Administration an option now?

killerandflash said:

Airman Brown said:

killerandflash said:

Airman Brown said:

Chris_from_Sidcup said:

Can someone explain how/why we would go into admin if wages and bills are being paid on time?

I get that we don't know who is paying them, but they are being paid. 

If the EFL refuses to allow the club to start next season without proof of funds and ESI cannot show it, they would presumably be trading insolvently pretty quickly - which is potentially a criminal offence. No central revenue, no ticket revenue because no matches and no demonstrable business plan. Yes, transfer fees, but to what end?

Someone has to show the EFL circa £20m to be allowed to continue. Anybody who does that with Duchatelet’s deal hanging over their head and without current independent means to pay it is likely to be a fool or a crook.

The first question is whether ESI can pay the July wages or will choose to do so. The second is who is putting up the £5m-£10m the club is likely to lose between now and next May, even allowing for transfer income. Break even budget in the Championship is a hefty loss in L1 and there is no equilibrium point. You cannot cut your way out of it even if the players are amateurs - and that’s before we get to the effects of Covid-19

It wouldn't be pretty to watch on the field BUT in normal circumstances it should be possible to more or less break even in L1, especially as we now have no legacy high wage "Driesen" era players on the books. Or a moderate loss (from the cost of the academy) covered by player sales. 

After all that's how it used to be not that long ago...

Of course Covid has thrown a massive spanner in football finances. PLUS the fact that ESI's presence will significantly reduce the crowds as well now

I'm sorry but that's complete nonsense. The club had an operating loss of £11.9m on turnover of £7.9m in 2018/19 and that was a year in which we reached the play-off final. How are you going to save £11.9m when operating expenses were £20m that season, even if the income were to be the same, which it won't be? Which players are you selling to offset it? The operating loss was £14.3m and £13.3m in the two previous L1 seasons.

Just because we heavily lost money that season doesn't mean we always have to. Especially as that side still had a few signings from our previous Championship campaign, the likes of Igor, Bauer, Sarr, and other players probably on big wages, the likes of Solly and Ajose

Burton Albion that season had a wage bill of around £6m versus our £10m and a loss of £1.9m vs our loss of £10m. And that was the season after they got relegated from the Championship, so would have had a higher cost structure than they would have done as a L1 club.

And out loss includes "accounting" costs likes depreciation and amortisation of £4m which aren't cash costs, and thus wouldn't be included if the EFL insisted on clubs being near break even on a cash basis.

killerandflash said:

mattinfinland said:

@Airman Brown
Couldn't PV and Co buy a new ground cheaper then 50m? If they brought the club in administration 

Like 15,000-20,000 seater somewhere.

I know It's far from ideal and everyone might be like no way. And there is finding a suitable area, planning permition etc 

But if it came to it, they could build something (or rent) cheaper then what RD's valuation of The Valley is?

And if they did go ahead with something like that, wouldn't RD be sitting on a useless bit of land? It's only real value is to CAFC? 

It's Sparrow's Lane as well that Roland owns, indeed, in the sort term it's more important. We could survive groundsharing briefly at Millwall (however horrible that might be) but we need our own training ground.