Rage Online

There is no doubt that the presentation was very accomplished and professional.

In fact so much so that the audience were somewhat shell shocked at the end and the quality and penetrativeness of the questions suffered.

£4m debt is worrying, given that it is apparent Leneghan is not in this for his love of Oxford, he made great play about being an egg chaser first and a liverpool fan second and as a bluff northerner who readily boasta of his worth, he will certainly have a strategy for getting his money back..

It was apparent that this was his show and the remainder of those up the front looked like a bunch of thunderbirds puppets, I swear you could see the wires.

There was also a degree of bluster which disguised certain issues, are the other two Leneghans his sons? He avoided confirming this referring to them as &quotfamily members&quot, why the caution. Very little on their business background, are they able to step into Kelvins shoes.

No mention of PRB in the lengthy discussion of community initiatives, Owen McGovern was being bigged up.

Overall I am cautiously happy with their performance as owners so far, but we need to watch them carefully, there is a worrying air of bullshit and take it or leave it it's our money in the club, just under the surface.

Good summary of the situation from scooter. Lenagan consistantly said &quotthe other Lenagans&quot and refused to call them his sons (which of course they are). I think this is just a father not wanting to labour the point and being overly careful in making sure that they appear to be there on merit/equal terms rather than because of their relation to him (which of course they are). Nothing wrong with that though I worked with my father for about 5 years until he retired.

Going back to Pena's point about the stadium (if its ever bought) being owned by the owners of the club raher than the club directly, I don't see anything wrong with this per se but one question it does raise is how do you legally allow profits from a stadium company to cover losses of the football club without the football club being in debt to the stadium company? One for the bean counters.

In reply to one of Snake's points as somebody already mentioned if the stadium was bought by WPL the saving wouldn't be £425,000 per year as some of this relates to overhead and admin charges that would have to be paid by WPL once they bought it so the saving would be in the regin of £250,000 per year.

From a cash flow and short term financial position it almost certainly makes sense to carry on renting but from a strategic point of view I think it makes sense to buy it now. Once the stadium is owned it can be used to its full potential by WPL and its businesses can be devloped further. For example why does the £25 million at Peers School all have to be spent there directly why not use the stadium and the East stand void as part of the academy project. Forget about halls of residence and lecture theatres for a university with acres of land and millions of pounds 2 to 3 miles away what about facilities for the football academy up the road?

&quotMally&quot wrote:Going back to Pena's point about the stadium (if its ever bought) being owned by the owners of the club raher than the club directly, I don't see anything wrong with this per se

I suppose the question &quotwhy?&quot does rather present itself.

&quotMally&quot wrote:Going back to Pena's point about the stadium (if its ever bought) being owned by the owners of the club raher than the club directly, I don't see anything wrong with this per se but one question it does raise is how do you legally allow profits from a stadium company to cover losses of the football club without the football club being in debt to the stadium company? One for the bean counters.

Loads of ways, but the simplest is pretty easy really. Both parties agree to a lease variation such that the club then has rights to all the income earned in the complex, in exchange for an increased rent. The increase in rent is less than the transferred income, so the football club ends up with more money (preferably to a break even point if the sums are done well).

As I've said previously, this is simply transferring debt from one company to another if the stadium company is not made profitable as well. To cover existing losses in the stadium company, and existing losses in the football club, and increased losses in the stadium company as a result of hugely increased loans, that's a lot of work to be done, which will take many years to achieve.

&quotPeña Oxford United&quot wrote:

&quotMally&quot wrote:Going back to Pena's point about the stadium (if its ever bought) being owned by the owners of the club raher than the club directly, I don't see anything wrong with this per se

I suppose the question &quotwhy?&quot does rather present itself.

Not sure what you mean - Why don't I see anything wrong with it, or why would WPL want to own them separately?

Of course if we weren't owned by such upstanding and honourable people, some cynics could visualise a situation where there was a profitable, solvent and valuable stadium company and an insolvent and indebted football club.

Lenagan's plans for the stadium are front page news in the Oxford Mail today under the headline - &quotOur Vision&quot

Not a lot more detail other than Ian Lenagan has said that he has started talks with Oxford University and also an organisation in the far east (Risinghurst? Barton? or even Wheatley?) who may want to create a language school there. A third unnamed organisation are also said to be involved in discussions.

&quotscooter&quot wrote:Of course if we weren't owned by such upstanding and honourable people, some cynics could visualise a situation where there was a profitable, solvent and valuable stadium company and an insolvent and indebted football club.

Or a situation whereby the club did not necessarily have the right to use the stadium or where it did not necessarily benefit from revenue that the stadium generated.

Why has £4m become the gospel figure about the club's debt position in the future?

That is based on interpretation of the presentation where £250k to be lost is actually budgeted for whereas others argue that they are prepared to cover losses of £250k but are looking to breakeven. Can anybody confirm the 05/06 debt position, ie £2.1m (i'm probably wrong) ? Likewise, can anybody remember if the £680k or so estimated for this year include any play-off monies?

Taking the worst case scenario of the figures mentioned then we have in addition:

£680k||£250||£250||£250= £1.43million || 05/06 debt position

So based on those figures (which I'm sure will be corrected) then debt is around £3.5/£3.6 million.

Don't get me wrong, I think the club has to work towards repaying debt and have a plan to do so rather than allowing it to increase based on some vague hope but the losses that already accumulated with OUFC weren't just going to disappear overnight.

Likewise, to assume a loss making position can be turned around so quickly into one of profit within 12/15 months also seems very optimistic in the circumstances. Particularly, considering the pressure they were under to get OUFC (and the mess it was in) out of the Conference 1st time, the carryover of the existing playing contracts, the expectation of improvement in coaching/scouting networks and having a permanent training base.

And the story in the Oxford Mail ends with - “A spokesman for Oxford University was unable to confirm that talks are taking place but would be unaware of the details if talks are taking place with an individual college

&quotMally&quot wrote:Lenagan's plans for the stadium are front page news in the Oxford Mail today under the headline - &quotOur Vision&quot

Not a lot more detail other than Ian Lenagan has said that he has started talks with Oxford University and also an organisation in the far east (Risinghurst? Barton? or even Wheatley?) who may want to create a language school there. A third unnamed organisation are also said to be involved in discussions.

Yes, very interesting story. Can someone advise Andrew Ffrench that the first para &quotTalks are now under way between Oxford United and Oxford University over a partnership to buy the U's football stadium&quot and the 7th para &quotThe club would then own the stadium outright&quot are total rubbish then as the plan is for WPL to own it!

Not that NM or IL will be too quick to ask him to get it right!

&quotMark G&quot wrote:Why has £4m become the gospel figure about the club's debt position in the future?

That is based on interpretation of the presentation where £250k to be lost is actually budgeted for whereas others argue that they are prepared to cover losses of £250k but are looking to breakeven. Can anybody confirm the 05/06 debt position, ie £2.1m (i'm probably wrong) ? Likewise, can anybody remember if the £680k or so estimated for this year include any play-off monies?

Taking the worst case scenario of the figures mentioned then we have in addition:

£680k||£250||£250||£250= £1.43million || 05/06 debt position

So based on those figures (which I'm sure will be corrected) then debt is around £3.5/£3.6 million.

Don't get me wrong, I think the club has to work towards repaying debt and have a plan to do so rather than allowing it to increase based on some vague hope but the losses that already accumulated with OUFC weren't just going to disappear overnight.

Likewise, to assume a loss making position can be turned around so quickly into one of profit within 12/15 months also seems very optimistic in the circumstances. Particularly, considering the pressure they were under to get OUFC (and the mess it was in) out of the Conference 1st time, the carryover of the existing playing contracts, the expectation of improvement in coaching/scouting networks and having a permanent training base.

At 30/6/06 the net liabilities were just over £2.5m.
The predicted losses for y/e 30.6.07 are £650k making total net debts of £3.2m at 30.6.07.
The budgeted losses for the 3 years ended 30.6.10 are £750k making total net debts of £4m.

You can argue over the pennies if you like.

Your example, and the above, is not the worst case scenarion as you stated. It is the budgeted scenario. The worst case scenario may well turn out to be worse than that, and it may turn out to be better. But we work on the basis of what the actual owners expect to happen.

Either way, whether it turns out to be £3.8m or £4.2m, its going to be a big sum of money that the club cannot afford. Don't get into a mindset of thinking that the club are suddenly going to make a million to reduce the debts in one of those seasons because it ain't going to happen.

&quotGodalmingYellow&quot wrote:
At 30/6/06 the net liabilities were just over £2.5m.
The predicted losses for y/e 30.6.07 are £650k making total net debts of £3.2m at 30.6.07.
The budgeted losses for the 3 years ended 30.6.10 are £750k making total net debts of £4m.

You can argue over the pennies if you like.

Your example, and the above, is not the worst case scenarion as you stated. It is the budgeted scenario. The worst case scenario may well turn out to be worse than that, and it may turn out to be better. But we work on the basis of what the actual owners expect to happen.

Either way, whether it turns out to be £3.8m or £4.2m, its going to be a big sum of money that the club cannot afford. Don't get into a mindset of thinking that the club are suddenly going to make a million to reduce the debts in one of those seasons because it ain't going to happen.

Thankyou, that is why I asked for clarification on the actual debt carried forward from 05/06 as I was trying to clarify where this £4m figure came from.

You have nicely sidestepped the view about the £250k each year being budgeted as a loss whereas others have disagreed that is case and if we are talking £500k difference then that isn't pennies even compared to £4million.

Whose getting into a mindset assuming we will make a £million in one season? Where did I say that? I talked about repaying debts with a long term plan (like Alty have although on a far larger scale) rather than vague hopes.

Taking what WPL have said on face value, they look to have a strategy for OUFC which looks past this and the following season unlike past owners seem to have done rather than operating on vague hopes. Also, do you really think that they as the people who have to underwrite the debt won't be doing their utmost to reduce any potential deficits with new income or cutting unnecessary expenditure?

The new Academy (should it actually happen) will end up getting OUFC a training facility without spending millions (even if it doesn't create any players) and income, iirc, which hasn't been included in any projections so far. This indicates to me, along with the different approach to the stadium purchase, that they are working towards what they have talked about in their strategy and aren't just looking at traditional solutions to problems.

One point that seems to have been overlooked to a degree is that we are getting a permanent training Ground for little financial input should the academy happen. To me this looks like pretty clever financial management considering all of the problems/financial issues suggested when our previous owner was talking about it publically.

&quotMark G&quot wrote:

&quotGodalmingYellow&quot wrote:
At 30/6/06 the net liabilities were just over £2.5m.
The predicted losses for y/e 30.6.07 are £650k making total net debts of £3.2m at 30.6.07.
The budgeted losses for the 3 years ended 30.6.10 are £750k making total net debts of £4m.

You can argue over the pennies if you like.

Your example, and the above, is not the worst case scenarion as you stated. It is the budgeted scenario. The worst case scenario may well turn out to be worse than that, and it may turn out to be better. But we work on the basis of what the actual owners expect to happen.

Either way, whether it turns out to be £3.8m or £4.2m, its going to be a big sum of money that the club cannot afford. Don't get into a mindset of thinking that the club are suddenly going to make a million to reduce the debts in one of those seasons because it ain't going to happen.

Thankyou, that is why I asked for clarification on the actual debt carried forward from 05/06 as I was trying to clarify where this £4m figure came from.

You have nicely sidestepped the view about the £250k each year being budgeted as a loss whereas others have disagreed that is case and if we are talking £500k difference then that isn't pennies even compared to £4million.

Whose getting into a mindset assuming we will make a £million in one season? Where did I say that? I talked about repaying debts with a long term plan (like Alty have although on a far larger scale) rather than vague hopes.

Taking what WPL have said on face value, they look to have a strategy for OUFC which looks past this and the following season unlike past owners seem to have done rather than operating on vague hopes. Also, do you really think that they as the people who have to underwrite the debt won't be doing their utmost to reduce any potential deficits with new income or cutting unnecessary expenditure?

The new Academy (should it actually happen) will end up getting OUFC a training facility without spending millions (even if it doesn't create any players) and income, iirc, which hasn't been included in any projections so far. This indicates to me, along with the different approach to the stadium purchase, that they are working towards what they have talked about in their strategy and aren't just looking at traditional solutions to problems.

One point that seems to have been overlooked to a degree is that we are getting a permanent training Ground for little financial input should the academy happen. To me this looks like pretty clever financial management considering all of the problems/financial issues suggested when our previous owner was talking about it publically.

Good post.

Reply to Mark G (to avoid the character limit having effect):

I haven't deliberately sidestepped anything. The £250k per year losses are what WPL is budgeting. Not figures I have plucked from the air to make the position seems worse. Even if the figures were £500k better, and yes that's a lot of money, it would still mean debts of £3.5m, which the club still can't afford to repay. It could equally be £500k worse than £4m of course.

I wasn't trying to put words into your mouth in the mindset comment, I was simply trying to show that even if the club has a number of exceptionally good years, the debt still wouldn't be repaid. £4m is a lot of money on our club's finances.

WPL do have ideas in place, and like you I hope they work and are successful. However, to bring this back to reality, one of their ideas is to have £4m of debt which the club cannot afford.

Of course they will try to cover their backs financially. Whether you believe they are sufficiently talented to achieve a position where the debts can be repaid is a matter for you to judge. Personally, as you will be able to tell, I have grave concerns about this. Very few clubs achieve significant profitability, and debts are a real potential threat to survival.