The Greenock Morton Thread - It's Better Than Yours

[Skyline Drifter]

3 minutes ago, The Ghost of B A R P said:

Glad to hear an extreme long-term lease is possible, but I'd be very wary of describing any legal obligation conceived over that period of time as 'bulletproof'. You seem to confirm that yourself by acknowledging that the lease Tesco had on land adjacent to Palmerston was in fact varied when circumstances changed.

The point about bureaucracy is a total red herring, btw: there's no more 'bureaucracy' involved in setting up and maintaining a trust than there would be setting up the lease/guarantee arrangement you describe.

Bound to say also (before other Morton supporters do) your point about 'placating people who don't actually understand the legalities' is a bit off; there are plenty of people among the Morton support who understand the legalities and dynamics of this situation all too well.

It wasn't "varied". It was cancelled when Tesco eventually handed it back to the club (with a small exit payment as a bonus) at the club's request and under some pressure from the Council who had made handing it back a condition of granting planning permission for a further Tesco store in the town. In point of fact it couldn't be varied and that was part of the problem and why the club were desperate to get it back.

There is more bureaucracy in maintaining a Trust which will need to keep annual accounts, than there is in a lease which is a one off set up cost. Granted in the scheme of things not a significant financial cost but somebody's time in dealing with it no doubt.

Fair enough that last part could have been phrased better. The point stands though, it appears to be more a gesture than actually achieving anything different.

 

[The Ghost of B A R P]

2 minutes ago, Skyline Drifter said:

It wasn't "varied". It was cancelled when Tesco eventually handed it back to the club (with a small exit payment as a bonus) at the club's request and under some pressure from the Council who had made handing it back a condition of granting planning permission for a further Tesco store in the town. In point of fact it couldn't be varied and that was part of the problem and why the club were desperate to get it back.

There is more bureaucracy in maintaining a Trust which will need to keep annual accounts, than there is in a lease which is a one off set up cost. Granted in the scheme of things not a significant financial cost but somebody's time in dealing with it no doubt.

Fair enough that last part could have been phrased better. The point stands though, it appears to be more a gesture than actually achieving anything different.

 

Ok, cancelled... but it didn't run for 999 years.

A trust certainly achieves something different from option 1 or option 2; we'll agree to differ on whether it achieves more than a lease with guarantees... but I really don't think you can call changing the legal ownership of the ground a 'gesture'. It's clearly more significant than that.

[vikingTON]

The fundamental point is that there is no benefit whatsoever to GC in forming this trust, and it is the Rae family's grasping self-interest to get 'their' money back that is the stumbling block.

No wonder Shoogly's talk every few years about interested buyers went nowhere, if they had the brass neck to ask them for all their money back that they spunked on a football club, despite not having actually increased the net worth of the club by a single penny since they took over. A shower of chinless wankers who couldn't be trusted to not rip out the copper wiring on their way out of the door unless there is a cast-iron guarantee in place, never mind play 'we'll watch the ground for you, honest mister' if fan ownership takes over.

Edited February 17, 2021 by vikingTON

[The Ghost of B A R P]

45 minutes ago, virginton said:

The fundamental point is that there is no benefit whatsoever to GC in forming this trust, and it is the Rae family's grasping self-interest to get 'their' money back that is the stumbling block.

Exactly why they should be asked the question.

[vikingTON]

1 hour ago, The Ghost of B A R P said:

Exactly why they should be asked the question.

We already know the answer to the question, it has been evident as soon as they put up their 'lol gies two million for it' options on the table.

 

[vikingTON]

Anyway, the gist of my survey response is that option 2 would be preferable if the debt was reduced significantly so that it could actually be paid off. If they want their precious car park so badly then let them keep it, who cares about that.

Neither option currently on the table spells anything but failure for a fan ownership model because GC cannot be trusted an inch and the burden/loss of assets is too great to remove them from the picture. Given that GC have proven time and time again over the last few years that they won't act in the best interests of the club as controlling shareholders, the idea that they're going to do anything other than f**k the club from outside as soon as they sniff a profit is no longer tenable. 

Edited February 17, 2021 by vikingTON

[The Ghost of B A R P]

20 hours ago, virginton said:

Anyway, the gist of my survey response is that option 2 would be preferable if the debt was reduced significantly so that it could actually be paid off. If they want their precious car park so badly then let them keep it, who cares about that.

Neither option currently on the table spells anything but failure for a fan ownership model because GC cannot be trusted an inch and the burden/loss of assets is too great to remove them from the picture. Given that GC have proven time and time again over the last few years that they won't act in the best interests of the club as controlling shareholders, the idea that they're going to do anything other than f**k the club from outside as soon as they sniff a profit is no longer tenable. 

Look, your view of the good faith or otherwise of GC is at this point no more than an assertion... although one I agree with. Anything that proves -- or maybe even disproves -- that assertion has to have some value. If they're genuine in their reasons about holding onto the ground, they have no valid reason to object to the ground being put in trust.

The other question is this: are you arguing that Morton owning the ground but still carrying debt is a better outcome than Morton having no debt but the ground being held in trust? Or do you acknowledge that trust/no debt is the best outcome, but just don't think it will happen?

[vikingTON]

A £500k long-term debt to pay off to have £2 million of assets actually on the books is better than wheeling away an asset into a trust and then having no asset backing for the club whatsoever. 

If we had two or three assets to dispose of then separating the stadium for extra security might make sense, but we do not.  The club would (still) have issues trading as a going concern if the stadium was kept off the books. It resolves a long-term problem but creates major short-term problems that any hit to cash flow (such as a spate of bad weather, or indeed a global pandemic) would expose brutally.

[accies1874]

He was ridiculously good for around half an hour against St Mirren before being subbed after 25 minutes the following game. Never started again.

[vikingTON]

I will take the ridiculously good against Saint Mirren and discard the clear evidence that we have another Dutch ringer, thanks very much. 

Unless we're planning to convert him into a centre forward then it's not likely to achieve much though, because beating seven players on the wing only for the cross to fall within six yards of Orsi/Oliver/Muirhead/'James Wallace' will not solve the fundamental issue with this team.

[SpoonTon]

On 17/02/2021 at 17:18, Skyline Drifter said:

It wasn't "varied". It was cancelled when Tesco eventually handed it back to the club (with a small exit payment as a bonus) at the club's request and under some pressure from the Council who had made handing it back a condition of granting planning permission for a further Tesco store in the town. In point of fact it couldn't be varied and that was part of the problem and why the club were desperate to get it back.

There is more bureaucracy in maintaining a Trust which will need to keep annual accounts, than there is in a lease which is a one off set up cost. Granted in the scheme of things not a significant financial cost but somebody's time in dealing with it no doubt.

Fair enough that last part could have been phrased better. The point stands though, it appears to be more a gesture than actually achieving anything different.

 

Sorry if I've skimmed over this point being made, but the important point is that:

'The lease will run for as long as MCT is the owner of Morton.'

Basically, best case scenario is that everything is fine in the immediate future - as long as it remains the best option for the club for MCT to be in charge. But in years to come if there was a viable option of a new owner wanting to take the club forward or a potential situation to build a new stadium, then we'd have to negotiate with whomever happens to hold power at GC at that time.

GC want to sell the club, but have no viable option to sell right now. So they want to hold enough power to ensure they get their cut if that situation occurs in the future. That will be a millstone around the clubs neck. 

Edited February 19, 2021 by SpoonTon

[The Ghost of B A R P]

8 hours ago, virginton said:

A £500k long-term debt to pay off to have £2 million of assets actually on the books is better than wheeling away an asset into a trust and then having no asset backing for the club whatsoever. 

If we had two or three assets to dispose of then separating the stadium for extra security might make sense, but we do not.  The club would (still) have issues trading as a going concern if the stadium was kept off the books. It resolves a long-term problem but creates major short-term problems that any hit to cash flow (such as a spate of bad weather, or indeed a global pandemic) would expose brutally.

You think carrying a 500k debt and owning the ground is better than having no debt and the ground secured in a protective trust, fair enough...

I can’t see why, though.

You talk about the ground as an ‘asset’, but it’s strange kind of asset, which can’t be used to derive (much) non-football revenue or sold (unless it’s to fund a bigger, better ‘asset’). All that can realistically be done on it at this stage is... play football and run the associated functions of a football club.

You seem to imply that having this ‘asset’ ‘actually on the books’ will facilitate some other kind of advantage, presumably access to credit? But that raises the question of why, in addition to the debt you’re happy to inherit, Morton should be borrowing money at all.

All a club in Morton’s position should need is a moderate overdraft. In fact, it would seem essential that the club is run to that discipline from year zero. And it seems pretty important to me, if fan ownership is going to have any chance of success, that there’s zero debt at year zero.

4 hours ago, SpoonTon said:

Sorry if I've skimmed over this point being made, but the important point is that:

'The lease will run for as long as MCT is the owner of Morton.'

Basically, best case scenario is that everything is fine in the immediate future - as long as it remains the best option for the club for MCT to be in charge. But in years to come if there was a viable option of a new owner wanting to take the club forward or a potential situation to build a new stadium, then we'd have to negotiate with whomever happens to hold power at GC at that time.

GC want to sell the club, but have no viable option to sell right now. So they want to hold enough power to ensure they get their cut if that situation occurs in the future. That will be a millstone around the clubs neck. 

That’s right and highlights the other main advantage of a trust... it’s future-proof.

The ground is protected against circumstances that might bring GC (or whoever owns GC at some point in the future) back into play. It’s also protected against any future owner who comes in if and when the fan-ownership experiment fails... which has to be entertained as a realistic possibility.

Put it this way: Hugh Scott would never have come near Morton if Cappielow had been owned in trust.

Or from another perspective, in the unlikely event that I had enough money to buy Morton, the first thing I’d do, as a material demonstration of good faith, would be to put the ground in trust.

[The Ghost of B A R P]

5 hours ago, accies1874 said:

 

 

He was ridiculously good for around half an hour against St Mirren before being subbed after 25 minutes the following game. Never started again.

 

All he has to be is better than Salkeld or McGuffie.

At this stage, I’ll take it.

[vikingTON]

35 minutes ago, The Ghost of B A R P said:

You think carrying a 500k debt and owning the ground is better than having no debt and the ground secured in a protective trust, fair enough...

I can’t see why, though.

You talk about the ground as an ‘asset’, but it’s strange kind of asset, which can’t be used to derive (much) non-football revenue or sold (unless it’s to fund a bigger, better ‘asset’). All that can realistically be done on it at this stage is... play football and run the associated functions of a football club.

You seem to imply that having this ‘asset’ ‘actually on the books’ will facilitate some other kind of advantage, presumably access to credit? But that raises the question of why, in addition to the debt you’re happy to inherit, Morton should be borrowing money at all.

All a club in Morton’s position should need is a moderate overdraft. In fact, it would seem essential that the club is run to that discipline from year zero. And it seems pretty important to me, if fan ownership is going to have any chance of success, that there’s zero debt at year zero.

How on earth is GMFC going to obtain access to a 'moderate overdraft' in the first place with hee-haw assets on the books? You need to put up security with the bank or any other non-buckshee lender to cover cashflow, in the same way that a personal loan would be tied to assets like a house. That is the practical function of having ownership of Cappielow, in addition to exercising full control over the club's future.

Any deal that leaves GMFC without the ground on its books leaves that it without any asset to demonstrate to creditors that it is a viable going concern, and you can safely bet that a bank is not going to accept non-binding MCT pledges to provide ongoing support. A deal that allowed GMFC to pay off up to £20k a year in the long run would be absolutely worth having, if it obtained that crucial financial flexibility. Otherwise we'd be running a glorified social club and not a proper business.

Edited February 19, 2021 by vikingTON

[The Ghost of B A R P]

25 minutes ago, virginton said:

How on earth is GMFC going to obtain access to a 'moderate overdraft' in the first place with hee-haw assets on the books? You need to put up security with the bank or any other non-buckshee lender to cover cashflow, in the same way that a personal loan would be tied to assets like a house. That is the practical function of having ownership of Cappielow, in addition to exercising full control over the club's future.

Any deal that leaves GMFC without the ground on its books leaves that it without any asset to demonstrate to creditors that it is a viable going concern, and you can safely bet that a bank is not going to accept non-binding MCT pledges to provide ongoing support. A deal that allowed GMFC to pay off up to £20k a year in the long run would be absolutely worth having, if it obtained that crucial financial flexibility. Otherwise we'd be running a glorified social club and not a proper business.

I have a moderate overdraft. It is not secured against the house I live in (in fact, if I was paying less for my mortgage, the bank would let me have more in overdraft). But I don’t want more; overdrafts are bad for you in the long run (cf. the bank of Douglas Rae, deceased).

Morton would easily obtain overdraft facilities to ensure there were no cash-flow blockages, based on its turnover.

Don’t get me wrong, the compromise you’re describing isn’t terrible... but it isn’t the best that can be had.

In that connection, I note you didn’t address any of the longer-term issues.

 

[Skyline Drifter]

Good luck in persuading any bank to give an overdraft to a football club without a personal guarantee from one or more directors. Ground or no ground thats not happening.

[parsforlife]

21 minutes ago, Skyline Drifter said:

Good luck in persuading any bank to give an overdraft to a football club without a personal guarantee from one or more directors. Ground or no ground thats not happening.

Aye.  They got absolutely fucked in the early 2000s and now banks see football clubs as a very risky investment,  and certainly aren’t going to view grounds which often have an inflated book value as a guarantee,  

Lets say Morton budget for an 8th place finish,  they want an overdraft to cover postponed games,  the instant question of the bank will be ‘what if you go finish below 8th?’  What if you go down and turnover is significantly reduced, will you still pay us back?  Can any club give an answer that would satisfy the bank? 

[vikingTON]

1 hour ago, The Ghost of B A R P said:

I have a moderate overdraft. It is not secured against the house I live in (in fact, if I was paying less for my mortgage, the bank would let me have more in overdraft). But I don’t want more; overdrafts are bad for you in the long run (cf. the bank of Douglas Rae, deceased).

You are not a business and businesses do not get the extent of overdraft needed to deal with a cash flow problem without giving security for it. 

'Overdrafts' i.e. short term access to credit are a simple fact of life for any business that has a variable cash flow like a professional football club. Long-term debt obligations like the IOUs that the Raes kept writing to their own company and lying through their teeth about are not.

Quote

Morton would easily obtain overdraft facilities to ensure there were no cash-flow blockages, based on its turnover.

Complete fantasy island nonsense. There is nothing to provide security other than GC's pinky pledges (now broken) and the stadium on GMFC's books at the moment. Turnover that goes straight out the door again is not capital. The club has no track record of profit-making (spectacularly the opposite) to justify that as a basis for credit. 

Quote

In that connection, I note you didn’t address any of the longer-term issues.

There aren't any credible long-term issues to address. If GMFC had the stadium and the car park then you could reasonably put the stadium into a separate trust for safekeeping. Without both - which GC show absolutely zero sign of giving up - you cannot have both the stadium magically protected forever and a functioning professional football club. Your idea is the path to being some stupid wee social club outfit and no more then that, whereas accepting a long-term, low-cost debt while obtaining an asset worth 4x that on the books is a financially sound path. I'd rather it was zero pounds and the car park as well, but that's not a realistic goal based on their starting position.

Edited February 19, 2021 by vikingTON

[The Ghost of B A R P]

8 hours ago, virginton said:

There aren't any credible long-term issues to address.

And with that piece of classic ‘fantasy island nonsense’, I bid you farewell...

[vikingTON]

Don't let the door hit your arse on the way out then.