ALK Capital or Farnell/Elkashashy takeover

[jojomk1]

No

Original one that just went into great detail over ALK's original proposed deal

Sure I saw some new postings on the subject last week - maybe I am mistaken ?

[Chester Perry]

That is the one that has had the recent updates and all the original stuff

There was this from the time of the takeover that hasn't been touched for months

£180m BFC

http://www.uptheclarets.com/messageboar ... =2&t=26485

and this was started more recently

Have we sold out for our owners to take us sideways

http://www.uptheclarets.com/messageboar ... =2&t=56070

[Chester Perry]

There was also this on Takeover day but it has been locked since then

The wait is over - ALK Capital buy Burnley FC

http://www.uptheclarets.com/messageboar ... =2&t=52063

[jojomk1]

Cheers Chester

[Chester Perry]

There was also this on Takeover day but it has been locked since then

The wait is over - ALK Capital buy Burnley FC

http://www.uptheclarets.com/messageboar ... =2&t=52063

it is interesting reading through that again just how many things we have learned since then about the takeover as well as the thoughts some had about the managers sphere of power

for my part I got it totally wrong about the club not being suitable for a leveraged takeover - something I have acknowledged several times now, though we now know there is still a sizeable chunk of money to be paid to Mike G and John B

The other curious thing is the initial claim that there were a number of significant investors - to my mind significant investors put in cash - we have 5 new directors but investors is a different issue entirely

[ClaretTony]

Have I missed something ?

Original thread (that ran to 00's of pages) seems to have vanished despite recent comments on the subject

Or am I wrong ?

Not vanished as far as I can see - I'll find it and merge them

[Kevwando]

Simon Jordan on talksport earlier talking about Pace & Dyche
https://twitter.com/talksport/status/14 ... 72901?s=21

[Chester Perry]

Simon Jordan on talksport earlier talking about Pace & Dyche
https://twitter.com/talksport/status/14 ... 72901?s=21

same caveats given there as have been on this board and thread since the details of the takeover came out - nothing new

[dsr]

This is where you are fundamentally wrong. It doesn't matter if there is £50m in the bank or £50m in player assets as the value of the club is still the same and Garlick would still have gotten the same price for the club.

The question around the cash in the bank is around it being needed as it was the only way ALK could structure the deal. This brings us back to your comment of wanting Garlick gone at all costs.

Also the club under Garlicks tenure has always carried cash in the bank to ensure if we went down and lost the TV money we had a platform to try and come back up and be able to transition into a secure Championship club if we didnt suceed. Takeover or no takeover in the midst of Covid Garlick was never spending anywhere near the amount of cash in our bank

That's clearly not the whole story. Garlick, as director of the club, is and was quite happy to spend all the money in the club's bank account and to provide security for someone else to borrow money and spend that as well.

The point about Garlick was that he was not willing to spend that money on new players. He had no apparent difficulty on spending the cash, but only when it ultimately went into his bank account rather than improving the quality of the squad.

[dsr]

It's old ground but Garlick didn't take the money out of the club, the money to pay him came from ALK. Obviously where that money came from isn't clear but you know enough about accounting to know the difference.

Kilby did receive fairly premium interest on loans to the club (although I'm sure it was lower than a commercial rate would have been).

Of course I know the difference. If Garlick had paid himself all that money in dividends and/or salary, he would have paid more tax than by paying it to himself as a capital gain.

As to the difference between paying it to himself directly, or arranging a deal by which the money went through a third party bank account - any difference is only technical. The money left the club's bank account and went into his, and he was party to every step of the deal.

[Chester Perry]

That's clearly not the whole story. Garlick, as director of the club, is and was quite happy to spend all the money in the club's bank account and to provide security for someone else to borrow money and spend that as well.

The point about Garlick was that he was not willing to spend that money on new players. He had no apparent difficulty on spending the cash, but only when it ultimately went into his bank account rather than improving the quality of the squad.

even though the sale has indeed transferred some of the club's cash to Mike G. John B and co that is just supposition about spending on players with no analysis of the whole financial picture and looking at overall annual cost of the squad against revenues and the spend and development elsewhere

[dsr]

even though the sale has indeed transferred some of the club's cash to Mike G. John B and co that is just supposition about spending on players with no analysis of the whole financial picture and looking at overall annual cost of the squad against revenues and the spend and development elsewhere

It's fact that the club did not spend much (in PL terms) and built up a cash pot which Garlick took with him. We don't know exactly when Garlick decided that taking the cash himself was better than spending it on players, and we don't know exactly why he did it, but there's no doubt that that's what he did.

He could of course choose to explain his reasoning.

[Lancasterclaret]

It's fact that the club did not spend much (in PL terms) and built up a cash pot which Garlick took with him. We don't know exactly when Garlick decided that taking the cash himself was better than spending it on players, and we don't know exactly why he did it, but there's no doubt that that's what he did.

He could of course choose to explain his reasoning.

Wouldn't matter though would it?

He's been hung, drawn and quartered in the court of social media, based on the crime of selling his stake in the club when almost everyone wanted him to.

Considering you and me were about his only defenders at times on here, your volte face is a tad surprising, especially based on the limited evidence we have

[Chester Perry]

It's fact that the club did not spend much (in PL terms) and built up a cash pot which Garlick took with him. We don't know exactly when Garlick decided that taking the cash himself was better than spending it on players, and we don't know exactly why he did it, but there's no doubt that that's what he did.

He could of course choose to explain his reasoning.

again their are reasons for not spending "much (in PL terms)" put it into the context of our annual revenues and annual football cost with all the other development work going on, I believe it explains much of the situation

I will also repeat that pre pandemic last summer was going to be one where there was significant money to spend on the squad - since then we have probably forever lost over £30m revenue in 16 months

[dsr]

Wouldn't matter though would it?

He's been hung, drawn and quartered in the court of social media, based on the crime of selling his stake in the club when almost everyone wanted him to.

Considering you and me were about his only defenders at times on here, your volte face is a tad surprising, especially based on the limited evidence we have

The point is that I believed that he was the local businessman running the club profitably and saving the cash for future benefit, and that his reluctance to sign players was that he didn't think there were players available to add value to the club, and that he was saving a pot of cash as a hedge against relegation so that if we go down we don't need a fire sale.

Now, I don't believe any of that. I am confident that some time before the day he sold up, he was running the club entirely for his own personal benefit and wealth and that he doesn't much care that he has left us right in Dickie's meadow if we go down.

Even on the limited evidence that we have, it seems pretty clear that if we had gone down under the old regime we would have had £50m in the bank to help us out. If we go down this season, we will have an overdraft, plus a mortgage of £60m owed on behalf of ALK which will be an insolvent company, and we haven't had any obvious benefit from all that expenditure. Certainly not on the playing side. We will be well stuffed.

If Garlick had sold his shares for £150m of someone else's money, that would be fine. But he's taken out all the money he can, he has sold to someone else who is also in it for the money they can raise from the club, and left the club vastly worse off.

[Chester Perry]

If it is correct that ALK still owe £70m to Mike G and John B then you would assume on a pro rata basis that Mike G still has the largest amount owed to him - on that basis to date he has only received a small amount amount of the circa £75m he was entitled to from the sale - probably less than half of it, if anyone is carrying risk given the financial model it is him

[milkcrate_mosh]

If he was running the club to rack up money for himself shouldn't we have made a profit? The idea of slashing costs to boost his own profits doesn't really tally with our accounts where we broke even...

[Wokingclaret]

If it is correct that ALK still owe £70m to Mike G and John B then you would assume on a pro rata basis that Mike G still has the largest amount owed to him - on that basis to date he has only received a small amount amount of the circa £75m he was entitled to from the sale - probably less than half of it, if anyone is carrying risk given the financial model it is him

In other words Chester he has probably already got his money back on his investment, with more to come

[Devils_Advocate]

That's clearly not the whole story. Garlick, as director of the club, is and was quite happy to spend all the money in the club's bank account and to provide security for someone else to borrow money and spend that as well.

The point about Garlick was that he was not willing to spend that money on new players. He had no apparent difficulty on spending the cash, but only when it ultimately went into his bank account rather than improving the quality of the squad.

How much did he not spend on new players? How much cash did we carry in the bank compared to previous seasons, how does our wage bill compare to previous seasons and what was the risk to our potential TV income in the midst of Covid last summer that Garlick would needed to have factor in.

If you can give me all this info then we can look at how much extra cash did Garlick hold back last year beyond what was needed to ensure we were not putting ourselves at financial risk.

Had Garlick spent £20m on a player instead of cash in the bank then Garlick would have still got that £20m for the club. It might have meant that someone buying it had to borrow more against the club to get Garlick his money rather than using cash reserves but either way Garlick gets paid the same. The difference is in one scenario we have a £20m player and £20m more debt leveraged against the clubs assets and in the other we dont have the player but we dont have that extra £20m debt.

The alternative could be that had Garlick spent £20m on a player, AKL couldnt have structured a deal to sell the club and Garlick would still be here with the majority unhappy including our manager who may not of wanted to stick around if some are to be believed. If that would have been your preference and you are now unhappy with the sale of the club then I have no problem as its a fair and logical position

Also if you did not want Garlick to sell, was happy for his cautious approach and are now upset that the way the club has been left from its sale by him then I dont have a problem with that. Its your view and its a logical one.

What I have been questioning is those who wanted Garlick out because he didnt have the money needed to increase our budget and because he wasnt going to change his cautious approach about always being prepared for relegation but are now unhappy with him for selling the club and getting the market value for it. If you fall into this category then my question is what could Garlick have done to satisfy your wish for him to sell the club and for you not to be happy that he has got the cash value of what its worth

[Devils_Advocate]

If it is correct that ALK still owe £70m to Mike G and John B then you would assume on a pro rata basis that Mike G still has the largest amount owed to him - on that basis to date he has only received a small amount amount of the circa £75m he was entitled to from the sale - probably less than half of it, if anyone is carrying risk given the financial model it is him

This, the best outcome for Garlick was to get paid up in full and be off. The only logical way ALK will default and have to hand the shares back is if it goes tits up and the £50m Garlick gets back will likely be worth a fraction of that if anything at all

[Chester Perry]

In other words Chester he has probably already got his money back on his investment, with more to come

or if the whole model comes crashing down he gets the club back and will have to put it all back in again just to stabilise, probably in the Championship (if not worse)

[ksrclaret]

If it is correct that ALK still owe £70m to Mike G and John B then you would assume on a pro rata basis that Mike G still has the largest amount owed to him - on that basis to date he has only received a small amount amount of the circa £75m he was entitled to from the sale - probably less than half of it, if anyone is carrying risk given the financial model it is him

If MG wasn't to see another penny from the sale, he'll still have done very, very well out of it. He'll not be short at the end of the month.

[dsr]

If it is correct that ALK still owe £70m to Mike G and John B then you would assume on a pro rata basis that Mike G still has the largest amount owed to him - on that basis to date he has only received a small amount amount of the circa £75m he was entitled to from the sale - probably less than half of it, if anyone is carrying risk given the financial model it is him

Wasn't Garlick the majority shareholder? Remember that he made sure the money was for him and his friends, not shared out among the minority shareholders. He would have got a good deal more than half the proceeds.

As far as we can gather from the information that has leaked out, ALK's funds were £15k from shareholders, £50k from BFC, £60k from a third party lender, total £125k. They have paid out, as far as we can gather, £115m to purchase 85% or so of BFC's shares, and owe £35m to Garlick and friends.

So Garlick may lose £35m but if he does he will get the club back, and he has already had £60m or so. BFC has already lost £50m and if the club gets relegated will be on the hook for £60m more. That is a huge financial risk, especially as it will crystallise at a time of much reduced income.

ALK's balance sheet now will have £150m cost of BFC in assets. In liabilities, £60m owed to third party lenders, £50m owed to BFC, £35m owed to Garlick and friends. The odd £5m either still in the bank or used for running costs. Part of the problem being that the club they paid £150m for had a large cash balance and no debts; now, it has no cash balance and a large mortgage. So it will be worth less than it was, and ALK is already short of assets to repay its liabilities.

If we get relegated, the value of BFC plummets to next to nothing, ALK becomes insolvent and may choose to go bust, and even if they don't they will certainly be unable to repay their £50m loan to BFC or their £60m loan to the third party, which means BFC will have to pay it. Bang goes the parachute money.

Burnley's future rests on two things. Either Dyche continues to work his miracles and keeps BFC in the Premier while still generating profits enough to pay ALK's debts, or else ALK sell the club while it's still worth something and wipes the debts out. In that latter case, but only in that latter case, we'll be OK.

[dsr]

or if the whole model comes crashing down he gets the club back and will have to put it all back in again just to stabilise, probably in the Championship (if not worse)

He won't have to put the money back. It's a limited liability company, he can walk away or sell the shares for tuppence or just wind up the company.

[dsr]

What I have been questioning is those who wanted Garlick out because he didnt have the money needed to increase our budget and because he wasnt going to change his cautious approach about always being prepared for relegation but are now unhappy with him for selling the club and getting the market value for it. If you fall into this category then my question is what could Garlick have done to satisfy your wish for him to sell the club and for you not to be happy that he has got the cash value of what its worth

As Lancaster pointed out above, I was more pro-Garlick than most and I didn't particularly want him out. Or at least, the only reason I wanted him out was that Dyche for unspecified reasons was very unhappy with him and I would rather keep Dyche than Garlick.

What Garlick could have done was to sell the club to someone who wanted it for hobby reasons rather than money-making reasons, and that he could have sold it intact without stripping out all the money and lumbering it with debt.

[Lancasterclaret]

As Lancaster pointed out above, I was more pro-Garlick than most and I didn't particularly want him out. Or at least, the only reason I wanted him out was that Dyche for unspecified reasons was very unhappy with him and I would rather keep Dyche than Garlick.

What Garlick could have done was to sell the club to someone who wanted it for hobby reasons rather than money-making reasons, and that he could have sold it intact without stripping out all the money and lumbering it with debt.

I think you've nailed the problem there with that last paragraph

People wanted Garlick to sell out to someone like Garlick, but one who spend loads of money without changing anything that Garlick had done in regards to ticket prices etc etc etc

I'm not sure that is possible for a club like ours tbh

[GodIsADeeJay81]

As Lancaster pointed out above, I was more pro-Garlick than most and I didn't particularly want him out. Or at least, the only reason I wanted him out was that Dyche for unspecified reasons was very unhappy with him and I would rather keep Dyche than Garlick.

What Garlick could have done was to sell the club to someone who wanted it for hobby reasons rather than money-making reasons, and that he could have sold it intact without stripping out all the money and lumbering it with debt.

Was there a buyer like that lurking around, willing to do a deal quick enough so that Dyche didn't potentially walk?

[Chester Perry]

If MG wasn't to see another penny from the sale, he'll still have done very, very well out of it. He'll not be short at the end of the month.

more than he would ever have expected when he put is money in certainly, but not a huge return so far - maybe two to four times his total in money

a few things to remember

- it was Mike that stumped up the cash for shares (and risk) when others wanted/needed out
- he has put well over of a decade of work into the club at no charge - 9 or so as co-chair/chair
- many aspects of the club away from the 1st team (mainly infrastructure and development) have moved forward under his tenure and his roadmap for such development is still the reference point for the work we are still seeing being done
- no other "small" club has lasted so long in the Premier League with a model of sustainability, Blackburn and Bolton are the only clubs of similar size to have lasted longer but both employed models which were not sustainable

[Devils_Advocate]

As Lancaster pointed out above, I was more pro-Garlick than most and I didn't particularly want him out. Or at least, the only reason I wanted him out was that Dyche for unspecified reasons was very unhappy with him and I would rather keep Dyche than Garlick.

What Garlick could have done was to sell the club to someone who wanted it for hobby reasons rather than money-making reasons, and that he could have sold it intact without stripping out all the money and lumbering it with debt.

I've no problem with that but that still relies on the buyer you want coming along. Given that there is no evidence of that kind of buyer being in the picture would you rather have Garlick kept the club even if it risked an unhappy Dyche leaving or was your preference for him to sell?

If its the former then again ive no issue with your viewpoint and as its a fair position. The bit im questioning with you is that his prudent financial strategy he employed successfully for many years was all a ploy to sell the club and make money when it looks for more likely that he realised (especially with Covid) that he had gone as far as he could, looked to sell the club and accepted an offer for someone willing t pay the asking price.

Again if you're unhappy for him allowing that kind of takeover to happen and would rather he kept the club I am not questioning you but those who wanted him out at all costs and now are unhappy that he has got the money for what the club is worth (even though the way it is structured means he hasnt and a lot of his money is still very much at risk) are the ones whose viewpoint Im saying doesnt add up. Ive asked several to clarify for me but once I get past their emotive feelings they disappear as they dont seem to have an answer beyond their emotional feelings to the subject

[randomclaret2]

more than he would ever have expected when he put is money in certainly, but not a huge return so far - maybe two to four times his total in money

a few things to remember

- it was Mike that stumped up the cash for shares (and risk) when others wanted/needed out
- he has put well over of a decade of work into the club at no charge - 9 or so as co-chair/chair
- many aspects of the club away from the 1st team (mainly infrastructure and development) have moved forward under his tenure and his roadmap for such development is still the reference point for the work we are still seeing being done
- no other "small" club has lasted so long in the Premier League with a model of sustainability, Blackburn and Bolton are the only clubs of similar size to have lasted longer but both employed models which were not sustainable

Just one thought on that last point CP...has MGs sale of the club left us with a model that is sustainable ?

[ksrclaret]

more than he would ever have expected when he put is money in certainly, but not a huge return so far - maybe two to four times his total in money

a few things to remember

- it was Mike that stumped up the cash for shares (and risk) when others wanted/needed out
- he has put well over of a decade of work into the club at no charge - 9 or so as co-chair/chair
- many aspects of the club away from the 1st team (mainly infrastructure and development) have moved forward under his tenure and his roadmap for such development is still the reference point for the work we are still seeing being done
- no other "small" club has lasted so long in the Premier League with a model of sustainability, Blackburn and Bolton are the only clubs of similar size to have lasted longer but both employed models which were not sustainable

I've got nothing against Garlick. My comment was for balance when you suggested that he was the one, if anyone, taking the financial risk. From my perspective Garlick did a very sound job, but Dyche decided to throw his toys out of the pram and the rest is history.

As it happens, dsr has nailed everything above, really. The only thing I disagree with him on that he would rather have kept Dyche over Garlick. For me, relegation under Garlick would have been a huge disappointment but one we'd have been able to come back from. Relegation under ALK lands us bang in the smelly stuff.

[Chester Perry]

He won't have to put the money back. It's a limited liability company, he can walk away or sell the shares for tuppence or just wind up the company.

but would he?

I suppose a lot would depend on age and health status, I would not blame him for doing so given that he would also be blamed by many for any such failure under ALK.

As I keep saying, I believe there where a series of event intersections that led to the sale to ALK at that juncture in time, most people are just unwilling to want to even comprehend that fact

[Chester Perry]

I've got nothing against Garlick. My comment was for balance when you suggested that he was the one, if anyone, taking the financial risk. From my perspective Garlick did a very sound job, but Dyche decided to throw his toys out of the pram and the rest is history.

As it happens, dsr has nailed everything above, really. The only thing I disagree with him on that he would rather have kept Dyche over Garlick. For me, relegation under Garlick would have been a huge disappointment but one we'd have been able to come back from. Relegation under ALK lands us bang in the smelly stuff.

FWIW I wasn't having a dig

I think if Garlick stayed and Dyche left then the vast majority of fans would have turned on Garlick, and in a rather nasty way too from some of them.

What I saw from his tenure was an effort to try and give the manager, as many tools as he could for the job, but also have a view to the medium and long term of the clubs sustainability. Our financial health was reasonable but in no way was it as rude as many pundits and fans would have you believe, 3 seasons in the Championship would have seen us with earnings of circa £20m or less with an expensive academy to run (£5m+ a year). The risks Garlick took were considerable and calculated, he appeared to absolutely believe in the manager (never once did he call him out publicly over his comments) but he also new the futility of overstretching the club in an effort to reach the mythical next level

[Chester Perry]

Just one thought on that last point CP...has MGs sale of the club left us with a model that is sustainable ?

for such questions I always try and refer people back to this

http://www.uptheclarets.com/messageboar ... =2&t=48329

MG left the club in a position where it could invest infrastructure and staff that could grow revenues (and the roadmap and cash with which to kick it off)

I have repeatedly pointed out that the circa £5m - £6.5m reported costs of servicing debt could have been used to bring in similar creative executive talent (particularly if the new directors are earning salaries) and still leave us with the option of borrowing to develop our revenues via infrastructure spend.

I will say that the old board would have found it more difficult to introduce the pricing structures we are starting to se and which I expect will develop more going forward

In short the model works while we are in the Premier League, though being in the Premier League for sustained periods becomes much more difficult as more club owners adopt the benefactor model and start to price us out of our traditional markets in the way Aston Villa, Southampton and now Crystal Palace have done for the better Championship players

[dsr]

I've no problem with that but that still relies on the buyer you want coming along. Given that there is no evidence of that kind of buyer being in the picture would you rather have Garlick kept the club even if it risked an unhappy Dyche leaving or was your preference for him to sell?

If its the former then again ive no issue with your viewpoint and as its a fair position. The bit im questioning with you is that his prudent financial strategy he employed successfully for many years was all a ploy to sell the club and make money when it looks for more likely that he realised (especially with Covid) that he had gone as far as he could, looked to sell the club and accepted an offer for someone willing t pay the asking price.

Again if you're unhappy for him allowing that kind of takeover to happen and would rather he kept the club I am not questioning you but those who wanted him out at all costs and now are unhappy that he has got the money for what the club is worth (even though the way it is structured means he hasnt and a lot of his money is still very much at risk) are the ones whose viewpoint Im saying doesnt add up. Ive asked several to clarify for me but once I get past their emotive feelings they disappear as they dont seem to have an answer beyond their emotional feelings to the subject

That begs the question why Dyche was unhappy with Garlick. I think there is a very fair chance that Dyche was unhappy because he knew Garlick was building up the pot of cash for his own benefit.

I do not care that he and his friends have got over £100m rising to £150m. What I care about is that it is the club's own funds that he has got. Every £50m of club funds that have gone to Garlick is £50m that cannot be spent on players, or wages, or new stands, or on trying to come back from relegation.

[Devils_Advocate]

That begs the question why Dyche was unhappy with Garlick. I think there is a very fair chance that Dyche was unhappy because he knew Garlick was building up the pot of cash for his own benefit.

I do not care that he and his friends have got over £100m rising to £150m. What I care about is that it is the club's own funds that he has got. Every £50m of club funds that have gone to Garlick is £50m that cannot be spent on players, or wages, or new stands, or on trying to come back from relegation.

See CP's last paragraph 4.32pm comment. I think its much more likely that Dyche was frustrated that the money wasnt available that he feels he needed (especially after everything he has done) and not that he thought Garlick was hording away millions of pounds for his own benefit.

[Lancasterclaret]

That begs the question why Dyche was unhappy with Garlick. I think there is a very fair chance that Dyche was unhappy because he knew Garlick was building up the pot of cash for his own benefit.

I do not care that he and his friends have got over £100m rising to £150m. What I care about is that it is the club's own funds that he has got. Every £50m of club funds that have gone to Garlick is £50m that cannot be spent on players, or wages, or new stands, or on trying to come back from relegation.

That is reaching a hell of a lot

We've no idea what the fall out was about, and I would be very surprised if its as simple as you claim

[ksrclaret]

FWIW I wasn't having a dig

I think if Garlick stayed and Dyche left then the vast majority of fans would have turned on Garlick, and in a rather nasty way too from some of them.

What I saw from his tenure was an effort to try and give the manager, as many tools as he could for the job, but also have a view to the medium and long term of the clubs sustainability. Our financial health was reasonable but in no way was it as rude as many pundits and fans would have you believe, 3 seasons in the Championship would have seen us with earnings of circa £20m or less with an expensive academy to run (£5m+ a year). The risks Garlick took were considerable and calculated, he appeared to absolutely believe in the manager (never once did he call him out publicly over his comments) but he also new the futility of overstretching the club in an effort to reach the mythical next level

The question I really want an answer to, but I don’t suppose we’ll ever get, is why Dyche and Garlick fell out so publicly.

Was it because Dyche wasn’t happy with how Garlick was running the club and wanted more money to spend, so decided he could no longer work with him? Or was it because Dyche knew/ suspected that Garlick was preparing the business for a takeover for the financial benefit of himself and to the detriment of the team?

It would make for intriguing reading one day.

[Lancasterclaret]

The question I really want an answer to, but I don’t suppose we’ll ever get, is why Dyche and Garlick fell out so publicly.

Was it because Dyche wasn’t happy with how Garlick was running the club and wanted more money to spend, so decided he could no longer work with him? Or was it because Dyche knew/ suspected that Garlick was preparing the business for a takeover for the financial benefit of himself and to the detriment of the team?

It would make for intriguing reading one day.

Forgot we can't edit, so this is replying to both you and Dsr

Think CP is bang on the money regarding MG and the plans, and that coronavirus seriously got in the way, and I have my suspicions that the fall out began long before that

[KRBFC]

Garlick was very supportive of Dyche for years, then it all dried up and their relationship soured. Why did we spend £40m+ in 1 year on Hendrick, Brady, Defour etc but last summer spend nothing when we needed it most and finance was available?

[Billy Balfour]

They fell out over who would win in a fight between a Siberian tiger and a grizzly bear.

[ksrclaret]

Forgot we can't edit, so this is replying to both you and Dsr

Think CP is bang on the money regarding MG and the plans, and that coronavirus seriously got in the way, and I have my suspicions that the fall out began long before that

That would probably point to the reason being closer to the former of my two questions, then.

If CP is right about the plans before covid got in the way, it’s a hard one to stomach considering the position we’re in now. Such is life and best laid plans.

[Chester Perry]

Wasn't Garlick the majority shareholder? Remember that he made sure the money was for him and his friends, not shared out among the minority shareholders. He would have got a good deal more than half the proceeds.

As far as we can gather from the information that has leaked out, ALK's funds were £15k from shareholders, £50k from BFC, £60k from a third party lender, total £125k. They have paid out, as far as we can gather, £115m to purchase 85% or so of BFC's shares, and owe £35m to Garlick and friends.

So Garlick may lose £35m but if he does he will get the club back, and he has already had £60m or so. BFC has already lost £50m and if the club gets relegated will be on the hook for £60m more. That is a huge financial risk, especially as it will crystallise at a time of much reduced income.

ALK's balance sheet now will have £150m cost of BFC in assets. In liabilities, £60m owed to third party lenders, £50m owed to BFC, £35m owed to Garlick and friends. The odd £5m either still in the bank or used for running costs. Part of the problem being that the club they paid £150m for had a large cash balance and no debts; now, it has no cash balance and a large mortgage. So it will be worth less than it was, and ALK is already short of assets to repay its liabilities.

If we get relegated, the value of BFC plummets to next to nothing, ALK becomes insolvent and may choose to go bust, and even if they don't they will certainly be unable to repay their £50m loan to BFC or their £60m loan to the third party, which means BFC will have to pay it. Bang goes the parachute money.

Burnley's future rests on two things. Either Dyche continues to work his miracles and keeps BFC in the Premier while still generating profits enough to pay ALK's debts, or else ALK sell the club while it's still worth something and wipes the debts out. In that latter case, but only in that latter case, we'll be OK.

Garlick was effectively the major shareholder though he held just under 50% of shares, Claiming he made sure small shareholders were not part of the deal is libel if you do not have the material evidence to back it up. The new owners wanted control and it is easier to do that by dealing with 7 people who hold enough shares to allow them on the board under the articles of association rather than the hundreds of others who will have no influence over them. We do not know why small share holders were not included but that may be as much financial as any other reason including that the new owners actually want fans to retain their shares

There is still much confusion of the sale numbers

- was it circa £170m or circa £150m for the 84% of shares
- was the loan circa £80m or circa £60m (I have previously suggested that the shorted of the two loans may be a flexible on - similar to the one West Ham have - and therefore maximum loan value was £80m with £60m exorcised and the rest available as an overdraft type facility)
- was shareholder input £10m or £15m or somewhere inbetween
- the common report on club money was circa £30m of the £50m or so in hand
- the common report on outstanding sum is £70m
- have the right denominations been used - I suspect some of these numbers were in $ not £ when relayed to reporters

we do know the two loans are interest bearing only - they have to be repaid or rolled over at some point

The loan agreements are secured against the clubs assets only and include provisions for first call on specific revenues if repayment schedules are not met, and yes that includes the parachute monies in the event of relegation, but also player sales and commercial revenues. All of which is manageable for one or two seasons in the Championship unless the loans have expired and require repaying rather than servicing

Burnley's future has relied on the efforts of Dyche for at least 5 years now, how he has used that power to push for what he wants is in part why we are now at this juncture - and from what I have seen his powerbase at the club has increased further since the takeover, he has become the deep rooted foundation on which the model is built on, which is a frankly ludicrous situation for any business with a turnover and debt liability of our size.

Iast night I posted an article about Barcelona;s handling of Messi down the years led directly to the mess they are in now, we could go the same way

[dsr]

Garlick was effectively the major shareholder though he held just under 50% of shares, Claiming he made sure small shareholders were not part of the deal is libel if you do not have the material evidence to back it up.

...

Iast night I posted an article about Barcelona;s handling of Messi down the years led directly to the mess they are in now, we could go the same way

Don't be facetious. Of course it's not libel. He's the managing director of the company who agreed the deal; to say it's libel to claim that he was responsible for the deal, is nonsense.

We know what Barcelona's problem is - they're in debt and can't afford to pay it back. I agree that by getting into debt we are in danger of going the same way. I think we have paid vastly more than we could afford to sign a new board of directors.

[JohnMcGreal]

In short the model works while we are in the Premier League, though being in the Premier League for sustained periods becomes much more difficult as more club owners adopt the benefactor model and start to price us out of our traditional markets in the way Aston Villa, Southampton and now Crystal Palace have done for the better Championship players

A model that's completely reliant on retaining PL status isn't a sustainable model.

[Chester Perry]

Garlick was very supportive of Dyche for years, then it all dried up and their relationship soured. Why did we spend £40m+ in 1 year on Hendrick, Brady, Defour etc but last summer spend nothing when we needed it most and finance was available?

it is in the accounts if you look - that spending spree saw a huge jump in wages and outstanding transfer payments - look at how the wages + amortisation to revenue ratio changes and consider the other spending on infrastructure at the club (infrastructure that did not grow revenues) add in the huge additions in football support staff and growing operational costs - I suspect we budget well over £1m a year on pitch maintenance alone

[Chester Perry]

A model that's completely reliant on retaining PL status isn't a sustainable model.

I have never claimed the new model was, it remains kind of sustainable if you get back up while under the first two years of parachute payments.

Of course there is a question to be asked as to whether parachute payments and the current Premier League financial model is sustainable if an independent football regulator is appointed with the power to change the distribution models as the EFL and many fans want it too

[KRBFC]

it is in the accounts if you look - that spending spree saw a huge jump in wages and outstanding transfer payments - look at how the wages + amortisation to revenue ratio changes and consider the other spending on infrastructure at the club (infrastructure that did not grow revenues) add in the huge additions in football support staff and growing operational costs - I suspect we budget well over £1m a year on pitch maintenance alone

There was money available, Defour and Hendrick had left the club by last summer.

[Chester Perry]

Don't be facetious. Of course it's not libel. He's the managing director of the company who agreed the deal; to say it's libel to claim that he was responsible for the deal, is nonsense.

We know what Barcelona's problem is - they're in debt and can't afford to pay it back. I agree that by getting into debt we are in danger of going the same way. I think we have paid vastly more than we could afford to sign a new board of directors.

the way you worded it was libel, reread the sentence as it stands alone

Remember that he made sure *** ***** was for him and his friends, not shared out among the minority shareholders

[Chester Perry]

There was money available, Defour and Hendrick had left the club by last summer.

demonstrate your numbers please taking into account everything else I have talked about, there is some not as much as many seem to think. then you have to allow in the things that remain unkown to us:

- targets Dyche wanted but wouldn't come/Garlick deemed we couldn't afford (fee, wages, agent fee or any combination)
- targets Rigg wanted but Dyche didn't
- positions Dyche wanted filling, but Dyche's targets could not be acquired or were refused (entirely possible, many fans worry about the age profile) so - Rigg identifies an alternative (maybe Drinkwater was a lower cost temporary alternative to the failed Phillips bid)
- long term infrastructure plans Garlick was saving for (maybe none but given there was a roadmap unlikely)
- what is a reasonable amount of Championship rainy day money to keep the academy strong and hopefully productive at Cat 1 level
- read the runes as what is happening re the fan led review and it;s consequential impact, Project Big Picture, UEFA club competitions post 2024 and the push to leagues that feed them to have no more than 18 clubs (only 4 do currently). Then There is FIFA's desire for a world cup of 48 teams every two years - that 18 club top league could easily be a FIFA membership rule. there is much more too