Tranche 2 & the Preservation of Power

[Jordanhill Jag]

So it’s gone quiet on Tranche 2 Cash Injection – despite a 2000 Word Statement from the Club Board saying how much it was needed – and there is a reason for the Silence.

But First lets look at the Club Finances as they stand – and for the avoidance of doubt – the numbers I’m about to state are from the Club - via AGM & various Financial Statements – this is important – as there are lots of “half truths” being used to justify our perilous finances  – The Club has a Fiduciary Duty that its Financial Statements are accurate – therefore figures quoted are from the Club – not “those in the know”   

There is much talk of “inherited debt “ from the previous Board – and that’s the justification for the Finances being in a poor state.  

Ok - so the stated figure ( at the last AGM ) was that around Jan 2023 a “Shortfall” of circa £600K was identified – since then various people have attempted to say it was £700K then £800K – it wasn’t – the £600K figure was advised by the Club at the AGM

By the end of Season 22/23 this “Shortfall” was reduced to £350K losses due to the Rangers Game Income in February 2023 – Now there is talk of £100K for Youth Apprenticeship & Women’s Team Funding as part of “inherited debt”

That’s simply untrue – there were costs no longer funded by Thistle Weir going into 23/24 Season – they were known & factored into that Seasons Budget

Same applied to Stadium Repairs – they were known-  including long term Large Capital Expenditure – allowances are made in the Budgeting ( let is not forget that for most of 23/24 & currently- we have had Two Qualified Accountants on our Board ) So there is no reason for Finances & Budgets not to be accurate.

Now the £350K debt goes into Season 23/24 -as it still needs to be paid – however  September of 2023 – the Tranche 1 Investment from Donald Mclymont cleared this debt - and left £280K of Cash Reserves

So we are very very clear - early in Season 23/24 - all of the previous Boards Debts were wiped off - and we were £280K Positive in Cash Terms – a very very strong position to be in financially -for any Championship Club

Now in Season 23/24 – the Board advised the following compared to Season 22/23 –

Football Budget was roughly the same in both Seasons

Gate & Commercial Revenue was up by circa £200K

Income from TJF + other sources was + £120K

So that’s an increase in income of + £320K for Season 23/24

Now deducted from that is (-) £100K of Costs for Youth Apprenticeship / Woman’s Team Funding  - no longer funded by Thistle Weir ( worth noting the Club does not fund our Youth Academy-  unlike all other Scottish Clubs )   

So overall comparable income is up £220K Season on Season

We are forecasting a loss of £150K for Season 23/24

Now previous Two Seasons under the Old Board losses were circa £300K each Season

So the figures seem stack up – additional £220K Revenue has reduced losses to £150K compared to £300K previously

But for one small detail – we also spent £200K in Cash Reserves in Season 23/24

So the losses are actually around £350K ( despite £220K of additional income ?)

The forecast losses Season 24/25 are £260K

Total losses over Two Seasons = £600K

These are identical losses from the previous Board which had mass protests & demands they resign ?

Now Tranche 2 is a defacto “ done deal” the only slight delay is how to get it across the line – it should be an EGM - with detailed figures justifying selling off another 10% of the Club 12 Months after the first Sale of 10%

But an EGM has close scrutiny on the 10% sell off – too much detail – too many questions

Tranche 2 will be shuffled onto the AGM – the reason is very simple – the published Club accounts give very little info to do an analysis – the Board present the more detailed numbers they want us to see them - on the night – with very little time to question them

Our New Chairman stated that the reason that he didn’t do due diligence on the Accounts before he accepted the shares from the Old Board was that there wasn’t enough info in the published accounts – and he is right – there will be No possibility of Due Diligence on Tranche 2 Share Sell Off    ( remember “Due Diligence”  used to be a thing for TJF ? – how times have changed ) 

Now TJF have said they will “consult” there members – however the TJF Club Board Rep who has advised that he is a “time served accountant “ has already stated that he cannot see why any Jags Fan would not want Tranche 2 ?

Rather than a Vote – Rather than a debate- allowing two sides of the argument-  TJF will do a “survey” the reason is simple – people pay less attention to a survey than they do a Vote ,in addition - a Vote would have to include eligible stakeholders who may not be in TJF ( same as the Fan Elections to the Board ie Season Ticket Holders  ) – so “Consultation”  is simply Window Dressing

So what is Tranche 2 actually for ?

There has been a vague list – Roof Repairs – More Staff - £100K on unspecified Fan Project – restore Cash Reserves ( with No explanation on how they burnt through £200K of Cash Reserves last Season ) - it was all the previous Board - a Big Boy did it and ran away  

The real requirement for Tranche 2 is to preserve the Status Quo – we have £260K forecast losses - £75K of Cash Reserves – at some point we run out of cash due to the losses ( without Tranche 2 )  – then we are back to where we were under the previous Board & the current cosy Board / TJF Set up implodes

Tranche 2 kicks that scenario down the Track ( it doesn’t resolve the problem ) it simply allows The Board & TJF to stay in Power a bit longer – hoping we get promotion before the additional cash runs out      

So the reality is very simple – Donald Mclymont has offered the Club another £500K in Tranche 2 – I don’t know him – never communicated with him – I'm sure his intentions are honourable

However – if he doesn’t demand radical change at Board Level & how the Club is run - as part of Tranche 2 – he has a duty of care to confirm in advance- that he will step up with a Tranche 3-  when Tranche 2 Runs out ( as it will ) – it’s on him – he calls the shots on finances

Without a commitment to Tranche 3 – it puts the Club at risk ref our future Finances – our Cash Burn – Losses etc will eat up Tranche 2 very Quickly & then what is the Plan ?

Tranche 2 £500K – that’s already down to £240K - based on this Years forecast losses of £260K - before its even received ? ( in addition there is no allowance in any budgets for major Stadium Repairs as confirmed by Tranche 2 being needed for the JHS Roof)  

The Board Forecasted a breakeven for Season 24/25 last December at the AGM – within circa 8 Months-  that was then restated as a Forecasted £260K Loss – with budgeting like that -how long will the remaining £240K from Tranche 2 last ?

Those involved in fighting for TJF to get Control of the Club Shares all publicly stated there 100% belief in ensuring we did not put the Club in Financial Jeopardy – they got support on that basis – but it would seem racking up large losses are OK-  as long as its done by the “right” people   

“Cry havoc and let slip the dogs of the TJF”

  '

 

[jaggy]

Here we go again 🙄 

[scotty]

4 minutes ago, jaggy said:

Here we go again 🙄 

At least it's in a thread about finances and not highjacking a match one!

[partickthedog]

5 minutes ago, jaggy said:

Here we go again 🙄 

In this week of US Presidential elections maybe it is apt to recall Ronald Reagan's catchphrase "there you go again" from his debates with Jimmy Carter.

https://en.wikipedia.org/wiki/There_you_go_again

 

[lady-isobel-barnett]

Tranche warfare.

[Jordanhill Jag]

48 minutes ago, jaggy said:

Here we go again 🙄 

Yip  - we are running at a loss of £350K for last Season + forecast £240K for this Season 

Serious Question - does that not concern you ? 

 

[jaggy]

Of course it does but we already know this after the repeated posts of the last few months 

[Jordanhill Jag]

3 hours ago, jaggy said:

Of course it does but we already know this after the repeated posts of the last few months 

And what ? 
 

maybe you should ask the question to those Running about the large losses then - rather than having a dig at myself 

[dl1971]

So we are running at a reduced loss....I'm not sure how many professional teams are running at profit ( celtic springs to mind ) but they are rare. We are hardly unique. 

[Dr.D]

So glad I have blocked this poster.

[Jordanhill Jag]

1 hour ago, dl1971 said:

So we are running at a reduced loss....I'm not sure how many professional teams are running at profit ( celtic springs to mind ) but they are rare. We are hardly unique. 

Thats the point - we are NOT running at a reduced loss - factoring in that we have burnt through £200K of Cash Reserves our losses are identical to the previous Boards ( who were sacked as we had run out of money ) 

£260K Forecast losses - £75K Cash Reserves is an issue 

Celtic are funded by a Billionaire who is underwriting the Thistle losses ?  

 

[Jordanhill Jag]

1 hour ago, Dr.D said:

So glad I have blocked this poster.

No one asked you to read the posts ? 

[fenski]

I believe the thrust of the argument is that we're living beyond our means and reliant on an injection of cash from sale of shares to a known party.

As such, what are the options and scenarios which could play out - promotion or no promotion at the end of the season basically.

And if we're not happy with this, what do we do as a fan owned club.

Trying to summarize, to avoid an endless thread of argument and counter argument.

[Auld Jag]

11 hours ago, lady-isobel-barnett said:

Tranche warfare.

You will require a Tranche coat for that. I will get mine. 

[Jordanhill Jag]

26 minutes ago, fenski said:

I believe the thrust of the argument is that we're living beyond our means and reliant on an injection of cash from sale of shares to a known party.

As such, what are the options and scenarios which could play out - promotion or no promotion at the end of the season basically.

And if we're not happy with this, what do we do as a fan owned club.

Trying to summarize, to avoid an endless thread of argument and counter argument.

The Core issue is that Shareholders are there to hold Boards to Account and if required remove them 

In our case the majority Shareholder is supporting and enabling the Board running up unsustainable losses

TJF even state themselves that the Boards Budgets are “ Pie in the Sky” but refuse to address the situation

TJF went to great lengths demanding due diligence before the would consider accepting “ free” Club Shares

Yet no demands for due diligence on selling off another 10% of the Club   
 

TJF members should be demanding similar Due Diligence on our current Financial Position and an EGM on Tranche 2  
 

 

[ChiThistle]

I’m going to need these threads converted into a shared Excel document with comments and track changes turned on.

[Jaggernaut]

7 hours ago, Jordanhill Jag said:

Thats the point - we are NOT running at a reduced loss - factoring in that we have burnt through £200K of Cash Reserves our losses are identical to the previous Boards ( who were sacked as we had run out of money ) 

£260K Forecast losses - £75K Cash Reserves is an issue 

Celtic are funded by a Billionaire who is underwriting the Thistle losses ?  

 

So for you it's fine for Celtic to be funded by somebody who has the money, but it's not fine for Thistle? That it's not good for Thistle is the view that you give on here repeatedly.

[scotty]

Is this going to revert to another long, long "sack the board" thread?

[eljaggo]

Just ignore him.  Don't give him any encouragement by responding to him.

[Jag]

Is the crux of the matter not:

We are running at a loss, but to offset that loss we are happy to accept a cash injection to our fan owned club. However, to do so, the cash injection isn't a gift from a wealthy backer, but involves selling off another 10% of the club? And fan owners are OK with this? Happy to be corrected on this.

Regardless, I'm not sure why people think it is OK to run with such losses. Where do we turn to when the 'investment' runs out? 

We have taken another huge risk this season by overspending. Everybody wants to get to the promised land but what price does failure bring?

It was only 18 months ago that we were in dire straights - again - and were offering players reduced wages to re-sign. You would think lessons would have been learned.

[Jordanhill Jag]

1 hour ago, Jaggernaut said:

So for you it's fine for Celtic to be funded by somebody who has the money, but it's not fine for Thistle? That it's not good for Thistle is the view that you give on here repeatedly.

Celtic Run at a Profit and have done for many Years

In addition Dermot Desmond is Celtic is the Majority Shareholder and defacto owner - they are a PLC and governed by strict rules on debt and Corporate Governance 

we are not comparable on any level to Celtic - we do not have any formal long term borrowing arrangements 

if you care to actually read what I said - I clearly stated we require a formal commitment to a Tranche 3 before committing to Tranche 2 

The ad hoc selling shares to fund debt runs the risk of not getting a buyer for future Share Sell offs - thereby putting the Club in jeopardy 

But obviously your ok with that arrangement 

[Lenziejag]

1 hour ago, Jag said:

Is the crux of the matter not:

We are running at a loss, but to offset that loss we are happy to accept a cash injection to our fan owned club. However, to do so, the cash injection isn't a gift from a wealthy backer, but involves selling off another 10% of the club? And fan owners are OK with this? Happy to be corrected on this.

Regardless, I'm not sure why people think it is OK to run with such losses. Where do we turn to when the 'investment' runs out? 

We have taken another huge risk this season by overspending. Everybody wants to get to the promised land but what price does failure bring?

It was only 18 months ago that we were in dire straights - again - and were offering players reduced wages to re-sign. You would think lessons would have been learned.

What lesson was learned then and previously ? At times of real financial peril, the fans put their hands in their pockets. What is the price of not trying to compete ? Pretty sure the fan owners are happy if they own 51% of the shares or whatever % gives you controlling interest.

 

[Jordanhill Jag]

1 hour ago, Lenziejag said:

What lesson was learned then and previously ? At times of real financial peril, the fans put their hands in their pockets. What is the price of not trying to compete ? Pretty sure the fan owners are happy if they own 51% of the shares or whatever % gives you controlling interest.

 

Thats all very good if you have a structured process to sell off shares to fund debt ( which is obviously the Club Strategy ) but to do this you need a willing buyer 

Currently we have one for Tranche 2 - whats the plan for further Tranches ? 
 

How can you state fans will be happy with 51% - if we continue as we are it will be more than 50% of shares we have to sell off 

Nothing has changed on any level from the previous board ( apart from now getting the support of TJF ) 

 

[Lenziejag]

25 minutes ago, Jordanhill Jag said:

Thats all very good if you have a structured process to sell off shares to fund debt ( which is obviously the Club Strategy ) but to do this you need a willing buyer 

Currently we have one for Tranche 2 - whats the plan for further Tranches ? 
 

How can you state fans will be happy with 51% - if we continue as we are it will be more than 50% of shares we have to sell off 

Nothing has changed on any level from the previous board ( apart from now getting the support of TJF ) 

 

I see you didn’t answer the question about what happens if we don’t try to compete ? 

[Jordanhill Jag]

On 11/9/2024 at 12:17 PM, Lenziejag said:

I see you didn’t answer the question about what happens if we don’t try to compete ? 

Our losses in Season 23/24 were not due to the Player budget as it was the same as 22/23,

we were up £220K on Revenue 

losses - £150K + £200K depletion of Cash Reserves 

there is no issue with out ability to compete on any level - thats just trying to deflect the core issue 

and in the past we have run at a Profit in the Championship so your statement is incorrect 

Edited November 11 by Jordanhill Jag