Canadian firm slams Toronto, RFL over debt debacle

[DemonUK]

Oh look.  Another Toronto thread is beginning to look like a Leigh bashing thread.  (Always the same people though)

Edited March 1, 2021 by DemonUK

[Big Picture]

3 hours ago, silverback said:

i thought they asked to not have any $$$£$  help to get in the door so hardly deprived,because of the sponser/owner/backer with lots of dosh,and as probably done damage to other clubs needing backing/sponsership if they then get stiffed for bundles of £$ with unpaid wages and bills.

No they didn't ask for that, it was a condition of them being accepted into the structure.  Pérez lost all the investors he'd lined up initially when they heard those terms, Argyle, LiVolsi and their partners only came in later.

5 hours ago, frank said:

Yes! We learned that the majority of SL clubs are only interested in themselves. This situation may never have developed if  the WP had not been deprived of their share of TV money. That being the case SL is mainly responsible for that fiasco.

The problem is that the English clubs can't afford such normal business practices, they're too small time and hand-to-mouth for that.

[Damien]

2 hours ago, DemonUK said:

Oh look.  Another Toronto thread is beginning to look like a Leigh bashing thread.  (Always the same people though)

Leigh have not been bashed, can you please show where? People have simply replied to untruths that someone stated about Toronto and Leigh by stating facts.

Edited March 1, 2021 by Damien

[Lowdesert]

3 hours ago, Dave T said:

That does sound like a full time role though - pretty much managing limited companies budgets.

I'm not sure that should be the case tbh, I think very harsh punishments for poor financial management is probably the best route. 

No, it would be an audit, nothing to do with managing budgets.   An easy way would be a snapshot of financial parameters provided by the club (self audit) followed by audit of that.  There might be recommendations for improvement and/or areas which showed risk on that report.

New clubs would be in more depth initially.

Basic focus on incomings, outgoings, sponsorships, sky money, purchases, expected purchases etc  Simple stuff to show the club did enough to ensure it fulfilled its commitment to the players and SL.

[M j M]

7 minutes ago, Lowdesert said:

No, it would be an audit, nothing to do with managing budgets.   An easy way would be a snapshot of financial parameters provided by the club (self audit) followed by audit of that.  There might be recommendations for improvement and/or areas which showed risk on that report.

New clubs would be in more depth initially.

Basic focus on incomings, outgoings, sponsorships, sky money, purchases, expected purchases etc  Simple stuff to show the club did enough to ensure it fulfilled its commitment to the players and SL.

It's not the RFL's role to ensure the clubs aren't being run incompetently. We hear so much about how we should give these "successful businessmen" at club level their head yet we also have to hand hold them all the way?

The RFL tries to strike a balance and does the basics but the clubs can't forever demand all the power and none of the responsibility.

Edited March 1, 2021 by M j M

[Lowdesert]

1 minute ago, M j M said:

It's not the RFL's role to ensure the clubs aren't being run incompetently. We hear so much about how we should give these "successful businessmen" at club level their head yet we also have to hand hold them all the way?

The RFL tries to strike a balance and does the basics but the clubs can't forever demand all the power and none of the responsibility.

My initial reply was to what have we learned and the RFLs ‘soft touch’ approach.  It is in everyone’s interest to know if a club is in hard times and needs advice or a drag out.  I’ve suggested regular audits, which is what companies I’ve been involved with do, to check a satellite region or project is not at financial risk.

I am an Engineer, not a financial expert such as yourself, but have seen this approach many times.  From the OP it seems that at least 1 game coverage nearly did not go ahead. We have to imagine the chaos and bad press the game would get if that happened at SL level.

 

[Dave T]

17 minutes ago, Lowdesert said:

No, it would be an audit, nothing to do with managing budgets.   An easy way would be a snapshot of financial parameters provided by the club (self audit) followed by audit of that.  There might be recommendations for improvement and/or areas which showed risk on that report.

New clubs would be in more depth initially.

Basic focus on incomings, outgoings, sponsorships, sky money, purchases, expected purchases etc  Simple stuff to show the club did enough to ensure it fulfilled its commitment to the players and SL.

I'm just not sure how it would ever be a meaningful exercise, unless it was done in great detail.

Had they done this at TWP over this period, they would either of a ) cancelled the project instantly due to the odd financial position, or b ) seen that Argyle had the money and therefore everything looked ok. 

A challenge is that there aren't often piles of cash in the bank at clubs, meaning a slight variation to forecast leads to shortfalls, or an investor moving on could lead to issues, and then we have the poor behaviour of clubs/owners who act like this when they don't necessarily need to.

Ultimately, I think this kind of thing can only be managed after the event in many cases - an audit would often only tell you what went wrong - I'm unsure what the RFL can do that would be meaningful above and beyond punishing clubs.

[Dave T]

4 minutes ago, Lowdesert said:

My initial reply was to what have we learned and the RFLs ‘soft touch’ approach.  It is in everyone’s interest to know if a club is in hard times and needs advice or a drag out.  I’ve suggested regular audits, which is what companies I’ve been involved with do, to check a satellite region or project is not at financial risk.

I am an Engineer, not a financial expert such as yourself, but have seen this approach many times.  From the OP it seems that at least 1 game coverage nearly did not go ahead. We have to imagine the chaos and bad press the game would get if that happened at SL level.

 

Interestingly, Elstone had many concerns about TWP that were difficult to address in advance of them being admitted to SL. I think it was Hudgell (for what that is worth) that said they reached a point where they had to say yes without all the info being forthcoming. 

I think the big problem there is no established process for the due diligence on that, and it seems the submitted bid was no better from the 'new' guy.

I suppose your audit point can work in a fully licensed environment, and may have flushed this out as it was from 2018, but quite often these financial difficulties come really quickly.

[Lowdesert]

4 minutes ago, Dave T said:

I'm just not sure how it would ever be a meaningful exercise, unless it was done in great detail.

Had they done this at TWP over this period, they would either of a ) cancelled the project instantly due to the odd financial position, or b ) seen that Argyle had the money and therefore everything looked ok. 

A challenge is that there aren't often piles of cash in the bank at clubs, meaning a slight variation to forecast leads to shortfalls, or an investor moving on could lead to issues, and then we have the poor behaviour of clubs/owners who act like this when they don't necessarily need to.

Ultimately, I think this kind of thing can only be managed after the event in many cases - an audit would often only tell you what went wrong - I'm unsure what the RFL can do that would be meaningful above and beyond punishing clubs.

Just the financials.

They would’ve seen the outstanding debt plus it might have flagged up the wages not being paid, which seemed to be alleged on here several times.  

It’s my suggestion anyway.  Just waiting for something to begin sinking before doing much is a pathetic way to do business imo.  I thought that lesson was learned (or maybe not) with Banks.

[Lowdesert]

7 minutes ago, Dave T said:

Interestingly, Elstone had many concerns about TWP that were difficult to address in advance of them being admitted to SL. I think it was Hudgell (for what that is worth) that said they reached a point where they had to say yes without all the info being forthcoming. 

I think the big problem there is no established process for the due diligence on that, and it seems the submitted bid was no better from the 'new' guy.

I suppose your audit point can work in a fully licensed environment, and may have flushed this out as it was from 2018, but quite often these financial difficulties come really quickly.

Yes indeed and I have been told by some very rich people that cash flow is king.

To their credit, SL clubs, through one way or another, have scrambled through the covid crisis and that came quick enough.  

 

[Dave T]

3 minutes ago, Lowdesert said:

Just the financials.

They would’ve seen the outstanding debt plus it might have flagged up the wages not being paid, which seemed to be alleged on here several times.  

It’s my suggestion anyway.  Just waiting for something to begin sinking before doing much is a pathetic way to do business imo.  I thought that lesson was learned (or maybe not) with Banks.

I suppose if we want to look at the controls that helped with the banks, we would have to go down the route of insisting that clubs have substantial provisions put aside - maybe in the form of bonds. This isn't a bad idea in itself, but I still think a signed off advance budget can still go very wrong very quickly in RL, due to the lack of substantial funding knocking around.

[Sports Prophet]

3 hours ago, DemonUK said:

Oh look.  Another Toronto thread is beginning to look like a Leigh bashing thread.  (Always the same people though)

An interesting observation for someone so new

[Robin Evans]

12 minutes ago, Sports Prophet said:

An interesting observation for someone so new

Eh?

[Cumbrian Mackem]

4 hours ago, Kayakman said:

Once this is all settled (post Covid) Toronto will be back in;  I'm sure of it! (+well sort of sure)

Not in super league they won’t.

[Hela Wigmen]

https://mobile.twitter.com/johnnyddavidson/status/1366419215348072456

A challenger emerging?

Edited March 1, 2021 by Hela Wigmen

[Lowdesert]

3 hours ago, Dave T said:

I suppose if we want to look at the controls that helped with the banks, we would have to go down the route of insisting that clubs have substantial provisions put aside - maybe in the form of bonds. This isn't a bad idea in itself, but I still think a signed off advance budget can still go very wrong very quickly in RL, due to the lack of substantial funding knocking around.

Bonds could work but regular checks are the future imo.

Whatever lessons are learned then now is the right time to make feasibility and planning on what will work.  Elstone will be doing little else, other than waiting for a pay off, and should be tasked.

 

[GUBRATS]

3 hours ago, Sports Prophet said:

An interesting observation for someone so new

He's been a member on here since 2005 

[ELBOWSEYE]

9 hours ago, Rupert Prince said:

Where are teams being let in by the SL "back door"?   Where are they?   In fact the SL showed TWP the door and slam it shut on the way out.  Leigh where let in by the Butler by the front door.

Can SL afford a butler never mind a front door. 

Weren't leigh allowed in with handcuffs on. 

[Rupert Prince]

4 hours ago, Hela Wigmen said:

https://mobile.twitter.com/johnnyddavidson/status/1366419215348072456

A challenger emerging?

It is the right way round to do it.  With investment of course.

What would the season dates be?  The weather would be an issue (?).

[Rupert Prince]

46 minutes ago, ELBOWSEYE said:

Can SL afford a butler never mind a front door. 

Weren't leigh allowed in with handcuffs on. 

Ha ha.  Didn't the butler hold out a silver platter?

[ELBOWSEYE]

17 minutes ago, Rupert Prince said:

Ha ha.  Didn't the butler hold out a silver platter?

The RFL /SL can't platter sawdust. 

[PhilCarrington]

11 hours ago, Kayakman said:

Once this is all settled (post Covid) Toronto will be back in;  I'm sure of it! (+well sort of sure)

Look forward to all these debts being settled, but I doubt if that will ever happen. The debt was racking up well before covid and before they won promotion to SL. Not the only organisation unpaid at that time and not the only 6 figure debt. Can't blame SL or Covid for the consistent approach TWP had to paying debts.

[silverback]

Am sure that big bag a  TWP free beer tokens must be worth sommat for next up and coming team to dish out . easy way to top up the crowds,but not make enough to pay your bills.

[BrisbaneRhino]

Putting aside cash isn't a sensible way to guard against the bankruptcy of what are actually quite small businesses. Bank guarantees could be more of an option, but given the likely appalling credit rating of most SL sides I'm not sure even they are viable unless owners effectively provide security themselves, as most operate at a loss and have probably close to zero net assets.

I've no problem with any expansion clubs being asked to provide some form of security. But they should not be asked to do things other clubs are unwilling to do - namely forego TV money.  Toronto ended up a mess, but how much of that was down to COVID we'll never know, and other clubs blocking them getting a fair share of income was utter selfishness.

[frank]

2 hours ago, BrisbaneRhino said:

Putting aside cash isn't a sensible way to guard against the bankruptcy of what are actually quite small businesses. Bank guarantees could be more of an option, but given the likely appalling credit rating of most SL sides I'm not sure even they are viable unless owners effectively provide security themselves, as most operate at a loss and have probably close to zero net assets.

I've no problem with any expansion clubs being asked to provide some form of security. But they should not be asked to do things other clubs are unwilling to do - namely forego TV money.  Toronto ended up a mess, but how much of that was down to COVID we'll never know, and other clubs blocking them getting a fair share of income was utter selfishness.

Some of these teams that deprived  Toronto from  the TV money( and to a lesser extent Leigh)are on the bones of their ---- and will not be able to afford to be in Sl before long. Be interesting to see how they fare financialy when thing get back to normal.