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Falcons in immediate crisis
Discussion started by Innings , 26 March, 2020 23:01
Falcons in immediate crisis
Innings 26 March, 2020 23:01
As is now common knowledge, Falcons have gone further and placed all paid staff, on- or off-field on furlough. The Guardian seems to have covered the story pretty well - words that I never imagined writing.

[www.theguardian.com]

This may not be the last such story. If clubs cannot pay, or cannot trade whilst solvent, a legal requirement for staying in business, then the professional game will not be able to pay, regardless of however many lawyers say their players are contractually entitled to the money.



Innings

Points win matches: tries win hearts and minds.



Edited 1 time(s). Last edit at 26/03/2020 23:02 by Innings.

Re: Falcons in immediate crisis
myleftboot 28 March, 2020 04:17
It's incredibly difficult. Cutting wages to zero seems a rather poor response, they have a duty of care, especially to those brought from overseas.

Re: Falcons in immediate crisis
PhillFez 28 March, 2020 08:44
Difficult times all round, not least with a legal challenge from Ealing against automatic promotion for Falcons. I do find it irritating that Dean Richards described the challenge as “distasteful”, I wonder what he thinks the rugby fraternity thought of his actions at Quins - much more than distasteful!

Re: Falcons in immediate crisis
Innings 28 March, 2020 09:23
The fact that Falcons have had to cut the wage bill overnight to zero hints at all sorts of possibilities, and not having any actual knowledge, my mind turns to two:

1/. There is no money.

2/. There is some money but not enough to get them as far as the 20-21 season's beginning if any is going on wages.

When this is all done, I like to think that those who treat their staff like expendable commodities will find that one cost will be that they have to pay a premium to attract people to work for them, especially any who were affected by this situation. But, perhaps the club will be playing in 9th tier rugby anyway, having gone broke and re-formed, so salaries won't be an issue for about ten seasons, if ever.

The folks in Newcastle must scratch their heads, first the egregious MIke Ashley, now this.



Innings

Points win matches: tries win hearts and minds.

Re: Falcons in immediate crisis
CharlieDog 28 March, 2020 12:40
Quote:
myleftboot
It's incredibly difficult. Cutting wages to zero seems a rather poor response, they have a duty of care, especially to those brought from overseas.

As a Falcon, it's worth pointing out there's a big difference between fact and fiction...... even you guys must understand that

Re: Falcons in immediate crisis
bigfecker 28 March, 2020 15:18
Quote:
Innings
The fact that Falcons have had to cut the wage bill overnight to zero hints at all sorts of possibilities, and not having any actual knowledge, my mind turns to two:
1/. There is no money.

2/. There is some money but not enough to get them as far as the 20-21 season's beginning if any is going on wages.

When this is all done, I like to think that those who treat their staff like expendable commodities will find that one cost will be that they have to pay a premium to attract people to work for them, especially any who were affected by this situation. But, perhaps the club will be playing in 9th tier rugby anyway, having gone broke and re-formed, so salaries won't be an issue for about ten seasons, if ever.

The folks in Newcastle must scratch their heads, first the egregious MIke Ashley, now this.

Poor situation all around. If I was a Falcons player I would be asking what happened to the CVC money?

I suspect the player on loan to Sale might not want to go back to a broke club? Queue offer from Sharks.

Re: Falcons in immediate crisis
Innings 28 March, 2020 18:25
Quote:
Queue offer from Sharks.
If Sharks are making offers, there will be a queue, because few other clubs will be. The cue will be if the offer you suggest is actually made.
Pedants of the world unite.



Innings

Points win matches: tries win hearts and minds.

Re: Falcons in immediate crisis
myleftboot 28 March, 2020 19:57
Quote:
CharlieDog

As a Falcon, it's worth pointing out there's a big difference between fact and fiction...... even you guys must understand that
Er, it seems to be fact I'm afraid. Falcons are not denying that staff have been placed on furlough, ie zero wages. Yes rugby players earn more than many of us, but from that to nothing?

Re: Falcons in immediate crisis
1876-Fez 28 March, 2020 20:22
Quote:
myleftboot
Quote:
CharlieDog

As a Falcon, it's worth pointing out there's a big difference between fact and fiction...... even you guys must understand that
Er, it seems to be fact I'm afraid. Falcons are not denying that staff have been placed on furlough, ie zero wages. Yes rugby players earn more than many of us, but from that to nothing?

If on furlough are they not able to claim 80% up to 2.5K?

"By doing so, this allows your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month."
BUT
"To qualify for this scheme, you should not undertake work for your employer while you are furloughed, according to gov.uk." .......so training, talking to coaches, skills training.... grey areas?



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Re: Falcons in immediate crisis
Innings 28 March, 2020 23:40
Careful - You know what PRL are like when it comes to grey areas!



Innings

Points win matches: tries win hearts and minds.

Re: Falcons in immediate crisis
AlanE 29 March, 2020 06:51
Quote:
Innings
Quote:
Queue offer from Sharks.
If Sharks are making offers, there will be a queue, because few other clubs will be. The cue will be if the offer you suggest is actually made.
Pedants of the world unite.

The 'Unite' meeting for the pedants was scheduled for Kew Gardens. Unfortunately that has temporarily closed.



I was 17 miles from Graybridge before I was caught by the school leopard

Re: Falcons in immediate crisis
GazzaFez 29 March, 2020 13:43
Last man standing. It seems that talk of the emergence of a European Super League are maybe not quite so fanciful after all?

Re: Falcons in immediate crisis
AlanE 29 March, 2020 14:24
Well, back to topic (for me), I really hope Falcons come through this successfully as they have always been one of my favourite clubs (despite a slight animus towards their current DoR).

I lived for a few years in the North East and played against Gosforth, the club from which Newcastle Falcons emerged through larval and pupal stages in the 90s into the butterfly of today.

The thought that they might go out of business and out of the sport is one of the more depressing items in the awful current newsround. Good luck and best wishes to the club and all their supporters.



I was 17 miles from Graybridge before I was caught by the school leopard

Re: Falcons in immediate crisis
Roger G 29 March, 2020 17:01
Quote:
AlanE
The thought that they might go out of business and out of the sport is one of the more depressing items in the awful current newsround.

Really? Compared to the prospect of thousands dying?

Don't get me wrong - I hope they survive as a club, but a bit of perspective and sensitivity please.

Edit:
On reflection the above may have been a bit terse. Sorry for any offence caused Alan - not intentional. I guess what I meant was that by far the most depressing part of the current global situation is the number of deaths that will inevitably occur. The inconvenience and stress that we all feel at the moment is also a major worry. No doubt there will be businesses and individuals (including rugby clubs and players) that suffer in financial and other ways, either directly or indirectly because of the virus, which is sad and depressing in it's own way, but isn't in the same league as the grief and life changing circumstances of those who have or will lose loved ones.



Edited 1 time(s). Last edit at 30/03/2020 11:13 by Roger G.

Re: Falcons in immediate crisis
AlanE 30 March, 2020 14:02
Quote:
Roger G
Quote:
AlanE
The thought that they might go out of business and out of the sport is one of the more depressing items in the awful current newsround.

Really? Compared to the prospect of thousands dying?

Don't get me wrong - I hope they survive as a club, but a bit of perspective and sensitivity please.

Edit:
On reflection the above may have been a bit terse. Sorry for any offence caused Alan - not intentional. I guess what I meant was that by far the most depressing part of the current global situation is the number of deaths that will inevitably occur. The inconvenience and stress that we all feel at the moment is also a major worry. No doubt there will be businesses and individuals (including rugby clubs and players) that suffer in financial and other ways, either directly or indirectly because of the virus, which is sad and depressing in it's own way, but isn't in the same league as the grief and life changing circumstances of those who have or will lose loved ones.

I did think of this, Roger. The actual deaths, and the prospect of others is incredibly sad; I think that is different from depressing. Sport has the capacity to light up our lives and I find the prospect of losing that, even if it were only in the NE, as very depressing, but we/they would get over it and other things would fill the void. For those who have lost friends and relatives, that - sadly - leaves a void which does not get filled.
Thanks for the edit, Roger, and no offence taken; I certainly did not, and do not, intend to show any lack of empathy towards those who are suffering directly.



I was 17 miles from Graybridge before I was caught by the school leopard

Re: Falcons in immediate crisis
Leipziger 10 April, 2020 10:08
Falcons fan in peace, joining the discussion late - it's not surprising that we have furloughed staff and players as we aren't a profitable company (like 11 of the other Premiership shareholders, I believe) but I agree that our players might, as with those from many other clubs, be justifiably asking what has happened to the CVC money. I saw a suggestion that one club (can't remember which, but it wasn't us or you) had invested it in new academy facilities - that's a very quick spend of over £10m.

As for the prospect of a club going out of business being sad, of course it doesn't quite compare to people dying, but a rugby club going out of business isn't any different to any other company, at the end of the day it's people's jobs on the line.

Stay safe everyone :-)

Re: Falcons in immediate crisis
Innings 10 April, 2020 13:36
A sad fact of life is that a great many companies will go under. Professional sport companies seems to work on a wholly unstable premise, running at a marginal or substantial annual loss, relying on wealthy owners to underwrite the losses.

It has been a paradox of austerity that the vast increase in money supply after the financial crash went more into increasing private and corporate debt than into fixing the public debt crisis, and the chickens are coming to roost, first in chronically weak areas like sports companies. Behind the ones that have never had a sustainable business model come others. Many too few have any reserves, and until this crisis some like Diageo, spirits worldwide, were in the middle of exercises to raise more debt, billions in their case. Often, as with Diageo, this has not been to invest or hold as a secured reserve but to buy back and cancel shares, thereby doing nothing but increase the overall debt, simultaneously reduce the capital base and leverage the company even more than it was already. Then consider already over-borrowed ones like Carnival Corporation, cruise ships, gross debts $19 billion, current income $0, current expenses about $40-50 million per day. Or look at Intu, whose UK property assets, largely shopping malls, had collapsed by 34% in two years to the end of 2019, to £6.02 billion and perhaps that lower value has fallen by another 10-15% this year so far, in which case to maybe £5 billion, which is not good when they had £5 billion of debt at the end of 2019. All three companies, and thousands like them around the world, used debt cleverness as their substitute for building sustainable ones. The chickens, as I say, are coming home to roost. Sports franchises, with overpaid employees, are among the many soon to fall off their perches.



Innings

Points win matches: tries win hearts and minds.

Re: Falcons in immediate crisis
ComeOnSarries 10 April, 2020 13:52
Agreed that there is going to be plenty of casualties in the wider economy from the current pandemic so the failure of a few professional sports clubs (whatever sport) whilst sad will not be that noteworthy. My biggest fear is that for some weaker countries this will push both the sovereign and their banking system into default which will have even larger consequences. One thing is for sure is that much of the debt being incurred now will not be repaid in my lifetime.

Re: Falcons in immediate crisis
TonyTaff 12 April, 2020 19:09
Quote:
Innings
A sad fact of life is that a great many companies will go under. Professional sport companies seems to work on a wholly unstable premise, running at a marginal or substantial annual loss, relying on wealthy owners to underwrite the losses.
It has been a paradox of austerity that the vast increase in money supply after the financial crash went more into increasing private and corporate debt than into fixing the public debt crisis, and the chickens are coming to roost, first in chronically weak areas like sports companies. Behind the ones that have never had a sustainable business model come others. Many too few have any reserves, and until this crisis some like Diageo, spirits worldwide, were in the middle of exercises to raise more debt, billions in their case. Often, as with Diageo, this has not been to invest or hold as a secured reserve but to buy back and cancel shares, thereby doing nothing but increase the overall debt, simultaneously reduce the capital base and leverage the company even more than it was already. Then consider already over-borrowed ones like Carnival Corporation, cruise ships, gross debts $19 billion, current income $0, current expenses about $40-50 million per day. Or look at Intu, whose UK property assets, largely shopping malls, had collapsed by 34% in two years to the end of 2019, to £6.02 billion and perhaps that lower value has fallen by another 10-15% this year so far, in which case to maybe £5 billion, which is not good when they had £5 billion of debt at the end of 2019. All three companies, and thousands like them around the world, used debt cleverness as their substitute for building sustainable ones. The chickens, as I say, are coming home to roost. Sports franchises, with overpaid employees, are among the many soon to fall off their perches.

Strewth, I take it that you have shorted these stocks!



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Re: Falcons in immediate crisis
Innings 12 April, 2020 22:32
Quote:
Tony Taff
Strewth, I take it that you have shorted these stocks!

In forty years I never shorted stocks. The old saying applies: The markets can be wrong for longer than you can be solvent.

However, I was never averse to writing put and call strategies on stock I didn't like.



Innings

Points win matches: tries win hearts and minds.

Re: Falcons in immediate crisis
TonyTaff 13 April, 2020 14:09
Quote:
Innings
Quote:
Tony Taff
Strewth, I take it that you have shorted these stocks!

In forty years I never shorted stocks. The old saying applies: The markets can be wrong for longer than you can be solvent.

However, I was never averse to writing put and call strategies on stock I didn't like.

Fairy nuff.

When a headhunter was enticing me toward a role as FD of merely a division of a quoted bank, she sweetened the pill by throwing in share options on the parent. Being sceptical about the abilities of the main board, I enquired whether I might get puts as well!

Needless to say, negotiations broke down. I dodged a bullet smiling smiley



£721.05 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication.


(*) As at October 31, 2018.

Re: Falcons in immediate crisis
boomer! 13 April, 2020 17:35
Quote:
Innings
Quote:
Tony Taff
Strewth, I take it that you have shorted these stocks!

In forty years I never shorted stocks. The old saying applies: The markets can be wrong for longer than you can be solvent.

However, I was never averse to writing put and call strategies on stock I didn't like.

You wrote "calls" ?



It's not the size of the dog in the fight, it's the size of the fight in the dog.

Re: Falcons in immediate crisis
Innings 14 April, 2020 00:38
Sold calls on stock owned, out of the money, when my partner and I thought the stock over-priced. Bought puts, well below the money, using the call premium. If we got called, we used the sale proceeds to do it again. It was good if the stock was to go ex-div during the option period, the option pricing always failed to price the div. adequately, reducing the overall strategy risk. I did that trade about six ex-div periods with RBS stock, convinced the bank was a basket case, just about washed its face until the financial crash when it cashed in in a big way. The overall cost was about the same as a straight short sell. It was all a long time ago now, been retired for nearly ten years, but it was OK if you had a real conviction on a stock being very over-priced. We were certain that the banking system was shot, and RBS the worst of them all. They had less than 1% margin between stated asset values and very real liabilities.

Although what this has to do with rugby is beyond me!



Innings

Points win matches: tries win hearts and minds.

Re: Falcons in immediate crisis
There's 35 seconds to go 15 April, 2020 22:39

Re: Falcons in immediate crisis
Mac L 21 April, 2020 10:49
Sorry, but I find the last entries something akin to a foreign language.......

Re: Falcons in immediate crisis
Innings 21 April, 2020 15:58
Quote:
Mac L
Sorry, but I find the last entries something akin to a foreign language.......

Fortunately, it was one language that lots of people thought they understood, but didn't. In any market that gives opportunities for those who try to master the reality rather than the jargon. Of course, now I'm over 70, 'going short' would tend to have different connotations.



Innings

Points win matches: tries win hearts and minds.

Re: Falcons in immediate crisis
TonyTaff 24 April, 2020 08:00
I am rather younger, but am often caught short!



£721.05 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication.


(*) As at October 31, 2018.


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