Meeting on Thursday

[ty cobb]

It always amazes me that as soon as things start going wrong on the pitch the chairman starts being blaimed as well. I'm actually quite happy with the resources provided in Jan, 3 players brought in all of a higher standard and on decent wages. The fact that none of them can play as a winger is up to Smith.

The injurys aren't helping but we're so predicatable at the moment, either whack it up to Duffy or get it wide to a 'wing back' who'll lose the ball.

We can't change the manager again I would hope that Smith knows what hes doing given the number of years he's been in the game and I think rumours about losing the dressing room won't help at all.

We were a lot better under Patto we showed more passion against Rovers at home then we did in any other game last season but now is not the time for a change, give Smith a chance to put it right. However, if we don't go up this season I think it would be time to go.

Questions for tonight - how are they going to fund the loss we make this season, from their own pockets or by a loan?

[Snake]

ResOx

So from what I can gather we can't ask (as in expect an answer) who owns the club. We can't ask if the manager has lost the players respect.

Can we ask if the Chairman and CEO are drawing salaries.

Wouldn’t the Directors pay be shown in the OUFC accounts, which could be published in the next two weeks?

Has anyone ever heard Merry say that he’s working for nothing for OUFC, because I’d be very surprised if he was.

[boris]

Has anyone ever heard Merry say that he’s working for nothing for OUFC, because I’d be very surprised if he was.

Section 3 of the OxVox / OUFC minutes. I know it's dated May 2006, but it's still the most definitive statement on the subject yet.

3 directors exist and all were full-time. This was not expected to change in the foreseeable future. None were drawing a salary as directors but the proposal was that KT would do so as Managing Director from some still to be determined date in the future.

[Snake]

Has anyone ever heard Merry say that he’s working for nothing for OUFC, because I’d be very surprised if he was.

Section 3 of the OxVox / OUFC minutes. I know it's dated May 2006, but it's still the most definitive statement on the subject yet.

3 directors exist and all were full-time. This was not expected to change in the foreseeable future. None were drawing a salary as directors but the proposal was that KT would do so as Managing Director from some still to be determined date in the future.

The accounts (when published) will only take us up to June 2006 so it’s not a real guide to what’s happening, salary wise - but I’d reiterate the fact that we can’t expect people who work for OUFC to do so for nothing and I think it’s reasonable for all the working Directors and the CEO to draw a reasonable salary for their time.

The key word in that posting is “reasonable

[GodalmingYellow]

Has anyone ever heard Merry say that he’s working for nothing for OUFC, because I’d be very surprised if he was.

Section 3 of the OxVox / OUFC minutes. I know it's dated May 2006, but it's still the most definitive statement on the subject yet.

3 directors exist and all were full-time. This was not expected to change in the foreseeable future. None were drawing a salary as directors but the proposal was that KT would do so as Managing Director from some still to be determined date in the future.

The accounts (when published) will only take us up to June 2006 so it’s not a real guide to what’s happening, salary wise - but I’d reiterate the fact that we can’t expect people who work for OUFC to do so for nothing and I think it’s reasonable for all the working Directors and the CEO to draw a reasonable salary for their time.

The key word in that posting is “reasonable

[DLT]

OXVOX's initial report indicates that it was an informative and open meeting.

[Mally]

Questions for tonight - how are they going to fund the loss we make this season, from their own pockets or by a loan?

This is true, but if the Directors are loaning money to the club, which is quite likely, a salary would only increase the amount they had to loan the club. Then they would be loaning the club money to pay themselves a salary, at future cost to the club. That would not be reasonable, except for KT who is there primarily for his expertise rather than his love for the club.

Why would the club make a loss this season? With vastly increased ticket revenues, increased merchandise sales and a much smaller wages bill due to the Conference cap the club should make a reasonable profit even after paying the stadium rent. There's no problem with directors being paid, as Snake says, a reasonable amount but if all the profits go to the directors then it would be unreasonable. Unfortunately we are unlikely to find out what they were all being paid in July 2006 until April 2008 by which time the horse could have gone and taken the stable door with him.

[GodalmingYellow]

Questions for tonight - how are they going to fund the loss we make this season, from their own pockets or by a loan?

This is true, but if the Directors are loaning money to the club, which is quite likely, a salary would only increase the amount they had to loan the club. Then they would be loaning the club money to pay themselves a salary, at future cost to the club. That would not be reasonable, except for KT who is there primarily for his expertise rather than his love for the club.

Why would the club make a loss this season? With vastly increased ticket revenues, increased merchandise sales and a much smaller wages bill due to the Conference cap the club should make a reasonable profit even after paying the stadium rent. There's no problem with directors being paid, as Snake says, a reasonable amount but if all the profits go to the directors then it would be unreasonable. Unfortunately we are unlikely to find out what they were all being paid in July 2006 until April 2008 by which time the horse could have gone and taken the stable door with him.

Who said anything about a loss?

There may or may not be a loss dependant on exactly what has been done at Milton.

As I recall, the club have invested heavily in the training ground and whether or not that was capital or revenue expenditure, it still has to be funded, and it is likely that that would be by Directors' loans unless there was a large amount of cash swilling about the club, which is unlikely.

Director's loans aren't only equated with trading losses. And losses don't necessarily result in Director's loans. Director's loans usually arise as a result of cash deficiency, rather than losses, which may or may not be linked.

As I said above, I don't think it is acceptable for Directors of a football club to fund their salaries through loans from themselves. That's a very good (bad) way for a football club to stack up debts.

[Mally]

Who said anything about a loss?

ty cobb did when he asked &quothow are they going to fund the loss we make this season,&quot

Technically speaking there are some circumstances where directors may loan money to a business where there isn't a loss but in the case of Oxford United unless they buy the stadium there is no reason to borrow money unless they are making a loss. Cash flow is not an issue as they get a large percentage of income up front and the vast majority of the rest of their income is cash.

I see no reason why the directors or owners who aren't directors should loan money to the club and am surprised that you think that it is &quotquite likely&quot.

[GodalmingYellow]

Who said anything about a loss?

ty cobb did when he asked &quothow are they going to fund the loss we make this season,&quot

Technically speaking there are some circumstances where directors may loan money to a business where there isn't a loss but in the case of Oxford United unless they buy the stadium there is no reason to borrow money unless they are making a loss. Cash flow is not an issue as they get a large percentage of income up front and the vast majority of the rest of their income is cash.

I see no reason why the directors or owners who aren't directors should loan money to the club and am surprised that you think that it is &quotquite likely&quot.

I don't want this to become a lengthy debate Mark, but there are many reasons why a Director advances money to a company even though the company makes a profit, it isn't an issue of technically speaking.

Cash flow at OUFC is an issue if they run at a significant loss or spend money on a capital project or potentially lots of other scenarios too, and I've given the example of Milton training ground for one of the ways this might have occurred this year.

It isn't correct to say there is no reason for the club to borrow money unless they make a loss, for the reasons I've already given. And where such events occur, it is very likely that Directors in a football club would fund the cash.

[Mally]

That may well be true for thousands of companies - all I'm saying is that I can see no reason in the case of Oxford United FC Ltd where directors' loans could be justified unless required to fund the purchase of the stadium.

[GodalmingYellow]

That may well be true for thousands of companies - all I'm saying is that I can see no reason in the case of Oxford United FC Ltd where directors' loans could be justified unless required to fund the purchase of the stadium.

OK, lets use the Milton example.

If we work on the basis that the club is running at neither a profit or a loss for general trading, and the club decide to plough £500k or whatever the sum is, into a training ground, that £500K has to come from somewhere.

If in general trading there is no profit or loss and no other influencing factors, all the income raised by season tickets and turnstiles will be used in running costs for the club.

Therefore, the £500k for the training ground has to be raised from somewhere. That can only be Directors loans or 3rd party finance, such as a bank, as there are no other sources of funds to pay for the development. As 3rd party finance tends to be expensive, especially in high risk football clubs, it is likely that Directors would fund the development.

Only if the club made sufficient profits after tax and after other projects, to cover the cost of the development, would the club avoid loans of some sort.

So to go back to the original point of this discussion, where the club has no spare resources generated from profits, any drawings by Directors would then have to be funded by Directors loans.

To make it OUFC specific, the only way there would be sufficient cash to pay Nick Merry a salary, is if the clubs income was more than its expenditure and capital projects and taxation and development of the training ground all put together. Experience suggests that OUFC is rarely in such a glorious position, even given the confines of the wage cap.

If the club is generating that sort of cash, it will show the club being run (or being forced to be run) better than it ever has in 114 years.

[ty cobb]

Well under Kassam we only just made a profit and that was through a lot of cost cutting. Now we have paid for the training ground, pay for overnight stays and the average attendance isn't going to be that much higher than last season. I would assume our wage bill has also increased since last season, theres more money into the youth system so if we don't make a loss I'll be amazed!

I'd be interested to know how that loss will be covered - under Kassam it was loans against his other companies, under Heard it was loans from banks, what will it be this time?

[DLT]

you forgot also paying an expensive CEO as well Ty.

10% of turnover at that.

[Baboo]

So what are we really trying to say here?

Heading towards another financial crisis?

Just asking, not stating this as fact.