Could we go into Administration next season?

[TonyN11]

6 hours ago, Pita said:

Until we have a total rebuild of the mansion the club we are in big trouble. Top got to show some ⚽️⚽️⚽️

Got 3 of 'em 

[Terraloon]

7 hours ago, ClaphamFox said:

This is from the April financial statement:

 

"The Directors have also considered the Club’s cashflow requirements in a severe but plausible scenario. Sensitivities considered in the forecasts included variances in finishing position, net player transfer spend and the non availability of future banking facilities. To cover the working capital needs of the Club in that scenario the Club has access to £10m remaining undrawn elements of a five year loan facility with King Power International in addition to an undrawn future share subscription agreement for 116m shares at £1 per share entered into on 21 April 2024 and amended on 4th April 2025 which can be further called on if necessary to support the Club’s cash flow in the unlikely event that all these negative events come to pass. Based on the above the Directors therefore have a reasonable expectation that the necessary funding will be available when required and the consolidated financial statements have therefore been prepared on a going concern basis."

 

Taken at face value, this would suggest we won't go into admin next season. How we fare after that if we remain in League One for a while is another matter....

A couple of points.

 

1) That statement is circa 10 months old.

2) The  latest confirmation statement tells us that £94m  £1 shares was issued in the in the year to Nov 25 to KP. 
3) Top likewise was issued £30m of £1 shares

 

 

2)+3) combined equates to the £124m of debt converted to equity. I would hope that this is a separate agreement but I am far from certain that the £94 m isn’t included in that £116m

 

 

 

 

 

[Jon the Hat]

13 hours ago, Lineker's Left Foot said:

Sorry if already posted but was wondering if we could go into Administration next season, as we have already used up the last of our Parachute Payments in the form

of the bank loans?

It's important to note that while we have committed those future payments to Macquarie, they are still income to the club when they are received, so form part of the max 60% wages / fees to income ratio in L1.  The owners can put in funds to cover the cash requirements, but not much of that can be used to fund wages / signings.

[Terraloon]

3 hours ago, Jon the Hat said:

It's important to note that while we have committed those future payments to Macquarie, they are still income to the club when they are received, so form part of the max 60% wages / fees to income ratio in L1.  The owners can put in funds to cover the cash requirements, but not much of that can be used to fund wages / signings.

You might be right re the parachute payments counting but you also could be wrong.

 

Irrespective in season 26/27 in EFL1 the % allowed is 75% not 60% but as has been posted a couple of times is the fact that if the money advanced from Macquarie is under a forward financing agreement then  any sum drawn down can’t be included in that 75%

[HitchinFox]

The short answer to the opening question is yes. Partly because there are so many variables in the wider, global economy and, ultimately, our financial security is closely linked to that of KP. The near collapse of the entire KP business last year isn't a secret and the pressures on their business models continue.

Without Vichai, there has been very little diversification of and/or clear vision for the business – even after the shock of Covid-19, when most businesses in the sector identified it as a priority. The KP executives/the wider family recognised where the issue is and that's why Top got removed as CEO and put in his box last year, effectively removing him from all decision-making in the wider business. 

Ironically, one of the KP divisions that has been making money is King Power Racing – ie. the horses. But to put that into context, the amount of annual profit it makes is roughly the same as Winks' wages in a month. 

We think it's grim for LCFC – and it is. But the financial issues are wider and deeper and reach far beyond what those who work for the club can control. This, however, doesn't excuse the terrible mis-management and incompetence within the LCFC executive team. The horse racing business is an example that, with good and competent people in charge who know what they're doing, the different divisions of KP can (and should) operate successfully. 

[Chrysalis]

19 hours ago, Lineker's Left Foot said:

Sorry if already posted but was wondering if we could go into Administration next season, as we have already used up the last of our Parachute Payments in the form

of the bank loans?

Not only already posted, but I think this is the 3rd or 4th thread I seen.

[Sol thewall Bamba]

16 hours ago, mad biker said:

Absolutely not !!

How can say this with so much certainty? I bet if there was a thread this time last year that said "could we be relegated back to back and get our first ever points deduction next season?" you'd have said the same thing then!

[apollo4joe]

As soon as Top decided he's had enough of covering major losses every season, that's when we will go into administration.

 

So probably not next season because he will more than likely keep funding in the short-term. But long term? I can't seem him funding a failing business year after year. Surely he will get fed up and eventually and pull the plug.

[CloudFox]

I initially read this thread title as a request 🥲

[Spanner73]

Hopefully yes !! 
It’ll turn out to be the best thing to happen to our football club in years ! 
God I cannot wait !!! 

[Qwerty]

6 hours ago, apollo4joe said:

As soon as Top decided he's had enough of covering major losses every season, that's when we will go into administration.

 

So probably not next season because he will more than likely keep funding in the short-term. But long term? I can't seem him funding a failing business year after year. Surely he will get fed up and eventually and pull the plug.

My guess is that it’s a little bit like gambling.  You start off putting money in and you keep winning, so it’s great, and you put more money in and keep winning.  Then you start losing, so you keep on putting money in to try and win it back.  Eventually you have to give up and walk away.   At the moment, it’s worth Top’s while to keep putting money into the club, because there’s a chance we may get promoted next season, and start to turn things around.  But if we’re not promoted, then I think he’ll walk away and accept administration. 

[mad biker]

9 hours ago, Sol thewall Bamba said:

How can say this with so much certainty? I bet if there was a thread this time last year that said "could we be relegated back to back and get our first ever points deduction next season?" you'd have said the same thing then!

I know someone at the club (one of the good ones) we will be fine for ONE season in League 1 but anything beyond that will be bad and result in the sale of assets, probably Belvior drive.

[Happy Fox]

11 hours ago, mad biker said:

I know someone at the club (one of the good ones) we will be fine for ONE season in League 1 but anything beyond that will be bad and result in the sale of assets, probably Belvior drive.

Can you see us getting promoted back to the championship at the first attempt? I cannot in all honesty.

[Qwerty]

4 hours ago, Happy Fox said:

Can you see us getting promoted back to the championship at the first attempt? I cannot in all honesty.

It depends entirely on whether or not Top is prepared to spend money.  In league 1 there’s no PSR, so if Top wants to spend big, he can.  

[Great Boos Up]

Seasons been over for hours. Why haven’t we sold players, sold the spare corner flags and sold that coffee machine. 

We’re still paying out through the summer with no football.
Yes we could go into admin.

[Mint23]

Yes, next question please. 

[cropstonfox]

7 hours ago, Qwerty said:

It depends entirely on whether or not Top is prepared to spend money.  In league 1 there’s no PSR, so if Top wants to spend big, he can.  

Top can't afford the losses of administration.No alternative but to throw money at it to make us an attractive acquisition. 

[Paninistickers]

Just now, cropstonfox said:

Top can't afford the losses of administration.No alternative but to throw money at it to make us an attractive acquisition. 

The owner can't afford to finance us. It's not about sustaining losses. It's about putting (real) money in the bank to pay wages, the electric and the mow the grass. He can't do it. He won't do it. He's gambling on selling 50 odd million in the transfer market and racing down to.Macquirie with the invoices..

 

We'll be out of business within months 

[Donwebbio]

We need a real salesman to get rid of the players still under contract on huge wages.

The maximum we can spend in League 1 will be 60% of revenue which for us, top end, will be £22M. So 60% of that say £13M - £250k per week.

 

Winks (£61k), Vestergaard, (60k), Choudhury (£56k)

Skipp (50k), BDCR (£48k),  Faes (£36k), Thomas (£35k). 7 players we could play without and who are on a combined £346k per week - those alone put us way above the limit. 

 

Copilot reckons we will have a revised wage bill of £650k per week after contracts expire but before any relegation clauses kick in. Lets call it £600k per week. We need to cut our wage bill by at least a whopping £350k per week  McCarron might be able to identify younger talent that could help regenerate our squad but what about the high earners? Who is going to shift £350k of wages? Rudkin?

 

[Qwerty]

14 hours ago, Donwebbio said:

We need a real salesman to get rid of the players still under contract on huge wages.

The maximum we can spend in League 1 will be 60% of revenue which for us, top end, will be £22M. So 60% of that say £13M - £250k per week.

 

Winks (£61k), Vestergaard, (60k), Choudhury (£56k)

Skipp (50k), BDCR (£48k),  Faes (£36k), Thomas (£35k). 7 players we could play without and who are on a combined £346k per week - those alone put us way above the limit. 

 

Copilot reckons we will have a revised wage bill of £650k per week after contracts expire but before any relegation clauses kick in. Lets call it £600k per week. We need to cut our wage bill by at least a whopping £350k per week  McCarron might be able to identify younger talent that could help regenerate our squad but what about the high earners? Who is going to shift £350k of wages? Rudkin?

 

I believe it’s 75% of revenue in the first season after relegation.

[Qwerty]

14 hours ago, Paninistickers said:

The owner can't afford to finance us. It's not about sustaining losses. It's about putting (real) money in the bank to pay wages, the electric and the mow the grass. He can't do it. He won't do it. He's gambling on selling 50 odd million in the transfer market and racing down to.Macquirie with the invoices..

 

We'll be out of business within months 

You sound very sure.  Do you have inside knowledge and professional accounting qualifications?   Or are you theorising, like the rest of us?

[ClaphamFox]

14 hours ago, Donwebbio said:

We need a real salesman to get rid of the players still under contract on huge wages.

The maximum we can spend in League 1 will be 60% of revenue which for us, top end, will be £22M. So 60% of that say £13M - £250k per week.

 

Winks (£61k), Vestergaard, (60k), Choudhury (£56k)

Skipp (50k), BDCR (£48k),  Faes (£36k), Thomas (£35k). 7 players we could play without and who are on a combined £346k per week - those alone put us way above the limit. 

 

Copilot reckons we will have a revised wage bill of £650k per week after contracts expire but before any relegation clauses kick in. Lets call it £600k per week. We need to cut our wage bill by at least a whopping £350k per week  McCarron might be able to identify younger talent that could help regenerate our squad but what about the high earners? Who is going to shift £350k of wages? Rudkin?

 

Where are you getting those player salaries from? I doubt any of them were being paid that much in the Championship and they’ll fall even further in L1. 

[Chrysalis]

21 minutes ago, Qwerty said:

You sound very sure.  Do you have inside knowledge and professional accounting qualifications?   Or are you theorising, like the rest of us?

Investment has been halted for a while, king power is in managed crisis mode, day to day is funded by pay day loans.

Yet people still think he is flush with cash and willing to put it in.

Edited 3 May by Chrysalis

[Paninistickers]

30 minutes ago, Qwerty said:

You sound very sure.  Do you have inside knowledge and professional accounting qualifications?   Or are you theorising, like the rest of us?

Theorising. Just joining the dots. 

 

Edit; I'm not a mechanic, but when the warning lights are blinking on the dashboard, the noise from the engine is screeching, the exhaust fumes are acrid black....you know the car is in trouble. 

Edited 3 May by Paninistickers

[john ridley]

Like when asked about funding, he said he'd "try",which doesn't  sound very convincing does it.I expect  he's  got to convince people  he's  competent to be given money  to carry on.