AmexRuislip
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[Football] QPR finally settle FFP dispute
- Thread starter warmleyseagull
- Start date
Super Steve Earle
Well-known member
What outraged me on TalkSport today was some reporter (from the Sun?) pontificating about QPR, then saying how Leicester did it and it paid off with winning the Premier League, and Brighton did it the season before last
Who were they paying that to, their owners? No decent sized company should be paying those kind of figures with global interest rates what they are.
In the bedroom maybe.
You can disagree ALL YOU LIKE.
For legal purposes, and for tax purposes they are different Entities. You move monies whether it be in salary or dividend or Capital Distributions Every Government around the world will tax it every time it is moved from one Entity to another. Doesn't even matter if it is an ''Owner Managed Company'' and you own 100% of the company
All Governments will levy Corporation Tax on the company when the income comes into the Company at whatever rate of tax is appropriate in that company in whatever country around the world. As soon as that company distributes any income whatsoever to its Directors or shareholder in the form of Dividends, Salary or Capital Distributions, it is taxed again in the form of Personal Tax.
My point is that the Owners of QPR. The cost to them personally is £50m plus.
They may have thought it was a price worth paying for the benefit of the club but it does not make my analysis of the situation incorrect.
Thanks.
I disagree, and it seems that El Pres disagrees too.
Converting the loan has not required them to take any further money out of their own personal accounts.
They would need to transfer physically, the funds from a personal or a separate company bank account to make the loan a legitimate loan. That is a definite ''Given'' . I don't even need to look up any books for that one.
It would contravene ML Regulations otherwise
What? They've already loaned the money, and on the books it shows as a loan. My understanding was that they simply had to convert that loan on the books into shares.
[MENTION=31]El Presidente[/MENTION]?
Yes I agree on that part of the transaction
But simple fact is. The initial Loan lets say £50m would have to have been transferred from lets say a personal account to QPR bank account. They had that money in their bank. Now they don't.. Its lost because that money is no longer theirs. If they want to get any of that back being almost an ''Owner Managed Company'' they can only do it in the form of Dividend Salary or Capital Distribution it will be taxed.
Yes QPR may be a more viable proposition but the loan being turned to Equity but that only makes the company more valuable. It only makes the company a more viable acquisition. Its doesn't increase the value of the company.
They now have worthless shares instead of worthless loans as a result of the conversion. No better or worse off financially.
The initial loan is lost to them though now
It was already lost though in all but name
That's only assuming that the lender never intended to ''call in'' the loan. You are probably correct that they never intended to call the loan in but most DL accounts are called in. In football it is not usual to do so. Roman Abramovitch will almost certainly not call his loans in at Chelsea but I wouldn't be sure about let say Mike Ashley at Newcastle
And that may even be the stumbling block over the potential sale of Newcastle in the last 12 months. Who knows ?
EV unaffected by capital structure and as lenders and shareholders identical makes no difference
That I agree 100%
Its the loss of the initial loan by the lender that I still go back to. Need to go to bed now. Gotta go to game tomorrow. Desperate to see Bissoma in his cameo 20 mins
So what are you going on about then? I said:
"Converting the loan has not required them to take any further money out of their own personal accounts."
and you replied with
"They would need to transfer physically, the funds from a personal or a separate company bank account to make the loan a legitimate loan. That is a definite ''Given'' . I don't even need to look up any books for that one."
That money was transferred years ago. I said they don't need "to take any further money out". They don't. So why post something about then having to have transferred it in the past, which is completely irrelevant?
Just tell us you were enjoying some lovely red wine and move on.
It was in their bank a long time ago, before they made the loan. Before this decision, it was already no longer money they could get hold of, it had been spent.
Although this isn't an issue for them at the moment, because QPR isn't making money or being sold, isn't it simply a case that they had money in the bank some years ago, and they've bought more shares with that money? So if they were to sell the club in the future, the money they put in is deductible as a cost before they have to pay tax. Equally, the club could buy back it's own shares, and if that's at the same rate, the owners wouldn't have made a profit and won't have to pay tax.
I think you've typed that a bit wrong.
Weststander
Well-known member
As you've reiterated several times, later paper exercises makes no difference.
Still sunk cash.