Often Partisan

The A Word

With time in the transfer window slowly ticking down, Birmingham City are left with the unenviable proposition of having to move players out or face the dreaded “A” word – administration. There’s been some talk about administration and I guess the big question is – would it be that bad?

I’ve spent the last week or so reading about administration and what it entails to try to get an idea of what would happen to the club; and I’ve spoken to fans of clubs who are and have been in administration. I should hasten to add that I’m not saying it’s a certainty that administration will definitely happen but as the likelihood grows I believe forewarned is forearmed.

How does a club go into administration?

From a simple point of view, a company can go into administration one of two ways. A holder of a “floating charge” – for example, in Blues’ case HSBC can as they hold a debenture – can put a company into administration or the company’s own directors can put a company into administration to protect it from hostile creditors – which in a football club’s case is normally HMRC (the Taxman).

The way I understand it with Blues is that whilst the club is currently keeping up with its debts the lack of cashflow means it will get increasingly difficult to do so until the end of the season. One of the biggest bills that Blues have is from HMRC – PAYE (income tax) and VAT bills as an example – and as a rule the taxman doesn’t hang around if payments are late. The first indications that Blues are in very serious trouble will be if players’ wages are delayed and once that happens we will probably be able to bank on administration following.

What happens when a club goes into administration?

From a football point of view two things normally immediately come into play – a transfer embargo on players coming in (if there isn’t already one in place) and a ten point deduction. The Football League have enough flexibility in their rules to ensure the deduction is applied in such a way that affects a club most – ie they can apply the deduction to the next season’s points total if they so wish.

From an accountancy point of view, all actions on debts are stopped. An administrator is appointed who takes over the running of the club from the directors and he will decide if it’s best to either sell the club as a going concern or liquidate it and sell the assets. He will make business decisions to reduce outgoings and will negotiate with creditors to secure a debt repayment which will be suitable for the club and the creditors.

Who gets to appoint the administrator?

This is the tricky bit. Taking Portsmouth as an example, the most recent time they went into administration they were put there by the secured creditor, Balram Chanrai. He wanted Andrew Andronikou of UHY Hacker Young to do the job again, as he had the previous time that they went into administration. The Portsmouth supporters trust however fought that in the courts and managed to convince the judge to pick their preferred choice, Trevor Birch of PKF.

Whilst one might think that administrators are much of a muchness it’s not the case; Portsmouth fans were very disgruntled with Andronikou’s first spell as administrator and therefore wanted someone else that they thought would do a better job.

What happens to the players?

Under Football League rules, the contracted players along with any clubs owed fees are all termed football creditors and are automatically first in the line – controversially ahead of the taxman. Unfortunately, under Football League rules the football creditors have to be paid off first, and have to be paid in full unless a compromise agreement can be reached. Thus any thoughts of being able to rip up Nikola Zigic’s contract on entering administration are wrong – a compromise would have to be reached with Zigic to be able to release him – much the same situation we’re in now.

Furthermore, the Football League can also order future “parachute payments” to be paid directly to football creditors. At this moment in time I’m not sure from the accounts if there is  figure for transfer balances outstanding but they would come out of the parachute money before it comes to the club.

The Football League can also limit the size of the squad allowed at the club. At Portsmouth, they were allowed 20 players when they went into administration last season. That’s 20 players maximum allowed to be used in first team football – they couldn’t call up youth or academy players to add to that so if they had ten injuries then it was tough luck, you’ve got ten players you can use for a game. At this moment in time I count 36 players with squad numbers at Blues with a further two out on loan. Thinking on our current injury crisis and how bad it has been trying to put a team together, imagine how hard it would be with 16 fewer players (even if they are just kids from the academy) to choose from.

Twenty isn’t a hard and fast figure – the number can be set at the Football League’s discretion – but any limit on squad size would make things doubly hard for Blues if they were fighting a relegation battle.

How long does administration take?

This is the proverbial “how long is a piece of string” question. The length of time that a club is in administration depends on several factors – but one of the ones that is in Blues’ favour is that there are groups out there who would be interested in taking the club on in that situation. Obviously it would take time for an administrator to look through bids and decide on a preferred bidder but the hope would be that it would make a sale of the club likely and whilst it would be pain in the short-term it would potentially make things better in the longer view.

However, I have concerns about the debts owed by the club to Hong Kong. There has been mention in the accounts that there is no formal agreement for the loan from Carson Yeung to the club and I have reason to believe that the loan payments made to the club were possibly “unusual”. An administrator will go through the books and will look at what has happened and I’d be worried that there may be something uncovered that could cost us further in points deductions or similar. I must make it clear that I’m not saying that is definitely the case – to do so would be wrong – but the worry remains all the same.

I also would add from a personal point of view that I would be worried that the club may lose some of its office staff. I’ve dealt with many of the behind the scenes staff at the club and I would be upset if we had to lose some of them because of the club going to administration – particularly as I know the players are looked after in a far better way.

In short – administration need not be the end of the world, but it would be painful. I know that there are some people out there who see administration as the panacea to our ills which would force the sale of the club from the current owner’s hands – which is true – but the short-term implications are quite frightening and I hope that it doesn’t have to come to that.

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106 Responses to “The A Word”

  • Berkshire Blue says:

    Average time spent in administration for league clubs over the last five years appears to be around 6 months – some more, some less. I’d say that there would be a very significant chance of redundancies amongst back room staff – not what we would want to see.

  • Luke says:

    Thanks for the article – informative and clear.

    Do you think that there’s a game of ‘chicken’ going on with the Palladini consortium? I can’t help wondering if the people he represents are looking at Blues’ situation and thinking that if they hold off for another few weeks, their bargaining position will be that much stronger. CY obviously won’t want administration and, if we get to February with Butland and Redmond still at the club, he might be forced to accept whatever offer is on the table. I don’t think Palladini wants administration either – they could pick up the club for a song, but their project would start (probably) from League 1, so a minimum of an extra 12 months work.

  • Quokkasskip says:

    PP and CY wont want admin, as their nice little earner will stop and accounts will be reviewed with a fine toothcomb.

    Prediction
    Sell to survive until the summer.
    Receive parachute payments
    CY pays back part of his loan (obv not telling anyone)
    Release half the squad
    Replace with v cheap players
    Go into admin q4 this year

    • Blue in Spain says:

      Please explain how buying a club for 80million, trying to sell it for 30 million is a nice little earner?

  • Support your club - Don't go down he says:

    There is a horrible stigma attached to administration which I don’t want associated with Blues.

    £700K would help immediately so first stop all these bullshit 5 star trips to HK

    I would love the murky world of our books to be gone over by a trustworthy impartial UK accountant. You use the word ‘unusual’ Dan, normally in the business world unusual means wrong, means something that wouldn’t normally be done, outside of process.

    More than ever we need full houses to help the club out. Come on everybody get down the ground on Saturday, put some money in. Help your club.

    • Ali Duncan says:

      Agreed. We want to be proud of our club and have it as a respectable and properous part of the community.

      Administration really is a dirty word and tarnishes our image. However (and I don’t want this) Portsmouth’s profile has massively been increased by administration and the media attention could potentially help our cause. I don’t put down Pompeys exposure just to the FA Cup win and that crazy geezer with the hat, blue hair and tattoos. Could the media attention tweak the interest of other potential bidders I wonder?

      On a side note the London biased media really gets on my tits. If I speak to many acquaintances / colleagues they have no idea what is going on at Blues. They’re shocked that we’re struggling at the bottom of the table and have no idea about or financial crisis. Granted they might not be interested as it’s “only little Birmingham City” but you can bet your life that it was QPR or Fulham in this mess it would be well documented and they would know exactly what is going on.

  • Big Al says:

    Clubs will bid for our players on the last day of the transfer window in the knowledge it will be 30% off closing down sale time.

  • andy says:

    I dont think this will happen. Pannu is in Hong Kong still trying to find investors and if all fails over there i think he will have no option but to sell to the Paladini consortium.

    • chris says:

      Will Paladini, A) still want to buy it when it’s either on the verge of League One or a certainty for League One and b) will he still be offering £17 million plus add-ons, i doubt it.
      Club will only be worth a maximum of £5 million in League One.

      • Pete says:

        Why should they pay £17m which will have sold an asset in Butland, etc that will no longer be at the club. Thanks to the forsight of Pannu we turned down £6m for him, told everyone we are desperate and are alegedly looking at offers for £4m if we are lucky….

  • Bluemat says:

    For a start the club shouldn’t be allowed to go into administration with an offer to buy the club on the table. It may not favour Pannu & co but with what we have seen of late it actually doesn’t seem a bad offer. I understand (through the media) its a deal spread over 4/5 years with specific add ons but unfortunately that the price you have to pay when you have run a football club into the ground. I cant see us selling Butland for a price that is worth selling, clubs know our financial problems thanks to the fog horn mouth of Mr Pannu. If i was them i would sit back, make contact with the players agent and set an agreement up on the side so that when it all goes bump at Birmingham they can come across to my club to a nice healthy wage a large signing on fee with barely a transfer fee. I would not go in with a 6mill bid all up front for a keeper that could either be the next banks or richard wright cus at the moment the jurys out on that one. KRO!!

  • Bombay Blues says:

    This is a really poor article! What about the many small supplies / creditors that are owed money by Blues for small services like printing, stationery, food etc.

    You need to research the impact of administration on people (other than CY) before preaching its acceptability.

    It would appear that you have no regard for anyone’s well being as long as Blues can be rescued.

    • almajir says:

      They could be affected massively – no doubt about that – and I agree that it wouldn’t be fair on them if they were.

    • Pele says:

      …….. or you could set up your own website, go to the time and trouble to research it on your own dime and release an article yourself if you think you can do a better and more consise job. I for one think its a well informed and balanced article, very hard to cover all potential scenarios in a situation such as ours

      • chas says:

        Well said, Pele , Sir..I is too easy to sit back and then knock anyone who tries to find info out..

      • Bombay Blues says:

        Sorry, Pele like yourself I have the right to reply to a published article requesting responses. Administration has much wider implications than outlined in Almajir’s article and the implications to other innocent parties, it is not just about BCFC and its supporters!

        • Pele says:

          I didnt say anywhere that you didnt have a right to reply……….

        • Paul Carter - The Voice Of Reason says:

          Bombay the point is business is always a risk whomever you do it with. Set up appropriate payment terms. As far as I know Blues are paying all their bills right now. Any supplier who may be affected if the club goes into admin has the opportunity to review and revise their contracts

      • Ali Duncan says:

        Exactly!

    • MarkyMark says:

      Think about OP’s target audience, nobody comes on here to read about the trials and tribulations of owning a printing shop… maybe you can jot a few words down see how many hits you get

      • Bombay Blues says:

        MarkyMark, does that mean the target audience is only to be told half of the facts? isn’t that on of the criticism’s of CY and PP, not being told the whole story? No wonder football fans are treated like fools by owners.

        • almajir says:

          Half the facts?

          That’s a tad unfair.

          Besides… there might actually be more to it than meets the eye. Not as simple as saying x and y will be shafted as I’ve been told it need not be the case.

          • Bombay Blues says:

            Hi Almajir, sorry did not mean to imply your article had half the facts, you have covered a lot of ground very well. Was trying to make the point that it all the facts should be considered prior to supporting a route as severe as administration.

            Some of the responses to my comments clearly indicate how shall I say “a lack of empathy” with small businesses and their employees who may well be affected by Blues entering Administration.

            Many of those businesses / employees have supported Blues for many years through sponsorship etc.

            Whilst we all want rid of CY / PP. However, it appears that some supporters will accept that at any cost, possibly including the guy in the seat behind losing his job through Blues going into Administration.

            It would be interesting to see how many of these people would want rid of CY and put Blues into Administration if their livelihood was at risk!

        • Atahualpa is a BlueNose says:

          Sorry BB, you are attempting to portray this particular blog by almajir as being ‘half told’ and not viewing the bigger picture.

          What utter patronising and facetious nonsense.

          This site covers all things Blue and does not attempt to provide answers to all of the country’s / society’s economic issues, and to claim that it is poor is simply silly and makes you sound like a pompous individual.

          I am sure that readers are aware that local businesses and companies will also feel the pain – some of who are no doubt Bluenoses themselves – but to say that almajir has no regard for anyone/anything else is really out of order.

          If you wanted to make a constructive comment you could have simply stated that you also felt what would happen to others in the ‘outer circle’ was also important, but to come onto the site and start making stupid accusations is not on.

          • Oldbluenose says:

            Well said Atahualpa, mate;, We are concerned with things B,C,F,C. but that does NOT mean we do not give a toss about other tradesfolk who may be hurt by us possibly facing “A “,!!!.

          • Bombay Blues says:

            Sorry, my old mate I disagree and I guess Almajir would also disagree. His blog is to communicate and illicit responses both positive and negative. If not then there should be no option to leave a reply.

            Whilst it would be be very pleasant if we all agreed, as we can see that it is nor the way of the world!

            I accept that you may not like my comments, but hey that tough. However, I accept your right to voice that opinion.

    • SirHarry1875 says:

      I dont know how you have the nerve to have a pop about this article. This is a website about Birmingham City for Birmingham City supporters. If i want to see how this all affects Peters Pies i will go and have a look at his website.

      • Bombay Blues says:

        it’s know as freedom of speech!

        • Atahualpa is a BlueNose says:

          Criticism is only valid when it is constructive and evidenced without having to resort to making silly personal comments.

          Freedom of speech comes with responsibility.

  • James says:

    I fear the worse is yet to come with regards to our debts. The owners have been very good with the numbers since day one and can see us owing a frightening amount.

    We probably won’t see any transfers until the final week with Butland and maybe Davies/Burke/Redmund. All we can do is support the team/manager ( even though this is quite painful!)

    5 points clear of relegation, we have turned a very small corner in the league with regards to performances, 3 points on Saturday will make us all breath a little easier.

    Fasten your seatbelts….

    KRO

  • Mickey07 says:

    What I want to know is what is pannus actual day to day buisness out in Hong Kong??Hes been spinning us a worn out yarn for sometime now and still he’s comes back to brum every now and again with absolute nothing, he will do a media interview and some stupid programme notes whilst here in the hope of smoothing everyone over for a bit then he’s back to Hong Kong…he’s got an offer on the table here from mr paladini and as up until today not one offer from anywhere in the Far East..I just don’t get it..what the feck does “he actually do” out there, as he ain’t came up with the goods for the last year or so,my feeling is hes having a load of people in the net here including our local media who seem just to go along not to rock the boat,but that’s another story anyway…I guarantee hes going to be the one riding off ino the sunset laughing.also mayor why no feed back to us fans regarding the email you sent him?

    • almajir says:

      Mickey

      He hasm’t replied.

      • Mickey07 says:

        Mayor

        So you haven’t got a reply from him and i can second guess that the birmingham city trust haven’t got a thing from him also…what does that tell you about the bloke.

        • almajir says:

          That he doesn’t want to reply to us? You know what Mickey… I kinda guessed he wouldn’t

          • Mickey07 says:

            Still though mayor,100% offer on the table here, and absolutely diddly squat from h.k. In any form of an offer which has been going on for sometime now…doesn’t make sense at all…you ain’t got a clue in what pannu is doing in the Far East at all mate but I bet it ain’t much…we are lingering to a slow death under this incompetent man and he’s emptying the bank account whilst he goes along in regard to his£687k pay cheque…..

  • Bluenosesol says:

    Almajir, if what you are saying about the rules is true, then as one who has been waiting nearly 4 years for any payout from my previous employer, then I am astounded. I always thought that no one could file for protection from HMRC. HMRC are ALWAYS secured creditors and would certainly be paid out before any obligations to employees i.e. footballers. How can the Football League dictate insolvency rules, surely these are government legislature? As an employee, legislation dictates that I am an UNSECURED creditor. Not disputing your stateents, rather confused?

    • almajir says:

      Football is weird, and the taxman DOES NOT like it. One reason the tax man has pursued football clubs so heavily is because of the football creditor rule.

      Here‘s a piece on a court case they lost on it in May of 2012.

      Note it only applies to the players – no one else at the club. Everyone else it’s business as usual. One reason why it sucks so much for the common man and/or supplier is the footballers (who get paid handsomely) don’t lose whereas the common man almost certainly will.

      • chris says:

        AJ, i thought it applied to clubs as well, so any transfer payments outstanding had to be paid, even if the club concerned wasn’t receiving parachute payments.

      • James Black says:

        Al, whilst i know your intentions was probably not to start a panic, but in effect that’s what this post has caused. I know you posted it as a worse case scenario or not depending on your view of administration, but the firestormers have been fed the petrol and the fire is now burning. I don’t think administration is going to happen, although of course i cannot say with certainty. Pannus silence is inevitable as again everyone read a lot into his salary and i don’t think he feels he is going to get a fair trial even if he answers. Let the man speak without the accusations flying and you just may get a response. I think if i was him, and i did have an explanation right now, i think i would take the view of whats the point in explaining as seems everyone has already decided. I don’t think for one minute administration is looming, its in nobodies interest and frankly its not wise to discus every piece of business in the media as well, this is what happens and it gets well out of hand. Just wait and see and give it time to unfold. I’m not gonna be one of those that pretends he has some inside knowledge, but im sure something is happening. I say this respectfully Al really, but i don’t think that this post will help in any way and i know if i was facing the kind of comments and sometimes ill informed thinking that’s going around, i would stay silent too. Just support the Blues and the manager to the max and wait and see. So much unnecessary speculation which is only pouring fuel on the fire. Yes its good to know what admin would mean to the club, but it was also bound to start a sea of silliness too as the comments have proven. I dunno, i know im on my own in this thinking, but fueling this is the last thing we need, and i really dont think its going to happen. Frankly i believe you have lost his trust by posting about his money without him being given a chance to put his side of the argument. Again im reading things about syphoning off etc something that i believe you know is not true. The debate about his income will never be answered now as the kangeroo court already decided. I think his simply in a position where as no matter what he says, he cant win and even if there is an explanation, whose gonna listen after all this. Your doing a great job Al but speculation or if you prefer to call it questions, is all well and good. But questions have to be asked without pre-judgment or they wont get answered. Not saying he has a good explanation im just saying pre-judging creates defensive silences, thats human nature. I think he aint ever gonna speak again and i dont blame him..

        • almajir says:

          James

          I’m sorry, but Pannu has had plenty of opportunity to answer questions in a nicey-nice sort of way. That time is over, and he’s gone into hiding.

          As for administration – again, I hate to be the bearer of bad tidings but it is a real possibility. Forewarned is forearmed.

          • swissjonny says:

            Absolutely right Al ! Pannu is a disgrace.He is trying to keep a low profile so as to try to distance himself from this debacle.I don’t know if he is a member of the Hong Kong law society and any other professional bodies.I will investigate this and most certainly will be writing in the strongest terms to these people to inform them of my views on his conduct.When I have ascertained this info I will let you have any relevant addresses so that any other fellow sufferers may write .i know its petty and probably a waste of time but you never know!

          • James Black says:

            Ok Al i know you are more clued up than me and its hard for me to argue otherwise while his not talking and i accept that. Just waiting but i do take your point. Until a development, theirs little i can say. Still hoping something is going on in the background. , and far be it from me to speculate after what Ive said, but i suspect a Butland deal or something is going on but its not gonna be discussed until the business is done. Of course i could also be totally wrong and we wont make it through the season. Its all speculation but the best deals are done quietly. As for Pannu, well lets see, maybe in hiding isn’t quite the right term. Perhaps his regrouping as no matter what he says, he will face an onslaught of abuse. Again, lets see, but i bow to your better knowledge and experience in the matter.

      • Bluenosesol says:

        Unbelievable! If I didnt hate footballers before I do now! The administartors and the Tribunal have conceded that my previous employer owes me nearly a quarter of a million and am told to expect around 2 grand!! Time to get tough on those bleeding the game dry!!??

        • James Black says:

          With you on that one Blue. Footballers wages are murdering the game and making admission prices what they are also. I dont hear many complain about that, but in truth, thats where most of the money goes. Zigic is bleeding us and although some argue its not his fault he was given such a good deal, i feel his kinda taking the urine by staying in our present predicament. For me its harder to bear as frankly i dont think he is anything like a 50k a week player. But he refuses to go and nothing we can do, thanks Ziggy.

  • chris says:

    Any club entering administration after the fourth Thursday in March have their 10 point deduction suspended until the following season.

    • almajir says:

      Chris – not necessarily.

      If we stayed up by 8 points and went into admin after that date the league could and probably would relegate us. They have the power to be, ahem, “flexible”.

  • BlueB says:

    Almajir, do you have any take on the monies required to stave off admin. If on last day the offers on the table are insufficient to keep us going to seasons end, would we still be looking to offload players knowing we would only be able to keep going till March for example. If this does occur, would CY and Pannu be then forced into the sale, knowing no more revenue will come into the club and admin is likely before seasons end..

    • almajir says:

      I don’t know for sure but I have an idea that it’s a few million.

      If the money is insufficient either a sale or admin will have to happen. Their hand will be forced.

  • DoctorD says:

    Cash flow is king.

    If you can’t get to games, buy some tat from the club shop. There’s a sale on now:

    http://www.bluesonlinestore.co.uk/41_Replica-Kit-SALE/102_201213-Adults-Home-Kit/

  • Evesham blue says:

    It’s not in CY and PP’s interests to go into admin. They would lose their investment. When you start at the beginning of the season you should surely forecast your expenditure for the whole season not just till January? We had 6m on the table for Butland then which we turned down. They gave LC sanction to sign players on wages. So how comes we get to jan and it is like sell sell sell after making a 15 million profit with transfer sales last year? Surely the terms of those sales must mean there is future installments due us from those sales to help with the cash flow?

    If we are so desperate then why not sell to paladini at the time rather than risk admin? Why turn down any offers for our players? Burke must be on decent wage for instance and he will be off in the summer regardless for no fee so any fee now would be a saving.

    Selling Lucas and Jervis for nominal fees is hardly going to keep us afloat is it?

    We could of maximised Butlands value if PP had kept stum about e finances. I don’t understand how the board would also sanction the exec salaries if we were that close to admin?

  • henry says:

    Given that Yeung is on multiple charges of money laundering, it’s a fair assumption that his loans to BCFC may indeed be a little “unusual”, along the same lines as Pannu’s expenses

  • Support your club - Don't go down he says:

    You on afternoons this Saturday Eve-Sham? Thought so.

    Afternoons every Saturday and nights every time there’s a midweek game.

    Are YOU gonna out a penny into the club to help or just post on the net?

    • Evesham blue says:

      Change your record fella. I was a season ticket holder for 15 years until recently. You know nothing about my personal circumstances either

    • Steve says:

      I have to agree with Evesham blue there, you are getting a bit boring with the whole ‘I go to the football every week and no one else does’ thing, give it a rest eh!!!

      • Ali Duncan says:

        Agreed. Getting very very old now.

        • SirHarry1875 says:

          Very old but so very true.

          The club needs money and it can only generate its own cash without help from anyone. Therefore what can we do other than attend the games and get behind the boys.15,000+ Blues fans turned their backs on the Club that gave them the time of their lives less than 2 years ago. Shameful.

          • Paul Carter - The Voice Of Reason says:

            Cant go cos of shifts was the tale last week

            Personal circumstances this week

            Always something.

  • KeeprightCroydON says:

    Personally I believe Admin who be disastrous and we would take a long time to recover from it. The only saving grace is that we have quite a good batch of youngsters, many of whom will be able to hold their own in League One – yes Admin almost certainly means playing in lower tier next season.

    If there are any CY apologists/defenders still out there, I would say this. He is slowly but surely driving us down the Admin road. Refusing to publish the accounts, has put off investors and buyers. The adjournment of his court case, though I accept he had every right to seek it, has not helped because it means that BIHL’s assets continue to be frozen for a longer period of time.

    I guess Admin won’t actually happen because we’ll sell Butland, probably for less than the £6m Southampton offered in previous window. As an aside it makes one wonder about Pannu’s et al revenue projections that they could not see this situation just three months ago – just how good businessmen are they? At the time they obviously believed that we would not be in too much difficulty until the end of the season, and were probably banking on promotion. Come Jan 31, Butland will probably be off for about £4m, maybe £5m along with King and Burke. Zigic will probaly still be around because no one wants to take him on on the same salary, and I don’t think he’s prepared to take a wage cut. We’ll then just hope we manage to glean enough points to survive the drop.

  • andy says:

    I dont see why there is such a fuss over the statement Pannu made recently. It doesnt take an einstein for anyone to work out Birmingham need cash by selling players. The owner has his assets frozen and is unable to put money in, everyone knows this so as time drags on so is the need for selling players. I also dont remember Pannu saying he will sanction cheap sales on the final day as clubs look for a bargain. In fact he said, how could he turn down a £15 million bid for Butland if it was on the table and i think its been made clear that the starting bid for Butland is £6 million anyhow.

  • bluenoseneil says:

    We don’t want Admin….end of.

    Next?

  • Paul Carter - The Voice Of Reason says:

    Dan

    Do you have any numbers on what we bring in through the gate mate in terms of revenue?

    At an average game what does 10000 people generate?

    Ergo how does it effect the club if say that 10K goes down to 5?

    • almajir says:

      Nothing precise, but I don’t think it’s as massive as you’d think.

      For a league game, we’ve got about 10.5k season ticket holders, so say around 10k off the gate you can’t count cos you’ve already taken the money for them.

      League attendances have fluctuated between about 14k and 18k so with average ticket price being around £20 then you’d be looking at say £80,000 to £160,000 in receipts. An extra 1000 of walk ups would bring in say an extra £20,000 – not even half of Zigic’s wages.

      However, when people are in the ground they buy merchandise and food/drink; a fuller ground makes it more appealing to advertisers and commercial sales so there’s probably a bit of intangible income on top of that too.

      • Paul Carter - The Voice Of Reason says:

        So if you add on the revenue from STH does it come out about a 1/4 of a mill?

  • Paul Carter - The Voice Of Reason says:

    Couple of other things Dan

    Are the parachute payments still OK if we go into admin

    Would it be better for a buying club not to make offers for our players, waiting for us to go into admin and then bidding?

    • almajir says:

      The first one is covered in the article. They are still okay but they will go to football creditors first – we have no choice in that. If we’re okay on that front, then yeah, the money will come through.

      Secondly – with the window I don’t think so. I doubt we’d go into admin until around March so there would be no real “saving” to be made I don’t think.

  • Atahualpa is a BlueNose says:

    It’s probably not just us that know sooner or later CY’s and PP’s hand is gonna be forced.

    I just hope that we do NOT get Paladini’s group in because the uncertainty and motives of their firm have not been settled. To simply claim to being a ‘fan’ is not enough on his part and in our desperation to get rid of the HK connection does not bode well if we find ourselves in a similar situation a year or two down the line. There’s simply too many questions unanswered with them.

    It leaves this mysterious consortium in HK as possible new owners and I again hope that if they do go ahead, they learn from the considerable mistakes by the current incumbents.

    • KeeprightCroydON says:

      I think we can now safely assume that new owners are not likely to materialise this season. More imminently the things that would concern us is either Admin, or selling players to stave off admin. Either scenario would make relegation more likely.

      We don’t need to concern ourselves with speculation of new buyers because no one will buy the club:
      A) because if they were going to do so it would have had to have been complete before 1 January to give new owners a chance to inject new blood on the playing side; that chance was missed.

      B) it was missed because interested parties were not given access to the overdue BIHL accounts, and as they are unlikely to be released soon, there will be no credible bids tabled for the club in the foreseeable future.

      My feeling is that most likely scenario is admin will be staved off by player sales to keep off the creditors until the end of the season. Then we just have to hope we can stay up, until the conclusion of CY’s trial and the release of the accounts. Then, only then, will we have a clearer idea of what the future holds in relation to the ownership of the club.

  • Mark Y says:

    The positive aspect of Blues situation is that BCFC is in no where near as bad a debt situation when compared to Pompey. Also Pompey were owned by an asset stripper. The problem with Blues ownership situation is mainly for 2 reasons. CY’s asset freeze and due to the fact that Directors of BIH have made a complete balls up with regard to corporate governance for what is required of a PLC. It became clear a few weeks ago that a sale could not occur until BIH accountancy issues are resolved and this will take no doubt another few months and may coincide with CY’s court case which I believe is another key factor for prospective buyers. Other than than these issues I believe BCFC is very saleable. Administration can be avoided as the debts are not too bad and some further cashflow from player sales will keep administration away for a while yet. If things get tight I am sure PP can stretch the creditors such as HMRC whilst the accounts are finalised. I personally feel administration will be a bad thing and if it does occur it will be many months away. If CY gets sent down I suppose all bets are off, but, I think the authorities may let him off if he pays a sizeable chunk of back tax, in which case his assets become unfrozen again.

  • Paul Carter - The Voice Of Reason says:

    I think Yeung will walk too

  • Dave76 says:

    Maybe Pannu is busy doing other stuff in HK – as a reason for him spending so much time there? Read the link below ( I know its dated early 2012)

    http://www.csair.cn/en/pages/newsdetail.aspx?itemid=147&ListName=News

    • almajir says:

      I’d love to know if the airport were aware that Pannu was negotiating on their behalf.

      • Atahualpa is a BlueNose says:

        Perhaps in their – PP and CY’s – initial strategy for Blues, they thought that BCFC should be involved in flights and aircraft as well as football.. Surely they go together in some way??

        Is there no end to Birmingham Holdings in airports, True Blue this and BCFC that?? In amongst all that tat that they initiated, they’ve forgotten there was a football club to run.

        The picture is supposedly from 2012 – well after CY’s much-publicised troubles, what on earth did PP think he was doing considering the mire that we have been in lately??
        Nothing more pressing for goodness’ sake??

        • DoctorD says:

          Whoa — stop right there!

          Al — what the eff is PP doing promoting Birmingham Airport? This needs serious investigation if our club is paying him to jet off to HK to promote the airport, presumably in a plane from our airport?

          I saw a link to this story here too:
          http://www.forums4airports.com/topic427-130.html

          • almajir says:

            I honestly don’t know. I’ve known about this story for a while but I understand nothing came of the talks. Still a bit weird.

          • DoctorD says:

            Oh, yeah and it says the Chinese “held meetings with a visiting delegation headed by Mr. Peter Pannu, senior advisor of Birmingham Airport Holdings Limited”. So my questions are:

            1. Are those guys with him in the picture — ie the rest of his “delegation” — the people PP’s been paying “pocket expenses” to? And if so, who are they?

            2 The meeting presumably took place in China and, if it did, who paid for PP to go there? It was just after the pre-season tour so presumably he jetted off from Munich to get there.

            3. What experience qualifies Pannu to speak on UK aviation matters?

            4. How long has he been advising the airport and how much does he earn for doing so?

            I want answers…

  • Bluenosesol says:

    One thing that is puzzling me, so OK Pannu’s personal contacts are all in HK so he swans there and back frequently to lobby the business community to invest in or buy the club. One could argue that we live in a shrunken world and that with modern day telcommunications, one’s location is not that significant. However, how many recent purchases of European football clubs have originated from HK/Chinese buyers? Surely sales basics dictate that you know your market and lobby that market, not your family and friends?? Methinks he is either going to HK to be with his best mate (a laudible attribute but of little value to his BCFC role), or else he is simply avoiding facing the music???

  • Philly says:

    It should be possible to get a rough estimate of the club’s monthly expenditure and potential income and so get an idea of the financial gap. Aj has suggested that it’s a couple of million, so let’s assume it’s 2mill.

    Our primary source of variable revenue is home gates. We have 10 more home games before the end of the season when I assume we get a parachute payment (if we don’t relegate).

    So we need to generate about 200k per home game. If we assume each additional attendee spends 30 quid (ticket, program, beer, merchandise), we need about 7,000 additional fans per match. That’s about a 50% increase on the current attendance. Difficult, but not impossible if everyone encouraged a mate to go with them.

    Sitting on the other side of the Atlantic reduces my ability to get behind the club, but I will be attending the Forest game. I’ll also be buying some stuff from the shop.

    KRI

    • Paul Carter - The Voice Of Reason says:

      Listening everyone?

      Oh I forgot you’re all bored with people telling you to stop moaning on the net and put your money in.

  • Paul Carter - The Voice Of Reason says:

    Negotiating the sale of a football club.

    Let’s think about that a little but first lets also think of all the other trips made to HK even before we were up for sale. Now given that the parent company BIHL only exist to service Blues then why was it necessary to keep going over when it can all be done by phone/skype/mail?

    This negotiation thing? You don’t go knocking on peoples doors saying ‘pssst wanna buy a football club guv’. You put the feelers out, let people know it’s up for sale then wait for contact. These people know how to contact one another so what gives? How does being in HK help anything? What actually goes on on these frequent business trips? Seeing as we’re paying £400K staff fees for it I think I’d like to know that. When Sully/Gold sold us I don’t recall them sodding off round the world every 5 minutes.

    • almajir says:

      Hold on a mo.

      As far as you know, BIH only exists to service Blues. It’s an assumption, could be a correct one but an assumption all the same.

  • Ali Duncan says:

    Off topic but just seen the Palace game has been moved. Second season in a row that my plans have been altered because of Sky – thanks a bunch Rupert!

  • Chippy Blue says:

    Not wanting to drag up old stuff, but when our history is written in a few years time I think it will now reflect differently on the Golds/Sullivan era. I always thought that their positive contribution to the club outweighed the various problems we had with them over the years. This last few months has shown how much we needed them to care about the club one last time before selling to CY. I distinctly remember David Gold being interviewed on R5 and asked the question about whether they’d done a ‘right and proper’ test on CY. His less than convincing answer made me twitch then – now I know why. Not sure admin is likely for the reasons already suggestewd by some above – but anybody got Carrot’s number?

    • Bluenosesol says:

      When Jasper was an ever present down the Blues, he was forever in the media associating himself with all things BCFC. In those days, when asked about his interest in BCFC, he would plead that his personal finances were not sufficient to make a difference. I am not aware that he has been posed the same question since realising tens of millions from the Celador venture?

  • Paulo says:

    Good article on some ‘potentially’ bad news. I agree that is best to know what could lie in front of us, as a lot of assumptions are being made currently, and rumours are spiralling out of control. I kind of assumed that the dreaded ‘A’ word would surface at some point, as I just could not see how financially viable the club could be the more the season goes on. In short, PP should be ashamed, along with all the BIHL board. If it happens, it happens, there’s not much we can do to prevent it ..but we can have a voice throughout this process.

  • Mickey07 says:

    Pannu and co will sell players to keep us going until next may and then we will all be talking about this shite again come may just going round and round in circles like feckin Groundhog Day..

  • KipperBlue says:

    For one thing I think we have to face the possibility of administration – any money we get in from player sales will just go to keeping us afloat – maybe it’ll get us to the end of the season but I wouldn’t hold my breath.

    Annoying fact for me is that only CY’s assets have been frozen, what about the remainder of the shareholders/business partners who have a definite interest in keeping BCFC out of administration – end of the day the club is worth a fraction when in administration as it is as a going concern.

    As for the Pannu pic the ad said he was working on behalf of Birmingham Airport Holdings Ltd which is the holding company for the airport – what they would want to be doing with someone like him is stunning – there’s nothing in the 2011/12 accounts however of him and no mention on their website despite stories regarding deals with China – not a very “special” advisor then lol

    All in all, I think we’ve been well stuffed by CY and the HK/Chinese crew – never thought Golds/Sullivan were bad for the club and it proves they ran a tight ship and did nothing to harm the club – yes they weren’t the sugar daddies with £billions to spend, but, at least they didn’t kill the club.

  • DoctorD says:

    If we get snow on the weekend then the club will have to turn on the under-soil heating which I presume will cost a bomb given current lekki prices. Another nail in the cash-flow coffin.

    Oh and PP, if you’re listening: can I have some of your “pocket expenses” too? I’ll help clear the snow if you like.

  • KipperBlue says:

    Just found a nice verbal slap from Pannu on the Birmingham Mail article last week………….

    “Your attacks on owners and directors does not and will not help the sale of the club. Bear that in mind too as evidenced by the last minute refusal to come in by the last interested party.’’

    Typical bullish words out but when genuine points are made he runs and hides !

    http://www.birminghammail.co.uk/sport/football/football-news/peter-pannu-says-carson-yeungs-699926

  • Wingman Blue says:

    Administration would quite possibly mean Paladini acquiring a threadbare, relegated club – if they still want it. I get the impression that BCFC has become merely status and financial collateral for schemes we know nothing of. There no longer seems realisable value in the club as we begin to freefall and gates, support and positive stories dwindle. What can we do to influence matters? From where can we get hope? Whatever the true state of affairs, how can we get over these problems, stop the rot and return to quality football??

    Answers on a postcard, please.

  • Wingman Blue says:

    Like Tuesday night? 7,000 turn up and scarcely a song? Mind you, the usual negative, critical, moaners managed to make it…

    It’s gone past, “turn up and everything will be alright” . People are staying away, and that’s because they clearly don’t think it’s worth going anymore. That attitude is the real crisis.

  • pedantic pete says:

    My concern about administration is that the administrators have to be paid. That money comes out of the business that has gone into administration, reducing its value and assets further, especially if the process is drawn out.

  • Bluenoes says:

    My fist post here, been a reader for a long time.
    Keep up the great work….

    One thing I have never understood is the ten point deduction for Administration.

    Let me get this right…
    A club gets into massive financial difficulty, and almost goes out of existence.
    So, the Football League or whoever, then make it even harder for that club to survive by taking ten points off the next season before you even start?
    Bearing in mind what Almajir has just written about limited squad numbers etc.
    Surely the Football League should be helping clubs get through this and maybe look into why things like this happen in the first place?!

    Its always the fans who suffer!


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