Question re: Bloom getting his money back

[seagullsovergrimsby]

I am not knocking TB or his ownership of the club but I thought, like many, that it was in the articles of the club that no 1 man could ever own BHA FC again following Archer.

A tough decision to take , do you abide by the articles of the club and never leave League 1 and League 2 or place your trust in a person who has the club next to their heart ? Archer was an asset stripper and his only motivation was making a fortune from a small investment.

 

[Creaky]

I disagree, the conversion of debt to equity was an irrelevance as he already owned >90% of the shares, so has been an effective dictator for some time. In relation to the auditors, if he gave assurances that he was not going to collect until at least 2023 then they would have simply given a going concern qualification, which they have done in the existing accounts anyway.

Before the latest conversion of debt to equity I believe TB's holding was somewhat less than you state however that is not the main point.

The assurances he gave to the auditors, and quoted in the latest financial report, did not relate to the loan he had made to the club but rather the ongoing trading position.

The club made a loss during the period covered by the audit and was projected to do so over the following year - the liabilities of the club exceeded the assets both in terms of current and long term liabilities. Without the assurance from TB that he was able and willing to cover those losses, (reinforced by the conversion of part of his loan into equity), the auditors would have had no option but to put a note on the accounts that the club was not in a viable trading position and would have been unable to sign off the accounts. Essentially meaning that the club would have had to be put into administration.

 

[andy1980]

That argument can only come from someone who is financially insane though.

First of all TB has underwritten the Albion's operational losses for the last few years at Withers and the first two seasons at the Amex. That comes to about £30 million, which he can never get back as it went on Ryan Harley's wages.

Secondly the money spent on the stadium is by the club, rather than TB. He can only get it back if the club has the cash to repay him, and as it makes losses each year, then the only alternative is to sell the stadium to a third party. The ground has ZERO value as anything other than as a sports stadium, and so it is very difficult to see who would ever pay £100million plus to buy it from the club.

Is it easy for him not to show his real wealth, or is he working really hard to keep it out of peoples view?

 

[tinycowboy]

What % does he own in the club? And when did we remove the clause that said no one could own more than 49.9%? Did that go with Knight too?

I think he owns 91% - from memory, so may be wrong. Any further conversion of loan into shares is therefore not going to achieve much, except effectively write off some of the money that's owed him, depending on a 'fair valuation' of the share price.

 

[BensGrandad]

wrong posting

 

[Creaky]

I think he owns 91% - from memory, so may be wrong. Any further conversion of loan into shares is therefore not going to achieve much, except effectively write off some of the money that's owed him, depending on a 'fair valuation' of the share price.

What it will do though is markedly dilute the equity of the other shareholders.

 

[KZNSeagull]

A tough decision to take , do you abide by the articles of the club and never leave League 1 and League 2 or place your trust in a person who has the club next to their heart ? Archer was an asset stripper and his only motivation was making a fortune from a small investment.

"We want Falmer" makes it pretty clear that we would never have left Withdean - the club could not raise the money due to the credit crunch. Who knows what would have happened.

That argument can only come from someone who is financially insane though.

First of all TB has underwritten the Albion's operational losses for the last few years at Withers and the first two seasons at the Amex. That comes to about £30 million, which he can never get back as it went on Ryan Harley's wages.

Secondly the money spent on the stadium is by the club, rather than TB. He can only get it back if the club has the cash to repay him, and as it makes losses each year, then the only alternative is to sell the stadium to a third party. The ground has ZERO value as anything other than as a sports stadium, and so it is very difficult to see who would ever pay £100million plus to buy it from the club.

You tinker!

 

[BensGrandad]

A tough decision to take , do you abide by the articles of the club and never leave League 1 and League 2 or place your trust in a person who has the club next to their heart ? Archer was an asset stripper and his only motivation was making a fortune from a small investment.

I fully understand what you are saying and we must be grateful for his involvement unlike Portsmouth where a crook sold it to another crook and so forth but were the articles ever changed. dissolved or just ignored

 

[martin tyler]

People have to remember although brighton tecnically iwe him money the club as an asset is worth a lot if dosh and i therefore doubt he will try and pull out millions at any stage. His ambition seems to be he wants to pass onto family.
The only time he is going to make any money is going to be if he ever sells up. If he did i think he would be able to recoup a lot of the money he invested.

 

[seagullsovergrimsby]

I fully understand what you are saying and we must be grateful for his involvement unlike Portsmouth where a crook sold it to another crook and so forth but were the articles ever changed. dissolved or just ignored

My take on it is the articles of the club have been re-written to allow one individual to have a majority shareholding. In 2002 Dick Knight held 49.5% , Bill Archer 49.5% and Martin Perry 1%

 

[Herr Tubthumper]

Billionaire or not, he isn't on lists like that because he chooses not to be.

Do you have a choice?

 

[Creaky]

The "danger", if there is any, of a majority shareholder is that at sometime in the future some rich individual could come along and offer an amount that couldn't be refused for the club.

I don't see this happening in the near future, I don't think we are an attractive enough proposition, but who knows what may happen in the long term.

 

[Chicken Runner61]

So if he doesn't get the loan paid back before he dies what happens about Inheritance tax?

 

[seagullsovergrimsby]

So if he doesn't get the loan paid back before he dies what happens about Inheritance tax?

The Amex is bequeathed to the nation and becomes a stately home

 

[Herr Tubthumper]

That argument can only come from someone who is financially insane though.

First of all TB has underwritten the Albion's operational losses for the last few years at Withers and the first two seasons at the Amex. That comes to about £30 million, which he can never get back as it went on Ryan Harley's wages.

Secondly the money spent on the stadium is by the club, rather than TB. He can only get it back if the club has the cash to repay him, and as it makes losses each year, then the only alternative is to sell the stadium to a third party. The ground has ZERO value as anything other than as a sports stadium, and so it is very difficult to see who would ever pay £100million plus to buy it from the club.

Possibly, and to be honest I do not know how it all works but I have heard of individuals putting their money into all manner of things as opposed to banks for safety reasons. Personally I do not see Bloom's situation as being much different. But, what really made me think about this was when a businessman told me he did exactly the same with cash and his own business and mentioned he had a feeling this could be part of Bloom's motive. The person who told me this does not strike me as insane....quite the contrary actually.

 

[Frutos]

Do you have a choice?

I believe so, but in any case the criteria may not favour him:

The editors estimate subjects' wealth from a range of public information, based on values at January each year. They typically explain their actions by stating: "We measure identifiable wealth, whether land, property, racehorses, art or significant shares in publicly quoted companies. We exclude bank accounts—to which we have no access..."

 

[beorhthelm]

I believe so, but in any case the criteria may not favour him:

The editors estimate subjects' wealth from a range of public information, based on values at January each year. They typically explain their actions by stating: "We measure identifiable wealth, whether land, property, racehorses, art or significant shares in publicly quoted companies. We exclude bank accounts—to which we have no access..."

so in other words, no unless you've made sure you're not identifiabe.

my thought is one might plan, once in the premiership and stable, to take repayments over 15-25 years, taking 4-6 million a year would pay it back without impacting the playing side. and you can waive the repayment in a tight year. this has always been a long term project, take a long term view.

 

[Herr Tubthumper]

That argument can only come from someone who is financially insane though.

First of all TB has underwritten the Albion's operational losses for the last few years at Withers and the first two seasons at the Amex. That comes to about £30 million, which he can never get back as it went on Ryan Harley's wages.

Secondly the money spent on the stadium is by the club, rather than TB. He can only get it back if the club has the cash to repay him, and as it makes losses each year, then the only alternative is to sell the stadium to a third party. The ground has ZERO value as anything other than as a sports stadium, and so it is very difficult to see who would ever pay £100million plus to buy it from the club.

A quick internet search shows that millionaires park their cash in items like art, rare books, boats and planes.
Bloom parking his in a football club does not seem that odd when compared to this small selection. Maybe this part explains the huge recent influx of rich individuals into English football? I am not convinced they're all in it for the glory. Is it because they see future profits? Are they parking their cash until the world is more financially stable? or a bit of both?

 

[El Presidente]

A quick internet search shows that millionaires park their cash in items like art, rare books, boats and planes.
Bloom parking his in a football club does not seem that odd when compared to this small selection. Maybe this part explains the huge recent influx of rich individuals into English football? I am not convinced they're all in it for the glory. Is it because they see future profits? Are they parking their cash until the world is more financially stable? or a bit of both?

I don't think so. Art, rare books etc are appreciating assets and therefore can be sold in an active market. A sports stadium in the Sussex Downs has no such benefit to a rich person.

Also remember that even under FFP Bloom is subsidising the club to the tune of £5-6 million a year.

 

[nwgull]

A quick internet search shows that millionaires park their cash in items like art, rare books, boats and planes.
Bloom parking his in a football club does not seem that odd when compared to this small selection. Maybe this part explains the huge recent influx of rich individuals into English football? I am not convinced they're all in it for the glory. Is it because they see future profits? Are they parking their cash until the world is more financially stable? or a bit of both?

No it's definitely a game of Football Manager on a grand scale for most of them. Best way to become a millionaire by owning a football club is to start off as a billionaire.

Glazer family will probably do well out of owning Man Utd for a few years, but that's an exception.