Motherwell FC - A Thread For All Seasons

[YassinMoutaouakil]

Was pretending (to myself) that I'd prefer a draw in the Livi game but actually yeah can Aberdeen please win

[redstarcvedza]

10 minutes ago, Handsome_Devil said:

It was acknowledged at the time as an unavoidable accounting quirk. Either Burrows on twitter or through the website explained it.

Edit: actually here it is...

Accounting standards require such debt transactions to reflect normal commercial arrangements, i.e., the interest rate an arms-length lender could be expected to charge on an unsecured 20-year loan. Therefore, the financial results recognise the “benefit” of having such a loan interest-free. The total of that computed over the loan’s full term is shown as a credit to Other Operating Income in year one of the borrowing. This has been calculated at £1.518m. This amount will subsequently be charged as a finance cost in the club’s future financial results spread over the total period of the borrowing.

Thanks that explains it. A typical accountants non cash entry that is technically correct but highly confusing to the average punter

[redstarcvedza]

10 minutes ago, Handsome_Devil said:

It was acknowledged at the time as an unavoidable accounting quirk. Either Burrows on twitter or through the website explained it.

Edit: actually here it is...

Accounting standards require such debt transactions to reflect normal commercial arrangements, i.e., the interest rate an arms-length lender could be expected to charge on an unsecured 20-year loan. Therefore, the financial results recognise the “benefit” of having such a loan interest-free. The total of that computed over the loan’s full term is shown as a credit to Other Operating Income in year one of the borrowing. This has been calculated at £1.518m. This amount will subsequently be charged as a finance cost in the club’s future financial results spread over the total period of the borrowing.

Thanks that explains it. A typical accountants non cash entry that is technically correct but highly confusing to the average punter

[Muzz1886]

25 minutes ago, redstarcvedza said:

Something strange here...if its a loan your bank balance increases but you have matching debt to pay back. If its a grant or a gift with no strings your bank balance increases and you recognise the income as there is no debt to pay back

We also owe a significant sum to the Well Society.

Edited December 20, 2023 by Muzz1886

[ML4]

8 minutes ago, Muzz1886 said:

We also owe a significant sum to the Well Society.

But not a penny taken from them since the financial year ending May 2020. And paying off Hutchison and Boyle in that time too

[redstarcvedza]

24 minutes ago, Muzz1886 said:

We also owe a significant sum to the Well Society.

I'm no expert in the dynamics here but will this debt likely only be paid back to Well Society in certain circumstances ?

[Handsome John]

36 minutes ago, Muzz1886 said:

We also owe a significant sum to the Well Society.

That was also explained previously at an AGM. 

The idea behind it is that, building up the WS as a large creditor is, in the event of another financial Armageddon (Admin), they would have a bigger say in any CVA. 

Pretty much in the same way Boyle dealt with admin

Edited December 20, 2023 by Handsome John

[Muzz1886]

I understand the principle of the Society and its purpose.  Creating a creditor that's there until its written off is an interesting way to run a business.

By my reckoning there is £500k cash balance in the Well Society. That's 6 weeks of operating cash for the club.  Its not the security net people think it is.

 

[Handsome_Devil]

32 minutes ago, Muzz1886 said:

I understand the principle of the Society and its purpose.  Creating a creditor that's there until its written off is an interesting way to run a business.

By my reckoning there is £500k cash balance in the Well Society. That's 6 weeks of operating cash for the club.  Its not the security net people think it is.

 

Someone on the inside may correct me but I don't think the first point started with a particular cunning plan...the club needed support for X, the Society had the funds, rather than borrow it at a cost, do this 'for free' and don't worry about paying it back because, in a future worst case scenario, it's an ace.

As for the second point, you're definitely right that it's not a massive safety net but that was never the original intention - it was a back-up for emergencies/an overdraft facility (at a point when, I think, getting even that level of credit from a bank was difficult given our previous history).

Re the Society, I don't love them giving money to the club 'for nothing' because to me that's not what it's for. Sure, donate occasionally for community stuff but I wouldn't be moving away from the original emergency/back-up plan just because we want a new striker.

However - the joy of fan ownership! - not everyone will agree and of course while I complain like everyone else about the Society drifting, I admit I'm two-faced here. You can ask people to fund-raise for new youth facilities, it's much harder to fund-raise for an emergency fund which already has six figures in the bank you don't intend to touch.

The club is supposed to operate within its own means over a period of years pretty much like we're doing. There's a lot of valid criticism of the club administration now, our finances are definitely not part of that. They have been handled well, despite some folk online suggesting otherwise because we've hit a sporting rut, a very separate thing.

[Swello]

1 hour ago, Handsome_Devil said:

The club is supposed to operate within its own means over a period of years pretty much like we're doing. There's a lot of valid criticism of the club administration now, our finances are definitely not part of that. They have been handled well, despite some folk online suggesting otherwise because we've hit a sporting rut, a very separate thing.

This sums it up for me. The model has actually been very successful on it's own terms from the point where we became fan-owned until now but the point is what happens over the next 5+ years (which in Football can be thought of as "long term"). 

Under our current arrangement, we have hit the ceiling where we are really dependent on the proceeds of big transfer fees to keep our playing budget growing, keep pace with others and keep us competitive. In isolation, we can run as a break-even (or even modestly profitable) business relatively easily but if at least 75% of our competitors have access to more money than we do and can reliably put bigger/better squads in place then the stuff that actually makes us successful (high league places, Europe, Cups) become more difficult to achieve and the break even part becomes a lot harder.

It's not a perfect analogy but if we stay exactly in our current way of doing things it will be kind of like St Johnstone during the silly money Setanta years - they were a well run club financially but *everyone* outspent them anyway and it ended up with them going down regardless. (there is probably also a lesson about clubs that rely on outside spending ending up fucked when that gets called in/goes away but that's for another day).

 

[Pettigrew]

16 hours ago, Swello said:

The Govt. Loan thing being presented as a problem is one of the things that I have most difficulty with. The terms of that loan are (from a commercial point of view) literally unbeatable - it would be impossible for us to get finance at that cost (doubly so due to our past admin). If the club didn't take that loan on, much bigger questions would have been asked as the Directors would have failed.

100% this - some of the AGM questions on this in the last couple of years truly beggared belief.  

[Handsome_Devil]

21 minutes ago, Swello said:

This sums it up for me. The model has actually been very successful on it's own terms from the point where we became fan-owned until now but the point is what happens over the next 5+ years (which in Football can be thought of as "long term"). 

Under our current arrangement, we have hit the ceiling where we are really dependent on the proceeds of big transfer fees to keep our playing budget growing, keep pace with others and keep us competitive. In isolation, we can run as a break-even (or even modestly profitable) business relatively easily but if at least 75% of our competitors have access to more money than we do and can reliably put bigger/better squads in place then the stuff that actually makes us successful (high league places, Europe, Cups) become more difficult to achieve and the break even part becomes a lot harder.

Yeah, it's an incredibly fine line to walk. On the one hand, it's daft to say 'we overspend, if we don't sell players we're fucked' because selling players always has and always will be the business plan.

On the other, it requires a little bit of balls to regularly plan to overspend on the assumption a fee or good season will deliver into the coffers.

On yet another (how many hands can you have?!) budgeting only for 10th, first round exits and no transfer fees, will certainly result in reduced income.

If you imagine a simple equation of what we need (and we'll ignore the difficulties in that definition for simplicity) equalling what we know we'll make each season and what we hope to make over a three-season period (fees, good performances), the need number is increasing much more rapidly than the guaranteed income number so to balance books the discretionary income has to increase substantially. 

So you either find a way to increase guaranteed revenue to ease that pressure, walk an ever finer line with bigger bollocks and accept greater risk to the future of the club or, throw in the towel at a certain level of competitiveness and accept relegation if it comes.

I think because we've survived so long people confuse constant success/stability with it being easy...it's not, what we've done for ages now is a combination of hard work, good people, marginal decisions made correctly and good luck on and off the park. It's not a surprise that occasionally one or more of those aspects will be lacking.

[eliphas]

22 hours ago, capt_oats said:

Noticed Scott Burns QT'ing this and well...where to fucking start:

As previously mentioned the club had £4.2m in the bank per the last accounts vs £1.2m prior to the Turnbull sale so it suggests that the "transformative" money, in fact, hadn't actually been touched.

Similarly the Scottish Government grant was to assist clubs with costs related to lost revenue during the Pandemic.

Are we really taking shots at the club for like, using the loan money for the purpose it was intended?

It's also pretty fucking clear what we spent a chunk of that £2.9m (almost exactly the amount we received for Turnbull) on ie: the stadium refurbs and new pitch which has resulted in the long term benefit that we're now no longer chucking six figures at the upkeep of the park instead IIRC the maintenance costs are the low 5 figures..

Also, in comparing our staff costs with Killie doesn't necessarily mean we're comparing the same departments but it also feels a bit weird given Killie were relegated and played a season in the Championship during that time - not exactly a like for like comp.

On top of that if we're talking about our time as a fan owned club then we have a net profit of £4m+ in that time so....

As @Busta Nut mentioned yesterday McMahon saying we require "significant investment" is the most stating-the-fucking-obvious thing going especially in a league with the various city clubs receiving investment and 3rd place getting group stage football.

Have we squandered money? Absolutely. Show me a club in Scottish fitba' who fucking hasn't.

However, implying that the club have burned through £6m+ or whatever when they like...haven't is either disingenuous, misleading or simply bad faith tbh.

I really hope someone has, in a polite manner of course, called Gavin and Scott out on those tweets. Far too alarmist for two journos who are 'Well focussed.

[ML4]

23 minutes ago, eliphas said:

I really hope someone has, in a polite manner of course, called Gavin and Scott out on those tweets. Far too alarmist for two journos who are 'Well focussed.

Who? There’s nobody there to do it.

[eliphas]

1 minute ago, ML4 said:

Who? There’s nobody there to do it.

Mad folk on Twitter I was meaning. 

[Wellwatcher]

Based on previous statements at AGM's we are currently running at a loss of £1M per season. Although I am hopeful about the transfer fee for Miller it is unlikely we will have another transfer fee like Turnbull's to pull us out of a financial hole and allow further investment in the pitch and ground etc. I think after years of trying to attract investment Kettlewell has been instructed to cut costs to allow the club to operate soundly. A cynic could say this is reflected in the teams performances and subsequent league position.

 

Edited December 21, 2023 by Wellwatcher

[capt_oats]

5 hours ago, eliphas said:

I really hope someone has, in a polite manner of course, called Gavin and Scott out on those tweets. Far too alarmist for two journos who are 'Well focussed.

4 hours ago, eliphas said:

Mad folk on Twitter I was meaning. 

Sort of related but that's a much more balanced take from Graeme McGarry in his mailout via The Herald landed this evening.

Hat tip to that man (also sign up if you haven't already etc).

[eliphas]

Just now, capt_oats said:

Sort of related but that's a much more balanced take from Graeme McGarry in his mailout via The Herald landed this evening.

Hat tip to that man (also sign up if you haven't already etc).

Just coming on to say the same thing. A much more balanced take on it all. 

Fair play.

[capt_oats]

For anyone who hasn't signed up for McGarry's mailshot there's an excerpt of yesterday's posted on The Herald/Times websites.

[Handsome_Devil]

If there's anyone left in our boardroom, I imagine some interest will be taken in this: https://dundeefc.co.uk/news/newstadium-concept-img/