Pimlico_Villa

Conversely, wouldn't this also be a great way to get rid of McCormack and Richards without having to book the loss?

Loan Notes are perfectly legitimate and a perfectly ordinary structure to utilise when buying a company. The issue might be the interest rate at which those Notes are accruing , however Xia - jut like Lerner did - can forgive loan notes. For context, the entity that owns Chelsea has £1.2B of Loan Notes payable to Abromovich. Curious as to who those other Trade Creditors are, though. The footnote to this figure is not included in that image, but can't see it being for acquiring players on credit as that figure seems too high. It would also show up as interest charge, if we'd used Credit and can't see that either. Would also add that Recon is a complicated series of companies and perfectly feasible that items from other companies are flowing through these accounts as well.

Saw in the comment section in today’s Financial Times that Xia has sold his stakes in Recon Group and is basically now a wealthy individual as opposed to acting through a corporation. This explains the difficulties he is having getting money out of China as an individual. : https://www.ft.com/content/df68edc4-68df-11e8-8cf3-0c230fa67aec?desktop=true&segmentId=7c8f09b9-9b61-4fbb-9430-9208a9e233c8#myft:notification:daily-email:content

Get that from a Telegraph? Normally quite reliable.

Hearing Wyness suspension unrelated to Tax payment, more to do with him trying to raise finance from elsewhere without authorisation from Xia

If we are loss making, what are we expected to be taxed on?

I can see that, but I'm also hoping Bruce feels he owes us something after the POF.

Renewed ages ago. Stopped letting the Football ruin the Football a while back.

Says he was once a Football Agent. Would not want one of those anywhere near us.

I’m not one to sympathise entirely with Bruce, but a lot of people aren’t recognising his contributions to fixing a culture of chronic unprofessionalism and ill discipline on the playing side. That was a poison that would have ultimately killed us that he remedied in less than a year. Without him doing this, I don’t think we would have stood half a chance on the pitch. It’s also the type of thing that you absolutely have to get right before you can even begin to think about getting results on the pitch. Considering where we were when Bruce took over to where we nearly got to this season is an acheivement in itself. In saying this, I would agree that with the playing staff we had last season we should have achieved more. If Cardiff can get promoted then we absolutely should have been, so agree he has underperformed relative to the quality of the squad we had. I’m sure we can all agree that last season, despite the disappointment, was an improvement on the one before, so I’d like to think that Bruce can continue that trajectory. Next season the top teams will all be characterised as having to go through some sort of restructuring - either Managerially or on the playing side - so I would like to think that the consistency we would get form keeping Bruce, plus his familiarity of this League, would give us a competitive advantage. Whilst others are finding their feet in this League, if we can stick together then it’ll do us good. Bruce just needs to be more authoritive tactically rather than rely on individual quality of players to do him a job.

That's how I understand it as well. Just hope we can get those values for those players in this market when buyers know we are motivated sellers. Emotionally, it's going to be painful watching tiny clubs spend so much more than us. Reading today that Cardiff are after Snods.

Like that thinking! More, more, more!

Agree with all of this

Not to rub salt into our wounds, but I've looked at Recon's finances as well. Recon is not public so can't see their accounts, but 2 of the 5 companies it owns are, hence Financials available (converting from CNY into £): Lotus Health Group: Net Income of minus £10.9M. Based on today's share price it is worth £268M Roma Group: Net Income of minus £11.5K (Yes, that is thousands not millions, phew). Based on today's share price it is worth £21M These figures are after Tax and Debt Service, but even Operating Profit is negative. Would caveat that these are only 2 of Xia's companies. Lets hope the other 3 are profit-making.

In that case, more sensible to keep him than to sell at a loss and book that loss for FFP.

Bruce has come in for a lot of criticism for his tactics this year, and rightly so. However, my argument is not that he implements the wrong tactics, its that he refuses to implement any tactics. It’s almost as if he says: “you’re good players, so go out there and play/win”. The issue with this is that the bulk of our players are old and tiring, hence they will always elect to sit deep and make unambitious passes as opposed to gun-ho attack, attack, attack like the teams that go up do. I don’t think Bruce is inherently consistently conservative or negative - apart from when he targets draws not wins. Rather, I think with the profile of players we had in key positions last season (Terry dropped deep to avoid a foot race, Jedinak dropped very deep to sweep and defend aerial balls into box and Hourihane bottles it all the time and plays safe) we were bound to play deep and create a gap between our CDM and attacking MFs. Most of the time, the gap between the player that wins the ball in our defensive third and the next MF up the pitch can easily be 50 yards. Given older players can’t run that distance with the ball, its no wonder we resort to lumping or just getting it out wide (albeit so slowly that we give opposition chance to get back into their defendsive shape). This is best evidenced by Bruce on occasion throwing on 4 strikers at once - i.e. Bolton Away. No lack of ambition, just a complete lack of tactical intelligence with too much focus on individual quality of players. This epitomises Bruce’s major flaw, I think.

Completely agree. All depends on this year's losses, which would have been helped by January's frugality. Add in salary savings from returnee loans, shipping back out more of our players on loans and JT + Snodgrass wages and I think we are okay. Given the profit/loss calc is applied against book value, anything north of £9M for McCormack (wishful thinking) would be a 'profit' as well. B'ham Mail already overstating consensus by £10M precisely to over dramatize it.

Probably awkward Legal territory as anything like that can be misconstrued and used against him if it went to Tribunal, a la O'Neill. This keeps his options open and wouldn't be surprised if Xia was just letting Bruce stew for a while as a sort of punishment. Fact remains that it would be expensive to get rid and Bruce explicitly mentioned in his post match that he wants to stay - anything other than that could be construed as a resignation and the LMA carefully advise Managers on what to say in those situations.

Nervous that announcements of players leaving are coming before Bruce announcement, just to make it not look like players are leaving because Bruce has left.

Agreed. I don't think Wyness has under-performed against the objectives he would have been set - in fact, I would say that, purely as a CEO, he has out performed. As a Club, operationally and culturally we are a million miles better than where we were when he came in and the stabilizing influence he has had in <2 seasons has been impressive. It was a huge task getting fans back on board (I still know fans that haven't returned since the dark days of McLeish) and I think we are actually being quite innovative on the commercial side as well. As CEO, he had to back Bruce, least of all because we needed so desperately that continuity and stability, which is critical. Bruce came to the Wyness as a highly experienced Manager with a fantastic record, so of course Wyness would have listened to Bruce when he outlined his plans for taking the experienced route. On paper, there would have been nothing to oppose Bruce on given his track record. What will be interesting, is to what extent Wyness can now properly evaluate what went wrong last season on the footballing front and then, critically, address it. For me, there were just too many games that we simply played to draw and it will be down to Wyness et al to carefully message to Bruce that next season we need to try and win every game and evolve our style (and likely personnel) to achieve this. Secondly, he will need to facilitate this financially. If he does both those things, then I don't think we can ask much more.

Would agree with that

I'd like to see Terry stay but would be more sensible to have him in a coaching capacity; that way, we can keep his influence around the club but not have to pay him huge wages. If we are to bring youth through, it would be hugely beneficial to have Terry looking after them. I actually think he looked a bit ropey on Sat and might be doubting his ability to do it over a full season next year. Having him in a coaching capacity also suits his own ambitions 

My view is that for those teams that narrowly miss out, if they can keep the core together and make some modifications, they usually go up the following season - just like Brighton. For this reason alone, I would keep Bruce - by doing so we maintain the culture, togetherness and discipline that he has installed. I just hope he realises that, under no circumstances, can you set out to draw a game and set his team out accordingly. Every single mode of play must be geared towards scoring a goal - that is the type of relentlessness that took Cardiff up this year. To be honest, I've often wondered this season whenever I have seen us sit deep and pass sideways and backwards - even when not in a winning position - whether this is Bruce's tactics or the fact that older players will always play the easy ball rather than the ambitious one. Perhaps a good infusion of youth - O'hare and Green in particular - will fix this. I'd like to see Terry stay but would be more sensible to have him in a coaching capacity; that way, we can keep his influence around the club but not have to pay him huge wages. If we are to bring youth through, it would be hugely beneficial to have Terry looking after them.

I could stomach selling him to Man U for this, assuming we did absolutely have to sell him. Plus could negotiate for Johnstone and Axel again.

I think I might try and spend some more time understanding this given it is so prominent for us now. My understanding at the moment (caveat, this is not a complete understanding and might be b**locks) is that what heavily impacts the loss making calculation is prior transfers, given that these are - in Accounting terms - 'Assets' that depreciate. Although this depreciation is a charge that runs through the P&L as a cost item, it doesn't actually cost us anything in cash. For example, if we sign a player for £10M on a 5 year contract, that 'Asset' represents a £2M annual 'depreciation' charge for 5 years. If you took out these charges and simply deducted the actual cash costs (salaries, mainly) I think we are modestly profitable. So, what is impacting us is previous transfers on sizeable, long term contracts. The same, I believe, works for players that are signed for free. To calculate the depreciation charge for Micah Richards, for example, you would take the value of his contract (£2M per year for 3 years = £6M) and depreciate each year. So, for players like him you get hit twice - the depreciation charge plus his wages - i.e. £4M per year. Perversely, this is why if we sold that same player that we bought for £10M for £8M after 3 years we would make a 'profit' as his value on the Books after year 3 would be £4M (£10M minus 3 years of £2M depreciation charges). In terms of the Owner being able to put money in - a so called Equity injection - I think they can only do this to cover losses, not to just have a pile of cash that can be placed on our books to be spent. Really, the only option we have is to attract more commercial revenue. For me, the best route to doing this would be for Recon Group to do more of what they did with Bodymoor - perhaps sponsor a stand (I nominate the Doug). If we see more of this, then I think it is a good sign of Xia's financial power and backing. If we don't, then I'll be nervous about Recon's ability to fund us.