Cash-flow is the problem...

Profit and loss versus balance sheet; income and sales can look strong based on the P&L but need cash for salaries and buying power. If it's all tied up in in creditors or long-term debt then it isn't realisable. That and risk appetite.

Most player sales have payments structured over time so £12m of sales may not appear in cash for for 2 - 3 years. However, getting high earners off the books reduces running costs immediately and helps with managing working capital.

A lot of clubs carry a mountain of debt, either to invest or to increase working capital. That's all well and good if you can service the debt but it comes with a risk. It's easier if your owner/investor is minted as they can just throw more money onto the bonfire to keep the flames going. 3rd party lenders are less keen in burning their money and want a return or at least be assured that they'll get it back with some interest.

Posted By: Worthing Yellow on September 1st 2017 at 01:40:50

Message Thread

Whilst I don't doubt Steve Stone when he says we have no money (NCFC) - Charles21, Sep 1, 00:55:26
- Via the egos of their owners who in lots of cases have very deep pockets... (NCFC) - Dandy Highburyman, Sep 1, 08:16:53
- Loads of them are now running at a massive loss (NCFC) - Under soil heating, Sep 1, 08:03:05
- All this makes it even more baffling why they didn't try to make a better fist of going (NCFC) - Mickdundee, Sep 1, 07:58:57
  - Yep should have fired AN after the Brighton thrashing (n/m) (NCFC) - SCC 28, Sep 1, 08:02:08
    - Possibly so, with hindsight but that brings its own risks as well. (NCFC) - APB, Sep 1, 09:02:35
      - ...which, of course, would have been labelled FIRE SALE!!!! by all the two-pot screamers. (n/m) (NCFC) - norway, Sep 1, 09:38:45
- God knows where all the money's gone (n/m) (NCFC) - SCC 28, Sep 1, 07:45:46
- I note he's now expressly saying we will have to flog anyone on decent money if we stay (NCFC) - Jim, Sep 1, 06:53:07
  - Doesn't matter if he expressly says it or not (NCFC) - mr carra, Sep 1, 07:33:05
- Our owners don't put anything in and insist we run debt free (n/m) (NCFC) - Jim, Sep 1, 06:42:35
- They don't have the likes of Naismith, Jarvis and Klose on ridiculous money (n/m) (NCFC) - thirsty work, Sep 1, 03:51:47
  - Yup, I suspect Jarvis + Naismith wages combined cost more than academy each year (NCFC) - ruudyforcity, Sep 1, 06:42:30
- Cash-flow is the problem... (NCFC) - Worthing Yellow, Sep 1, 01:40:50
  - Thanks WY. Far too sensible and factual I suspect... (NCFC) - Pixelman, Sep 1, 07:38:49
    - VMT (n/m) (NCFC) - Charles21, Sep 1, 09:58:58
- They don't (n/m) (NCFC) - Ralf Scrampton, Sep 1, 01:10:33
- Investment by owners? (n/m) (NCFC) - Gob on a Stick, Sep 1, 01:05:52
  - In most cases investment = debt (NCFC) - Knitted Jesus, Sep 1, 06:57:31
    - tbf KJ they are "fucking loaded" (n/m) (NCFC) - Dandy Highburyman, Sep 1, 08:30:31

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