Tan`s Exit plan and debt to equity

[insider]

It`s must be plainly obvious to even the most optimistic city fan that Tan is taking as much money out as he can before pissing off but will he make the club debt free before leaving?
I think if he wavered the debt that is owed to him we could be a club that a new investor could find an attractive proposition.
At the moment we are stagnating and haemorrhaging fans at an alarming rate. I for one hope he goes, closing the door on the worst period in the club`s history.
It`s sad that the club had built up a decent fan base from about 2008 on wards that has now been culled by one man`s ego.
I can`t see us signing anyone for anywhere near the money we have had in, in this transfer window.

[Blue in the Face]

I can`t see us signing anyone for anywhere near the money we have had in, in this transfer window.

Parachute payments running out. FFP. Umbungo.

[insider]

Parachute payments running out. FFP. Umbungo.

I think that is rubbish to be fair , If you take it that we have already suffered an embargo and then had it lifted so we have been punished once for it.
If a value is then taken off the clubs debt then surely we can re-spend up to that value without going into an embargo again.

[Random in Duquesa]

If Tan is manoeuvring into a position where we are more saleable , even if struggling n the pitch , but with the high earners gone then it's probably the best we can hope for.A sort of ground zero for someone to start again.
Small debt , ok staff and players , good stadium , reasonable fan base (though fickle ) might be an attractive proposition for someone ?

[insider]

If Tan is manoeuvring into a position where we are more saleable , even if struggling n the pitch , but with the high earners gone then it's probably the best we can hope for.A sort of ground zero for someone to start again.
Small debt , ok staff and players , good stadium , reasonable fan base (though fickle ) might be an attractive proposition for someone ?

I`d settle for that now mate, it then all depends on who buys us.

[Random in Duquesa]

I`d settle for that now mate, it then all depends on who buys us.

Me too mate. Possibly a consortium of a couple of rich painters and a mega rich plumber I know

[Blue in the Face]

I think the only thing counted towards FFP calculation will be the interest payments on the debt, not the sum of the debt itself. I doubt these interest payments have been our biggest problem, compared to fees and wages.

Is it "Since62" who is the expert on the club accounts? Would be good if he has time to jump on this thread to give a bit of clarity.

[Alfonso Perez]

I think that is rubbish to be fair , If you take it that we have already suffered an embargo and then had it lifted so we have been punished once for it.
If a value is then taken off the clubs debt then surely we can re-spend up to that value without going into an embargo again.

Blue in the Face is not talking rubbish as FFP, magnified by reducing parachute payments, has a lot to do with our current situation.

FFP relates to losses, I think the limit is £13m for this season which includes a max of £8m for shareholder investment & a £5m loss. Tan has set out his strategy to convert debt to equity of £8m per year for the next 5 years which should serve to make us debt free. The reason why he is structuring this over 5 years is to comply with FFP shareholder investment rules. I wouldn't be surprised that our pre transfer income this season will be around £20m which will be quickly swallowed up noting the number of high earners we have etc.

If Tan is taking out as much money as he can as you suggest, then why sanction the signings of say Emyr Hughes, Jazz Richards, Ben Amos & Joe Bennett who will all be earning very good salaries & in Huw's case a transfer fee estimated in excess of £1m was payable. Personally, I doubt very much he has taken a penny out but I also suspect that he does not want to put anymore in, hence a far more prudent approach to recruitment & a concerted effort to remove high earners from the wage bill.

Personally I am in favour of a debt free club operating within it's means so if this is achieved then we will be in the best financial position we have been for a long time & it can provide a firm foundation for the club to move forward. As you have said crowds are indeed dwindling & some of this is indeed down to Tan. That said, in my view far more is down to results on the pitch - if by some miracle we got promoted this season I am certain the crowds would come flocking back.

Tan has made lot's of mistakes, including wasting a lot of money via a number of bad choices, there is no doubt about that. However, I will be pleased if he delivers a debt free club as promised.

I am sure that Since 62 will be able to add to this & indeed correct me if I have any details wrong.

[Since62]

Blue in the Face is not talking rubbish as FFP, magnified by reducing parachute payments, has a lot to do with our current situation.

FFP relates to losses, I think the limit is £13m for this season which includes a max of £8m for shareholder investment & a £5m loss. Tan has set out his strategy to convert debt to equity of £8m per year for the next 5 years which should serve to make us debt free. The reason why he is structuring this over 5 years is to comply with FFP shareholder investment rules. I wouldn't be surprised that our pre transfer income this season will be around £20m which will be quickly swallowed up noting the number of high earners we have etc.

If Tan is taking out as much money as he can as you suggest, then why sanction the signings of say Emyr Hughes, Jazz Richards, Ben Amos & Joe Bennett who will all be earning very good salaries & in Huw's case a transfer fee estimated in excess of £1m was payable. Personally, I doubt very much he has taken a penny out but I also suspect that he does not want to put anymore in, hence a far more prudent approach to recruitment & a concerted effort to remove high earners from the wage bill.

Personally I am in favour of a debt free club operating within it's means so if this is achieved then we will be in the best financial position we have been for a long time & it can provide a firm foundation for the club to move forward. As you have said crowds are indeed dwindling & some of this is indeed down to Tan. That said, in my view far more is down to results on the pitch - if by some miracle we got promoted this season I am certain the crowds would come flocking back.

Tan has made lot's of mistakes, including wasting a lot of money via a number of bad choices, there is no doubt about that. However, I will be pleased if he delivers a debt free club as promised.

I am sure that Since 62 will be able to add to this & indeed correct me if I have any details wrong.

You and others are correct in saying that FFP is nothing to do with debt levels ( strangely) but the level of losses in the profit and loss account each season ( the season end is the same date as the financial year end) .

I have seen no evidence whatsoever that Vincent Tan has taken any money out of the club by way of either loan repayments or interest on those loans, but a small part of the loans due at 31 May 2015 ( the latest filed accounts) were said to be interest bearing- this May be waived in a future period as other loan charges have. I have also been assured by the CEO and Chairman at the club's holding company board meetings and when meeting them elsewhere that this lack of repayments remains the case.

In my personal opinion, which I have expressed at those board meetings, a lot of the current debt was unnecessarily run up as a result of very poor business decisions made by Vincent Tan and previous senior management he put in place. However, having strongly criticised this, both personally and in my Trust role, it is only fair to say that those mistakes have been recognised and strenuous efforts are being made to reverse those mistakes, no matter how unpopular those decisions are in the short term.

End of initial response as I am abroad on holiday and my wife is just about to give me severe grief for using the iPad. for CCFC stuff

[Cyclops]

A buzz-word that has come out of the club recently is SUSTAINABILITY.....

[jon1959]

You and others are correct in saying that FFP is nothing to do with debt levels ( strangely) but the level of losses in the profit and loss account each season ( the season end is the same date as the financial year end) .

I have seen no evidence whatsoever that Vincent Tan has taken any money out of the club by way of either loan repayments or interest on those loans, but a small part of the loans due at 31 May 2015 ( the latest filed accounts) were said to be interest bearing- this May be waived in a future period as other loan charges have. I have also been assured by the CEO and Chairman at the club's holding company board meetings and when meeting them elsewhere that this lack of repayments remains the case.

In my personal opinion, which I have expressed at those board meetings, a lot of the current debt was unnecessarily run up as a result of very poor business decisions made by Vincent Tan and previous senior management he put in place. However, having strongly criticised this, both personally and in my Trust role, it is only fair to say that those mistakes have been recognised and strenuous efforts are being made to reverse those mistakes, no matter how unpopular those decisions are in the short term.

End of initial response as I am abroad on holiday and my wife is just about to give me severe grief for using the iPad. for CCFC stuff

That is the crux of it. I think Tan has kept to the position he outlined back in the meetings with media and invited fans back in February.

http://www.walesonline.co.uk/sport/f...-best-10879235

He may have hoped that Slade would take us into the play offs, but the main focus was on clearing the debt and making the club sustainable. That isn't a quick fix on or off the field and it will be frustrating for the fans.

However, there does seem to be a clear plan to get there. It would be helpful, as others have said, if Tan/Dalman/Choo would speak directly to fans again and explain in detail the 5 year plan and the constraints the club are working under, and explode some of the myths that are reappearing.

Sustainability is a good thing. I have a feeling some other clubs (Derby County for one) might be looking enviously in our direction in a year or two's time. There is no doubt that Tan made some monster mistakes with the club, but I see no evidence that he is walking away and the stated ambitions for the future (debt clearance, sustainable finances, youth development, local identity) are 100% right.

[Blue in the Face]

... FFP, magnified by reducing parachute payments, has a lot to do with our current situation.

FFP relates to losses, I think the limit is £13m for this season which includes a max of £8m for shareholder investment & a £5m loss. Tan has set out his strategy to convert debt to equity of £8m per year for the next 5 years which should serve to make us debt free. The reason why he is structuring this over 5 years is to comply with FFP shareholder investment rules. I wouldn't be surprised that our pre transfer income this season will be around £20m which will be quickly swallowed up noting the number of high earners we have etc.

If Tan is taking out as much money as he can as you suggest, then why sanction the signings of say Emyr Hughes, Jazz Richards, Ben Amos & Joe Bennett who will all be earning very good salaries & in Huw's case a transfer fee estimated in excess of £1m was payable. Personally, I doubt very much he has taken a penny out but I also suspect that he does not want to put anymore in, hence a far more prudent approach to recruitment & a concerted effort to remove high earners from the wage bill.

Personally I am in favour of a debt free club operating within it's means so if this is achieved then we will be in the best financial position we have been for a long time & it can provide a firm foundation for the club to move forward. As you have said crowds are indeed dwindling & some of this is indeed down to Tan. That said, in my view far more is down to results on the pitch - if by some miracle we got promoted this season I am certain the crowds would come flocking back.

Tan has made lot's of mistakes, including wasting a lot of money via a number of bad choices, there is no doubt about that. However, I will be pleased if he delivers a debt free club as promised.

I am sure that Since 62 will be able to add to this & indeed correct me if I have any details wrong.

So what I take from this is that a loss of a maximum of £13m a season, or tax year, which includes a reduction of the debt at the maximum of £8m per season, is the biggest loss a club can incur in order to comply with FFP. So from this point forward, VT intends to wipe the debt in the quickest time frame possible. And VT has already paid off somewhere around half of the club's debt already?

It doesn't make a lot of sense for Vincent Tan to wipe our debts right away given that CCFC has been a money pit for him. I imagine that the £40m he has earmarked to wipe our debts in the long term are better off invested elsewhere in the short term to insure he gets some return somewhere on the liquid capital he posseses.

I'm bumping this post because I made the mistake of have a look at the darkside to see if there is finally some acceptance that there is every chance of silver linings in regard to CCFC for the first time in many a generation. Fat chance. I understand that the darkside leader was on the Sam Hammam payroll and stood to gain something if Sam was to re-gain some level of club ownership. But there is no possibility of that happening now of course. So what is there to gain now by being continually critical of the club? Is it a hits thing? Stubborn pride? Or just a lack of intelligence to comprehend the strategy to make us debt free?

This only bugs me because there are a lot of impressionable people who visit the darkside who are given an image of doom when it comes to CCFC. This can only be a bad thing for the club. Surely.

[Phill Stants brother]

So what I take from this is that a loss of a maximum of £13m a season, or tax year, which includes a reduction of the debt at the maximum of £8m per season, is the biggest loss a club can incur in order to comply with FFP. So from this point forward, VT intends to wipe the debt in the quickest time frame possible. And VT has already paid off somewhere around half of the club's debt already?

It doesn't make a lot of sense for Vincent Tan to wipe our debts right away given that CCFC has been a money pit for him. I imagine that the £40m he has earmarked to wipe our debts in the long term are better off invested elsewhere in the short term to insure he gets some return somewhere on the liquid capital he posseses.

I'm bumping this post because I made the mistake of have a look at the darkside to see if there is finally some acceptance that there is every chance of silver linings in regard to CCFC for the first time in many a generation. Fat chance. I understand that the darkside leader was on the Sam Hammam payroll and stood to gain something if Sam was to re-gain some level of club ownership. But there is no possibility of that happening now of course. So what is there to gain now by being continually critical of the club? Is it a hits thing? Stubborn pride? Or just a lack of intelligence to comprehend the strategy to make us debt free?

This only bugs me because there are a lot of impressionable people who visit the darkside who are given an image of doom when it comes to CCFC. This can only be a bad thing for the club. Surely.

They should give a life ban to him and his cronies from the club for all the hate and shit throwing he aims towards Tan. He's the Anjem Choudary of Cardiff City.

[JumpersforGoalposts]

Tan is not taking money out, but has stopped pumping money in.
The club has to make sure it can run within the FFP rules which mean a max average loss of £13m per season over a three season period - this in itself REQUIRES a capital injection of £8m per season under the rules or otherwise the cap is £5m. This is why Tan has already stated that there will be a debt to equity conversion of £8m per season for 5 seasons.
Under the FFP calculations the club made a loss of £10m in 2014/5 (although there was a disagreement with the EFL on the calculation), when we get the official figures for 2015/6 (which should be soon) we will then have an indication of the scale of the problem for the club for this season with the parachute payments falling.

[NYCBlue]

Tan is not taking money out, but has stopped pumping money in.
The club has to make sure it can run within the FFP rules which mean a max average loss of £13m per season over a three season period - this in itself REQUIRES a capital injection of £8m per season under the rules or otherwise the cap is £5m. This is why Tan has already stated that there will be a debt to equity conversion of £8m per season for 5 seasons.
Under the FFP calculations the club made a loss of £10m in 2014/5 (although there was a disagreement with the EFL on the calculation), when we get the official figures for 2015/6 (which should be soon) we will then have an indication of the scale of the problem for the club for this season with the parachute payments falling.

So tan can convert his debt to equity but the club can still operate at £65M over those 5 seasons? Tidy!

[Rjk]

Im still not totally convinced he is looking to sell, just it isn't the right time to invest

[TruBlue]

Im still not totally convinced he is looking to sell, just it isn't the right time to invest

Not that I'm convinced anyone would want to buy us, but for any foreign investment surely now would be a great time to invest?

[Blue in the Face]

Not that I'm convinced anyone would want to buy us, but for any foreign investment surely now would be a great time to invest?

I can see why you're saying that TruBlue. Weak pound, club way off it's potential with good assets. But the 2nd tier of English football is looking enviable at the moment. As Lawnmower says above, there's too many other clubs chucking money at gambling on promotion too, so it's not rational factoring in the payoff of going up. Added to this, there are a lot of economists saying we could be in for another global meltdown soon (though this might be divisive "opinion" and have something to do with it being a US election year). I better shut up before I get this useful thread booted into the politics forum.

[Rjk]

Not that I'm convinced anyone would want to buy us, but for any foreign investment surely now would be a great time to invest?

I meant for Tan to invest more into us, any money spent on us in the last few years would have been throwing it away, we could have spent 20 million a season like derby and still not gone up.

[stan butler]

It`s must be plainly obvious to even the most optimistic city fan that Tan is taking as much money out as he can before pissing off but will he make the club debt free before leaving?
I think if he wavered the debt that is owed to him we could be a club that a new investor could find an attractive proposition.
At the moment we are stagnating and haemorrhaging fans at an alarming rate. I for one hope he goes, closing the door on the worst period in the club`s history.
It`s sad that the club had built up a decent fan base from about 2008 on wards that has now been culled by one man`s ego.
I can`t see us signing anyone for anywhere near the money we have had in, in this transfer window.

Are you the other forum multi grange_end1927

[Lawnmower]

Tan is not taking money out, but has stopped pumping money in.
The club has to make sure it can run within the FFP rules which mean a max average loss of £13m per season over a three season period - this in itself REQUIRES a capital injection of £8m per season under the rules or otherwise the cap is £5m. This is why Tan has already stated that there will be a debt to equity conversion of £8m per season for 5 seasons.
Under the FFP calculations the club made a loss of £10m in 2014/5 (although there was a disagreement with the EFL on the calculation), when we get the official figures for 2015/6 (which should be soon) we will then have an indication of the scale of the problem for the club for this season with the parachute payments falling.

Well explained.
Tan CAN gamble under the current rules, but with 5/6 clubs already doing that this season it would be madness.

Also, he might not have the money free to do so, investing £150m out of £6-700m isn't chicken feed.

Recent events are a direct effect from bad decisions made over the past few seasons

[CCFC CASUAL]

Too many sensible posts on this thread, sadly they won't dispel the myth that Tan has pocketed all the parachute payments.

[insider]

Ok I take on board a lot of what has been said about ffp but why not come out and communicate this with the fans and why say we have to get people off the wage bill to get people in when what has come in has been absolute dog shite.
Also a 5 year plan with this idiot at the top sounds like absolute purgatory to me especially when it is all his own doing.
He brought in the people to manage his cash the buck stops with him.

[Hilts]

Ok I take on board a lot of what has been said about ffp but why not come out and communicate this with the fans and why say we have to get people off the wage bill to get people in when what has come in has been absolute dog shite.
Also a 5 year plan with this idiot at the top sounds like absolute purgatory to me especially when it is all his own doing.
He brought in the people to manage his cash the buck stops with him.

All his own doing?????

The problem started long before he came. Or are you choosing to forget Sam Hammam , Riddler and us having winding up orders.

Have we actually announced a 5 year plan?

Pretty sure the club have stated we need players off the wage bill.

[insider]

All his own doing?????

The problem started long before he came. Or are you choosing to forget Sam Hammam , Riddler and us having winding up orders.

Have we actually announced a 5 year plan?

Pretty sure the club have stated we need players off the wage bill.

Yes ALL his own doing.
Mega rich man X Ego X Debt = Huge Debt