indeedido
Well-known member
You do get that Allardyce and Curbishley were managers and that Gibson is the owner?
Surely you do?
Steve Gibson “pumps in £1m a month to keep the club afloat”
- Thread starter InglebyUTB
- Start date
Surely you do?
clay
Well-known member
What's the difference between a gift and a loan that everyone knows will never be repaid?
MickaelDebevePhenomenal
Well-known member
clearly, the point being fans wished for change after growing complacent.
indeedido
Well-known member
If he knows it is never going to be repaid, or asked to be repaid, then it would benefit the club to convert the debt to equity as he did 2012-16, becoming gift not loan.
Keeping it as loan means he discourages any external interest in the club.
h_m_boro
Well-known member
Sooo......how many clubs outside of the PL operate at a profit (genuine question 
).
Wages, agents fees etc are crucifying clubs finances but absolutely nothing is done. Sure Boro are not alone in finding this, and at least we have a (reasonable?) wage structure in place. And - I hope - are being good boys and being compliant with FFP?
Not sure from a financial perspective what Gibson is supposed to do? He's keeping us afloat - we've known this 20+ years - but right here, right now not sure what his best option is. Selling up to foreign billionaires?
).Wages, agents fees etc are crucifying clubs finances but absolutely nothing is done. Sure Boro are not alone in finding this, and at least we have a (reasonable?) wage structure in place. And - I hope - are being good boys and being compliant with FFP?
Not sure from a financial perspective what Gibson is supposed to do? He's keeping us afloat - we've known this 20+ years - but right here, right now not sure what his best option is. Selling up to foreign billionaires?
clay
Well-known member
Any idea why they haven't done that already? Presumably it's either an FFP thing, or he's holding on for the microscopic hope that some of it gets repaid?
Yes, it might be that. But if the debt is either written off or converted to equity then it would adversely affect the balance sheet of the parent company.
indeedido
Well-known member
I am sure that it is very much the latter.
Gibson can only put £24m in every 3 years from an FFP perspective outside the PL. From an FFP perspective then it would take 15 years to convert the debt to equity and it all count for FFP.
The truth is however, we are not in any FFP danger at all right now (as we did to death on here in early summer). Wage bill is reduced, revenue increasing and amortisation low. The allowances for FFP (Community and U21 spend and Fixed Asset revaluations) appear well managed and keep us FFP whole.
The conversion of loans to equity helps the financial health of the Company and would make attracting a new owner much more realistic.
indeedido
Well-known member
This is undoubtedly true, and is why I said that the only reason I would be sad at Gibson having to write the £120m off was if the employees of Bulkhaul were really adversely impacted.
Or it just shows whats needed to prop up an at best mid-table Championship club with a fan base restricted to it's immediate area with little other source of income.
Why do you think Gibson thinks it's a 'massive win'? What a ridiculous thing to say.
How would you know where'd we'd be without his support? Mainly because absolutely nobody else would have us. So we'd be no better off. I've asked constantly on here for people like you to come up with an alternative owner..... and none of you have come up with anything other than a whinge about the level of debt.
We wouldn't have had everything we have had under his ownership. Thankfully the majority of fans recognise that and continue to be thankful of his support.
indeedido
Well-known member
What don't you see?
If Gibson stops loaning extra money from Group to cover the loss his decisions result in every year (other than 2016/17), then the club ceases to be solvent, can't trade and would have to go into administration. He would lose hope of recouping the loans as the club is worth -£120m.
If he writes off the £120m loan, then the club could be sold, he might actually get something for his equity; though in our position, unlikely to be that much.
Now then, a new owner doesn't guarantee success; but after 16 years of overall failure, I want to try, and with a club that would have effectively reset, rather than limp along under the current bloke..
You continually asking who would come in and take the club on is a daft attempt to just close it down and say it is not possible. We don't have to find the new owner, Gibson would.
A bit like thinking who we suggest as manager makes any difference.
Still no answer on an owner then.
OK give me an example of the type of person or business that might be interested in buying us, and what why would they buy us?
JM14
Well-known member
If he hadn’t wasted so much over the years due to his own mistakes he wouldn’t have to prop up the club so often
Like a few have said we owe so much to Gibson the reality of someone else coming in and taking all of that on is just impossible, we are stuck with him for a long time yet, but that shouldn’t stop anyone calling out his many mistakes
You're another one that loves a whinge but still doesn't come up with any alternative.
Humour me, what kind of person or business would be interested in buying the Boro and why would they do it?
JM14
Well-known member
like I said the club owes so much to Gibson we don’t really have any alternative, who would realistically take a club on with that level of debt
indeedido
Well-known member
Can you not get through my final paragraph?
I don't have to find the new owner.
Nobody will take the club on unless Gibson writes the debt off and steps aside.
If he would spend the money you think he has, and he would walk away, then I think a debt free club (without negative nett shareholder value and being a genuine Going Concern) that has a stadium, a training facility, a large fan base, a top flight history and PL potential would be a very attractive proposition for somebody.
Promotion to the PL would bring revenues that could sustain a PL club at MFC.
I could easily see a new owner being willing to invest equity funding to help establish the club in the PL and build something of real value.
We are unlikely to attract Sovereign Wealth, but wealthy investors could see real potential in a well run PL club.
Soton were bought by Sport Republic an investment firm for £100m earlier this year. They are very similar to us.
Leicester were bought by a foreign billionaire when nothing special at all.
Steve Parish bought Palace for £3.5m in 2010 and has attracted international investors.
Even Burnley were able to attract investors...Burnley!
Leeds were on their arses, but still able to attract investors who could see potential.
Wolves attracted investment.
I've focused on clubs here who are not minnows, but we could genuinely compare ourselves to. Championship clubs have also attracted investors
You will only rubbish any potential investor, because they are not local and crucially, not Steve Gibson.
In reality it is matterless, as unless Gibson writes the debt off it. can't happen.
[/QUOTE]
Southampton had a nice big £90 million BANK loan (ie won't be written off) when Sports Republic bought them.
Debt isn't much of a problem there then.
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indeedido
Well-known member
Southampton had a nice big £90 million BANK loan (ie won't be written off) when Sports Republic bought them.
Debt isn't much of a problem there then.
[/QUOTE]
Southampton were bought for £100m despite having an outstanding loan.
They had value, did not have negative shareholder value, they were established in the PL and should survive there.
The calamity is not about debt, it is about debt over asset value AND whether there is confidence in future PL level revenues and market value above book for the intangibles (players).
In August 2017 the Chinese fella bought 80% of Soton for £210m. At that time they had £79m positive book value and only £20m in shareholder loans and an £18m Bank loan.
The Serbian cable TV billionaire bought that 80% in Jan 2022 for £100m. At that time the St Marys Group had £17m positive shareholder value. The Group debt was indeed a £90m Bank loan (imagine being able to get one of those)
It's not hard to work out why the reduction in money paid for the club that effectively stayed in the PL - as much as it will do.
The Serbian has struck what looks a very good deal, the Chinaman has dropped a big chunk. He was really bashed by Covid.
Redwurzel
Well-known member
We ran up a £14.5m transfer surplus in the Summer, so Gibbo's subsidy is not needed this season, if its not spent.
The £1m a month was during the 2019/20 season. Still paying some big wages from contracts negotiated in 2017, Assombalonga, Fletcher, Clayton, Friend, Ayala, Gestede, Shotton etc. I think the wage bill was over £25m a year. I suspect the wage bill is significantly less now.
The £1m a month was during the 2019/20 season. Still paying some big wages from contracts negotiated in 2017, Assombalonga, Fletcher, Clayton, Friend, Ayala, Gestede, Shotton etc. I think the wage bill was over £25m a year. I suspect the wage bill is significantly less now.
indeedido
Well-known member
Crucially Gibson is loaning the club, he is not giving the money. It is a Balance Sheet exercise across his Group. Overall the Group is very healthy despite MFC and Rockliffe Hall.
When MFC lose money, he has to loan them the loss to keep it as a Going Concern.
The Group gets tax relief on the MFC loss. Without that the Group tax bill would be higher - see also Rockliffe on a smaller scale. But their profit and therefore reserves would be higher too.
The Club AND the Group still of course actually lose the money MFC does, but they do play the tax dimension to favour MFC and it is a help to MFC's books.