Mike Garlick

[Chester Perry]

Any ideas where the money comes from to buy shares from the fans? and how much impact is hundreds of fans now spending ''club credit'' likely to have on our future income figures?

There is a significant amount of unknown about who/what is paying for:

- the staged payments on the original 84% share transaction
- the shares from the small shareholders
- the remaining shares (that are ringfenced by an option agreement) of the original sellers

which is where I calculated the worst case scenario up this page (that includes the interest payments to MSD)

as for the club credit - if you suspect it is going on early bird season tickets for the most part (which I do) it is likely to hit the next two years of accounts the most - given a maximum exposure of circa £6.4m and probably closer to £6m in reality you would expect no more than a £3m - £3.5m direct hit on the cash flow in any set of accounts. Though it will be interesting to see how that is managed - you will need the accountants to post about the technicalities of how it will all be registered

I have noticed that there is encouragement to exercise the spend quickly (that gold card) and the fact from next season it can be used for matchday purchase purposes within the ground. It will be interesting to see if it encourages some to splurge in the club shop and hospitality. It should be acknowledged that the club would lose profit margin, the actual costs will be less than face value of purchases.

[Chester Perry]

Chester would you expect the loan details to be online Burnley FC’s upcoming accounts?

yes, certainly the amount and possibly the interest rate and loan term

[Chester Perry]

yes, certainly the amount and possibly the interest rate and loan term

It is possible that they could also post about what happens on relegation - is there a repayment triggered? in full or part? - VSL have confirmed to the small shareholders that repayment triggers do exist.

[IanMcL]

Just brings tears to one's eyes, if one ponders too much.

Garlick out.

[AfloatinClaret]

A profit on his risk, when selling his shares is one thing, to actually empty everything the club had (which was substantial) and enforce a mega debt on the club, at the same time, for entirely personal gain, is reprehensible.

He spouted for years, how important the club is to the town. Well your pal just placed one of the two on its uppers, to simply fill his own pockets. Thus placing the other under strain.

He appears to be cash rich and morally bankrupt.

Mike Garlick didn't 'empty everything the club had' the new owners were the ones who chose to do that.
Mike Garlick did indeed often comment on the club's importance to the town, though perhaps not nearly as often as many supporters (yourself included perhaps?) spouted demands for Mike Garlick to sell it and now those supporters are spouting complaints because he has; have you heard the adage about being careful what you ask for?

[IanMcL]

I never asked for a sale. I liked locals still being in control and careful about the club.

Sadly, Garlick ensured that went out of the window.

Like Wolves, for example, the price could have been one which, conditionally, retained the funds in the bank, instead of Garlick's pocket.

[ksrclaret]

Mike Garlick didn't 'empty everything the club had' the new owners were the ones who chose to do that.
Mike Garlick did indeed often comment on the club's importance to the town, though perhaps not nearly as often as many supporters (yourself included perhaps?) spouted demands for Mike Garlick to sell it and now those supporters are spouting complaints because he has; have you heard the adage about being careful what you ask for?

Nonsense. Garlick chose to sell to people knowing full well what the plans were regarding taking money out of the club. Or perhaps you’re suggesting Garlick had no say in the matter and ALK forced him to do it?

[dsr]

Mike Garlick didn't 'empty everything the club had' the new owners were the ones who chose to do that.
Mike Garlick did indeed often comment on the club's importance to the town, though perhaps not nearly as often as many supporters (yourself included perhaps?) spouted demands for Mike Garlick to sell it and now those supporters are spouting complaints because he has; have you heard the adage about being careful what you ask for?

I suspect you've never been involved in any sort of significant financial deal, if you believe that. Because when you are selling any significant asset, you don't hand over the keys until the cash is either in your hand or else you know exactly where it is coming from. for example, when you sell a car, you don't wait till the new owner has started the engine before asking for the cash. When you sell a house, you don't wait until completion before asking whether the new owner can get a mortgage. Those details are part of the contract.

When Garlick was negotiating with both these consortia, he asked in detail where they were going to get the funds from. He knew before he agreed to sell that the funds going into his bank account were coming, directly or indirectly, from Burnley Football Club. It was all part of the deal.

(And he's still a director. If he didn't approve, he would have resigned.)

[AfloatinClaret]

...for example, when you sell a car, you don't wait till the new owner has started the engine before asking for the cash. When you sell a house, you don't wait until completion before asking whether the new owner can get a mortgage. Those details are part of the contract...

Not usually 'part of the contract' but I understand what you're trying to explain; when when I sell a car or a property, I certainly ensure that the purchaser can meet the purchase price ahead of the sale's completion, but it is purchaser not the I who takes out the loan/mortgage/draws on his bank account to make that payment, not me; or in the case of Burnley FC, not Mike Garlick.

I suspect that you've never been involved in any sort of business/company purchase? When I (or indeed anyone) buys a company, I'm gaining title to that company's assets and indeed its liabilities and it is I, not the previous owner who dictates how I utilise those assets; the club's 'cash in hand' was an asset that ALK chose to utilise to fund their purchase - they could've alternatively chosen to sell a few players, the training ground or even Turf Moor to do so - but it was they, not Mike Garlick who would be making that decision.

[dsr]

Not usually 'part of the contract' but I understand what you're trying to explain; when when I sell a car or a property, I certainly ensure that the purchaser can meet the purchase price ahead of the sale's completion, but it is purchaser not the I who takes out the loan/mortgage/draws on his bank account to make that payment, not me; or in the case of Burnley FC, not Mike Garlick.

I suspect that you've never been involved in any sort of business/company purchase? When I (or indeed anyone) buys a company, I'm gaining title to that company's assets and indeed its liabilities and it is I, not the previous owner who dictates how I utilise those assets; the club's 'cash in hand' was an asset that ALK chose to utilise to fund their purchase - they could've alternatively chosen to sell a few players, the training ground or even Turf Moor to do so - but it was they, not Mike Garlick who would be making that decision.

But Mike Garlick was fully party to that decision and agreed with it. He signed a share sale deal that he knew would transfer funds from Burnley FC to Mike Garlick. When both parties agree a contract, to argue ALK agreed first and Garlick is likely sophistry and if not is certainly an irrelevant nitpick. If Garlick hadn't supported using BFC's assets to pay for his shares, then he wouldn't have signed the deal and he woukin't have supported it as a director.

[Newcastleclaret93]

But Mike Garlick was fully party to that decision and agreed with it. He signed a share sale deal that he knew would transfer funds from Burnley FC to Mike Garlick. When both parties agree a contract, to argue ALK agreed first and Garlick is likely sophistry and if not is certainly an irrelevant nitpick. If Garlick hadn't supported using BFC's assets to pay for his shares, then he wouldn't have signed the deal and he woukin't have supported it as a director.

I find it a strange concept blaming the previous owners for the financial issues caused by the new owners.

Surely there’s only one party to blame here

[RVclaret]

I find it a strange concept blaming the previous owners for the financial issues caused by the new owners.

Surely there’s only one party to blame here

They were allowed to buy the club like they have. PL laws allowed it. MG and co allowed it. It’s hardly the fault of the buyer, at least at this stage. Plus we don’t know what arrangements there are upon relegation.

[Newcastleclaret93]

They were allowed to buy the club like they have. PL laws allowed it. MG and co allowed it. It’s hardly the fault of the buyer, at least at this stage. Plus we don’t know what arrangements there are upon relegation.

That’s correct but I find it incredibly harsh blaming the previous owners as many seem to be doing.

[BurnleyFC]

I find it a strange concept blaming the previous owners for the financial issues caused by the new owners.

Surely there’s only one party to blame here

Be under no illusions that Mikey G knew exactly what he was doing, pre and post takeover.

[ksrclaret]

Mike Garlick claimed to be a fan of the club who only had the best interests of the club at heart. He would never do anything to jeopardise the long-term future of the club, he once pretended. Mike Garlick then proceeded to sell the club to people whose plan centres around a perilous financial model and mountains of debt with eye-watering interest owed.

Mike Garlick only ever had the best interests of Mike Garlick at heart. Fact. The turkey had certainly been fattened. So whilst Alan Pace will take the blame for the dubious decisions made during his ownership, Mike Garlick will take the blame for Alan Pace being here and everything that follows.

[AfloatinClaret]

But Mike Garlick was fully party to that decision and agreed with it. He signed a share sale deal that he knew would transfer funds from Burnley FC to Mike Garlick..

and in exchange for that consideration, Mike Garlick transferred ownership of his shares (or at least the vast majority of them) to ALK Capital - The 'Investor' that so many Burnley fans (you didn't comment as to whether or not you were one of them?) were calling for in his place.
Have you often sold houses/cars/businesses where you've completed the sale and then told the purchaser that they can keep the money? The club was predominantly owned by Mike Garlick, not you, I, or anyone else, therefore the cash in hand (an asset of the club's) that you're wittering about already belonged to Mike Garlick.

[RVclaret]

That’s correct but I find it incredibly harsh blaming the previous owners as many seem to be doing.

Well as has been questioned, were the clubs cash reserves being built up to look more attractive for potential buyers? Did we miss out on key targets in them awful windows under Garlick because he wasn’t prepared to commit those mentioned funds? Those cash reserves have ultimately been used by ALK (and by MG), in part, to finance the deal it would seem. Also - they have chosen to go with only the second leveraged buyout in English football (I think) and risk the future of the club - having said that, there may well be clauses that he has inserted which protect that. But, he could have turned that offer and waited for any other offers, no?

[taio]

and in exchange for that consideration, Mike Garlick transferred ownership of his shares (or at least the vast majority of them) to ALK Capital - The 'Investor' that so many Burnley fans (you didn't comment as to whether or not you were one of them?) were calling for in his place.
Have you often sold houses/cars/businesses where you've completed the sale and then told the purchaser that they can keep the money? The club was predominantly owned by Mike Garlick, not you, I, or anyone else, therefore the cash in hand (an asset of the club's) that you're wittering about already belonged to Mike Garlick.

Those who wanted a change of ownership didn't say the wanted a leveraged buyout and significant debt.

[Newcastleclaret93]

Mike Garlick claimed to be a fan of the club who only had the best interests of the club at heart. He would never do anything to jeopardise the long-term future of the club, he once pretended. Mike Garlick then proceeded to sell the club to people whose plan centres around a perilous financial model and mountains of debt with eye-watering interest owed.

Mike Garlick only ever had the best interests of Mike Garlick at heart. Fact. The turkey had certainly been fattened. So whilst Alan Pace will take the blame for the dubious decisions made during his ownership, Mike Garlick will take the blame for Alan Pace being here and everything that follows.

surely even if Garlick did sell in full knowledge that Pace intended on taking on mass debt. Then the FA have a lot to be blamed for. Clearly they must not have done there due diligence.

[ksrclaret]

surely even if Garlick did sell in full knowledge that Pace intended on taking on mass debt. Then the FA have a lot to be blamed for. Clearly they must not have done there due diligence.

Of course. But the FA have allowed these sorts of transactions before.

For Mike Garlick to allow it though is incompatible with all of his previous claims about loving and safeguarding the club.

[taio]

surely even if Garlick did sell in full knowledge that Pace intended on taking on mass debt. Then the FA have a lot to be blamed for. Clearly they must not have done there due diligence.

Why the FA?

[Newcastleclaret93]

Why the FA?

Well whichever organisation does the fit and proper owner test

[AfloatinClaret]

They were allowed to buy the club like they have. PL laws allowed it. MG and co allowed it. It’s hardly the fault of the buyer...

So if I buy a car that I can't afford to run/service and as a result said car falls apart, the fault lies with the person who sold me the car and whomever allowed me (the wife perhaps?) to buy the car and not myself; brilliant, do you have a Ferrari you want to sell?

[Newcastleclaret93]

Of course. But the FA have allowed these sorts of transactions before.

For Mike Garlick to allow it though is incompatible with all of his previous claims about loving and safeguarding the club.

I just find it strange your blaming Garlick.

If you sold your house and it went to rack and ruin under the new owners would you be responsible for that? Given you cared and loved that house

[ksrclaret]

I just find it strange your blaming Garlick.

If you sold your house and it went to rack and ruin under the new owners would you be responsible for that? Given you cared and loved that house

These house and car analogies are tedious, but I'll bite.

If I claimed to love and cherish my house and would only sell it to someone who'd look after it properly, I'd probably not sell it to someone who had to borrow the deposit from a loan shark.

So whilst the decision to ruin the house was the new owner's, if I really cared for that house as I'd once claimed, I'd be blaming myself and so, I suspect, would my old neighbours who've been left with an eyesore.

[Newcastleclaret93]

These house and car analogies are tedious, but I'll bite.

If I claimed to love and cherish my house and would only sell it to someone who'd look after it properly, I'd probably not sell it to someone who had to borrow the deposit from a loan shark.

So whilst the decision to ruin the house was the new owner's, if I really cared for that house as I'd once claimed, I'd be blaming myself and so, I suspect, would my old neighbours who've been left with an eyesore.

Haha ok, well I hope all the buyers of your previous homes have looked after them then. Would hate for you to blame yourself over what others have done.

[RVclaret]

So if I buy a car that I can't afford to run/service and as a result said car falls apart, the fault lies with the person who sold me the car and whomever allowed me (the wife perhaps?) to buy the car and not myself; brilliant, do you have a Ferrari you want to sell?

ALK have clearly shown they CAN finance it and have secured a loan from a professional organisation that, I don’t imagine, hands out 10s of millions off the cuff. They have also passed the ‘fit and proper persons test’ of the PL and convinced MG and co that they have the funds to acquire and run the club. My point was more MG knew this was a leveraged buy out and would put the club (he was supposedly a custodian of) in debt, simple.

[Chester Perry]

Mike Garlick claimed to be a fan of the club who only had the best interests of the club at heart. He would never do anything to jeopardise the long-term future of the club, he once pretended. Mike Garlick then proceeded to sell the club to people whose plan centres around a perilous financial model and mountains of debt with eye-watering interest owed.

Mike Garlick only ever had the best interests of Mike Garlick at heart. Fact. The turkey had certainly been fattened. So whilst Alan Pace will take the blame for the dubious decisions made during his ownership, Mike Garlick will take the blame for Alan Pace being here and everything that follows.

You will actually find there is more than one way of interpreting that first sentence

for clarity Mike Garlick would have definitely known the plan at takeover and he remains on the board to this day, so will be reasonably abreast of the situation.

one interpretation (it is an interpretation) of events is that following the breakdown in relationship with the manager, he thought the manager more important to immediate Premier League survival, so took a punt on those available who he thought Dyche could work with and may be able to do something in growing the club. There is no doubt that Garlick is heavily invested in this takeover, he may also have invested in VSL (see the last set of Clarets go Large Limited accounts) as they have struggled to bring new investors on board. We know that he has also signed up to agreements to reinvest in the club if the plans create a serious financial struggle or threaten create a default to MSD - hardly the actions of someone who does not care now he has his money.

there is plenty that remains unknown, and plenty that can be extrapolated if you look at the wider pool of information out there. I choose to believe that the decision to sell was not as binary as most believe, simply because that is how decisions are made in like but also because of all the intricacies that are involved and are slowly revealing themselves.

[ksrclaret]

Haha ok, well I hope all the buyers of your previous homes have looked after them then. Would hate for you to blame yourself over what others have done.

I've only ever had one previous home, and I was more than ready to leave it when the time came, as I never really cared for it. It was simply a means of getting on to the ladder and then moving to where I really wanted to be. I couldn't give a shite really what the house looks like now.

Same goes for Mike's boyhood club, you can only assume.

"haha"

[Swizzlestick]

All I'll say vaguely in the defence of Garlick is that a lot of supporters and, most notably, our manager wanted him out the door. ASAP. I wasn't party to the inside conversations at the time, but the comments by the normally guarded Dyche about the owners at the time were actually pretty extraordinary when you look back on them - it's a distinct possibility that he'd have gone if Garlick hadn't. Add in the increasing pressure from fans and you can see that he maybe felt the sale had to be accelerated. There were two concrete offers from what I can remember - ALK and El Kashashy/Chris Farnell. Those in the know were basically saying the latter bid was poison, Farnell in particular was dodgy as and it should be well avoided. Which left ALK. We can go over the ethics of selling to an entity that was essentially conducting a leveraged buyout, but that was the scenario at the time. It would have been interesting to see what would have happened if Garlick had turned down ALK too. I doubt Dyche would still be manager.

[ksrclaret]

one interpretation (it is an interpretation) of events is that following the breakdown in relationship with the manager, he thought the manager more important to immediate Premier League survival, so took a punt on those available who he thought Dyche could work with and may be able to do something in growing the club. There is no doubt that Garlick is heavily invested in this takeover, he may also have invested in VSL (see the last set of Clarets go Large Limited accounts) as they have struggled to bring new investors on board. We know that he has also signed up to agreements to reinvest in the club if the plans create a serious financial struggle or threaten create a default to MSD - hardly the actions of someone who does not care now he has his money.

"Taking a punt" on someone who he thought Dyche might work with, but knowing their financial model, are hardly the actions of someone who does care about the club once he'd got his money. It simply does not square with everything Garlick claimed publicly.

If he genuinely, genuinely, believed the breakdown in relationship with the manager meant one had to go immediately, he should have removed Dyche and then used the assets in the club to build again if we did get relegated. That would certainly have made him even more unpopular with large elements of the fanbase but it would have been far, far less risky than doing what he eventually did. Namely, as you put it, taking a punt (but one which netted himself a cool fortune).

You are correct though that with the level of detail involved we'll never know the full picture, but my judgement is that he is largely to blame.

[taio]

All I'll say vaguely in the defence of Garlick is that a lot of supporters and, most notably, our manager wanted him out the door. ASAP. I wasn't party to the inside conversations at the time, but the comments by the normally guarded Dyche about the owners at the time were actually pretty extraordinary when you look back on them - it's a distinct possibility that he'd have gone if Garlick hadn't. Add in the increasing pressure from fans and you can see that he maybe felt the sale had to be accelerated. There were two concrete offers from what I can remember - ALK and El Kashashy/Chris Farnell. Those in the know were basically saying the latter bid was poison, Farnell in particular was dodgy as and it should be well avoided. Which left ALK. We can go over the ethics of selling to an entity that was essentially conducting a leveraged buyout, but that was the scenario at the time. It would have been interesting to see what would have happened if Garlick had turned down ALK too. I doubt Dyche would still be manager.

Dyche was wrong to go public.

If it had resulted in Dyche leaving then that would be his decision.

[Swizzlestick]

Dyche was wrong to go public.

If it had resulted in Dyche leaving then that would be his decision.

He was. His comments were very unprofessional but also very out of character, which suggested fundamental issues.

It would be, but the fans would have been pretty toxic towards Garlick - narrative being one of our greatest ever managers forced out by Garlick. Could have been a messy one.

Note I say all this as somebody with great reservations about the ALK deal, but there was a lot going on behind the scenes at the time.

[aggi]

Are you suggesting that the reduction in value was less than £100m, or that the reduction in value was zero? If the former, then you're quibbling about details. It may be £80m less, it may be £110m less, it's thereabouts.

But if the latter, then I think you're purely looking at the balance sheet historic cost, and the historic cost balance sheet is a poor way of assessing the worth of the company. On the balance sheet, £50m cash is worth the same as £50m debt owed by a shell company with no profitable assets. In market value terms, it clearly isn't.

And on the balance sheet, being liable to pay a £60m loan is of the same value as not being liable. But in real life, it is. Take a mortgage example - if your neighbour was on beam ends and had no cash assets, you could agree to guarantee his mortgage if he couldn't pay it back. Your personal balance sheet would be no different, but you would certainly be worse off, not only for the potential liability but also for the reduced potential in borrowing money yourself.

In your analogy I'm not quite sure whether I own my neighbour or my neighbour owns me. That's quite an important part of it.

On sale the debt would be discharged. It's not an additional debt for working capital that's always present. It goes away when the club is sold. That's why it doesn't impact on the value.

[boatshed bill]

The actual figure going in MGs pocket is unknown; however, it's been widely reported that the club was valued at £200 million and the actual sale was around £178 million.

£60 million has been borrowed from MSD - an American finance company and a further £68 million is owed to the former owners at some point in the future. A further £50 million is floating around somewhere and ALK are talking about purchasing the rest.

So, compare the figures above with this: (1) if the club does not get back into the Premiership within three years its turnover will be less than £20 million

Yes - that's TWENTY because the vast bulk of its current £134 million turnover is Premiership broadcasting money, which is lost within 3 years.

Yes, that's right a business was valued at £200 million based on revenue of £134 million, of which £113 million was Premiership TV money.

Absolutely bonkers .....!

I can see no other reason for the deal and how it has been structured other than to get as much money our of the club as possible. The safeguards in place are not safeguards they are in fact a reflection of the reality that ALK could not afford the business and the value placed on it was extremely risky for any potential purchases outside of the normal billionaire who buys football clubs.

IO didn't realise you were Ian McL's appointed spokesman.
Are you saying, on your own behalf, or Ian's?

[aggi]

The actual figure going in MGs pocket is unknown; however, it's been widely reported that the club was valued at £200 million and the actual sale was around £178 million.

£60 million has been borrowed from MSD - an American finance company and a further £68 million is owed to the former owners at some point in the future. A further £50 million is floating around somewhere and ALK are talking about purchasing the rest.

So, compare the figures above with this: (1) if the club does not get back into the Premiership within three years its turnover will be less than £20 million

Yes - that's TWENTY because the vast bulk of its current £134 million turnover is Premiership broadcasting money, which is lost within 3 years.

Yes, that's right a business was valued at £200 million based on revenue of £134 million, of which £113 million was Premiership TV money.

Absolutely bonkers .....!

I can see no other reason for the deal and how it has been structured other than to get as much money our of the club as possible. The safeguards in place are not safeguards they are in fact a reflection of the reality that ALK could not afford the business and the value placed on it was extremely risky for any potential purchases outside of the normal billionaire who buys football clubs.

If we were guaranteed to stay in the Premier League then the valuation would have been way higher, I'd have put it at £400m or so.

Current evidence suggests that ALK could afford the business (they've bought it after all).

[Chester Perry]

"Taking a punt" on someone who he thought Dyche might work with, but knowing their financial model, are hardly the actions of someone who does care about the club once he'd got his money. It simply does not square with everything Garlick claimed publicly.

If he genuinely, genuinely, believed the breakdown in relationship with the manager meant one had to go immediately, he should have removed Dyche and then used the assets in the club to build again if we did get relegated. That would certainly have made him even more unpopular with large elements of the fanbase but it would have been far, far less risky than doing what he eventually did. Namely, as you put it, taking a punt (but one which netted himself a cool fortune).

You are correct though that with the level of detail involved we'll never know the full picture, but my judgement is that he is largely to blame.

You have to remember December 2020 was 9 months into Covid, attempts to play again in front of crowds failed and there were very significant worries as to when that would be possible, even though vaccinations had just started. Huge rebates had been sought for Project restart and there were still concerns about rebates for the 2020/21 season particularly in the overseas markets, as a result of all the rearranged fixtures - The club were in line for a financial loss on the season (before they knew of the difficulties with sponsors not paying) - the budget would have planned to minimise it - hence the summer spend (or lack of it), though that seemed to be more about the manager not willing to trade players.

I had suggested in the early days of Covid that there were two different key business strategies in facing it - those with wealth would seek to weaken the opposition and take advantage by trying to surge forward and those without would likely bunker down - it was always obvious that we would seek to operate as close to breakeven as possible - just like we have done in all the Garlick years, The Premier League teams did exactly as forecast - a huge summer spend blitzed across Europe and clubs surged forward courtesy of deep pockets and a lot of financial loans. It is interesting how many clubs in the Premier League have brought in new investors (or had existing investors increase their stake) to pay off/down those loans in 2021 - Leeds United (twice), Crystal Palace, Southampton, Wolves, Liverpool, West Ham also Everton and Aston Villa have had new share issues. There is at least one billionaire at all those clubs, and at least two at most of them.

I have long maintained and demonstrated that we were in a position to spend in the summer of 2020 if it were not for Covid - Amortisation and Salaries (as a result of letting out of contract players go) were about to be at levels which would allow for a new (and I agree much needed) influx of talent - Covid ended that and ultimately may have done for us as a Premier League team, which is hugely disappointing I agree. The underlying financial strategy was entirely consistent throughout the Garlick reign, what changed was the player trading. This was further impacted by several big money signings not pushing their way into the team and moving us forward - which no doubt frustrated Garlick as he knew how it would hamstring the clubs finances - the manager chose to be oblivious to that while demanding (understandably) that the the environment and facilities for his players be invested in repeatedly (often diverting funds from investment in revenue generating work at the club).

these points are far from being an exhaustive list - like I keep saying there where a great number of inputs to the decision to sell, when it was made and who if was made in favour of.

I believe the sale price was too high - though it appears to take into consideration the time take for the payments to conclude (a kind of inbuilt interest rate) and also the potential risk of bailing out the MSD loan. As it stands Mike Garlick is effectively VSL's (and therefore the clubs) biggest investor.

Back when the takeover happened I argued that the club could have spent the likely interest rate on the MSD loan on new executive talent salaries and if necessary borrow money for new revenue generating initiatives rather than in new owners. That didn't seem to gather much support or recognition - most just wanted Garlick out because the manager was very unhappy when he was there and appeared to very happy when he wasn't.

[dsr]

and in exchange for that consideration, Mike Garlick transferred ownership of his shares (or at least the vast majority of them) to ALK Capital - The 'Investor' that so many Burnley fans (you didn't comment as to whether or not you were one of them?) were calling for in his place.
Have you often sold houses/cars/businesses where you've completed the sale and then told the purchaser that they can keep the money? The club was predominantly owned by Mike Garlick, not you, I, or anyone else, therefore the cash in hand (an asset of the club's) that you're wittering about already belonged to Mike Garlick.

You're right about how the whole thing belonged to Mike Garlick in that sense. And of course you're right that the cash was his, the players' registrations were his, Turf Moor was his, the PL Golden Share was his, and he could have sold the lot and closed the club down quite legally. I'm not dure if he would still have qualified as a fan of the club, though, any more than I am convinced he could be a fan of the club when he only took half or a quarter of the assets with him.

It would have been a lot more open if he had paid himself a salary of say £10m per year for 10 years. At least we would have known where we stood with him, and it wouldn't have been a shock at the end of his tenure. The effect on BFC would have been similar, though of course it would have been less tax efficient for Garlick.

I have never called for an investor to own the club. Investors want profits. When investors take profits, the club has less as a result. An owner who is an investor is bad news for a football club.

[DCWat]

You have to remember December 2020 was 9 months into Covid, attempts to play again in front of crowds failed and there were very significant worries as to when that would be possible, even though vaccinations had just started. Huge rebates had been sought for Project restart and there were still concerns about rebates for the 2020/21 season particularly in the overseas markets, as a result of all the rearranged fixtures - The club were in line for a financial loss on the season (before they knew of the difficulties with sponsors not paying) - the budget would have planned to minimise it - hence the summer spend (or lack of it), though that seemed to be more about the manager not willing to trade players.

I had suggested in the early days of Covid that there were two different key business strategies in facing it - those with wealth would seek to weaken the opposition and take advantage by trying to surge forward and those without would likely bunker down - it was always obvious that we would seek to operate as close to breakeven as possible - just like we have done in all the Garlick years, The Premier League teams did exactly as forecast - a huge summer spend blitzed across Europe and clubs surged forward courtesy of deep pockets and a lot of financial loans. It is interesting how many clubs in the Premier League have brought in new investors (or had existing investors increase their stake) to pay off/down those loans in 2021 - Leeds United (twice), Crystal Palace, Southampton, Wolves, Liverpool, West Ham also Everton and Aston Villa have had new share issues. There is at least one billionaire at all those clubs, and at least two at most of them.

I have long maintained and demonstrated that we were in a position to spend in the summer of 2020 if it were not for Covid - Amortisation and Salaries (as a result of letting out of contract players go) were about to be at levels which would allow for a new (and I agree much needed) influx of talent - Covid ended that and ultimately may have done for us as a Premier League team, which is hugely disappointing I agree. The underlying financial strategy was entirely consistent throughout the Garlick reign, what changed was the player trading. This was further impacted by several big money signings not pushing their way into the team and moving us forward - which no doubt frustrated Garlick as he knew how it would hamstring the clubs finances - the manager chose to be oblivious to that while demanding (understandably) that the the environment and facilities for his players be invested in repeatedly (often diverting funds from investment in revenue generating work at the club).

these points are far from being an exhaustive list - like I keep saying there where a great number of inputs to the decision to sell, when it was made and who if was made in favour of.

I believe the sale price was too high - though it appears to take into consideration the time take for the payments to conclude (a kind of inbuilt interest rate) and also the potential risk of bailing out the MSD loan. As it stands Mike Garlick is effectively VSL's (and therefore the clubs) biggest investor.

Back when the takeover happened I argued that the club could have spent the likely interest rate on the MSD loan on new executive talent salaries and if necessary borrow money for new revenue generating initiatives rather than in new owners. That didn't seem to gather much support or recognition - most just wanted Garlick out because the manager was very unhappy when he was there and appeared to very happy when he wasn't.

So, Dyche has played a significant role in seeing us to where we are today. A lack of flexibility in transfers / trading, throwing his toys out of the pram when funds weren’t made available and not grasping or not wanting to grasp the wider financial picture?

Their relationship seemingly becoming untenable meant that Garlick either had to move the club onto someone else or dismiss Dyche and his team.

If this is the case, Garlick was between a rock and a hard place, presumably knowing full well that the latter would result in a huge backlash that may ultimately have required the former anyway!

[dsr]

So, Dyche has played a significant role in seeing us to where we are today. A lack of flexibility in transfers / trading, throwing his toys out of the pram when funds weren’t made available and not grasping or not wanting to grasp the wider financial picture?

Their relationship seemingly becoming untenable meant that Garlick either had to move the club onto someone else or dismiss Dyche and his team.

If this is the case, Garlick was between a rock and a hard place, presumably knowing full well that the latter would result in a huge backlash that may ultimately have required the former anyway!

I do wonder if the reason for the Dyche/Garlick fallout was because Dyche knew that Garlick was saving all the pennies to take with him when he left?

[Chester Perry]

So, Dyche has played a significant role in seeing us to where we are today. A lack of flexibility in transfers / trading, throwing his toys out of the pram when funds weren’t made available and not grasping or not wanting to grasp the wider financial picture?

Their relationship seemingly becoming untenable meant that Garlick either had to move the club onto someone else or dismiss Dyche and his team.

If this is the case, Garlick was between a rock and a hard place, presumably knowing full well that the latter would result in a huge backlash that may ultimately have required the former anyway!

There are other names in all this,

Mike Rigg - we do not know if Rigg was pushing players Dyche did not want - the fact he was quickly moved out post takeover suggests there was a problem there for Dyche, who has been very publicly championed/backed by VSL. Garlick appointed Rigg, we thought with Dyche's backing and support at the time. Having appointed him and coming from the recruitment industry no doubt Garlick felt he had to follow his advice/direction. We all know Rigg talks a good game - he is still regularly quoted in the Media - Longtimelurker has always been very certain of his view of him and it appears to be that Dyche came to agree with that view

If that indeed was a problem then that is another rock and hard place for Garlick

You cannot help but feel the loss of Chief Executive Dave Baldwin was huge in all this as was replacing him with Neil Hart (which felt like a panic move), Garlick moving into the position of Executive Chairman also changed the dynamic.

It could be reasonably argued that those 3 decisions are purely down to Garlick and each one on reflection appears to be poor. Combined they appear to have been vey significant to the deterioration of relationships and the overall atmosphere at the club.

[IanMcL]

Even vampires avoid Garlick.

[aggi]

Just to add some context to my previous post

Lots of Burnley fans were wanting that unicorn. An owner who was morally sound but also willing to invest a load of money (and we're talking upwards of £100m) with no reward.

after a few posters suggested they wouldn't expect that level of investment.

This, from Swiss Ramble, is the current state of play in the Championship. £100m is a pretty average amount



It's also worth looking at the wages to turnover ratio to see how realistic competing in the Championship is:



Ultimately, whether it is Garlick or ALK in charge, if we go down and don't go back up again there would be financial problems. I don't think Garlick had deep enough pockets to keep us going indefinitely. I don't know whether ALK do, they are a bit more of an unknown than Garlick (although personally I suspect not).

[Newcastleclaret93]

Just to add some context to my previous post

Lots of Burnley fans were wanting that unicorn. An owner who was morally sound but also willing to invest a load of money (and we're talking upwards of £100m) with no reward.

after a few posters suggested they wouldn't expect that level of investment.

This, from Swiss Ramble, is the current state of play in the Championship. £100m is a pretty average amount



It's also worth looking at the wages to turnover ratio to see how realistic competing in the Championship is:



Ultimately, whether it is Garlick or ALK in charge, if we go down and don't go back up again there would be financial problems. I don't think Garlick had deep enough pockets to keep us going indefinitely. I don't know whether ALK do, they are a bit more of an unknown than Garlick (although personally I suspect not).

I imagine we will follow a similar model as Swansea then.

[ClaretPete001]

Just to add some context to my previous post

Lots of Burnley fans were wanting that unicorn. An owner who was morally sound but also willing to invest a load of money (and we're talking upwards of £100m) with no reward.

after a few posters suggested they wouldn't expect that level of investment.

This, from Swiss Ramble, is the current state of play in the Championship. £100m is a pretty average amount



It's also worth looking at the wages to turnover ratio to see how realistic competing in the Championship is:



Ultimately, whether it is Garlick or ALK in charge, if we go down and don't go back up again there would be financial problems. I don't think Garlick had deep enough pockets to keep us going indefinitely. I don't know whether ALK do, they are a bit more of an unknown than Garlick (although personally I suspect not).

f Garlick had stayed in charge we would not have a £60 million charge on the assets? And the additional debt owed to Garlick and others could be a real impediment to any future sale to someone who wants a Championship club but does not want to pay £200 million for a club with a £20 million turnover and no profits.

[Quickenthetempo]

Certainly in the early premier league years, there was cash there for transfers that the board wanted spent to improve us.
Dyche didn't want to, he wanted his own type of player etc..

In recent years there has certainly been cases where the chairman has bought players (Drinkwater/Vydra) but the manager has just refused to play them.
That was wasting money and there was no point in Garlick putting anymore money in for them transfers.

[IanMcL]

I think that would be a gross misrepresentation of transfer dealings and subsequent happenings.

[Rodleydave]

Chester you wrote "We know that he has signed up to agreements to re-invest in the club if the plans create a serious financial struggle, or threaten to create a default to MSD ."
Is this something new, or just another way of saying if ALK cannot make the repayments to directors, the club reverts back to Garlick et al.
I understand ALK have another payment of app £11million to make to directors on March 31.

[ClaretPete001]

Certainly in the early premier league years, there was cash there for transfers that the board wanted spent to improve us.
Dyche didn't want to, he wanted his own type of player etc..

In recent years there has certainly been cases where the chairman has bought players (Drinkwater/Vydra) but the manager has just refused to play them.
That was wasting money and there was no point in Garlick putting anymore money in for them transfers.

I feel it's sad that a desire to deflect the issue from Garlick ends up with comments like this about Dyche. The club spent money in the early years and we bought fine players that kept us in the Premiership for 6 seasons.

I have no idea whether the chairman bought Vydra but I see little point debating whether Dyche should have played one player or another given his success as a manager. Mike Garlick has done a magnificent job as chairman and his decision not to gamble with the clubs future was laudable.

The question surrounds the sale to ALK, which looks to me anything but prudent.

[Quickenthetempo]

I feel it's sad that a desire to deflect the issue from Garlick ends up with comments like this about Dyche. The club spent money in the early years and we bought fine players that kept us in the Premiership for 6 seasons.

I have no idea whether the chairman bought Vydra but I see little point debating whether Dyche should have played one player or another given his success as a manager. Mike Garlick has done a magnificent job as chairman and his decision not to gamble with the clubs future was laudable.

The question surrounds the sale to ALK, which looks to me anything but prudent.

I think that would be a gross misrepresentation of transfer dealings and subsequent happenings.

It was quite commonly known at the time. From board members family the board was a little frustrated with Dyche for not spending. Dyche has done wonderful things for this club but this thread is about money and Garlick.