Franconian Royal needed to get in before someone shuts this down.
But are we basically saying that the 90mill is just a bubble that never bursts? been reading all of the comments made by the knowledgeable ones here, but still can't get my head around it.
Someone sent the this the other day, which helped me get my head around it. I'm taking his word for it, as I'm not an accountant!
At the moment, we don't know exactly how the deal was structured, as we have no sight of the accounts. We'll have to wait for them to be published to really get into it. This is how I see it working though:
Imagine Dai had put £90m in cash into a giant glass jar and gave it to the club. The money could have come from Dai's pocket, he could have borrowed it from somebody, or it could have been a combination of the two.
The club then spent that £90m cash, but instead of Dai asking for that £90m back in cash, he instead said to thw club he sees the value of the glass jar as minus £90m.
When Dai sold the club to Couhig, he sold the glass jar as part of the deal too. Dai chose to sell everyhing for £25m, so Couhig owns the club, the training ground, the stadium and this glass jar.
Dai has lost the £90m. If he did borrow any of that money, Dai still has to repay it. That responsibility is his alone and divorced from the club.
This is where it gets a bit complex...
When Couhig decides to sell, he can sell that glass jar with the club again. However, if he sells the club for £35m - a profit of £10m - he can reduce the value of the glass jar to minus £80m. From a tax point of view he would be reducing the value of the loan to the club and that £10m is therefore tax free.
It's in Couhig’s interest to keep the debt with the club for that reason, but it is just an amount on the club's accounts. Crucially, the responsibility for paying back the original debt was retained by Dai when he sold up.
All that being said, Couhig could take back the money at any point by selling off assets, etc, but he has said multiple times that's not his end game.
