+++ Summary of CAS Trust meeting with Richard Murray +++

I've said this before but talk of RD holding on to the club to see if we are promoted is a disaster for us.

Every normally run club will be planning for next season and going as far as talking to agents about moves the day this window closes to be prepared for next season. If the takeover doesn't happen until june/July or even May then we are way behind everyone else. The new owners will have to make a decision over Robbo if they replace him tbat will put us further behind everyone else.

Once again we so go into a season unprepared, without a full squad and behind every other club due to Rolands cocking about. Even after he has left.

The urgency I feel isn't for this season but for next.

Get out of OUR club.

Would have thought it was just the freed up wages from Holmes that have been made available. I'd be very surprised if we saw anymore incomings without others leaving - unless the Best wages are made available.

cafc-west said:

Don't really get all the "he'll sell Konsa arguments" as surely that will reduce the overall value of the club to any buyer who are buying a going concern including the "playing assets". Plus - he isn't funding the ongoing losses out of his own pocket - his company Staprix are effectively funding the losses by loaning the deficit to the club at 3% interest. It's this that's making the club so expensive as he tries to recover the debt he's built up through years of mis-management.

It in fact increases the value because the transfer fee is bigger than the value of Konsa in the books. It provides cash that avoids Staprix having to make a loan to cover operating costs.

Rather than negotiate a fee for Konsa when buyers know you are selling, surely, he is worth more money in a valuation as an asset. If Murray is acting as a sort of CEO at this time, he has to be in regular contact with Duchatelet and I would be surprised if he didn't have a decent idea what is going on.

MartinCAFC said:

cafc-west said:

Don't really get all the "he'll sell Konsa arguments" as surely that will reduce the overall value of the club to any buyer who are buying a going concern including the "playing assets". Plus - he isn't funding the ongoing losses out of his own pocket - his company Staprix are effectively funding the losses by loaning the deficit to the club at 3% interest. It's this that's making the club so expensive as he tries to recover the debt he's built up through years of mis-management.

Even if Konsa goes for £4m on deadline day yes you knock off £4m of the valuation of the club, I'm not sure how it works but let's say for arguments sake it does, it just means it's £4m less for RD to put into the club from anywhere from within his empire.

I could be entirely wrong but I just think RD will fund the rest of the season without dipping into any of his own resources so the debt and interest doesn't rise any further to make it harder for him to get the price than he already wants.

If you sell a home grown player for £4m, or a player you got on a free for £4m, you increase the assets by £4m cash.
Players are not counted as an asset, it's the registration that is an asset so the cost of acquiring a player's registration is put in the books simply because it has an accounting value i.e an asset that can be valued. If there was no cost of acquiring a player's registration i.e a home grown player, there is no asset to be valued. Where a registration fee is put in the books, that value is written down every year over their contract period. So the clubs assets fall all the time they are not not selling home grown players and other players for more than they bought them for.

Just as (in accounting terms) you can't put an economic value on the company secretary you can't (in accounting terms) put an economic value on a player. A home grown player has the same asset value as the ticket office supervisor as far as the club's assets are concerned.

RD is not actually asset stripping in accounting terms because he is just replacing debt with cash generated out of nothing - the sale of a home grown player. This does not affect asset value, cash and debt are both assets. RD is gaining by having cash instead of debt because the debt servicing costs are reduced so giving a higher net future revenue for a purchaser so a higher potential price.

@Dippenhall
For all that, if any Konsa cash is then taken out to reduce the debt the club owes him, and then he sells without having to reduce his price by the amount he sold Konsa for, he will be smiling and stroking his white cat, right? This seems to be how it went at Standard, except that SL was profitable so he also helped himself to a dividend before selling, leaving the club short of cash.

PragueAddick said:

@Dippenhall
For all that, if any Konsa cash is then taken out to reduce the debt the club owes him, and then he sells without having to reduce his price by the amount he sold Konsa for, he will be smiling and stroking his white cat, right? This seems to be how it went at Standard, except that SL was profitable so he also helped himself to a dividend before selling, leaving the club short of cash.

If he gets an increase in the asset value of the club by selling Konsa the value of the club goes up. If he uses the cash to reduce the debt by £4 the price of the club goes up. However, he can't reduce the debt by £4m if he takes it out and then later has to inject £6m to cover operating expenses. If he takes out £4m and doesn't put it back the company is insolvent.

As far as Staprix is concerned it receives £4m and has reduced it's investments and has replaced it with cash, nothing changes the value of Staprix, in fact it is reduced because the value of a 3% interest stream on a £4 loan is worth more than £4m sitting in cash. He just has the option of investing £4m in another project. What will happen is that Staprix will have to write off most of the debt, assuming no one is actually going to pay £50m to buy the club, so the more he can reduce the debt the less he loses. More like kicking the cat than sitting back and stroking it.

SL presumably had surplus cash to operating expenses so could pay a cash dividend, but we don't, so he can't do the same trick, unless he can sell players to cover more than the difference between operating costs and revenue. Would only make a small dent in the Staprix debt though, so still unlikely to stop kicking the cat.

The biggest gripe is not the issue of taking out cash but leaving it in the club and not using player sales money to buy a replacement. Whether it's £4m cash or a player registration that costs £4m, the value of the club is the same. The only reason for withholding player purchase is to minimise the level of indebtedness to Staprix because he knows he will be writing that off effectively.

cafc-west said:

Don't really get all the "he'll sell Konsa arguments" as surely that will reduce the overall value of the club to any buyer who are buying a going concern including the "playing assets". Plus - he isn't funding the ongoing losses out of his own pocket - his company Staprix are effectively funding the losses by loaning the deficit to the club at 3% interest. It's this that's making the club so expensive as he tries to recover the debt he's built up through years of mis-management.

Is it possible that a figure might have been agreed for each players value (ie £4m for Konsa), but that allows RD to sell for more if he can? So if he sold Konsa for £8m, the 'club' (or the buyers of the club) gets four, and RD gets a bonus of 4.

[Edit: See @Dippenhall for a much better explanation!]

Dippenhall said:

MartinCAFC said:

cafc-west said:

Don't really get all the "he'll sell Konsa arguments" as surely that will reduce the overall value of the club to any buyer who are buying a going concern including the "playing assets". Plus - he isn't funding the ongoing losses out of his own pocket - his company Staprix are effectively funding the losses by loaning the deficit to the club at 3% interest. It's this that's making the club so expensive as he tries to recover the debt he's built up through years of mis-management.

Even if Konsa goes for £4m on deadline day yes you knock off £4m of the valuation of the club, I'm not sure how it works but let's say for arguments sake it does, it just means it's £4m less for RD to put into the club from anywhere from within his empire.

I could be entirely wrong but I just think RD will fund the rest of the season without dipping into any of his own resources so the debt and interest doesn't rise any further to make it harder for him to get the price than he already wants.

If you sell a home grown player for £4m, or a player you got on a free for £4m, you increase the assets by £4m cash.
Players are not counted as an asset, it's the registration that is an asset so the cost of acquiring a player's registration is put in the books simply because it has an accounting value i.e an asset that can be valued. If there was no cost of acquiring a player's registration i.e a home grown player, there is no asset to be valued. Where a registration fee is put in the books, that value is written down every year over their contract period. So the clubs assets fall all the time they are not not selling home grown players and other players for more than they bought them for.

Just as (in accounting terms) you can't put an economic value on the company secretary you can't (in accounting terms) put an economic value on a player. A home grown player has the same asset value as the ticket office supervisor as far as the club's assets are concerned.

RD is not actually asset stripping in accounting terms because he is just replacing debt with cash generated out of nothing - the sale of a home grown player. This does not affect asset value, cash and debt are both assets. RD is gaining by having cash instead of debt because the debt servicing costs are reduced so giving a higher net future revenue for a purchaser so a higher potential price.

In reality the valuation of a football club bears little relation to the balance sheet accounting assets figure, as only purchased players can be treated as a capital asset. To take an extreme example, Harry Kane is worth nothing in the Spurs balance sheet, despite being worth £100m-£200m if sold to Real Madrid.

Is Spurs tomorrow sell him for £200k to us, their balance sheet assets will go up by £200k in cash, but the value of the club would crash by the market value of the player they've missed out on.

In terms of our future owners, if they are still hoping for promotion THIS SEASON, then sales of key players may impact their valuation of the club as cash is no use outside the window. In an extreme example, if RD sold 5 players in the 31st January and left the cash in the club (with no time to spend it) and we got relegated as a result, then the valuation of the club would definitely be lowered, even if the prices received were decent

According to someone on the 'dark side' who has just messaged saying the cub is sold and will be completed early Feb to an ex footballer and a Brit Tweeted by a Fred Davidson

RedChaser said:

CheshireAddick said:

According to someone on the 'dark side' who has just messaged saying the cub is sold and will be completed early Feb to an ex footballer and a Brit Tweeted by a Fred Davidson

I saw that but don't do twitter, can anyone check the account out @stonemuse / @Henry Irving ?

Can’t locate the tweet.

This is the account.

Going by his profile, I wouldn't believe a word :-)

It could be done for all intents and purposes @JBLOCK subject to the approval of the fit and proper person test by the EFL. When you mentioned McLeish as Scotland manager, I thought it was Mark McGee at Barnet who was in the Directors box with AM recently and in the frame for that?

J BLOCK said:

CheshireAddick said:

According to someone on the 'dark side' who has just messaged saying the cub is sold and will be completed early Feb to an ex footballer and a Brit Tweeted by a Fred Davidson

No offence but that literally makes no sense - you say ‘it’s sold’ then go to say ‘ it will be completed early Feb’.

It’s either done or it isn’t.

Not really. A deal can be agreed, a deposit exchanged and a completion date set, which is what happened last time (albeit without the closure of the transfer window in between).