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CAFC Ltd annual report 20/21

2

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    I don't think it's terrible and you have to look at the thing in the round - Duchatelet had saddled the club with £44m of debt when he sold it to ESI. However, the key question is always affordability - Birmingham's turnover is circa £23m; Charlton's is about a third of that in L1 and two thirds of that in the Championship. It's a big chunk of the income for something that cost a notional £50k a year for the previous 30 years - equivalent to about a quarter of all season-ticket revenue. Think of it as not buying - or selling - a £500,000 player every season.
    Are we sure there isn'a rent increase clause if we get promoted to the second tier? I don't think there is, in which case then as you say it looks better.

    Birmingham are a basket case though, I'm not sure their deal isa sound benchmark.. There are not that many good benchmarks available. Let's not even look across the river...
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    We can debate long and hard the value of the rental deal for The Valley and training ground but, for me, the key point is that Duchatelet is raking in pure profit on his assets.

    At £500k per year for doing nothing ... absolutely nothing (including maintenance etc) ... he will never have an incentive to sell.
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    edited April 2022
    Dave Rudd said:
    We can debate long and hard the value of the rental deal for The Valley and training ground but, for me, the key point is that Duchatelet is raking in pure profit on his assets.

    At £500k per year for doing nothing ... absolutely nothing (including maintenance etc) ... he will never have an incentive to sell.
    What about when the undersoil heating boiler needs replacing?
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    Dave Rudd said:
    We can debate long and hard the value of the rental deal for The Valley and training ground but, for me, the key point is that Duchatelet is raking in pure profit on his assets.

    At £500k per year for doing nothing ... absolutely nothing (including maintenance etc) ... he will never have an incentive to sell.
    What about when the undersoil boiler needs replacing?

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    Is the Lookman Trench finished?
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    Hasn't the boiler been installed, looks like it from the new thing by the control room at the Valley
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    Dave Rudd said:
    Dave Rudd said:
    We can debate long and hard the value of the rental deal for The Valley and training ground but, for me, the key point is that Duchatelet is raking in pure profit on his assets.

    At £500k per year for doing nothing ... absolutely nothing (including maintenance etc) ... he will never have an incentive to sell.
    What about when the undersoil boiler needs replacing?

    Misleading picture.  That's Watson's iron lung.

    The figures are interesting of course and understanding them I will leave to those more competant.

    I hate the removal of The Valley, not so much Sparrows from the club. I understand that needs must, that got the deal over the line.

    TS will be found out this summer, one way or the other.
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    Dave Rudd said:
    Dave Rudd said:
    We can debate long and hard the value of the rental deal for The Valley and training ground but, for me, the key point is that Duchatelet is raking in pure profit on his assets.

    At £500k per year for doing nothing ... absolutely nothing (including maintenance etc) ... he will never have an incentive to sell.
    What about when the undersoil boiler needs replacing?

    Misleading picture.  That's Watson's iron lung.

    The figures are interesting of course and understanding them I will leave to those more competant.

    I hate the removal of The Valley, not so much Sparrows from the club. I understand that needs must, that got the deal over the line.

    TS will be found out this summer, one way or the other.
    Trouble is it was the ESI deal that it got over the line. Everything since is damage limitation.
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    Cafc43v3r said:
    Dave Rudd said:
    We can debate long and hard the value of the rental deal for The Valley and training ground but, for me, the key point is that Duchatelet is raking in pure profit on his assets.

    At £500k per year for doing nothing ... absolutely nothing (including maintenance etc) ... he will never have an incentive to sell.
    It's not profit is it?

    Its cost him about £18 million, he sold the club for a quid so it cost him about 18 million.  It also cost him another 40 odd million to own it. 

    So he is about 60 million down.  At 500k a year it will be about 120 years until he is in profit.

    His asking price and justification for it are ridiculous but he isn't, and hasn't, trousering money.  Is he? 
    Oh dear.

    OK, not 'profit' on his overall investment ... but free income based on his ownership of the assets.

    OK with that?
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    Dave Rudd said:
    Cafc43v3r said:
    Dave Rudd said:
    We can debate long and hard the value of the rental deal for The Valley and training ground but, for me, the key point is that Duchatelet is raking in pure profit on his assets.

    At £500k per year for doing nothing ... absolutely nothing (including maintenance etc) ... he will never have an incentive to sell.
    It's not profit is it?

    Its cost him about £18 million, he sold the club for a quid so it cost him about 18 million.  It also cost him another 40 odd million to own it. 

    So he is about 60 million down.  At 500k a year it will be about 120 years until he is in profit.

    His asking price and justification for it are ridiculous but he isn't, and hasn't, trousering money.  Is he? 
    Oh dear.

    OK, not 'profit' on his overall investment ... but free income based on his ownership of the assets.

    OK with that?
    Not really because it's not free.

    Even if he sold at a fair price (about 20 million, ball park?) he isn't going to live long enough to start making more out of rent.

    The bloke is delusional but implying he is making money out of it is wrong and actually makes him more mad than if he was. 
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    The old bugger will never sell if he thinks it's worth that much, nobody will pay it
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    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    Sorry but this makes no sense financially. 

    He could have sold The Valley for £20M, given up the huge "free profit 2.5% return" and bought a bunch of industrial sheds down the road for a 4% return or bought the retail park in Charlton recently bought by Syson for probably 5-6% return.  There is no logic from a financial perspective to hold on to The Valley for £500Kpa if you could get £20M+ for it.

    He is holding it because a) he is too stubborn to accept a loss and would prefer to accept a 120yr pay back to prove a point he won't live long enough to prove; b) he is bitter at the fans and sees this as pay back despite getting himself into this mess and c) he is as mad as a box of frogs. 
    I’m going with (c)
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    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


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    JohnnyH2 said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    The reason he wants £40-£50m for the ground as that is the sum he spent on purchasing us and keeping it going (or wasted would be more appropriate). The reason no one has bought the ground is its not worth his asking price 
    The value in Charlton is really only there if we get promoted to the Premier League. You don't get your money back until that happens if it ever does.
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    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    It's painful.  But 'thank you' for reducing the numbers by a factor of 1000 to help me understand.

    Yes, the £500 (or £500k - see, I can manage it) is free income.  Duchatelet still has the asset, which is also increasing in value.  He is getting an additional £500k per year which he wouldn't get if he had not agreed the deal with Sandgaard.  Sandgaard is also responsible for maintenance and upkeep.

    With Sandgaard - free income.

    Without Sandgaard - no free income, plus Duchatelet is responsible for maintenance and upkeep.

    In both cases, Duchatelet retains the assets (and you can value those at whatever figure you choose). 

    Why would anyone sell?  Especially when Duchatelet has such a high valuation of the assets that no-one is going to offer his potential asking price anyway.

    Got it yet?
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    edited April 2022
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
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    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
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    Does anyone actually think we will ever own the Valley again?

    I can’t see it. Roland will never sell it while alive and nobody could afford until we get to the Prem, which unfortunately looks as likely as me having a fling with Gemma Arterton.

    It will soon, if not already become easier and maybe cheaper just to start again somewhere else.

    Sandgaard could never afford and unless your crazily rich nobody would pay it.
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    edited April 2022
    Maccn05 said:
    Does anyone actually think we will ever own the Valley again?

    I can’t see it. Roland will never sell it while alive and nobody could afford until we get to the Prem, which unfortunately looks as likely as me having a fling with Gemma Arterton.

    It will soon, if not already become easier and maybe cheaper just to start again somewhere else.

    Sandgaard could never afford and unless your crazily rich nobody would pay it.
    Sadly I also doubt it happening within these 15 years. However I think the price will come down. If it doesn't at the end of that 15 years the club is moved on to a new site or the lease renewed.
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    Yes when Roland dies
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    What do you mean by “we”?
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Roland Out Forever!