bonsonshead
Vital Squad Member
Hopefully the EFL will toughen up after this farce but i won't hold my breath.
Hopefully the EFL will toughen up after this farce but i won't hold my breath.
...by the way LCFC's gross debt at June 2018 was over £4.2 million using that definition.
Bury ain't playing this season, just hope Bolton do get sorted.
Only 3 senior pros in the Bolton squad for today, farcical.
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.
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"
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.
So only £2m in debt then. Or is that also magic money?
£250,000 was all it took to almost kill us.
...The Bury and Bolton Pyramids are falling apart...
I think it is a problem with distribution of wealth
Wage inflation. Good one.
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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
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.