Carl`s posts re financial pressures on club

Carl and I had a great (and long) talk on the phone about this , and other things CCFC , on Sunday night and I promised to post back with some comments. I didn`t have chance over the last couple of days , but here goes now.

Firstly , I should stress that where I disagree with some of Carl`s conclusions I don`t do so with any greater authority than an opinion based on the (limited) written evidence in the public domain and a professional (some may disagree ) interpretation of that information on my part. Other than that I have no factual information so won`t post anything in capitals , let alone the word FACT .

Secondly , for the avoidance of any doubt , just because I have a different view on some points to Carl doesn`t mean we have fallen out over it. Far from it , we had a great chat and I respect his views and opinions very highly. I just thought I had better make this clear to try and prevent the "my Dad`s bigger than your Dad" type responses from some of the numpties on this (and other) boards that seem to think that having alternative views to a popular one is not allowed.

Where Carl and I agree without doubt is that the club continues to face major financial problems which the Malaysian investment to date have helped reduce but have far from eliminated.We do though have different views on the timing of big lumps of cash that will have to be paid out by the club by the end of this calendar year.

The first , and biggest , cash payment Carl refers to is £10m to be paid to Langston by the end of the year , failing which the deal reverts to the original one where the full £24m debt will have to be paid. Personally , I don`t think it does even if (as appears to be the case) the club failed to stick to the amended agreement by paying Langston the monthly on account payments of £83k.In reality in law a court would be highly unlikely to allow this to happen provided the club fixed the breach by bringing the payments back up to date (which would cost a max. of £1m by Dec `10). The club would then revert to owing £11m , payable by Dec 11 or £12m payable by Dec 12 etc. until the end of 2016 when the full £16m under the 2009 agreement with Langston would have to be found as lump sum.

Carl has a different view to me based on what he has been told (neither of us has actually seen the relevant legal document) that the breach of monthly payments means a full lump sum of at least £10m now has to be found by the end of the year.

My own understanding , which was based on a conversation I had with A Flitcroft a few months ago , on the Chopra transfer fee was that it was payable at £500k a season over the 4 year contract period and that the full balance would only be payable to Sunderland out of transfer income received should we sell Chopra. Carl has been told that the balance has to be paid this Summer , so either AF misled me , or we are planning to sell Chopra or whoever told Carl misled him (I am not suggesting deliberately).

Where I disagree most with Carl`s interpretation of events is over the £2m claimed to be payable to PMG shortly. I have read again all the papers sent out before the recent EGM to approve the new share issues (those papers were agreed by PMG`s lawyer before they were sent out). These clearly show that any balance of debt due to PMG after they converted their first £300k of debt into shares is repayable by 30 Sept 2013 - so more than 3 years to do so - not now. Also , the club still has the option to never repay £2.7m of that debt by converting it into shares by 31 Dec 2011.

I agree with Carl entirely that the ongoing costs of running the club on a day to day basis , including a wage bill which currently runs at about £1m a month (after announced releases of players and non-playing staff) have to be met from somewhere other than expected matchday income and the funding of that has not been fully explained by the club (they may not know themselves!!).

Also , there is clearly an unexpected hole in the club`s cash budgets due to the very poor take up of shares by existing shareholders that Carl refers to in his posts - about £1.7m short of what the club hoped and planned for.

That`s some initial views and comments to stimulate some (hopefully healthy and balanced) debate.

Keith

Just to move this up the board so it doesn`t get lost

The first , and biggest , cash payment Carl refers to is £10m to be paid to Langston by the end of the year , failing which the deal reverts to the original one where the full £24m debt will have to be paid. Personally , I don`t think it does even if (as appears to be the case) the club failed to stick to the amended agreement by paying Langston the monthly on account payments of £83k.In reality in law a court would be highly unlikely to allow this to happen provided the club fixed the breach by bringing the payments back up to date (which would cost a max. of £1m by Dec `10). The club would then revert to owing £11m , payable by Dec 11 or £12m payable by Dec 12 etc. until the end of 2016 when the full £16m under the 2009 agreement with Langston would have to be found as lump sum.

I do have some connection with civil courts and this viewpoint is spot on. For instance, if you had agreed to pay off mortgage arrears on your house of £300 over 3 months at the rate of £100 per month but merely made the £300 payment on the last day of that period then you would be hard pushed to find a judge who would find in the building society/banks favour.

Of course, if you don't pay that agreed amount in full you have a problem

It's good to have a different perspective. Whoever is right these are concerning times but common sense tells me that the Malaysians knew about all these problems before they came in so therefore if the wages are paid today then this is of less concern than perhaps we initially thought.

BY the way, TP says that the official pay day at the City is today but that in the past they had it a couple of days early. Is that right or just typical Echo bullshit

if there is 1.7 mill shares not taken,why dont malaysians takd them,in return for paying wages.

if there is 1.7 mill shares not taken,why dont malaysians takd them,in return for paying wages.

They can`t take those specific shares without a new shareholders` meeting being called and a new resolution passed as they were set aside for existing shareholders only and had to be subscribed and paid for by 25 May.

However , the club has authority to issue another 34.47m new shares without a further meeting being needed which , at 15.69p each (the latest issue price) could raise another £5.4m for the club.

So in laymen terms Keith, would you say the pot is leaking faster than we can piss in it?

Keith here's a thought, why don't the club allow non shareholders to purchase shares, I would buy some, and I am sure there are loads out there who would do the same. At 15.69pence per share if everyone bought a 100 to a 1000 that would bring in lots of money, but there what do I know

Said all this yesterday Keith.

In far less words.


I was just told I was wrong as others know more than me.

Which might well be the case.



It could also be the case that whoever is telling Carl this information has got things mixed up. It is Chinese whispers after all.

I repsect Carl and his measured posts, but also won't hang off every word when what I've seen elsewhere - and in legally binding documents (e.g. the EGM) offers evidence to the contrary.

Keith here's a thought, why don't the club allow non shareholders to purchase shares, I would buy some, and I am sure there are loads out there who would do the same. At 15.69pence per share if everyone bought a 100 to a 1000 that would bring in lots of money, but there what do I know

I asked Alan Whitely that at and after the recent EGM and he was a bit non-commital about it , although he said the CCFC board would probably give it consideration.

When I asked Gethin Jenkins the same question , he said it would be a matter for AW , as the club`s legal man , to consider and advise the rest of the board on.

I agree with you that a share issue to fans should bring in reasonable new money for the club.However , as I have said elsewhere , very few fans who are currently shareholders took up the offer to buy new ones - perhaps many were put off by the £1,000 minimum purchase level mind.

Keith

Said all this yesterday Keith.

In far less words.


I was just told I was wrong as others know more than me.

Which might well be the case.



It could also be the case that whoever is telling Carl this information has got things mixed up. It is Chinese whispers after all.

I repsect Carl and his measured posts, but also won't hang off every word when what I've seen elsewhere - and in legally binding documents (e.g. the EGM) offers evidence to the contrary.

Your words , though less , were undoubtedly more eloquent than mine Tim

One of the problems , as you say , is that when people are told things unofficially from sources from within the club , those sources themselves may not fully understand the position. That`s not meant to be rude to them (I am advised that the correct term is "dissing" ) , its just that they can`t be expected to have full knowledge to the detailed extent necessary.

For example , if the source was say Steve Borley , then Steve I am sure would admit is neither a legal or financial expert (he is an expert in other fields so why should he be expected to be) so might not be the best to comment on possible technical legal breaches of the Langston agreement or the correct treatment of debts in the accounts. Similarly , if a source of information is Sam Hammam , then he can hardly be regarded as an unbiased commentator on what money and when is due to Langston .

So most information gathered from within the club is actually opinion (even though it may be well meaning and truly believed by the leaker of the information)rather than undisputed hard fact - it may be true , it may not.


Posters like Carl are aware of this , but are trying to relay information they are told to a wider fan base in good faith. Some fans then take that as gospel as it were and the poor bugger then has to take some flack when some of what he posts either turns out to be not true , or the source of information later does a bit of a U-turn in what he/she says.
Keith

Keith here's a thought, why don't the club allow non shareholders to purchase shares, I would buy some, and I am sure there are loads out there who would do the same. At 15.69pence per share if everyone bought a 100 to a 1000 that would bring in lots of money, but there what do I know

I asked Alan Whitely that at and after the recent EGM and he was a bit non-commital about it , although he said the CCFC board would probably give it consideration.

When I asked Gethin Jenkins the same question , he said it would be a matter for AW , as the club`s legal man , to consider and advise the rest of the board on.

I agree with you that a share issue to fans should bring in reasonable new money for the club.However , as I have said elsewhere , very few fans who are currently shareholders took up the offer to buy new ones - perhaps many were put off by the £1,000 minimum purchase level mind.

Keith

Glasgow Rangers Supporters Trust run a share scheme called 'GerSave'

Basically any Trust Member can save a minimum of £10 P/M on an ongoing basis which they convert into shares. The money also goes straight to the club and not other shareholders as there is a large amount of unissued shares put aside for the scheme.

It is very popular and has made over 4,000 fans shareholders in the past few years.

Keith, Thanks for the post, like Carls most infomative.

I agree with you (although you didn't say this in so many words), for all the excellent posts on this board, there are a growing number of posters that leap on the back of tidbits of information and skew it for their own agenda, whether it be "bring back Sam", "get rid of the eggers" etc. Thanks for providing facts (not FACTS) without an angle.

Keith here's a thought, why don't the club allow non shareholders to purchase shares, I would buy some, and I am sure there are loads out there who would do the same. At 15.69pence per share if everyone bought a 100 to a 1000 that would bring in lots of money, but there what do I know

I asked Alan Whitely that at and after the recent EGM and he was a bit non-commital about it , although he said the CCFC board would probably give it consideration.

When I asked Gethin Jenkins the same question , he said it would be a matter for AW , as the club`s legal man , to consider and advise the rest of the board on.

I agree with you that a share issue to fans should bring in reasonable new money for the club.However , as I have said elsewhere , very few fans who are currently shareholders took up the offer to buy new ones - perhaps many were put off by the £1,000 minimum purchase level mind.

Keith

Glasgow Rangers Supporters Trust run a share scheme called 'GerSave'

Basically any Trust Member can save a minimum of £10 P/M on an ongoing basis which they convert into shares. The money also goes straight to the club and not other shareholders as there is a large amount of unissued shares put aside for the scheme.

It is very popular and has made over 4,000 fans shareholders in the past few years.

I joined the Trust ( CCFC ) hoping that my money would be used in the same manner !

Your words , though less , were undoubtedly more eloquent than mine Tim

One of the problems , as you say , is that when people are told things unofficially from sources from within the club , those sources themselves may not fully understand the position. That`s not meant to be rude to them (I am advised that the correct term is "dissing" ) , its just that they can`t be expected to have full knowledge to the detailed extent necessary.

For example , if the source was say Steve Borley , then Steve I am sure would admit is neither a legal or financial expert (he is an expert in other fields so why should he be expected to be) so might not be the best to comment on possible technical legal breaches of the Langston agreement or the correct treatment of debts in the accounts. Similarly , if a source of information is Sam Hammam , then he can hardly be regarded as an unbiased commentator on what money and when is due to Langston .

So most information gathered from within the club is actually opinion (even though it may be well meaning and truly believed by the leaker of the information)rather than undisputed hard fact - it may be true , it may not.


Posters like Carl are aware of this , but are trying to relay information they are told to a wider fan base in good faith. Some fans then take that as gospel as it were and the poor bugger then has to take some flack when some of what he posts either turns out to be not true , or the source of information later does a bit of a U-turn in what he/she says.
Keith

That's a really good post.

We should always treat any 'info' given to us with good faith because at the end of the day Carl gains nothing from posting a load of rubbish. He is simply the relays the info he is not the author of it.

I agree with you on the Langston deal, although buried somewhere in the deal there is almost certainly a clause stating that the debt reverts to £24m should the club default completely on the latest arrangement. I suspect it is this clause which is causing the confusion and rightly so considering the recent in fighting at CCFC.

Glasgow Rangers Supporters Trust run a share scheme called 'GerSave'

Basically any Trust Member can save a minimum of £10 P/M on an ongoing basis which they convert into shares. The money also goes straight to the club and not other shareholders as there is a large amount of unissued shares put aside for the scheme.

It is very popular and has made over 4,000 fans shareholders in the past few years.

I joined the Trust ( CCFC ) hoping that my money would be used in the same manner !

What is different about the GerSave scheme is the shares reside in the name of the fan not the Trust (so the fan sees a 'return' for his cash!). All the Trust asks is that the supporters give the proxy voting rights to them at the AGM.

Martyn - the Trust HAS bought shares on your behalf as a member. We initially bought £1,000 worth as that is all the club allowed us , but have since bought a further £6,000 worth under the subscription offer last month (very few other existing shareholders did).

The money came from a fund set aside for that purpose from the Phil Dwyer membership category , as we told members we would do.

Keith

Martyn - the Trust HAS bought shares on your behalf as a member. We initially bought £1,000 worth as that is all the club allowed us , but have since bought a further £6,000 worth under the subscription offer last month (very few other existing shareholders did).

The money came from a fund set aside for that purpose from the Phil Dwyer membership category , as we told members we would do.

Keith

That fair enough and the Trust did promise to do that when it was set up.

However, IMO the Trust has simply poured £6k down the drain and will never be in a position to obtain a sigificant shareholding in a company which is worth £35m????

That is not a dig at the Trust just an honest assessment that you will simply never get enough supporters to sign up to the Phil Dwyer scheme to buy enough shares at £2.50 p/m.

I do like the idea of individual fans holding shares and coming under the Trust umbrella. The individual fan holding shares will always be more of an attraction than just giving away money and shares to the Trust. Admittedly even 4,000 fans paying £10 p/m would still mean that getting a large shareholding is a long way off, but it would be a great start.

Thanks for the post Since62. Why do you think that TG appears not to be in a rush to increase the Malaysians' shareholding?
I am guessing that the Malaysians are discrete (& live on the other side of the world) and that some at the CCS are "on trial" and this may explain the conflicting flow of info. Like you, I am grateful for the latest info that those in the know post. It is dissing anybody if posters query the consistency of the insider information.
Bosco

Thanks for the post Since62. Why do you think that TG appears not to be in a rush to increase the Malaysians' shareholding?
I am guessing that the Malaysians are discrete (& live on the other side of the world) and that some at the CCS are "on trial" and this may explain the conflicting flow of info. Like you, I am grateful for the latest info that those in the know post. It is dissing anybody if posters query the consistency of the insider information.
Bosco

Deliberate mistake in the last sentence of my earlier post above - it should read "It is not dissing ....". !
Bosco

I like the idea of individual fans holding shares in their personal names as well

Martyn - the Trust HAS bought shares on your behalf as a member. We initially bought £1,000 worth as that is all the club allowed us , but have since bought a further £6,000 worth under the subscription offer last month (very few other existing shareholders did).

The money came from a fund set aside for that purpose from the Phil Dwyer membership category , as we told members we would do.

Keith

That fair enough and the Trust did promise to do that when it was set up.

However, IMO the Trust has simply poured £6k down the drain and will never be in a position to obtain a sigificant shareholding in a company which is worth £35m????

That is not a dig at the Trust just an honest assessment that you will simply never get enough supporters to sign up to the Phil Dwyer scheme to buy enough shares at £2.50 p/m.

I do like the idea of individual fans holding shares and coming under the Trust umbrella. The individual fan holding shares will always be more of an attraction than just giving away money and shares to the Trust. Admittedly even 4,000 fans paying £10 p/m would still mean that getting a large shareholding is a long way off, but it would be a great start.

I like the idea of individual fans holding shares in their own name as well. Its just that the club policy in recent years has not made this easy - shares were either not issued at all or only in minimum values of £1,000.So an individual fan paying £10/month would take 100 months or over 8 years to build a minimum stake- hence trying to buy as a group through the Trust.

The first , and biggest , cash payment Carl refers to is £10m to be paid to Langston by the end of the year , failing which the deal reverts to the original one where the full £24m debt will have to be paid. Personally , I don`t think it does even if (as appears to be the case) the club failed to stick to the amended agreement by paying Langston the monthly on account payments of £83k.In reality in law a court would be highly unlikely to allow this to happen provided the club fixed the breach by bringing the payments back up to date (which would cost a max. of £1m by Dec `10). The club would then revert to owing £11m , payable by Dec 11 or £12m payable by Dec 12 etc. until the end of 2016 when the full £16m under the 2009 agreement with Langston would have to be found as lump sum.

Carl has a different view to me based on what he has been told (neither of us has actually seen the relevant legal document) that the breach of monthly payments means a full lump sum of at least £10m now has to be found by the end of the year.

Keith, when I said that I had not seen the relevant legal documents, I did tell you that I was there when the paperwork was presented and they were seen by Annis, this happened as a result of the seating positions we had in the room but the legalities of it were read out by the person holding them and Annis was a witness to them


My own understanding , which was based on a conversation I had with A Flitcroft a few months ago , on the Chopra transfer fee was that it was payable at £500k a season over the 4 year contract period and that the full balance would only be payable to Sunderland out of transfer income received should we sell Chopra. Carl has been told that the balance has to be paid this Summer , so either AF misled me , or we are planning to sell Chopra or whoever told Carl misled him (I am not suggesting deliberately).

Keith It has now made the press that the payment to settle the £1.5 million is to be completed in July as I said