What's going on at Leicester

[Aleksz]

By the way, Business of Sport is a fantastic podcast to watch/listen if you aren't already - watched them pre Charlie Methven getting involved (can't say I'm a huge fan despite him knowing his stuff) and its a great one to watch in terms of getting to grips with the stuff that the general fan, myself included, can't really wrap their head around. 

[Terraloon]

1 hour ago, CarolinaFox said:

While I don't want to diminish the financial stress the club are in, I think the view expressed by Charlie in both videos is heavy handed. We are a financially stressed club, no doubt, but most of our debt is owned by King Power, not outside banks and that plays a big factor here, and changes our risk profile completely. If we owed a lot of money to outside banks then yes, relegation would be dangerous, but the things Charlie points out: taking out loans against parachute payments, transfers etc is normal. The only way the club goes into administration is if King Power cannot pay the club's bills as they fall due.  We haven't seen strong signs that's the case. He brings up paying staff late in December, but paying wages early in December is a courtesy, not an obligation. If this club were as bad as he indicates we would see bigger red flags: short-term emergency loans, not paying transfer wages, and other bigger signs that there are insolvency issues. And this is why there isn't strong reporting on it, there aren't clear and obvious signs to back up a claim that King Power are insolvent. Relegation to League One would be bad for the club - it would reduce revenue and put more on the owners to finance club operations, but it wouldn't automatically place us in administration. This is one of those things that sounds good for a podcast to get listeners, and bears some truth, but is a bit heavy handed.  

At this point in time it’s impossible to know how much debt the club has and to who it’s owed post 30/6/24

 

Here  we are the best part of 20 months on from the last published  set of accounts knowing not much save the club have factored all  fees yet to be paid   but it doesn’t just end there because the parachute payment due not just for 25/26 have been advanced but also the sums due for 26/27 in effect cash due to fund in part the 26/27 year is almost certainly been used this season.
 

Bear in mind that in Jan 26 the club entered into another agreement providing a facility with that Aussie Bank but this agreement isn’t secured against future fees or parachute payments, they are already committed,  this time the security is against every fixed asset the club owns.

 

Charlie is spot on when he points out that factoring these matters are red flags. I am not sure that I heard Charlie say it was normal to take out parachute payments in advance of the year they would fed into cash flow. His point about the change of Christmas pay date in isolation may not have been the issue but I actually think taking all things into consideration it all adds to the negativity. 
 

You say the only way that LC go into Administration is if KP can’t pay but that isn’t correct there is at least one other  possibility and that is they , KP, won’t pay any more and if that’s the case then then leads to even darker thoughts.

 

We have absolutely no idea what creditors are being paid on time if they indeed are. When clubs particularly in the EFL are in arrears with say other clubs or HMRC for we don’t get to hear about debts of that nature if the club has agreed a payment arrangement as for other creditors any business that is fire fighting tends to prioritise payments based on who is pushing the hardest at some point those owners will see one of the balls drop as it were.
 

The likelihood is that the club will limp on ( unless Top opens his cheque book) but just as there was an inevitability that the day of judgment would arrive for those PSR matters if the signs are being read correctly then at some point sooner rather than later the weight of debt or put another way the lack of cash  could well be catastrophic 

 

 

 

1 hour ago, Heathrow fox said:

I would still like to know if they have borrowed on future ticket sales

To a degree any money borrowed , save income already committed ( parachute payments and transfer fees still due ) is borrowed against future ticket sales the problem comes for instance if season ticket renewals don’t reach projections or God forbid relegation means prices have to be reduced 

Edited 20 February by Terraloon

[CarolinaFox]

6 minutes ago, Terraloon said:

At this point in time it’s impossible to know how much debt the club has and to who it’s owed post 30/6/24

 

Here  we are the best part of 20 months on from the last published  set of accounts knowing not much save the club have factored all  fees yet to be paid   but it doesn’t just end there because the parachute payment due not just for 25/26 have been advanced but also the sums due for 26/27 in effect cash due to fund in part the 26/27 year is almost certainly been used this season.
 

Bear in mind that in Jan 26 the club entered into another agreement providing a facility with that Aussie Bank but this agreement isn’t secured against future fees or parachute payments, they are already committed,  this time the security is against every fixed asset the club owns.

 

Charlie is spot on when he points out that factoring these matters are red flags. I am not sure that I heard Charlie say it was normal to take out parachute payments in advance of the year they would fed into cash flow. His point about the change of Christmas pay date in isolation may not have been the issue but I actually think taking all things into consideration it all adds to the negativity. 
 

You say the only way that LC go into Administration is if KP can’t pay but that isn’t correct there is at least one other  possibility and that is they , KP, won’t pay any more and if that’s the case then then leads to even darker thoughts.

 

We have absolutely no idea what creditors are being paid on time if they indeed are. When clubs particularly in the EFL are in arrears with say other clubs or HMRC for we don’t get to hear about debts of that nature if the club has agreed a payment arrangement as for other creditors any business that is fire fighting tends to prioritise payments based on who is pushing the hardest at some point those owners will see one of the balls drop as it were.
 

The likelihood is that the club will limp on ( unless Top opens his cheque book) but just as there was an inevitability that the day of judgment would arrive for those PSR matters if the signs are being read correctly then at some point sooner rather than later the weight of debt or put another way the lack of cash  could well be catastrophic 

 

 

 

To a degree any money borrowed , save income already committed ( parachute payments and transfer fees still due ) is borrowed against future ticket sales the problem comes for instance if season ticket renewals don’t reach projections or God forbid relegation means prices have to be reduced 

The biggest factor me is that most of the club’s major liabilities are to King Power, and owner‑funded debt behaves very differently from external bank debt. That doesn’t mean everything is fine, but it does mean administration isn’t an automatic or imminent outcome unless King Power stop funding the club altogether. So for me, it’s fair to say the situation is serious, but the more catastrophic interpretations go beyond what the available facts can support right now. As for KP not funding the club and choosing to let it it go into administration, that would mean losing equity in the club and control of the club and no rational owner chooses that outcome. At worst they would get the club into a situation where its attractive to a buyer and sell the club. Letting a club go into administration would not be in the interest of King Power at all. Lastly, if creditors weren't being paid you would hear about it through the news media. Leicester's downfall is hot sports news, so I'm sure people have gone digging. Charlie is making us sound like we are Sheffield Wednesday 2.0 - unpaid tax, unpaid wages, inability to meet basic obligations. We are far from that. If were anywhere close you would know it by now. 

[Sky Blues]

1 hour ago, CarolinaFox said:

The biggest factor me is that most of the club’s major liabilities are to King Power, and owner‑funded debt behaves very differently from external bank debt. That doesn’t mean everything is fine, but it does mean administration isn’t an automatic or imminent outcome unless King Power stop funding the club altogether. So for me, it’s fair to say the situation is serious, but the more catastrophic interpretations go beyond what the available facts can support right now. As for KP not funding the club and choosing to let it it go into administration, that would mean losing equity in the club and control of the club and no rational owner chooses that outcome. At worst they would get the club into a situation where its attractive to a buyer and sell the club. Letting a club go into administration would not be in the interest of King Power at all. Lastly, if creditors weren't being paid you would hear about it through the news media. Leicester's downfall is hot sports news, so I'm sure people have gone digging. Charlie is making us sound like we are Sheffield Wednesday 2.0 - unpaid tax, unpaid wages, inability to meet basic obligations. We are far from that. If were anywhere close you would know it by now. 

Don't be so sure that you would know the outcome of going into administration would be. My club got put into administration in a situation that didn't look good. The company that took us on was a company the hedge fund in charge of us started so they still owned us 🙄 You would need someone with deep pockets with the ability to lay their hands on cash knowing a lot of money will just evaporate. There's not a big queue of people like this. 

 

Creditors are presently being paid, but it is with money due from future payments. Where is the money coming from for next season? Your outgoings are still miles above your income. You're still spending well above what's allowed with FFP rules so there could well be more trouble coming from that direction. 

[Terraloon]

1 hour ago, CarolinaFox said:

The biggest factor me is that most of the club’s major liabilities are to King Power, and owner‑funded debt behaves very differently from external bank debt. That doesn’t mean everything is fine, but it does mean administration isn’t an automatic or imminent outcome unless King Power stop funding the club altogether. So for me, it’s fair to say the situation is serious, but the more catastrophic interpretations go beyond what the available facts can support right now. As for KP not funding the club and choosing to let it it go into administration, that would mean losing equity in the club and control of the club and no rational owner chooses that outcome. At worst they would get the club into a situation where its attractive to a buyer and sell the club. Letting a club go into administration would not be in the interest of King Power at all. Lastly, if creditors weren't being paid you would hear about it through the news media. Leicester's downfall is hot sports news, so I'm sure people have gone digging. Charlie is making us sound like we are Sheffield Wednesday 2.0 - unpaid tax, unpaid wages, inability to meet basic obligations. We are far from that. If were anywhere close you would know it by now. 

Sorry but we simply don’t know the extent of the clubs liabilities nor how things have changed , save a few snippets, since the end of the 23/24 accounting year.

Charlies point wasn’t that the club can’t meet its current liabilities but more that the person running the accounts seems to be using all the levers available to pay todays liabilities but not from today’s income  included in those levers is the drawing down of monies that realistically will be needed for next season. Potentially another example of LC kicking the can down the road ?

I  worked in debt management and yes unpaid wages would be a major red flag and there’s no suggestion that is happening but you talk as if you know what’s going on re creditors we don’t know either way but surely you can see why alarm bells are ringing.? Often when I dealt with distressed companies to the outside world every thing seemed fine but almost in a blink of an eye something goes wrong and bang the whole deck of cards crumble.
As for losing equity in the club in terms of KP that ship has long since sailed  and who knows there may well be significant tax benefits in Thailand in allowing debt to be written off in another tax regime. I simply don’t know nor I would guess do you but one thing I do know is that I wouldn’t at all be surprised if at some point the club does enter administration .

 

[Corky]

I think (optimistically, naively?) that we would be attractive to buyers but the fact that liquidation is even being discussed is ridiculous given the level the club has been at for the past decade.

[Great Boos Up]

With a possibility of being placed into administration should the worst happen, the short of it is no billionaires have the liquid funds to write off the massive overheads. We then go into liquidation.

[DJW1]

Arrived at the ground last night around 7.30 to see around 40 security personel, and a dog, detailed to watch over around 5 BC fans entering the ground. 

Barriers around the entire perimeter, legions of security searching fans or doing nowt, pre-match pyro nonsense etc.

Now I know where the bank loans money goes

Some security is justified but it should be adjusted according to the size of the crowd

[Stadt]

3 hours ago, DJW1 said:

Arrived at the ground last night around 7.30 to see around 40 security personel, and a dog, detailed to watch over around 5 BC fans entering the ground. 

Barriers around the entire perimeter, legions of security searching fans or doing nowt, pre-match pyro nonsense etc.

Now I know where the bank loans money goes

Some security is justified but it should be adjusted according to the size of the crowd

Are we still taking away stewards too?

 

My biggest gripe with Davies promotion to CEO is we’ve not cut any of this unnecessary crap when he could have stopped it as FD. Why are we still operating two training grounds!? 

[Foxes1]

9 hours ago, Stadt said:

Are we still taking away stewards too?

 

My biggest gripe with Davies promotion to CEO is we’ve not cut any of this unnecessary crap when he could have stopped it as FD. Why are we still operating two training grounds!? 

Didn't see any away stewards at Ipswich or Middlesbrough.

[FLAN]

Stewards are more drilled than the back four. Ridiculous amount there on Tuesday 

[Philkeavo]

Stewards everywhere yet only three personnel at the ticket windows out of seven. My friend’s digital ticket didn’t work and had to queue for 30 minutes and therefore missed the first 20 minutes and first goal.
 

Every turnstile has an imbecile with a yellow jacket who shout go to the ticket office rather than offer any assistance. This club is not just financially bankrupt it’s morally bankrupt too.

[Sly]

This will slap a little harder this morning! 
 

Linking the video again for anyone that hasn’t watched it! 
 

 

[Parker Pen]

**** me, If we all had a pound for every text or WhatsApp that contained this line from non Leicester supporting mates or work colleagues I’m sure we could all group together and buy the club!