adrian93 Posted October 20, 2016 Share Posted October 20, 2016 Hello, At the beginning of my third season in Barnsley, the board asked me whether or not I thought it was a good idea for the club to buy the stadium. I told them I thought it was a good idea, and a year later the board completed the deal to buy the stadium. Right after this, the board decided to take up a huge bankloan of about £40 mill for "maitanance of the stadium and training facilities". Because of this, my total debt is now about £47 mill, and the club itself is only worth £35 mill. Surely this has to ruin the club long term? My finances are still labeled "safe", and we have a helathy balance, but I don't understand how the club can survive a debt of that magnitude? Because this was a decision made by the board, I feel I have to trust them that this will work out okay. Am I wrong? Has anyone else experienced this? Link to post Share on other sites More sharing options...
Matt ex SEGA Posted October 20, 2016 Share Posted October 20, 2016 Well - I don't know for sure, but... I'd have money on the fact that just because they've done it, doesn't mean its safe and secure. The game represents lots of different types of errors - from on-pitch mistakes to refereeing to financial. Its possible that they feel good about the resources they have to pay down and service the debt. It's also possible that they're idiots... Good luck! Link to post Share on other sites More sharing options...
Sonikku Posted October 20, 2016 Share Posted October 20, 2016 Which division are you in? When will the debt be paid off? How much are the monthly repayments? Are you making a profit? The size of the debt is not a problem, not being able to repay the debt is a problem. Link to post Share on other sites More sharing options...
adrian93 Posted October 20, 2016 Author Share Posted October 20, 2016 1 minute ago, steven gilbert said: Which division are you in? When will the debt be paid off? How much are the monthly repayments? Are you making a profit? The size of the debt is not a problem, not being able to repay the debt is a problem. I have just completed my third season (2018). The board estimates to pay back about £430 000 each month until 2028. My projections indicate a loss of about £400 000 at the end of the next two seasons, and a loss of £1.1 mill at the end of the third season from now. However, during my first two seasons my projections also indicated losses at the end of the season, but when I got prize money etc. we always ended up with a healthy balance. This was before I got the £47 mill debt, though... Link to post Share on other sites More sharing options...
Warhawk Posted October 20, 2016 Share Posted October 20, 2016 40 minutes ago, adrian93 said: I have just completed my third season (2018). The board estimates to pay back about £430 000 each month until 2028. My projections indicate a loss of about £400 000 at the end of the next two seasons, and a loss of £1.1 mill at the end of the third season from now. However, during my first two seasons my projections also indicated losses at the end of the season, but when I got prize money etc. we always ended up with a healthy balance. This was before I got the £47 mill debt, though... In my experience projections are super conservative. Assuming similar seasons as your previous ones, would the profit then be sufficient to cover the payments on the debt? From an economics perspective it's not really that surprising, commercial real estate is a highly leveraged industry. Link to post Share on other sites More sharing options...
adrian93 Posted October 20, 2016 Author Share Posted October 20, 2016 1 hour ago, Warhawk said: In my experience projections are super conservative. Assuming similar seasons as your previous ones, would the profit then be sufficient to cover the payments on the debt? From an economics perspective it's not really that surprising, commercial real estate is a highly leveraged industry. Not sure really. Guess I'll just have to play on and hope for the best Link to post Share on other sites More sharing options...
withnail316 Posted October 20, 2016 Share Posted October 20, 2016 2 hours ago, adrian93 said: Hello, At the beginning of my third season in Barnsley, the board asked me whether or not I thought it was a good idea for the club to buy the stadium. I told them I thought it was a good idea, and a year later the board completed the deal to buy the stadium. Right after this, the board decided to take up a huge bankloan of about £40 mill for "maitanance of the stadium and training facilities". Because of this, my total debt is now about £47 mill, and the club itself is only worth £35 mill. Surely this has to ruin the club long term? My finances are still labeled "safe", and we have a helathy balance, but I don't understand how the club can survive a debt of that magnitude? Because this was a decision made by the board, I feel I have to trust them that this will work out okay. Am I wrong? Has anyone else experienced this? Have to point this out as no-one else has, but you did have some say in it - they asked your advice. Too late now, but without a crazy amount of cash in the bank, I'd have told them buying the stadium wasn't the best idea. Oakwell may not be the biggest ground, but it was always going to be pricey. What division are you in, fella? Link to post Share on other sites More sharing options...
thomit Posted October 20, 2016 Share Posted October 20, 2016 Why o why does the board ask the manager whether an investment of that sort is a good idea? The manager knows football (presumably), but very little about corporate economics. Except in rare occasions - Wenger for example is actually educated and have a degree in economics, but that is not very common among managers, is it? Asking for the manager's opinion is one thing - that's fair enough - but actually putting a lot of weight onto that opinion is another matter. Link to post Share on other sites More sharing options...
adrian93 Posted October 20, 2016 Author Share Posted October 20, 2016 8 minutes ago, withnail316 said: Have to point this out as no-one else has, but you did have some say in it - they asked your advice. Too late now, but without a crazy amount of cash in the bank, I'd have told them buying the stadium wasn't the best idea. Oakwell may not be the biggest ground, but it was always going to be pricey. What division are you in, fella? That's true. I have, however, convinced the board in other clubs I've managed to buy the stadium because of the financial benefits, and nothing like this has happened before. That's why I was a bit baffled when I saw the clubs new debt..Also, I feel they should have told me what this would cost and how it would affect the finances in the future, but when they approached me they had pretty much made up their minds and just wanted my opinion..but as you say, too late now. I have just finished my second season i the championship. Link to post Share on other sites More sharing options...
withnail316 Posted October 20, 2016 Share Posted October 20, 2016 23 minutes ago, adrian93 said: That's true. I have, however, convinced the board in other clubs I've managed to buy the stadium because of the financial benefits, and nothing like this has happened before. That's why I was a bit baffled when I saw the clubs new debt..Also, I feel they should have told me what this would cost and how it would affect the finances in the future, but when they approached me they had pretty much made up their minds and just wanted my opinion..but as you say, too late now. I have just finished my second season i the championship. Long term it's generally a good idea (unless your ground is tiny and without enough space to expand, so a new ground is a better idea instead) but personally I'd have wanted to be settled as a top flight club first. Should keep things interesting, anyway! Link to post Share on other sites More sharing options...
phd_angel Posted October 26, 2016 Share Posted October 26, 2016 On 10/20/2016 at 16:11, thomit said: Why o why does the board ask the manager whether an investment of that sort is a good idea? The manager knows football (presumably), but very little about corporate economics. Except in rare occasions - Wenger for example is actually educated and have a degree in economics, but that is not very common among managers, is it? Asking for the manager's opinion is one thing - that's fair enough - but actually putting a lot of weight onto that opinion is another matter. I totally agree with this statement. Why the heck is the Board asking the coach to decide on a corporate investment?!... + Adrian93, I guess Steven's question on the what division you are playing is because higher divisions provide a massive scale of revenues in terms of sponsorships, TV rights, merchandise, etc. Depending on that, your club can easily offset your debt. Link to post Share on other sites More sharing options...
Legionaire Posted October 26, 2016 Share Posted October 26, 2016 So it's just like Arsenal irl, built a new stadium but need to repay huge debt. Link to post Share on other sites More sharing options...
Kaiser_Tottenham Posted October 26, 2016 Share Posted October 26, 2016 Honestly I necer experienced that. It's always me who ask for those things, but recently noted that I've a improving youth facilities request for 6th tier club in FM16, I was surprised the board accepted jt & costs worth more than balance & the club value. anyway.. You have to do well in FA cup by particular, promotion or being forced to sell players by installments to cover monthly commitments. Link to post Share on other sites More sharing options...
Nobby_McDonald Posted November 1, 2016 Share Posted November 1, 2016 Sounds like a massive debt for a team not in the Premier League. Link to post Share on other sites More sharing options...
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