The NSWE Board

[KentVillan]

10 hours ago, CVByrne said:

The reason - an I know this will be hard to understand - is that debt is better than cash atm. If I take a loan of 100m and pay say 1.5% interest on that loan over 5 years. If the consumer price index for inflation averages at 3% in that time. The value in terms of purchasing power of the money I pay back drops 3% per year while I pay 1.5% interest per year. So I'm net positive in real terms. So taking out a loan "earns" Villa money essentially if they spend it now an pay it back later.

What would be much worse would be if the owners put cash in this year and next year, then with our future cash flows we ended up cash rich in the years afterwards. We'd then lose the value of that money, we' pay tax on that profit and we would then pay Dividends to our Owners to take excess cash out. FFP is our constraint not cashflows. 

Debt is good in this scenario

I think this is the correct answer, but wouldn't that imply there is big net spend lined up for a future transfer window?

[Czarnikjak]

16 minutes ago, KentVillan said:

I think this is the correct answer, but wouldn't that imply there is big net spend lined up for a future transfer window?

We have "net spend" cash this transfer window, contrary to popular belief. See my summary post few pages back (in ffp thread).

Part of it might be to cover this transfer window cash outflow and the rest to cover operational expenses until next big pay check from Premier League arrives.

Edited September 9, 2021 by Czarnikjak

[KentVillan]

Bloomberg reporting that lots of major US blue chips are securing financing at the moment before govt starts to pull back on stimulus.

Perhaps the club have identified this as an ideal moment to lock things down for similar reasons?

https://www.bloomberg.com/news/articles/2021-09-09/bond-buyers-embrace-72-hour-52-deal-corporate-borrowing-binge

Quote

Corporate America’s unprecedented issuance spree showed no signs of slowing Thursday amid what bankers and borrowers say are ideal conditions for high-grade companies to tap the bond market for financing.

After a relatively slow August even by Wall Street standards, issuers are back in force. They’re taking advantage of pent-up investor demand for high-quality credits, and looking to lock in their funding needs for the year amid concern that the Federal Reserve will soon begin to pull back stimulus that’s helped push interest rates to near-record lows. 

 

[Xela]

23 hours ago, OutByEaster? said:

So if I understand the view of the learned accountant - all we've actually done is agree in principle a deal whereby if we need it we can have an overdraft facility of up to £45m with Barclays to cover operating costs, secured against future TV revenues?

Thats how I read it. The usual security would be a debenture, but another bank already holds one. The deed of assignment is just an alternative item of security. 

22 hours ago, Follyfoot said:

I was actually reading  the 2016 charge However HSBC have a full debenture over the club how can Barclays go over the top with another facility

The banks will sign priority deeds between themselves. Barclays will take priority over the debenture on the specific items detailed in their deed of assignment only. The original debenture will cover everything else. 

The original debenture would have covered future income anyway, the new deed has just 'ring-fenced' that to another lender. 

[QldVilla]

9 hours ago, TRO said:

They said that about Abramovich, "short stay".....like him or loathe him.....he has stood the course.....I think our boys will do the same.

Yep. I don't get all the banter, people reading things into documents and coming up with worse case scenarios.

They wouldn't be putting their money into infrastructure and youth if they had short term aspirations.

It's going to take 10-15 years to build the infrastructure the club requires to catch up to the elite teams, we don't have the luxury of being able to game the system like Man City and Chelsea were able to do.

The club didn't quite take their opportunities through a few sliding doors moments in the 80's, 90's and 2000's and we've left a huge gulf between us and the so called Top 6. We need to be patient, as I truly believe these owners see what could have been and are going about it the proper way to rectify it.

[imavillan]

Reading the last few pages of this thread i started to worry but then i read the article in the Guardian from the link posted in this tweet on Twitter.

I am now comfortable they are just doing normal business practices.

It's an article from 2020 and well worth a read.

 

Teams in England’s top two divisions are taking sizeable loans from Macquarie, at times mortgaged against future TV earnings

It was once dubbed the “vampire kangaroo” and accused of “feasting on Britain’s creaking infrastructure” after investing in companies such as Thames Water and avoiding tax through a legal but controversial web of subsidiaries in Luxembourg and the Cayman Islands. But Macquarie Group Limited is a growing influence on English football, underlined on one day last month by Leicester and Wolves extending sizeable loans with the Australian investment bank that are mortgaged against future TV earnings.

[Vive_La_Villa]

On 09/09/2021 at 07:23, CVByrne said:

The reason - an I know this will be hard to understand - is that debt is better than cash atm. If I take a loan of 100m and pay say 1.5% interest on that loan over 5 years. If the consumer price index for inflation averages at 3% in that time. The value in terms of purchasing power of the money I pay back drops 3% per year while I pay 1.5% interest per year. So I'm net positive in real terms. So taking out a loan "earns" Villa money essentially if they spend it now an pay it back later.

What would be much worse would be if the owners put cash in this year and next year, then with our future cash flows we ended up cash rich in the years afterwards. We'd then lose the value of that money, we' pay tax on that profit and we would then pay Dividends to our Owners to take excess cash out. FFP is our constraint not cashflows. 

Debt is good in this scenario

I like the cut of your jib.

[sparrow1988]

1 hour ago, Vive_La_Villa said:

I like the cut of your jib.

 

 

[TRO]

On 09/09/2021 at 07:23, CVByrne said:

The reason - an I know this will be hard to understand - is that debt is better than cash atm. If I take a loan of 100m and pay say 1.5% interest on that loan over 5 years. If the consumer price index for inflation averages at 3% in that time. The value in terms of purchasing power of the money I pay back drops 3% per year while I pay 1.5% interest per year. So I'm net positive in real terms. So taking out a loan "earns" Villa money essentially if they spend it now an pay it back later.

What would be much worse would be if the owners put cash in this year and next year, then with our future cash flows we ended up cash rich in the years afterwards. We'd then lose the value of that money, we' pay tax on that profit and we would then pay Dividends to our Owners to take excess cash out. FFP is our constraint not cashflows. 

Debt is good in this scenario

debt, can be good if its managed correctly and if the money created from the debt is invested well...it can be good economics.

These owners of ours have a wealth of experience with all this and I would imagine have close proximity to the finest brains in the finance industry.....I have to trust them, with our club.

I am no finance expert at this level of business.......after the setup formations of 4-4-2 or 4-3-3....my brain hurts....I'll stick to the football side, thats hard enough.

 

[BleedClaretAndBlue]

 

[maqroll]

On 09/09/2021 at 17:02, Xela said:

Thats how I read it. The usual security would be a debenture, but another bank already holds one. The deed of assignment is just an alternative item of security. 

The banks will sign priority deeds between themselves. Barclays will take priority over the debenture on the specific items detailed in their deed of assignment only. The original debenture will cover everything else. 

The original debenture would have covered future income anyway, the new deed has just 'ring-fenced' that to another lender. 

I feel really dumb reading this post.

[maqroll]

1 hour ago, BleedClaretAndBlue said:

 

Do we know how these two connected? Mutual associates?

[Mark Albrighton]

What with everything that’s taking place in Jawdee land, this near year old article is worth remembering.

Quote

Fulham may currently be propping up the Premier League after a difficult start to the season, but the west London club has emerged top of the pile after an ethical audit of top-flight sides.

Aston Villa secured the runners-up spot in the table, which ranked clubs against a series of ethical metrics including ownership, sponsors, employment practices and fan involvement, as well as their tax status. Struggling at the foot of the table were Manchester City and Wolves.

While the research found that most clubs were “well run and had a strong presence in their local community”, the audit highlighted that the Premier League remains devoid of fan representation at board level.

Guardian link

I’m under no illusions, if you’ve managed to become a billionaire, chances are you’ve ****ed someone over along the way at the very least. But as far as these things go, I think Villa supporters can rightly feel less defensive or embarrassed about their club’s current ownership than other supporters.

[Hank Scorpio]

I just hope this whole Newcastle thing isn't a mirror of Randy realising he couldn't compete once Man city got bought.

There are being realistic if Newcastle do what they may now be capable of,  6-8 teams we realistically won't be able to compete against. What would their thoughts be on making villa a success now.

[hippo]

23 minutes ago, Pissflaps said:

I just hope this whole Newcastle thing isn't a mirror of Randy realising he couldn't compete once Man city got bought.

There are being realistic if Newcastle do what they may now be capable of,  6-8 teams we realistically won't be able to compete against. What would their thoughts be on making villa a success now.

Exactly.

I take comfort from the fact these guys aren't idiots. Unless they pump billions in  we aren't getting Europe. Whilst they publicly state Europe  is the aim - I'm hoping they don't just throw in the towel because we don't get it.

[MWARLEY2]

I hope they realise that they have given us so .much pride back . All of the infrastructure in place now is great. The academy system is bringing through loads of high quality potential and we are seeing really exciting players being bought to play for us. We are just a new north stand short of perfection in my ey3s. 

Newcastle are playing catch up . Their training ground is pretty shit apparently and they have so few staff . Probably a third of what we have. It will take them a while to put into place their people and buildings infrastructure . Look how fast we moved yet it has taken 3 years to get to where we are. 

 

[Czarnikjak]

44 minutes ago, Pissflaps said:

I just hope this whole Newcastle thing isn't a mirror of Randy realising he couldn't compete once Man city got bought.

There are being realistic if Newcastle do what they may now be capable of,  6-8 teams we realistically won't be able to compete against. What would their thoughts be on making villa a success now.

Newcastle takeover makes our job more difficult but it doesn't dramatically changed the picture.

Now we have 4 teams we cannot possibly compete with (and another 2 that we have little chance to compete with),soon we will have 5. 

We still gonna have a chance for an occasional European qualification if we are managed astutely.

[OutByEaster?]

I'd say that while it adds a team we'll struggle to compete with, it damages others.

Liverpool and Man Utd will be battling for one Champions league place before too long and Spurs and Arsenal aren't going to see that Champions league money again for a long, long time - it'll bring those two teams in particular closer to us.

It makes life difficult for us, but it's an absolute body blow for a team that have budgeted for the champions league and an NFL team to pay for their stadium - for Spurs and Arsenal, this is a complete game changer - they're now the biggest teams in our group, not the smallest teams in the top group.

I'd say there are three to five teams that we're going to struggle to compete with and two big ones that just stumbled a little closer to us.

 

[hippo]

14 minutes ago, MWARLEY2 said:

I hope they realise that they have given us so .much pride back . All of the infrastructure in place now is great. The academy system is bringing through loads of high quality potential and we are seeing really exciting players being bought to play for us. We are just a new north stand short of perfection in my ey3s. 

Newcastle are playing catch up . Their training ground is pretty shit apparently and they have so few staff . Probably a third of what we have. It will take them a while to put into place their people and buildings infrastructure . Look how fast we moved yet it has taken 3 years to get to where we are. 

 

Newcastle can rise pretty dramatically over the next 3 years.

I could be wrong but think we might tread water abit. 

[Czarnikjak]

8 minutes ago, OutByEaster? said:

Liverpool and Man Utd will be battling for one Champions league place

Not necessarily. As of 2023 season two additional CL places will be available  to highest coefficient teams that fail to qualify from their league. Perfect failsafe for Manutd or Liverpool. We could realistically see 6 Premier League teams in the CL at that point.