Re: How long.....
sliper said:
Isn't it a control thing Gonzo.. aren't folks like these are interested in dosh as a means of CONTROL ? PNE isn't exactly a money factory but it is still pretty high profile business and a useful way of extending business contacts.
John Smith : What do you do ?
Trev : I own Guild Ventures.
John Smith : Right.. (yawn)
John Smith : What do you do ?
Trev : I own a chunk of PNE football club.
John Smith : Wow.. lets talk about it.
I've suspected in the past, that football with its buckets full of cash transactions is a handy vehicle, if you get my drift.
Do the owners pay for their tickets ? Lets say they have an entourage of half a dozen at a games in the exec area and they have a meal before hand.. £500-1000 per match x 25 matches x 5-10-15 seasons ? Starts to make sense to just buy the club if you've got a few mill knocking around and you never know if we make the Prem the shares might increase in value by 50% and then they might actually get the money back on their original investment.
Moving the ground... really its a bit early to be hitting the sherry ?
I'm not a sherry drinker, Sliper, neither am I a shandy quaffer: dark rum is my tipple, but only after the sun sinks below the yard-arm; and it is still early afternoon.
When I made the posting you refer to, I held back on a few things: I am interested to see if there is any worthwhile debate on this subject and I don't want to pre-empt what others have to say; but in view of your posting, perhaps, I should now say a little more.
There's a report about to be issued by the supporters' trusts initiative 'Supporters Direct' - it happens that I get some of their publications sent to me - and a few days ago I got one containing an article by Stephen Hope, who is the author of the forthcoming report, namely 'The Ownership Structure of Football League Clubs 2005-6'. In part, this report goes into matters of Business taxation and corporation tax and its advantageous use by club owners' where they satisfy Inland Revenue criteria. Stephen Hope has found that only a mere handful of clubs have ever paid business tax, and that it is more common for clubs to run up losses on a strict income and expenditure basis, with club finances being kept afloat either by generous benefactors, or by the sale of players at a profit.
But perhaps I should let the Supporters Direct article speak for itself: here are three snippets from Stephen Hope's article: one, a though-provoking hypothetical example, then a reference to Milton Keynes Dons, and finally a reference to Middlesboro football club. These are snippets, I hasten to add, and not necessarily directly related to things at Deepdale; but they trigger off my curiosity and I would like to know more. But let me move on to the snippets:
"So how does this work? Let's say Fred Bloggs owns a successful scrap metal business on the edge of town. He has a good year, and makes £750,000 profit. That means he has a corporation tax bill of £142,000 which he'll have to pay. He's going to lose that £142,000 whatever he does, but he can choose how he does it.
"He could put it into Anytown Rovers (as a loan, naturally), which artificially inflates the playing budget beyond what the club can afford, storing up trouble for the future and making it harder for the trust-run Otherplace City down the road to hold onto their players as Anytown can pay higher wages. And to cap it all off, Fred gets to look like the very embodiment of civic generosity... Or he could just pay the tax bill and have done with it.
"Those (clubs) that make a loss have a tax offset their business men backers can offset against profits made elsewhere. Pete Winkleman, for example, through his property company InterMK which controls Milton Keynes Dons, received a pick-me-up of over £500,000 from taxpayers for running a loss-making club with a turnover of less than £2m n the financial year that ended in 2005. In The Premiership, of course, the numbers simply go forth and multiply: Steve Gibson has rediced the losses made by Middlesboro by around £30m in the last decade through the profits his groiup of companies have made."
There's lots more, of course, but these snippets give an indication of how the ability of clubs to run losses can be used by businessmen to offset their company profits elsewhere; the tax man, and you and I losing out in the process for the benefit of profligate football clubs.
The snippets and just that; they beg a number of questions, but the article is not meant to be a seminar on business and corporation tax accountancy and assessment. I haven't done any business tax assessments for over thirty years, I chose to move my career in a different direction; but maybe we have one or more tax accountants on this Forum who would have a view on this?
So, there you go, Sliper: my generalized question about what is in it for those significant investors in PNE, is just that: but why should a hard-nosed businessman sink large sums of money into a football club simply to get "free tickets", or as a means of control"? - control of what? But I do wonder what is the real benefit for a club like PNE, where the principal shareholders obtain holdings in excess of 5% of the shares in issue (which can trigger off tax offsetting implications subject to Inland Revenue rules) including shares obtained relatively cheaply in the market, and not at the original issue price; and yet not enhance the club by investing other monies directly for the development of the club? Without this latter commitment, I don't see how these investors can be viewed as benefactors of the club; but I am happy to be persuaded otherwise.
Supporters Direct and football trusts, and PNE is another topic for discussion, on another occasion perhaps.
