Exiled Wiganer
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Posts posted by Exiled Wiganer
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2 hours ago, Worzel said:
If there was someone who wanted to put £5m into a random championship club, they've had 30 years to do it. Father Christmas isn't coming. What we need to do is attract investment into our elite league, so we can grow the competition which generates 99.9% of the sport's revenues, so we can support the growth of the game.
Dozens of major investors have stepped up in the last 30 years. This 12 happen to be the 12 when the music for the current round of musical chairs happened to stop. Father Christmas has come over and over again. The problem with Salford, I would argue, is that they have shown virtually zero ability to grow themselves or the game. If the test was what would be the best way to grow the game, then, over your 30 years you would have Bradford far above Salford by pretty much every measure.
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5 minutes ago, RigbyLuger said:
People still believe the Doctor is some kind of saviour!
I thought he poured in a fortune of his own money. And left them with no debts. I may be wrong though. If so, then in many contexts those actions would be rightly praised. I thought the problem was the gap between the perception and the reality.
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5 minutes ago, Eddie said:
You’re stuck with 12 clubs then, no room for expansion in SL as it’s impossible for a new club to get enough IMG points to get in.
Is that right though? Clearly this takeover has not gone smoothly, because Salford were living beyond their means.
It is possible that they have been bought by a league loving group who are happy to follow the same path as at Huddersfield, say, and bridge the gap between revenue and income indefinitely, but I would be (happily) surprised if that were the case. There remain lots of clubs who are one benefactor’s heart attack away from being in terrible trouble. Which of course has been ever thus…
However, the closed shop question is perhaps a subject for a separate thread - as far as this one is concerned, today looks to be a great day for our game and especially for Salford.
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11 minutes ago, The Future is League said:
Let's hope that London and Cas can get their takeovers over the line now.
Cas’ looks to be on track from what I have seen and heard.
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12 minutes ago, Worzel said:
Nobody wanted you to go bust. The sport, and your fellow clubs, have bent over backwards to give you enough rope to survive... at considerable risk to themselves had this deal not gone through.
Now might be a moment for some gratitude, rather than the tone-deaf sulking we've heard from some Salford fans and members of the club's senior leadership over the last few weeks.
This is great news, and I'm delighted. Yet more inward investment for the sport in the UK. This IMG "reimagined" era with greater security of tenure for sensible investors is beginning to look more like that "What have the Romans ever done for us?" Monty Python sketch as every day goes by.
You see what you want to see.
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That sounds like brilliant news. I lived watching Salford play last year, as pretty much every game was a nail biter, so am looking forward to settling down for some more of the same in 25.
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2 hours ago, M j M said:
As with Salford, the public has zero right to that knowledge, as in any business transaction. Anyone demanding it doesn't understand how this works.
We have the “right” to understand how Salford will be kicking off in Super League and Toulouse will not, and to understand the circumstances around the game advancing funds to them. I am not interested in who the people taking over Salford are, or the details of any takeover, save only to the extent that their behaviour distorts - or not - the competition.
In Cas’ case, I entirely agree. They are paying their players and the rest of their staff, and are ready to take their place.
Wigan were taken over by Danson not so long ago, and we didn’t get or ask for a running commentary on that. I think in this instance it is that quirk of human nature to look at things which have similarities and look for patterns which aren’t necessarily there.
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I see nothing to be at all alarmed about, as we have a business which is currently trading going through a transfer of ownership. Had Salford been paying for things in the usual course there would be no story there. This is a very relaxed press release: sometimes things take time. 3 months is nothing, particularly as the named new owner is taking care of business in the meantime.
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28 minutes ago, Dave T said:
There are scores of nuanced scenarios. But your scenario is covered in my list under number 3 (they go bust). That then leads onto all sorts of other scenarios on what happens then.
Nobody is ignoring debt, it's been discussed on here.
I feel like you think I am unnecessarily banging on about this, but this isn’t “go bust”, this is an offer based on a prepack. I have read very little about debt, but have only dipped in and out, so maybe it has been covered. Anyway, rather than get more slagging off for drawing out a reasonable point - which seems to be the TRL way - life’s too short to bother commenting until we see how this plays out.
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2 hours ago, Dave T said:
You seem to have got a bit stuck on this point. There are processes in place that cover this. People don't get to negotiate to ignore the punishment under grading.
But if an investor only wants to come in based on the club going belly up, that's a risky strategy, as they may not even get permission to reenter the league.
We don't need to create sinister hypothetical situations. Salford are struggling to pay the bills, they are hoping to bring in an investor, if it doesn't happen they will have to cut costs. If those things don't work, they may go bust.
I have not got stuck at all. You set out one option: Salford are taken over. I was reiterating that any takeover will be either through a purchase or a prepack. People are focussing on cash but seemingly ignoring the debt. We shall see soon enough whether my supposition holds water.
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There is more than one option 1 in Dave T’s scenario.
There is cashflow and there is debt. As as I can see there is nothing stopping a potential bidder from saying to the RFL that they want to do a Bradford: wind up the old company, leaving the creditors high and dry, and laughing in Toulouse’s face, then acquiring the membership and right to use the stadium. And away they go. They may even make it conditional on not being punished in the next assessment.
The game would then be faced with a take or leave it 11 or 12 team competition. That would be entirely consistent with there being no announcements or deadlines being missed. They have what they want for now - a stay of execution making it impossible for them to be kicked out whatever the terms of the offer.And all this happening in year one of the all new professional super league as we have never seen it before era.
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6 hours ago, super major said:
As the RFL effectively loaned money to Salford I don't see them getting anymore central funding if the go into administration
But the RFL has run out of road. The bidder can include whatever terms it likes, as the RFL has nowhere to go. It’s far too late to bring in another club. There is nothing to stop them submitting a bid to re start a Salford SL team, debt free post insolvency, retaining all of their players. Either the RFL accepts the terms, or we have an 11 team competition. Which destroys the value of the competition. And all this while implementing a process to “reimagine” the game.
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1 hour ago, Charlie said:
Oh there’s no doubt they’ve pushed the boundaries which I think everyone would do. Especially if your playing for time with new investors
There is pushing the boundaries and there is breaching undertakings because they know at this stage no one in the game can stop them doing whatever they like.
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I think one absolutely vital element of this is whether any new owners have to care about putting Salford into administration.
From comments earlier in this thread, going bust means a (very minor in Salford’s case) reduction in the financial score rather than relegation. In that case, purely from the points perspective, I see no disincentive for any new investors from sinking the old company, having the traditional laugh at the expense of creditors and other clubs who live within their means and restarting debt free.
However, it may not be quite as simple as that, depending on who is owed what, and, say, the terms on which the ground is leased. So, said investors may need time to navigate themselves to a position in which they can proceed to step into a debt free Super League club on favourable lease terms.
The advances the game had pretty much no choice to provide would have greatly facilitated this.
All conjecture, of course.
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The day I go out of my way to navigate “social media” to find a union player is the day I would like to be taken to the glue factory.
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3 hours ago, Wakefield Ram said:
How can they score any points for financials when they are on the verge of administration/ liquidation?
Indeed. My main issues (setting to one side who should have been asked to carry it out) with the evaluation process in this case is not that an evaluation process of some sort is not a good thing - I agree with TT and believe it is, but that the outcome here shows either Salford weren’t honest, it was designed incorrectly or it was applied incorrectly. That someone unable to afford a full time team can get any financial points at all, and ends up being on the right side of a line with Toulouse on the other side will lead us to a devalued competition when we are in a race against time to drive up standards. You could not make up that level of strategic stupidity.
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I agree with RP’s post above to some extent.
However, it would have been feasible to go beyond the numbers and assess the likelihood of being able to field a professional team, and give that a very high weighting. Nothing odd has happened to Salford - they didn’t lose a key sponsor or a key investor. What they have done is run out of credit, having out spent income over a long period of time with no external support or assets to draw upon.
We have different takes on this - mine is that it fundamentally damages everything this process is supposed to work towards: improving standards and a high quality competition - for either this test or its application to have failed to pick this up.
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He did a really good job at Wigan, but is clearly not in the same class as Wardle. He showed he is not a weak link in a strong side, but is not a difference maker. I had the impression he was on a very large contract, hence his being shunted around. Wigan may be interested, and he may be interested in Wigan. I am not sure what Keighran’s contractual position is, as we don’t need them both of course. Plus, Eckersley is developing, which may make him surplus to our requirements.
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23 minutes ago, RP London said:
without pulling this round in to the IMG debate and forgetting whether you think the gradings are doing this or not but....
Thats sort of what it was supposed to look at was the potential for the next cab off the rank to be better than the one your letting fall.. if the next club can be in a good position (and that is all stuff/guff about the social media, catchment, pitch, yes big screen etc) to make the most of the promotion and the potential then we will see that the "new system" having the merits people are hoping it would. I am not sure in the past that clubs have been in the best position to exploit the new exposure when they have been promoted before (some have, of course, but the exception doesn't prove the rule).
if we can get the other leagues to be ready to exploit the promotions then the game will be in a really good place. At the moment its replacing like with like really.
Thanks for taking the time to make an informed and informative response to my previous hypothetical gaming of the system scenario. Tied in with that is the point that bothers me most around this - how was their imminent demise not sufficient to allow Toulouse to take their place? Nothing peculiar or unexpected has happened. They didn’t have a major backer or major sponsor pull out. All that happened was that their cash ran out, because more was being spent than was coming in. How on earth was that not picked up, and their place given to Toulouse?
I have assessed many proposals in my working life, and there is always an ability for the assessors to flag up game breakers, which allow/require you to ensure the outcome isn’t nonsensical - even if the assessors felt constrained by the point scoring system, there must have been room for them to say something like “they score highly enough across the board, but unless a white knight comes over the horizon won’t be able to field a team”. Which would surely have got people’s attentions. I hope someone somewhere with the power to sort this out gets a grip.
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2 hours ago, M j M said:
Yes but it's still rented by the Wigan company and, for the purposes of what we're looking at here (which is historical data anyway) the employment costs of maintaining and running it won't be born by Wigan.
They are all the same group. It’s all Danson’s money/assets. How he chooses to charge/recharge things is up to him, and I am sure he will organise his affairs efficiently. So, I suspect the financial picture is not quite as straight forward as “Wigan leases”. It’s a detail point, I agree with the main thrust of your analysis.
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1 hour ago, M j M said:
Firstly Employer's National Insurance is excluded from the salary cap so add that on to their squad spend. But then there is the off-field team including the coaches, physios etc, back office staff for admin, finance functions, ticket office (unless covered by the rent). Salford employed an average of 64 people last year, which is probably the fewest in the league, but is still a large chunk of payroll on top of the playing squad. Then costs of training locations, transport costs, utility costs, all the other things associated with running a business.
Only the largest clubs in the league give any useful indication of breakdown of spend in their financial statements and most of those are distorted by the costs of running their stadia. But just as an indication, and obviously the scale of operation is very different, but if we look at the one big club that rents a stadium Wigan's total payroll was £5m for 119 employees.
Aside from their playing squad I really don't think there is any spending black hole waiting to be exposed at Salford, they almost certainly run the skinniest set of overheads in the league. For them it's a revenue problem.
Wigan’s stadium is now owned by Wigan’s owner.
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I feel as if I am being slow today, as I have read 2 comments that seem at odds with one another.
Here is my scenario:
- I want to buy Salford and want them to be debt free and in Super League
- I make sure they tell IMG what they need to hear to make sure I get a place
- I am then happy for that club to flounder and die: ideally, they get enough cash to tide them over, then they can die quickly and I can start a new Salford, with a shiny clean balance sheet
- I may then be safely in SL in the following year, as the new approach to finance has a marginal impact on me at best
- once this is wrapped up I can drive round the creditors left with nothing shouting “Unlucky you massive losers!”
Someone said that they would be relegated because they would lose a grade whereas someone else said that they would lose a proportion of a small number…
Am I alone in wondering whether, if this is the case, the game has collectively lost its senses?
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So, if I wanted to buy a club and avoid all its debts, I could make sure they pass the IMG test first, by saying whatever needs to be said to achieve that, allow the target to run out of cash, but grab an advance on future payments sufficiently late that it is too late to be kicked out, then simply allow the target to fold entirely before buying it debt free from insolvency practitioners.
Would the new company then be allowed to do the IMG dance again this year, or does insolvency mean that they would drop down in 26?
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Am I right that, even had it been known at the time Salford would have been fielding a part time team they would have been offered an SL place ahead of Toulouse?
Salford financial issues(again…)
in The General Rugby League Forum
Posted
I admire your attempt to engage, but I think you will find that Things Have Never Been So Good.