Talking the Blues podcast, Guardian report on auditor uncertainty, Moshiri representative statement, & Manchester United (h)

Welcome to this week’s delayed Talking the Blues podcast. As well as our usual examination of our last game we start with analysis of the breaking report from the Guardian newspaper regarding BDO, Everton’s current auditor. We examine the story, whilst firmly acknowledging Farhad Moshiri’s strong denial through his press people.

With Andy & George’s worst nightmare, a defeat to Manchester United, we look back on the game, look at why things weren’t quite right and the lessons to be learned.

Thanks for listening, our podcasts are available on all major podcast platforms, links to which can be found here

6 replies »

  1. Paul, a very interesting discussion re that Guardian article

    the Daily Mail came up with a much less convincing claim about no one knowing who the owners of Burnley FC are over the summer, citing an unknown owner of a Jersy based operation – which was totally ludicrous given that detail is (and has been for a long time, as per Premier League and EFL regs) clearly detailed on the club’s website under Company Details

    Perhaps more interesting is my suspicion that either this and/or Everton’s credit rating is preventing Burnley FC from factoring the Dwight McNeil transfer (something they have done with every transfer this calendar year, all with Macquarie), this is based on the assumption that Everton did not pay the £15m McNeil fee in full (if indeed it really was £15m).

    Of all Burnley’s outgoing transfers this summer, this was the one that would have been the most beneficial to do – (we factored the Nathan Collins deal even though at least £6m of the advanced money went straight to Stoke). McNeil was a product of the youth system so provided clear profit.

    Burnley have spent the year juggling cashflow and needed this money to fund the owner’s takeover commitments and a huge summer squad transformation, 16 incomings, 13 outgoings with only 4 generating fees (not to mention the disposal of a management team).

    It is the club’s contribution to its takeover, that has caused the most financial pain, and driven the need for these factoring agreements. By the end of this calendar year the club will have met the following takeover expenditure:

    – £10m loan to the owners so they could by shares from small shareholders (which was an £849.50cash/£849.50 club credit per share offer that appears to have been widely taken up.
    – £37m loan to the owners so they could meet stage payments on the original takeover (there is a final £21m payment due next year)
    – Circa £4m – £5m in interest payments to MSD for the loan the owns took out and transferred to the club to help pay the deposit on the takeover.
    – £35m+ including penalties to reduce the balance on the MSD principal capital by £32,237,986.25 (a payment triggered by relegation). this was paid in 3 separate instalments over the summer as monies (including parachute payments) became available.

    I would be grateful if you could give credence or dismiss the issue of Everton’s credit rating affecting Burnley’s ability to factor the McNeil transfer.

    • Hope you are well Chester
      Gosh Burnley are in a difficult position aren’t they! Given the football creditor rule in the event of default & the fact that Everton have successfully negotiated extended payment terms for the likes of Onana & McNeil I don’t think Everton’s credit rating is a significant factor in Burnley’s failure to date to factor future payments.
      Good luck, hope it all works out

      • It is depressing just how quick things can change, when you consider that only two years ago we were widely considered one of the better run clubs in the game with no debt (football or external) and circa £80m in the bank.

        The numbers listed above re the club’s contribution to the takeover are on top of the circa £6m in interest payments and £37m in loans to the owners that were used to contribute to the initial down payment and the first stage payment for the takeover in 2021. From what we can deduce in public record, the owners now have about an 89% share in the club (valued at £202.5m at takeover on December 30 2020) in which they have contributed just £10m themselves. They have a ringfence agreement to buy almost all the remaining shares by October 2024 for £20m, which we are all expect the club to pay for via another loan to the owners. The owners have already made it explicitly clear that the club will be paying all costs to MSD.

        More depressingly for the game as a whole, I am beginning to see a way in which they may actually succeed in this endeavour – though we may end up being a yo-yo club at best for some time. In what seems to be a situation only sport can create, most of the fanbase hold only positive views of the new owners, given our dramatic change in playing style and youthful nature of our largely untested new squad, and management team, Home match attendances have held and away attendances are sky high, selling out rapidly by the thousand. Shirt and merchandise sales are at record levels.

        As for the McNeil thing, that is more or less what I thought you would say.

        I had considered that, given Macquarie are said to insure their factoring agreements for that rare case of default (the premium being part of the fee for the advanced monies I assume) they may not have been able to find someone willing to cover or a premium price considered reasonable enough for the deal to go ahead.

        The Charges registered at Companies House also clearly show that in the case of default on any transfer payment (not just the ones in the agreement) or HMRC payment then Macquarie need to be informed asap (both of these come into the bounds of the Football Creditor rules for both Premier League and EFL, which is a pretty standard for a credit agreement in football I know). Have Everton missed any such payments recently?

        I ask on this being a possible basis for not attaining an agreement in this case,
        It is still extremely strange to me that, given all the other factoring, this one in particular has not occurred. I know I have rambled on too much, but I am genuinely puzzled by it, thanks for your patience if you have gotten this far.

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