Administration

[Haag Royal]

Can someone explain how we are 38 million in the red? When he have'nt bought anyone for more than 3 million?

http://www.dailymail.co.uk/sport/footba ... -club.html

Can anyone please give me an idiots guide to how a club like Reading, who have spent bugger all on players, had a year in the Prem and now have parchute payments can be £38m in the red? Who do we owe this to and how did it get to £38m?

[Tilehurstsouthbank]

Bolton currently have a debt of around £160m and are still in business. I think all the doom mongers need to calm down a bit.

[ZacNaloen]

The debt isn't the problem its just a fairly large number (and its several years worth of build up, this didn't happen overnight.)

The issue is the tax bill we'll have to sell players to cover unless someone with money to burn comes in.

In case anyone is wondering about those annual black holes that used to be talked about, this is one part of it it just never got explained.

[East Grinstead Royal]

Apologies if this has already been mentioned, but I've just spotted the following for The Reading Football Club (Holdings) Limited.

Three new board members appointed yesterday - Ms CA Morris, Miss HJ Morris and Mr I Smith. Credit rating improved to "creditworthy" from "caution - credit at your discretion."

This company appears to be engaged in the hotels business and owns the Madejski Stadium Hotel Limited. Not clear to me how it fits in with the actual football club! The company now has two directors called Ian Smith, both born in 1959, but some 8 months apart.

[Nameless]

RFC is a subsidiary of RFC Holdings.

Surely the existing director is Ian Wood-Smith ?

The others are SJM's daughters

[Nameless]

Can someone explain how we are 38 million in the red? When he have'nt bought anyone for more than 3 million?

http://www.dailymail.co.uk/sport/footba ... -club.html

Can anyone please give me an idiots guide to how a club like Reading, who have spent bugger all on players, had a year in the Prem and now have parchute payments can be £38m in the red? Who do we owe this to and how did it get to £38m?

I think traditionally the articles on the STAR website are referred to when this question is asked.

The answer is basically that footballers cost a lot of money, the cost rising to always be more than a club earns.

[RoyalBlue]

Spending on players is discretionary, a tax bill is not.
We've laid out more than this tax bill on plenty of players, I would be amazed if the club was unable to find this amount if the option was administration.

If we sold all our best players (and also saved their wages), you'll need to explain how a £3 million tax bill would bring us to our knees

Indeed - particularly as the club will probably be taking in a good chunk of that through season ticket sales. Tax bill gets paid first, everyone else, including players, has to wait if necessary!

[ZacNaloen]

Sky say Le Fondre is off to Cardiff, if Nicky does his job that should cover the tax bill at least, still need a new owner though.

[Nameless]

Sky say Le Fondre is off to Cardiff, if Nicky does his job that should cover the tax bill at least, still need a new owner though.

As long as the tax man will let us pay the bill over 3 years, gambling that Cardiff go straight back up and ALF plays lots of games and scores lots of goals.
Not sure they will be too helpful !

[madstadblues]

IMHO I think the big problem here is Mr Mad not wanting to spend any money if at all possible. It's no different to when your selling a house or car you don't want to spend money that you won't get returned. I am sure we could cover the tax bill but why do it now when there could be a new owner in place that would pay it.

[RoyalBlue]

IMHO I think the big problem here is Mr Mad not wanting to spend any money if at all possible. It's no different to when your selling a house or car you don't want to spend money that you won't get returned. I am sure we could cover the tax bill but why do it now when there could be a new owner in place that would pay it.

Only the money will be due to HMRC whichever way it happens. Therefore pay the money now and add it to the loans he is asking to be repaid. Makes no difference to the total outlay that any prospective buyer will face.

[Royal Biscuitman]

Can someone explain how we are 38 million in the red? When he have'nt bought anyone for more than 3 million?

http://www.dailymail.co.uk/sport/footba ... -club.html

Can anyone please give me an idiots guide to how a club like Reading, who have spent bugger all on players, had a year in the Prem and now have parchute payments can be £38m in the red? Who do we owe this to and how did it get to £38m?

The answer is who the debt is owed to, In the most part I expect that's TSI.

Also profit does not equal cash and cash is what's needed to pay tax bills - classic overtrading.

I hope everyone who renewed their season tickets did it with a credit card, at least you might have some luck getting it back if the club goes under.

[Royal Biscuitman]

IMHO I think the big problem here is Mr Mad not wanting to spend any money if at all possible. It's no different to when your selling a house or car you don't want to spend money that you won't get returned. I am sure we could cover the tax bill but why do it now when there could be a new owner in place that would pay it.

Only the money will be due to HMRC whichever way it happens. Therefore pay the money now and add it to the loans he is asking to be repaid. Makes no difference to the total outlay that any prospective buyer will face.

Maybe he's forcing TSI to pay it in the form of a further loan as the risk of administration means they will end up having to write off most of their loans anyway as the administrators give them 1p in the £1 or whatever, so they may want to try and buy time with a further £1.6m loan to the club.... if they have it.

[melonhead]

Bolton currently have a debt of around £160m and are still in business. I think all the doom mongers need to calm down a bit.

sounds like a brilliant plan if theyre ok with it.

[melonhead]

IMHO I think the big problem here is Mr Mad not wanting to spend any money if at all possible. It's no different to when your selling a house or car you don't want to spend money that you won't get returned. I am sure we could cover the tax bill but why do it now when there could be a new owner in place that would pay it.

Only the money will be due to HMRC whichever way it happens. Therefore pay the money now and add it to the loans he is asking to be repaid. Makes no difference to the total outlay that any prospective buyer will face.

we dont have the money now.

[RoyalBlue]

IMHO I think the big problem here is Mr Mad not wanting to spend any money if at all possible. It's no different to when your selling a house or car you don't want to spend money that you won't get returned. I am sure we could cover the tax bill but why do it now when there could be a new owner in place that would pay it.

Only the money will be due to HMRC whichever way it happens. Therefore pay the money now and add it to the loans he is asking to be repaid. Makes no difference to the total outlay that any prospective buyer will face.

we dont have the money now.

So no one has bought season tickets in the past two months?

Piss poor business management again if that money was spent on things other than a tax bill! You can get away with not paying most people for a while but not HMRC.

And Madejski has already blown the money that he did get off Anton for his shares? As I said, he could have added the tax paid to his loan. I reckon there's more chance of him getting his loans repaid that way than if HMRC put the club into administration.

[Ian Royal]

Can someone explain how we are 38 million in the red? When he have'nt bought anyone for more than 3 million?

http://www.dailymail.co.uk/sport/footba ... -club.html

Can anyone please give me an idiots guide to how a club like Reading, who have spent bugger all on players, had a year in the Prem and now have parchute payments can be £38m in the red? Who do we owe this to and how did it get to £38m?

Wages of £26m when we got promoted with income of about £14m.
The money we owed Madejski for running the club at a loss for most of his time here and building a stadium.
Wages this season probably significantly above our income even including the parachute payment.

[Royal Rother]

Can I just put a moment of common sense into the discussion - there is almost zero chance that HMRC would try to force the club into administration for one month's unpaid PAYE.

Ok. Done.

[Ian Royal]

Can I just put a moment of common sense into the discussion - there is almost zero chance that HMRC would try to force the club into administration for one month's unpaid PAYE.

Ok. Done.

Given how much debt other teams have built up with HMRC, even the new aggressive version isn't going to be issuing a winding up notice for this amount, due this recently, any time imminently, I agree. At the very least there are debt recovery procedures to go through first.

[Hoop Blah]

And Madejski has already blown the money that he did get off Anton for his shares? As I said, he could have added the tax paid to his loan. I reckon there's more chance of him getting his loans repaid that way than if HMRC put the club into administration.

From what I was told a couple of months back, Madejski just hasn't got the money let alone the motivation to dip even further into his pockets. He stumped up a similar figure in Q1 that kept HMRC off our backs at a time when the club considered not paying and the prospect of administration and the 10 point deduction that would've ended the fading hopes of the play offs.

Basically he can't afford to keep subing the club whilst the bills are so high and incomce isn't there.