What’s the consensus on Gibson then?

[Bruce]

So, MFC's FFP calculation will be c-£13.3m.
Regardless of any funding into the club, the club is within the lower permitted loss of £15m.

This is really interesting to see. I know the basics of book-keeping but not the ins- and outs- of FFP allowances.
It seems to me to be quite rational to keep to this lower limit while COVID and all of its after-effects are unwinding along with the hangover from the Monk signings. Given that we know Gibson has argued for a salary cap and better policing for FFP then he is clearly keeping his house in order.

I do think that he is keeping his FFP balance quite low so that, if he feels we have significant chance of promotion that he can spend big at that time. There is a cart and horse element here but also I suspect that he has to be convinced that his money won't be chucked down a drain. We're also still losing a shed-load of money in the real world.

Judging by the last few years, if we're going to make a proper promotion push, it's going to cost us the best part of £40m and at that point Gibson has to feel absolutely confident of the manager and the team that is already in place.

 

[indeedido]

This is really interesting to see. I know the basics of book-keeping but not the ins- and outs- of FFP allowances.
It seems to me to be quite rational to keep to this lower limit while COVID and all of its after-effects are unwinding along with the hangover from the Monk signings. Given that we know Gibson has argued for a salary cap and better policing for FFP then he is clearly keeping his house in order.

I do think that he is keeping his FFP balance quite low so that, if he feels we have significant chance of promotion that he can spend big at that time. There is a cart and horse element here but also I suspect that he has to be convinced that his money won't be chucked down a drain. We're also still losing a shed-load of money in the real world.

Judging by the last few years, if we're going to make a proper promotion push, it's going to cost us the best part of £40m and at that point Gibson has to feel absolutely confident of the manager and the team that is already in place.

You give him far too much credit IMHO.
The high amortisation and wage burdens of the Monk/pulis era are now gone from FFP.
Revenue is also recovered post Covid.
Add to this the fact that he is generating large profits from sales of players (£34m in the last year) and the way that profit is accounted. The spending on players is lower and hence amortisation charge is lower, much much lower than the profit from sales.
When exactly will the conditions be right for him to actually have a go again?
A man who has spectacularly bungled 15 years plus, is not perhaps the man to coordinate a multi year plan to go up at “the right time”.

 

[Quicksilvera]

You give him far too much credit IMHO.
The high amortisation and wage burdens of the Monk/pulis era are now gone from FFP.
Revenue is also recovered post Covid.
Add to this the fact that he is generating large profits from sales of players (£34m in the last year) and the way that profit is accounted. The spending on players is lower and hence amortisation charge is lower, much much lower than the profit from sales.
When exactly will the conditions be right for him to actually have a go again?
A man who has spectacularly bungled 15 years plus, is not perhaps the man to coordinate a multi year plan to go up at “the right time”.

Do you have some sort of vendetta against Gibson?

The debt level owed to Gibson O’Neill I wouldn’t really call that a loan as such. If he intended on recouping any of those funds he will have surely started reducing that debt year on year? There are benefits to the loan system between business he is using.

 

[changingman]

Just catching up...

Re: the other commercial opportunities, most of them are chicken feed though right? And any increase in revenue would need to be balanced with costs in the other column. The bars/concourse for example, it could be more efficient but would that entail either more, or better paid, staff (or both?)

Shirt availability does seem a farce, at least externally, but again presumably the conditions of that contract make it unenforceable to provide a better service (presumably as the low quality is "baked into" the price)?

There are some tunes to be played with ticket prices, and I'm amazed the club doesn't use a more data-driven approach on this (regular fan surveys, focus groups etc to understand latent demand) but it can be a blunt tool and the volume of season tickets means it can be difficult to trial multiple pricing strategies to gauge which is preferable.

 

[indeedido]

Do you have some sort of vendetta against Gibson?

The debt level owed to Gibson O’Neill I wouldn’t really call that a loan as such. If he intended on recouping any of those funds he will have surely started reducing that debt year on year? There are benefits to the loan system between business he is using.

Back again eh?
Not a loan?
What would you call it then?
It is not a gift that’s for sure.

 

[Quicksilvera]

Back again eh?
Not a loan?
What would you call it then?
It is not a gift that’s for sure.

Is he repaying himself this loan season on season or is he extending/not calling the loan in? From the outside looking in it looks like it is investment, he isn’t going to call it in all at once is he?

 

[indeedido]

Is he repaying himself this loan season on season or is he extending/not calling the loan in? From the outside looking in it looks like it is investment, he isn’t going to call it in all at once is he?

Loans and Equity are both Investments.
His loans are an investment. One that make him no return given no interest is charged.
But they are recoverable and at any time he chooses beyond 12 months.
That means he retains absolute control over everything.

If we don't go up to access PL revenues (and inflated squad value) then he can't get repayment on the loans, as no profit will be made. He has to keep extending bigger loans to cover the ongoing losses as well as his historic ones.
If he did try and call the loans in, in full at once, then he is calling time on his own club. The club would be liquidated with liabilities (inc his loans) £132m greater than assets.

So he has to keep on covering the losses with extra loans to give himself even a theoretical chance of getting any of his money back.

My opposition to Gibson - as I have always stressed - is in his competence and the likelihood of MFC getting into the PL and staying there.
He has put an awful lot into the club, but it is covering the impact of his running of the club.

 

[Philly-Red]

Is he repaying himself this loan season on season or is he extending/not calling the loan in? From the outside looking in it looks like it is investment, he isn’t going to call it in all at once is he?

Read the standing orders! Read then and understand them!

 

[atypical_boro]

I’ve always defended Gibson, but we have reached a point where it cannot be denied that the last 15 years have been pretty poor really. Only 1 season of those 15 hasn’t ended in sheer disappointment! Compare that to the previous 20 or so.

That said, I’d want to know who he was selling to before I could answer the question.

 

[Smoginexile]

He may have his faults but he is no Mel Morris.
I hope he stays for a lot more years to come.

 

[coluka]

From the outside looking in

 

[Quicksilvera]

 

[Quicksilvera]

Loans and Equity are both Investments.
His loans are an investment. One that make him no return given no interest is charged.
But they are recoverable and at any time he chooses beyond 12 months.
That means he retains absolute control over everything.

If we don't go up to access PL revenues (and inflated squad value) then he can't get repayment on the loans, as no profit will be made. He has to keep extending bigger loans to cover the ongoing losses as well as his historic ones.
If he did try and call the loans in, in full at once, then he is calling time on his own club. The club would be liquidated with liabilities (inc his loans) £132m greater than assets.

So he has to keep on covering the losses with extra loans to give himself even a theoretical chance of getting any of his money back.

My opposition to Gibson - as I have always stressed - is in his competence and the likelihood of MFC getting into the PL and staying there.
He has put an awful lot into the club, but it is covering the impact of his running of the club.

I understand the points you make but if he intends on recouping any money whatsoever why isn’t he gradually reducing the debt? It doesn’t make sense really, I don’t believe the ‘loans’ will ever be recovered and will be written off when it’s time to sell or pass on.

 

[Bruce]

I understand the points you make but if he intends on recouping any money whatsoever why isn’t he gradually reducing the debt? It doesn’t make sense really, I don’t believe the ‘loans’ will ever be recovered and will be written off when it’s time to sell or pass on.

Mostly, he can't. I'm sure he would love to be at least breaking even. Since our last relegation we have been absolutely hammered financially. Some of that is due to Covid but mostly it is due to the Championship being a basket case. You simply can't afford a competitive team in the Championship without making a £5-£10m profit from transfers each season. We are probably uniquely bad because of the after-effects of Monk's season.

I think that Gibson's exit strategy is to get us into the Premier league then sell up once we manage to stay up. He won't get all his money back but he will get a decent chunk. Then again, no one knows except Gibson. He also gives the impression of someone who can't let go.

 

[Kowalski]

I understand the points you make but if he intends on recouping any money whatsoever why isn’t he gradually reducing the debt? It doesn’t make sense really, I don’t believe the ‘loans’ will ever be recovered and will be written off when it’s time to sell or pass on.

Your question was explained in the post?

Under the present model the club requires additional loans on an annual basis as explained.

 

[Kowalski]

Mostly, he can't. I'm sure he would love to be at least breaking even. Since our last relegation we have been absolutely hammered financially. Some of that is due to Covid but mostly it is due to the Championship being a basket case. You simply can't afford a competitive team in the Championship without making a £5-£10m profit from transfers each season. We are probably uniquely bad because of the after-effects of Monk's season.

I think that Gibson's exit strategy is to get us into the Premier league then sell up once we manage to stay up. He won't get all his money back but he will get a decent chunk. Then again, no one knows except Gibson. He also gives the impression of someone who can't let go.

I agree with this apart from the profit on transfers part. While it is unusual, Luton managed it last season.

 

[Keanu_Reeves]

Like others have said, better the devil you know. Gibson isn’t rich in footballing terms but he is giving us a steady if not spectacular club.

We punched above our weight last season because Chuba had a season that no one in their right mind would have predicted. We signed some loan players who happened to be very good at our level. But ultimately we fell at the second from last hurdle. Is that Gibsons fault? I’d say more the players (who were more than capable) were to blame. This season could very well be the same. Gibson cannot be blamed for last season.

Would I love for a Middlesbrough born billionaire to come in and take the club over? Absolutely! But that’s not going to happen. We are better off running with what we have and try and emulate the Bournemouth and Brighton models that didn’t become successful in a season and a half.

We did not punch above our weight last season - punching above our weight would be challenging for the top 6 in the premier league. The club should be in the top league which historically it has been until the more recent under achieving period

 

[Bruce]

I agree with this apart from the profit on transfers part. While it is unusual, Luton managed it last season.

Luton, like Coventry are an unusual case in that they came up through the divisions with a mix of very low paid players. If you take the various salary sites seriously, they may still have a smaller wage bill than us despite being in the Premier league.

Luton are the poster child for making a success by sticking with a manager who is capable of getting the best out of a limited group of players. We have been doing the polar opposite for 6 years and are paying the price.

According to the June 2022 accounts, it looks like our players' and coaching staff wages were around £24m in the year. (That includes all the juniors.) The operating (non-staff) costs of the club look to be around £6m per year. Our other staff costs were about £4m. Our "cost of sales"* looks to come in at around 25%. With a turnover of around £27m what that means is that you generate £21m in profit to pay your costs.
Our costs were
£24m in player wages
£4m in other wages
£6m in operating costs (bills, repairs, insurance etc)
Total £36m.

So we are £15m in the hole.
The other wages and operating costs are pretty fixed so that means we need, in simple terms, to halve our wage bill to have a chance of breaking even. That means we would be paying players about as much as someone like Birmingham does.

We have been paying significantly more than we can afford for players on the basis that this time next year, Rodney, we will be in the Premier league.

 

[Corco65]

So basically the master plan of running a successful football club is that we need and expect to find an even bigger mug than SG and expect them to gamble their millions away, buying players, paying their salaries and their agents. I thought this was what SG has already done. As with other clubs, there is a chance it might get you in the Premier league and you can hover around for a few years maybe mid table if your lucky or perhaps the excitement of a relegation battle before things turn again, and a lot of clubs in premier league are in debt despite being there. Over the last 10 years Man U have spent over 1.5 billion net on players and what have they achieved. Last time we were in the premier league and for most seasons before that in the Premier league we rarely sold out, some clubs have limits to growth potential unless like some others you are owned by a nation state and all that brings, and then once nation states own all the clubs, the same thing happens, as there will be the richest and poorest nation states.

It also seems that if we can't find a mug stupid enough to want to waste their money, then a lot of people would be happy with SG if he started to waste his millions again as long as he doesn't expect to protect it in someway.

The man has in some form or other invested almost 200 million into the club and he is accused of mismanagement and it's all his fault and yet the answer is, do it again, what you did before, for which he is criticised, for so called turning us into a basket case club, only this time you simply just need to find the right people to work for you, which was what of course he thought he had done last time, until things don't quite work work out like they should on paper and then their all useless again and look what SG has done, he doesn't know what he is doing.

Too many people are playing fantasy chairman with other people's money and stating simplistic solutions to complex situations.

Also I don’t expect or think it's my right that someone else should subsidise my entertainment and demands , and if I was a multi millionaire or billionaire I know who I would be giving my money to and it wouldn't lining the pockets of players and agents, or subsiding those amongst us who would only blame me when I did.

Long may SG own the club.

UTB

 

[indeedido]

I understand the points you make but if he intends on recouping any money whatsoever why isn’t he gradually reducing the debt? It doesn’t make sense really, I don’t believe the ‘loans’ will ever be recovered and will be written off when it’s time to sell or pass on.

Seriously do I have to spell it out?
The club lose money, they are already totally dependent on his loans.
He can't reduce the debt/repay any loans, because there is no profit to use to payback.
He has to carry on funding the debt and future losses; there is no money to pay back debt.
They can only make profit in the PL when established.