BBC News: Lee Power: Swindon Town owner moves to allay money fears

[News Monkey]

Lee Power: Swindon Town owner moves to allay money fears
     

Swindon Town chairman Lee Power promises financial stability at the League One club following his takeover on Tuesday.
     

http://www.bbc.co.uk/sport/0/football/25217953
     

[4D]

Ooh, a fans phone in 

[horlock07]

Ooh, a fans phone in 

At least that will get to the bottom of the cheese issue.

[suttonred]

I doubt that with the sort of dribbler's these phone ins attract.

[kerry red]

So, him saying the club has no debt surely means the rumours of a host of unpaid creditors is a load of bollocks, then.

[suttonred]

I wouldn't go that far. I read it as saying there is no outstanding large debt i.e 10 million tax, but he did say money was still leaking, so I assumed that there probably are some smaller ones that will be mopped up now the take over is ratified

[kerry red]

But, surely, there is a world of difference between day to day running costs and creditor debt which has, allegedly, built up to the stage where legal action was being considered - not to mention staff not getting paid.

All sounds like bollocks to me

[Flashheart]

But, surely, there is a world of difference between day to day running costs and creditor debt which has, allegedly, built up to the stage where legal action was being considered - not to mention staff not getting paid.

All sounds like bollocks to me

You're probably right Audrey. There may well be some existing 'debt', and some have chosen to portray it out of context.

[iffy]

I would guess he's talking about the difference between current and long-term liabilities.

For the first time ever (thanks to A Black) the club claims not to have serious long-term liabilities and massive rolled-up debts (assuming Jed didn't mortgage anything*) it only has short-term liabilities like suppliers etc. Not that these aren't trivial, but they're more manageable.

(*And given that AB appears to have put some change of control provisions in the Jed deal, he may well have put other provisions around debt in there too. If he did make it a condition of sale to stop future morons gearing the club up again, then there's another reason to be impressed with him.)

[pauld]

You're probably right Audrey. There may well be some existing 'debt', and some have chosen to portray it out of context.

Debt is when you owe people money. Which we patently do, unless all the stuff about repayment schedules etc is untrue (i.e. never mind the rumoured threats of legal action). Any attempt to pretend otherwise is, at best, not giving the full picture, surely?

[Flashheart]

Debt is when you owe people money. Which we patently do, unless all the stuff about repayment schedules etc is untrue (i.e. never mind the rumoured threats of legal action). Any attempt to pretend otherwise is, at best, not giving the full picture, surely?

I know what debt is Paul but thanks for educating me anyway. I was quite clearly referring to rumours that creditors are unhappy and considering taking legal action etc.

[pauld]

I know what debt is Paul but thanks for educating me anyway. I was quite clearly referring to rumours that creditors are unhappy and considering taking legal action etc.

Sorry, wasn't trying to be patronising but Power seems to be using a different definition. Which may well be technically correct in accounting terms, but it's not how folks use the term in common parlance. Which was my point, that he was (possibly unintentionally) perhaps being slightly misleading in making this bold claim

And actually your meaning wasn't at all clear. At least not to me.

[iffy]

Businesses always owe money and most businesses will try to pay suppliers as late as possible. Anyone I know who runs a small business tends to makes a distinction (in their books and in their heads) of working capital liabilities and proper big, scary liabilities like mortgages and loans. Without trivialising the cases of those who are owed money, having a charge over your business isn't the same as paying the milkman late.

Prepared to give him the benefit of the doubt on this for the moment.

[kerry red]

Debt is when you owe people money. Which we patently do, unless all the stuff about repayment schedules etc is untrue (i.e. never mind the rumoured threats of legal action). Any attempt to pretend otherwise is, at best, not giving the full picture, surely?

Of course there will be a level of debt - businesses will pay creditors between 30 and 60 days and until they actually get paid there is debt. This is normal business practice.

When LP said the club had no debt I took this to mean long term debt, outside of normal business running costs.

[pauld]

Of course there will be a level of debt - businesses will pay creditors between 30 and 60 days and until they actually get paid there is debt. This is normal business practice.

Sure but, to take just one example, Murrall spoke in the Adver, and it's not been challenged/corrected to my knowledge, about repayment schedules being established with suppliers. Which suggests a special arrangement outside of the usual terms of trade, and more of something that would be called debt.

Pffft. If it's minor, it's minor, not trying to trip the fella up, just seemed a little at odds with what else we'd been told was all.