where debt has become less meaningful than it was in the past, primarily (in my opinion) because of two things,

1) the much easier access to, and low cost of, credit, which can be used to service debt, and,
2) the continuation of regular increases in the value of assets to secure that credit against (in the case of the world, this is population growth, in the case of the UK it is growth in the economy - UK debt is invariably measured as a percentage of GDP, and that total UK debt has continued to rise, it is only falling when measured as a percentage of GDP. GDP growth disguises and minimises the importance of actual debt- , in UK households it is the growth in house prices and wage inflation, and in the case of football clubs it is TV money).

When any of these things changes, slows down, or even stops growing at all, then the paradigm shifts and countries, households and football clubs go bust.

Basically, we are all operating on a series of Pyramid Schemes which, while they are in the growth phase, are very pleasant places to be. When the Pyramid becomes so large that the Pyramid can no longer fuel the creation of a new base layer it starts to fall apart.

The Bury and Bolton Pyramids are falling apart. The question is whether they are isolated examples relating to their own Pyramids, or whether they are symptoms of a systemic problem with the EFL, which will eventually have to lead to a new Paradigm if it is to continue to operate successfully. I don't think we can argue that it is a problem with football as a whole, since the Premier League Pyramid continues to be a in a growth phase, I think it is a problem with distribution of wealth where the EFL clubs will find it increasingly difficult to compete with the top dozen or so Premier League clubs and they will eventually form their own League with the EFL shrinking to 2 Leagues and the fourth tier becoming regionalised along with the NFL.

For 5 marks and a gold start critique the observations above.
Wage inflation. Good one.
 

Brendan Bradley

Vital Squad Member
...The Bury and Bolton Pyramids are falling apart...
I think it is a problem with distribution of wealth
It's a good idea to try and pull the disparate thoughts of this thread together, but firstly there never really was a pyramid where Bury or Bolton (or most EFL Clubs) reside because the whole pack of cards - to mix metaphors - is dependent on the owner funding the losses.

This is the case for practically every club, and though graemetheexile sometimes comes across as if he has a bit of a bee in his bonnet about that, I don't see how anyone who looks at this can deny the truth of it? Championship club losses are astounding and Bury lost £10m in four seasons (that's almost 50k per week) on average gates of 3,500.

There is no problem with the distribution of wealth. Apart from the recently relegated PL clubs (who have problems of an entirely different nature), the rest of the league is fairly consistent in income, usually in accordance with the size of the club's support. The only other variable is that owner input.

It's because these owners (and the fans who pressurise them) don't have the balls to accept that overspending in order to either go up a level - or more likely, maintain their existing level - is incredibly risky without a safety net.
 
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Deleted member 10554

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View attachment 34334
I know that since the credit crunch (which caused a paradigm shift) wage inflation has been muted, but I would argue that over time it has been a consistent feed into the growth in the value of household assets.

https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/kgq2/qna
Fair dos. However, real wage growth has consistently slowed since the 1970s, and for the last decade has been negative. So half a century of slowdown, then a decade of falling wages relative to the price of living.

Housing only really only became unaffordable for the masses in the 1990s - easy credit creating a bubble (earnings never kept up with price inflation), then financial 'products' that eventually destroyed the economy. And the only reasons house prices are still so high is the artificial shortage and low interest rates.

Why am I saying all this? Actually I'm not sure - but yes, generally, I agree. What we have is a football cash bubble at the top forcing prices up everywhere else despite earnings at the bottom remaining stagnant. How do you compete? You borrow and hope Black Monday doesn't arrive. Enter Bury.
 
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Deleted member 10554

Guest
It's a good idea to try and pull the disparate thoughts of this thread together, but firstly there never really was a pyramid where Bury or Bolton (or most EFL Clubs) reside because the whole pack of cards - to mix metaphors - is dependent on the owner funding the losses.

This is the case for practically every club, and though graemetheexile sometimes comes across as if he has a bit of a bee in his bonnet about that, I don't see how anyone who looks at this can deny the truth of it? Championship club losses are astounding and Bury lost £10m in four seasons (that's almost 50k per week) on average gates of 3,500.

There is no problem with the distribution of wealth. Apart from the recently relegated PL clubs (who have problems of an entirely different nature), the rest of the league is fairly consistent in income, usually in accordance with the size of the club's support. The only other variable is that owner input.

It's because these owners (and the fans who pressurise them) don't have the balls to accept that overspending in order to either go up a level - or more likely, maintain their existing level - is incredibly risky without a safety net.
Buzz. My point, apparently yet to be understood, is that we have a thread hating on Bury for being so irresponsible and the EFL for being wet, yet others refuse to see the reality of practically everyone else doing the same thing to a degree.

I don't like Bury, for their owner and the thugs who beat our fans up last year. But I can see that while they're in above their heads in shit by their own doing, they're surrounded by others standing on tiptoes.
 
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