City to be Sold for a £1?

Surely given the gravity of our finances, the futility of board members trying to get a certain price for their shares is a joke, scope is surely there for the club to be sold for a £1 given we are at the extreme least £30m in debt (just what we know about) at the moment and will unquestionably add to that over the next season or so by around £15m mainly as the result of a huge wage bill and so much of next season's turnover already being spent. Any prospective investors wil have to absorb debt and further operating losses over the next 18 months or so of a total of around £50m, without player sales substantially higher, how the hell and why the hell should they have to pay for that "privellege?" More to the point, why would they want to?

I think Ridsdale is relying on making a killing on his shares to pay off HMRC regarding his personal debts to avoid a personal bankrupcy.

lets have a whip round

We all know that, Gerry, my point is, is Cardiff City, a club carrying conservative debts of currently £30m and projected further losses over 18 months of at least another £15m, a business that investors warrant investing in at all, never mind paying 45p a share (around £14.4m) or even 10p a share (£3.2m) for the privelige of inheriting such astronomical debt? The club's turnover is around £17m, the math simply doesn't work.

Salad -

I said exactly the same to the Riddler in an email, that the shares are worthless when carrying that level of debt. He chose not to mention this part of my email in his response.

I think you are right! City could be sold for a pound with the current debt. Ken Bates paid £1 for Chelsea in 1982 with only 1.5 millon of debt.

It's possible.

Heck, would it sell at that price? Woolworths (before it went bankrupt a while back) was put up for sale for £1 but no-one wanted to buy at that price!

It's possible.

Heck, would it sell at that price? Woolworths (before it went bankrupt a while back) was put up for sale for £1 but no-one wanted to buy at that price!

That AVATAR is class!

I think Ridsdale is relying on making a killing on his shares to pay off HMRC regarding his personal debts to avoid a personal bankrupcy.

the thing here jerry he had a stadium completion bonus that more than covered the personal debt an it would seem he dident pay it off

steve, what a surprise, just had a phone call off my mate, the office of fair trading has had loads of complaints over season tickets,

It's possible.

Heck, would it sell at that price? Woolworths (before it went bankrupt a while back) was put up for sale for £1 but no-one wanted to buy at that price!

That AVATAR is class!

Thanks

lets have a whip round

PR had a whip round in December, called a ST offer..

We all know that, Gerry, my point is, is Cardiff City, a club carrying conservative debts of currently £30m and projected further losses over 18 months of at least another £15m, a business that investors warrant investing in at all, never mind paying 45p a share (around £14.4m) or even 10p a share (£3.2m) for the privelige of inheriting such astronomical debt? The club's turnover is around £17m, the math simply doesn't work.

Can you back those figures up - the £15m loss seems way out to me.

Bear in mind unless there is a takeover there will be another season ticket 'promotion' this time next year, possibly at a discount. SO unless something radical changes, inflows to the club next season will be more-or-less the same as this year. Also, don't forget to add that at least 5m of player sales are due in the summer. Bank on it.

Then when considering debts, bear in mind that the player pool can be valued at anywhere from £20m to £30m (this excercise was done by a dozen or so on the other board and most figures came out in this range) and the stadium and related deal with the blues, and value to us in future peppercorn rents can be valued at around £20m (which is what we could get on a 'sale and leaseback' basis), although £15m was mentioned in the Echo I dont beleive the reporter had done his sums correctly.

So yes, we have debts of something between £25m and £30m, (after the land sale next week) but the club Does have significantly more in assets.

The problems it has are.

1. Cash. I dont believe the longer term needs to be such an issue, but the next 3-5 months will be.
2. Running costs, especially off-field costs. These will HAVE to be dealt with this summer, at the latest, both with player sales, management cuts and reductions in boardroom salaries.
3. Severance costs.
4. Continued success on the pitch will be required to keep the support base up.



Sorry to sound as if I'm defending PR, i'm not - he's indefensible. But these figures need balancing up.

By operating by selling season tickets in the previous financial year, you will always be chasing your tail and fans will soon tire of doing so so far in advance. I don't see it as prudent to budget for selling next years tickets this year as one day it has to be accounted for. As such, its a pretty raw assessment, but here goes and please correct me if there are any anomalies, which I'm sure you will(!);

£1.2m per month wage bill until July = £7.2m, crucially not including any other running costs whatsoever. £3m season ticket money and at least £1.5m of tv money has already been borrowed, whilst on full turnover of around £17m which includes 16k season ticket holders paying in that financial year, allied with all the Premier Club money, we make an operating loss of around £1-2m. That is before factoring in the lowest possible payment to Langston of an additional £1m. That is an extremely conservative £13.7m alone. I would suggest the actual figure will be a lot nearer £20m and not necessarily below given the escalating list of creditors owed money already, along with any additional running costs incurred up until July. Or dare I say it, any other debts Peter may not have told us about. Or any stadium related debts for that matter.

In truth, its all irrelevant anyway, without investment, which I remain highly sceptical is coming at all, we won't make it till the end of the season.

By operating by selling season tickets in the previous financial year, you will always be chasing your tail and fans will soon tire of doing so so far in advance. I don't see it as prudent to budget for selling next years tickets this year as one day it has to be accounted for. As such, its a pretty raw assessment, but here goes and please correct me if there are any anomalies, which I'm sure you will(!);

£1.2m per month wage bill until July = £7.2m, crucially not including any other running costs whatsoever. £3m season ticket money and at least £1.5m of tv money has already been borrowed, whilst on full turnover of around £17m which includes 16k season ticket holders paying in that financial year, allied with all the Premier Club money, we make an operating loss of around £1-2m. That is before factoring in the lowest possible payment to Langston of an additional £1m. That is an extremely conservative £13.7m alone. I would suggest the actual figure will be a lot nearer £20m and not necessarily below given the escalating list of creditors owed money already, along with any additional running costs incurred up until July. Or dare I say it, any other debts Peter may not have told us about. Or any stadium related debts for that matter.

In truth, its all irrelevant anyway, without investment, which I remain highly sceptical is coming at all, we won't make it till the end of the season.

You are right, its not prudent. But prudence disappeared a long time ago from footy. Its a fact of life at many clubs and will be here as well, so the £3m s/t money can be ignored - at least most of it anyway.

Ther WILL be income in between now and the summer, gate receipts, tv money form the cup, Chelsea money, then there will be further season ticket sales in the summer, first payment of TV money for next season, there is also the potential to pre-sell the 2nd stage and sale of player(s) in the summer. Then there is transfer income which is due to us on Johnson and Jerome which is over £1m (although we need to take off the next Chopra installment, in the unlikely scenario he will be here in the summer).

There is confusion in your post between cashflows and items which are to be accounted for in that year. They are 2 different things. For example, current creditors are already accounted for, so have ne effect on profit and loss, only cashflows. Then on the other hand in order to boost cash-flows, incomes which have been pulled forward this year can also be repeated next year, so cashflow in will be similar.

Honestly I'm not doing this for the sake of it !
I will happily bet you the loss will be far less than the one which your doomsday scenrio depicts.