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   WWW.RLFANS.COM • View topic - Bulls finances 'considerably worse than originally thought'
isaac1 wrote:
As has been the case on this forum for the last six or seven weeks, there is much assumption and guesswork, punctuated by Adey giving us his reasoned ideas as an acountant. theres the usual, "hood's a liar" versus "Caisley scuppered the pledge" and the truth is we will never know!

All I ask is: Why did the club announce Elliot Whitehead's new contract when they did? If we are talking about knowingly trading whilst insolvent, this is a bombshell for Hood and Bennett isnt it?

OK - Worst case scenario - Administration.

The clubs financial commitments going forward on contracts already signed are cancelled. This would include suppliers, players and staff. The newco is then able to negotiate new contracts going forward. we may lose some dead wood, but also risk losing some that we would want to keep. Would the contract with Bradford MDC for Tong be cancelled??? Do we own, or rent Tong? I am sure that as part of the review, these are the type of discussions taking place, not just looking at where we are, but what we need to function!

the club will receive a points deduction upon entering administration - costing a possbile playoff place (but perhaps not!) and a likely share of prize money.

We may be risking our license at the next review for SL - but are we really??? would the RFL bin the BUlls where it had already kept Wakefield in under similar circumstances, and financially supported the London club and the Welsh club over a number of years? Also, if we are not in SL, what is ODsal worth to them? This could be Hood's legacy. Giveing the RFL odsal to protect our Superleague status!

Our reputation to business partners and ability to get anything on credit will go through the floor - but isnt it there already?

A less complicated shareholding is created. The current shareholders are annoyed, but perhaps in a year or two of prudent trading, a new owner comes along and buys Caisley et al out? Long term stability could be acheived much more quickly?

I am no expert, and have no more intimate understanding of running a sports club than anyone else on here. Could it be that simple?


It COULD be, if:

1 - the incoming lot voluntarily agree to pay all the creditors (mainly HMRC, employees and trade) in full, so the only material losses are to the major shareholders (oh dear oh dear how sad...).

2 - the council agree to transfer the Bulls' obligations under the Odsal Settlement agreement to Newco.

3 - the RFL agrees to transfer the Odsal lease to Newco (it COULD throw the Bulls out and let someone else play at Odsal)

4 - all the other organisations with contracts with the Bulls agree to transfer the contracts to Newco

5 - there is no points deduction, because administration will be seen to clearly have been a device to sort out the ownership and has NOT caused loss to creditors.

6 - the likes of Noble and Tasker and any others friendly to the new lot are given key jobs (whatever they are) only if they bring an improvement compared with the present incumbent.

Plus a few others that I could add if I had more time.

Some wish list, that!

WILL it work out like that? Page forward a few weeks and we'll have a better idea.
Adeybull wrote:
Had he settled with Leeds, that act would have immediately rendered Bulls insolvent. He would have immediately have had to put the club into formal insolvency. ...


I'd have thought that would depend on the terms of the settlement. If they included terms for payment on the drip, and if we could (theoretically) still therefore afford to pay our debts as and when they fell due . . .?
Ferocious Aardvark wrote:
I'd have thought that would depend on the terms of the settlement. If they included terms for payment on the drip, and if we could (theoretically) still therefore afford to pay our debts as and when they fell due . . .?


Indeed. MB I think was (perfectly reasonably) putting the case for a settlement payable in full immediately though, which the club obviously could not pay, as a means of triggering administration.

Another point of law: HAD the club said to Leeds "OK gazza, fair cop. Send us the bill for £3.2m" could that contract for settlement have been set aside through a court action by a third party? And could the company have repudiated the contract by saying the directors acted ultra vires or whatever?
Adeybull wrote:
Indeed. MB I think was (perfectly reasonably) putting the case for a settlement payable in full immediately though, which the club obviously could not pay, as a means of triggering administration.

Another point of law: HAD the club said to Leeds "OK gazza, fair cop. Send us the bill for £3.2m" could that contract for settlement have been set aside through a court action by a third party? And could the company have repudiated the contract by saying the directors acted ultra vires or whatever?


Highly unlikely, to the point of near-impossibility.
It's all history now in any case, and while it might have been a major contributor to the current black hole as far as I am aware all Harrisgate payments have been made, so the battle to come is of more concern.

Several posters seem very concerned about wrongfull trading, and directors personal liability - but the reality is unless they find a few million in a Swiss bank account, or a suitcase full of phoney invoices (a la Rangers) actually in the hands of the villians - the chances of any of the directors actually having action taken against them is rather less likely than Mr Zucherberg handing over all the proceeds from the Facebook IPO to the Odsal fighting fund. Our CPS couldn't even have made the false tax return rap stick on Al Capone. All the past, present and future directors of the Bulls would be more than adequately covered by the" acted in good faith on their evaluation of the information to hand" defence, plus I think it very unlikely that any of them have benefited financially from their directorships at the Bulls - infact they are all probably net cash injectors. Suspect they only current player in the Bulls saga to make any money out of rugby league is CC in his role as a players agent!!!!!!
exactly Nr, water under the bridge and cash gone out of the bank, nor would £300k be worth putting the club into admin for.

Awford gate is more relevant to the clubs current state. FAced with virtually fixed costs Hood and Bennett took the risk of the pledge to kick start an increase on crowds, basically as a loss leader that would lead to the pot of gold at the rainbows end and other metaphors. The risk: that the team did not perform. and it did not. so year two of the pledge was a damp squib compared to what it could have been if we had made the playoffs last year. more customers paying more this year would help to bridge the revenue v cost gap. As someone says, the squad could be cut to match the two. Theres no spare in Admin costs, but moving from Odsal would save money and help to match income and expenditure and minimise any cuts to the players budget. But if the figures for a move do stack up then administration may be needed to eliminate the contingent liability, just depends on exactly what the agreement says/how willing BMC would be to enforce it etc. It certainly is not enough for the review, if it is truly strategic, to simply say what the liabilities are, it needs to identify why they are what they are and ways of dealing with those reasons. One thing is for sure: if Harrisgate is mentioned in the review it will only be in the small print.
martinwildbull wrote:
exactly Nr, water under the bridge and cash gone out of the bank, nor would £300k be worth putting the club into admin for.

Awford gate is more relevant to the clubs current state. FAced with virtually fixed costs Hood and Bennett took the risk of the pledge to kick start an increase on crowds, basically as a loss leader that would lead to the pot of gold at the rainbows end and other metaphors. The risk: that the team did not perform. and it did not. so year two of the pledge was a damp squib compared to what it could have been if we had made the playoffs last year. more customers paying more this year would help to bridge the revenue v cost gap. As someone says, the squad could be cut to match the two. Theres no spare in Admin costs, but moving from Odsal would save money and help to match income and expenditure and minimise any cuts to the players budget. But if the figures for a move do stack up then administration may be needed to eliminate the contingent liability, just depends on exactly what the agreement says/how willing BMC would be to enforce it etc. It certainly is not enough for the review, if it is truly strategic, to simply say what the liabilities are, it needs to identify why they are what they are and ways of dealing with those reasons. One thing is for sure: if Harrisgate is mentioned in the review it will only be in the small print.


I'd agree we need to look forward more than back, though I'd disagree that the Orford business was more relevant than Harris; it is more recent, but on the assumption that both are concluded, they are both a part in why we are where we are, with the losses of the Harris business being a greater part.

Your assessment of the pledge is a reasonable one and, as you rightly say, it hasn't worked out, though given it was after a very similar, successful and much lauded scheme at City it was a reasonable attempt to reverse the decline in gates. I don't think it was necessarily badly thought out (though I've clearly not seen the projections) but it was done with the backdrop of one of the more disastrous seasons of recent years, which whilst more than unfortunate, isn't something that could have been foreseen.

I think, leaving aside the position viz a viz BMC, it's far from certain that moving away from Odsal would bring any relief as the (relatively) short journey to VP showed, with attendances dropping away, even in a period of outstanding success on the field. At the end of the day we came back to Odsal because we couldn't afford to stay at VP. Though obviously the 'Odsal settlement' money would have been a big factor. Though, for similar reasons, along with 'Harrisgate', if it is mentioned in the review, I don't suppose, how the settlement was spent, will get out of the small print either.
The uncertainty that Awford created by his antics before the start of last season is I believe a major factor in the failure of the team and therefore pledge. We ended up with Briggs and Herbert as half backs, followed part way into the season by ben jeffries. No settled half backs = no settled team. Harris perhaps caused the need for, but did not affect the failure of the pledge, Awford did not cause it but most certainly did affect it. In my opinion.

The pledge in the circumstances was the only option. At the time I described it as pulling ourselves up by our boot straps, because it was the only way to reverse the decline with no external investment to rely upon.

Regarding Odsal, Caisley fully knows the risks. this is from his statement in the 2002 accounts: “it is hoped that a return to playing at Odsal Stadium will go a long way to correcting this position (of lower income at VP due to lower crowds leading to lower secondary income), although there will be SIGNIFICANT INCREASED OVERHEADS as a consequence of the club taking on board the STADIUM RUNNING COSTS.”

at the time he said that, the gate at VP was significantly higher than in 2010 at Odsal. the following graph shows the numbers. The first years are taken from the respective statutory accounts chairmans reports, Caisley then stopped saying what they were, and the later years are my own calculations derived from Wikipedia. and as you can see in 2010 our average gate of 8000 at Odsal was aprox 4000 lower than the VP 2001, but with significantly increased overheads. if as Coulby implied, season ticket costs are going to significantly go up, without any investment an average gate of 8000-9000 is about as good as you could expect. Which will not cover Odsals overheads.
Image

So Caisley knows the score, it has not changed. But if he has suddenly worked out a way to stay at Odsal and get the crowds back up despite not having done so for the last 8 years (and having for the last 6 years delegating the problem to Hood) then I will happily get behind him but most importantly the team. a team that without any help from Caisley has picked itself up and got into a playoff position.
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martinwildbull wrote:
So a team that without any help from Caisley has picked itself up and got into a playoff position.

And gained a position of impending insolvency.

Make no mistake, no matter what adverse financial situation Hood took over he is responsible for his period of tenure.
Selling seasons tickets for £100 x 10,000 = £1M was never enough to make a long term contribution to running costs.
It did however cover a short term cash fix back in October, which of course had all been gone by January, leaving an ongoing VAT liability of approx £12,000 per home match in the future.

There MUST have been indications to Hood and his BOD that the business viability of Bradford Bulls was perilous for at least the last two years.
It MUST have been clear to them that the cash flow was perilous for at least the same period.
We hear that when the bank called in their overdraft in January 2012 it was circa £500,000. Whatever the real value it had risen from £111,447 on 31/12/2010 per the Bulls accounts.
That they borrowed shucks of money from the RFL that they could not repay and sold the Bulls ground lease to pay for it is another example of cash outflow.

All leads to a horrendous amount of cash outflow from 31/12/2010.
Hood does have some questions to answer
martinwildbull wrote:
The uncertainty that Awford etc....


I don't doubt for second the that Orford caused many problems on the playing front, not only that he tied up a large proportion of our 'cap', but when he was back in Aussie, 'playing silly beggers', it meant we couldn't sign a replacement. He effectively blighted two seasons as by the time it was sorted we were never going to get another (quality) half for the following season. If you look at the, maybe unquantifiable, losses, like the resultant poor performances causing crowds and, as a consequence, income to fall, it probably ranks somewhere up with the more direct losses incurred due to the Harris signing.

There's no doubt though that, if we have any feeling for the club, we'll have to get behind the team and whoever is in the driving seat. Whatever the failings of the past, and there have been many, we have to go forward with what we've got.
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