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Burnley F.C. and the price of ambition · Minnows Football

• Sam: Welcome to the Minnows Football Podcast. It's Thursday, October fifteenth. I'm your host, Sam Martin. so much football going on this week with doubleheader with weekend and midweek games across the championship. But today, we're gonna do something a little different. We're gonna draw our focus to one specific club, and that club is Burnley FC, a club that occupies a big space in the English football landscape. In a club known for years of punching above its weight for yo-yoing up and down, especially of late between the top flight, the Premier League, and the championship. And while I was putting this all together, they sat winless on the bottom of the table. But good news, they've since broken that winless streak, came out and thrashed Watford on the weekend, and then followed up with a two-two draw against Charlton. So maybe this is all changing and and what we're going to go over today is going to be null and void in a few weeks of undefeated football, but I don't think so. they sit here today, Burnley, twenty first in the championship, just above the relegation zone. And most recently, this last year in particular, they've been a club that's been more and more in the spotlight because of their ownership. And much was written between publications like The Swiss Ramble to the Elk, iPaper, BBC, lots of familiar publications about the club's financial position after they released their finances in April and All the way through to the last month, those finances were kind of poured over by experts. And I wanted to look at those numbers again, not to make any new revelations specifically, but to try to explore whether the way the club was being run was making the most of the asset that was Burnley FC from the ownership side. And then from the fan side, whether the way the club was being run was compatible with the soul and the spirit and the heritage of the club and the town and its supporters. And I was trying to answer this central question that I don't think is just limited to Burnley, but is epitomized by Burnley in a way at the moment, which is why do things feel so off here? This is not a situation where you have sort of your traditional negligent owner or a hostile owner or an absent owner. This is something else entirely. And I wanted to figure out what it was. And after digging into that question a little, I came across another question that I think. maybe more specific to Burnley, but again has repercussions across other clubs, which is how do you survive without sustained success? This is something that runs up and down the entire gamut of the English football pyramid, but also other leagues. How do you keep going when you don't have a club that is just winning all the time? And so I'm going to try to answer these questions today. And I'm going to do so by digging into the financial part of the acquisition back in 2020. When Alan Pace and ALK Capital bought the club from Mike Garlic. I want to talk about the nature of Burnley as a place and as a club and its rich heritage as a fan base. And then finally I want to go over the period of time between ALK's acquisition of a second club and where they stand today and try to understand how these two pieces and the ownership ambitions of ALK Capital and the fan base and heritage of Burnley FC might be at loggerheads for the foreseeable future. Well let's begin with some words from Alan Pace speaking soon after he acquired Burnley FC in twenty twenty. So this is the original promise from Alan Pace. Trust begins with a promise. And in this case, Pace's promise is that over time you will see that his decisions and the decisions of the ALK Capitol and and the the board of Burnley are gonna be done in order to benefit the club. And that the new owners are genuine, sincere, and responsible in his words, and that the decisions they're making are the right way to set up Burnley for the greatest chance at being successful in the future. Let's just start here by reminding ourselves what state Burnley was in prior to the ALK Capital acquisition in December of 2020. They had 42 million pounds of cash on hand. In the prior decade, they'd spent six seasons in the Premier League on what was one of the smallest wage bills in the EPL, and in many years was the smallest. They had five seasons in the championship, two with promotion. And Mike Garlick, the previous owner, had the kind of maybe perfect pedigree is not quite the right way to say it, but the kind of typical pedigree of a small club owner. He was born in Burnley. He'd made his fortune as an entrepreneur in the international IT recruitment space, as, you know, IT and and computers were booming in the nineteen eighties. And he'd worked his way up from the board, from a part owner to become co-chairman and then chairman across seventeen years. And the way he ran the club was as a profitable, self-sustaining, debt-free entity. And importantly, he partnered with Sean Dyke across the 2010s to create this identity of Burnley, which became synonymous with the club, this kind of hard-scrabble, do more with less approach that was a really cohesive unit between the manager and ownership. And the only thing that was odd about Garlic's ownership of Burnley was who he chose to sell to in 2020, when he owned roughly 49% of the club at that time and then chose to sell his stake to ALK Capital for a deal valued between 170 million and 200 million pounds reportedly. And the reason it's odd is because the financial structure of the takeover goes completely against the way that Garlic has run the club up until that point. But it's also not odd because it was probably the best offer on the table and maybe the only offer on the table. And something that Garlic wanted to do to move on to do other things. And you gotta remember the idea of the good Samaritan owner, someone who's there just really to benefit the the community and and the club and its fans, that has to be taken with a grain of salt. These are business people. There's a myth, very prominent myth these days around the benevolent billionaire. And it's the same thing around football club owners. They They often want to do what's best for the community, but the reason they became successful business people is they made good business. And that's something that Garlic does. He sells his stake for this this great sum, and then he moves on. And what's interesting about Garlic moving on is that he's gone on to build his new portfolio of clubs. He's got three clubs FC Antiquara, Spanish third tier side, St. Joseph's FC, a Gibraltar Gibraltar. Gibraltarian, how do we say a Gibraltar? Gibralton, top flat club. And then last year bought Cheltenham Town and League Two. And he's running all three of those clubs in the same way that he ran Burnley over so many years with this commitment and this declared commitment to sustainable, organic, debt-free business. Garlic has three core principles of football club ownership, as he states it. Live within your means, which basically means manage costs and increase revenues in places where there's opportunity. He's a believer in utilizing player development and player trading as a great pillar of commercial revenue growth, but still doing that in a debt-free way. Infrastructure growth, rather than spending recklessly on massive player wages to force immediate promotion, direct funding at improving facilities, direct your funding at improving facilities, youth academies, and infrastructure. A great example of Cheltenham recently, he said. We're going improve the facilities at the club for fans because we think we can have them spend more money on game day. That's the definition of kind of the one-to-one relationship that he sees between cost and revenue. And then multi-club synergies. He believes, like many do, that there are efficiencies and opportunities to be gained by having multiple clubs in multiple markets. But at the time he was at Burnley, he had one club, and that club was Burnley. And after this period as a responsible, coherent custodian of the club, he sold it to ALK Capital and Alan Pace. So let's have a look at that deal itself. And none of this is new news, but I think it's important to go back to that original deal and not just talk about what happened, but set up how the deal positioned ownership's relationship with the fans and the club beyond just the dollars and what it leveraged really in terms of the trust and belief that fans had in ownership. So in plain English, the ALK Capital takeover of Burnley in December of twenty twenty was a classic leveraged buyout. I'm sure something That everyone has heard of in terms of of the description of this deal. A leverage buyout is basically when you acquire a company using a large amount of borrowed money or debt to pay for it. And it allows a buyer to take control of a business without spending a massive amount of their own cash. And the idea there is that you would pay back that cash over time because presumably the business that you're buying is going to make more money and you're going to use that more money that you're making. To pay back rather than paying it all in one bug big lump sum to start. So the deal that PACE does in terms of the Burnley leverage buyout has some traditional leverage buyout elements and some non-traditional elements. The traditional traditional elements are that there was minimal buyer equity up front. There was a high leverage deal. So the numbers here are all reported numbers that we're taking from other sources. But reportedly ALK put up somewhere around 10 million pounds up front. They then used outside debt to fund the vast majority of the deal. The debt itself was asset backed. And what that means is that you are leveraging and securing the debt against the club's assets, so the things that the club owns. And so the the deal size in this case was reportedly 60 to 80 million pounds that was used as secured against all the assets that Burnley owned. And then Burnley became legally responsible for paying the interest rate on that, which was reportedly nine to twelve percent. And that was going to be funded through ongoing operational revenues at the club. So they're all traditional elements of a leveraged buyout. Some of the things that were non-traditional about that deal that Alan Pace did was using the existing cash reserves up front of the club to do the buyout itself. So ALK reportedly used 40 million pounds of Burnley's own cash to pay out shareholders, which immediately gutted the club's pre-existing financial cushion that they'd worked so hard under Garlic to build and maintain through years of responsible roster management management, careful spending. And when you think about this in terms of the fans and the fans' perception of ownership, this is the first kind of gut punch of this acquisition. You've lived through these really frugal times and they've made you feel. Not just proud, but probably become part of your identity in a way, even if you don't name it that explicitly. You don't go out and say we are a frugal club. That's not something that you really necessarily hang your hat on in terms of your named identity, but it's something that the club feels and something that really associates, so I'll go into in later depth later, but something that's really associated with the the identity of the town itself. And then a new owner comes in, a foreign owner at that. And takes that away immediately in order to pay for themselves to be able to buy the club. And so s that kind of structuring is something that Pace and ALK they almost leverage and borrow against the trust of the fans in that way. And that you've got to pay them back not just the money, but you've got to be able to earn the trust of the fans that that was something that was worth doing, really changing the structure and changing the fans' perceived relationship with the club in that way. And then from a pure operational standpoint. most leverage buyouts preserve target cash for working capital. So paying it all out immediately is a decision where you dig a hole for yourself and by setting this existing money on fire essentially and start from a position where you're you're kind of behind the eight ball financially. They then in their the way they built out these revenue models made these really aggressive assumptions that they would continue to receive Premier League television payouts, despite the history of Burnley As all Burnley fans would be able to tell you, as a yo-yo club and this kind of known gap between the Premier League and championship in terms of television revenues. That gap between Premier League and Championship, it's one of the steepest economic cliffs in world sports. Baseline TV revenue is around 120 million pounds a year from the bottom of the EPL to the top of the championship. That's the gap between those two leagues. And that's why parachute payments obviously exist. But even with parachute payments, There's an immediate 50 million to 80 million pound drop in TV income that compounds and fades the longer you spend in the second tier. Another non-traditional element of the deal of the leverage buyout were these accelerated relegation triggers. So the loan reportedly included a mandatory repayment clause upon relegation. Let's not forget that Burnley is in the Premier League when they're acquired. So If relegation is to happen, relegation would force an immediate full repayment of the remaining balance. There's two things about this. One, standard corporate debt, when you go out and you borrow money from a company, rarely dictates terms based on sporting performance, which is something which is somewhat in control of management, but largely not. It's usually done in terms of performance management of a business, not of a sporting team. B this incredibly risky. To tie a dollar amount to a sporting performance, especially when you look at Burnley's history. And then secondly, the biggest thing this does is gives your investors incredible leverage. It backs you into a corner and gives you two paths. You've got one path, which is complete success, and everything works out and you get out of the debt and everything is great. The second path is everything else, every other possibility that's available to you, which is different forms of failure, but all lead to some kind of debt restructuring. Which leaves your lenders in a position of having real leverage over you and puts you in a position where you have fewer and fewer options and fewer choices. And of course, this is exactly what happens when they drop to the championship in 2022. This clause kicks in. The lender demands a massive chunk of its loan to be paid back immediately. Burnley didn't have cash reserves available because they were used to buy the club. And so then it's widely deduced and reported that they then had to go through this gutting of the roster to be able to pay for this. And so any time in a business of this size where you're spending capital to pay down debt and pay interest is at its best an expensive way to use capital. But it's worst, it's a r just a really inefficient and potentially fatal use of your resources. You know, if you go back to the way Garlic is running the club prior to ALK's acquisition, he's thinking it's a dollar to dollar relationship. You put a dollar into a revamped hospitality suite, that dollar can start earning for you immediately upon opening that suite. A dollar into interest paid on debt is not working for you, some would argue at all, but it's definitely not working for you in that same kind of direct relationship. And the final comment on the structure a traditional leverage buyout assumes a steady minor fluctuation in consumer demand. So if you think about the way the the one that's l that's mentioned a lot in terms of the the analogy here for the Burnley leverage buyout is Manchester United. Their revenue, Manchester United's revenue is so much more diversified and so much more stable, even if you take away the fact the stability of them staying in the Premier League. If you think about their revenue pool, so their last fiscal year, for example, they did 677 million pounds reportedly in revenue. 46% of that was commercial, including half of that being retail and merchandising, 30% broadcasting, 22% match day revenue. Burnley's 24, 25 revenue. was reportedly 72 million pounds of revenue, so a little over one-tenth the total revenue of Manchester United. But really importantly, 77% of their revenue is broadcasting. And that broadcasting, as we just talked about, is tied to the tier that they're in. Only 12% match day revenue, only 10% commercial revenue. So these are very different businesses. And the kind of fluctuation that could reasonably be expected by Burnley, by the ownership to happen to Burnley When they're having 70% of their revenue tied to broadcasting, and that s cliff is so steep between the first tier and the second tier, meant that that kind of fluctuation is one that means that a leverage buyout is an incredibly risky move. So why would you do this in the first place? Why would would ownership and these, you know seemingly, if we if we think about everyone and assume good intent from everyone, you know, smart business people structure a deal in this way? There's a few reasons. One would be that they they liked the structure. They preferred debt to people actually just investing in their their business and then making the acquisition that way. They didn't have the money themselves to put up front. Or they were bullish on the opportunity and they could see the upside, especially with this kind of debt structure. They could see the upside to really accelerate Burnley's ambitions and go and become this perennial Premier League club. I think that's most likely the reason. why they why they pick this path. You know, Alan Pace and ALK had no interest in managing a second-tier side or really the kind of Burnley of old. If you look at what Garlic's done since selling Burnley, that's really the antithesis of what Pace and ALK want to do. They want the prem they want Purnley to be a perennial Premier League club, which is fair enough. If you have it this kind of glass half full approach, you can step back and see what this plan was, that this was step one in a multi-pronged attack to show that you could really exponentially explode commercial revenue in clubs like this that were in and out of the Premier League, that it seemingly hit a ceiling in their ownership structure and the way they were being run, that kind of seem stuck. You could unstick it by taking risk, borrowing money, securing the bag that is EPL television rights, revamping the commercial model to become a brand. And then becoming the next Brentford, Brighton, Bournemouth, whatever it might be, that example of kind of perennial EPL mid-table success. And to be fair to them, it hasn't all gone wrong. They've had two promotions in five years. They've done things that other clubs that have been mismanaged have not done. So they've paid wages and taxes on time. Alan Pace is not a An absent owner. He lives in Lancashire. He goes to games. He's shown up a little bit less so recently, perhaps. But like he, especially when they took over, he really showed up in the community in meaningful ways. And so this isn't like a Barry or a Reading sort of situation. It's something different. And in some ways, I think that's what makes it harder to see. But if we step back and we consider the Burnley fan and how they react to this and how they survive through this kind of acquisition and what they think of it. Think it's important to think about their mindset going into this, which stretches back a really long way for many fans. You know, if you think at the most basic level, sort of why does someone become a fan of a football club? It's to become part of something that's bigger than you. That's that's really it, I think. There's n many other things. There's Tons of reasons, certainly, why you get into it in the first place. Geography, family, you enjoy the sport itself. You like a player there, you're sort of hooked by their marketing, their colors, whatever it might be. But the reason you stay and the reason you feel something as a fan is because of the community around the sport and the desire to be part of something bigger. That's why f winning feels so good as part of a a club. It's not just the fact that your team has won, it's that you're winning together. You're able to celebrate this thing together and you feel part of something that's big. And that's the value of institutions like a sporting club. And it's something that's acutely felt at a club like Burnley. Like, let's think about some of the cultural elements of Burnley and its history a little bit more closely. You've got cultural icons there that are purely uniquely Burnley. You've got Benny and Hott, the Benedictine and and hot water drink that was brought home from Normandy by soldiers of the East Lancashire Regiment. And it ends up making Turf Moor one of the biggest sellers of that liquor anywhere in the world. You've got Turf Moor itself, Burnley's home since 1883. Only Preston's been in their ground longer. Incredibly kind of hallowed turf. You've got the clarit and blue colors. You've got rivalries with clubs like Blackburn Rovers. You've got the town of Burnley itself, a small town, a beautiful town, with big attendance, crowds of around 21,000 from a town of less than 100,000. That tells you how important that institution is to the town. They're a yo-yo club, but you know, what does that mean exactly? When we break down their weight of history and put it up against other clubs in the championship, we find that Burnley ranks sixth in terms of the expectations fan ha fans have on their club's performance based on their history. Seventh in terms of their total time spent in the top flight and the amount of silverware they've won. This is against other teams currently in the championship. Fourth in terms of the number of movements up and down, so a club that goes up and down a lot. And ninth in terms of how far below their best that they sit now. So there's somewhere where they're quite used to being in this kind of position. They also rank sixth in terms of their club and play circumstances. So they have second smallest town size in the championship after Wrexham, the second highest local hardship, which basically takes into account unemployment and average income, the seventh smallest ground size. And there's something in Burnley's history that helps explain this relationship between the town, the club, and its supporters. On the final day of the 86-87 season, as I'm sure this isn't going to be news to anyone who if you're a Burnley supporter, especially, you'll know this story. Burnley was staring at relegation. out of the football league altogether. This was a club that had twice been champions of England. They were reduced to fighting for their very existence in the fourth division. Their average attendance that season had been around 3,300, but on the final day when they're fighting to stay in the Football League, nearly 16,000 fans turn up at Turfmoor, watch them beat Late Norian 2-1 and survive. And here's what's particularly interesting is that the following season, attendances rose by 88%, even though the club only finished 10th in the fourth division. The supporters came back before the success came back to the club. They weren't turning up because Burnley were winning. They were turning turning up because Burnley was really important to them. And that distinction between the club as an institution and the people running the club and the performance of the club has been part of Burnley's identity for decades. You know, there's so many stories amongst Burnley's history of supporters protesting against boards, questioning the ambitions of owners, even helping finance the purchase of Turfmore back into the club's hands. There's a wonderful line from former chairman Barry Kilby, who recalled a supporter saying that Burnley was a town too small for big ambitions, but with a history too big for anything else. And I think that gets right to the heart of the tension here. You know, Burnley supporters understand the limitations of their town, but they also carry the expectations of a club that's been champions of England. And those two things exist together. The ambition doesn't disappear when the results do, but neither does the loyalty of the fans. So the picture this paints is kind of a hard scrabbled tiny town that takes immense pride in its football team. And most importantly, I think it's that it's a supporter base that doesn't believe it has to win or even be in the top flight to be relevant. And more so for them to have pride in the team. It's a supporter base that might even value coherence and pride in the clarinet blue over big names and flashy football. No place could you see that more of of when the club was really humming under Sean Dyke, but his coherence of identity with with Garlic as the owner. So let's fast forward then to October 2025, where Burnley's back in the Premier League, but they're struggling. Scott Parker's system, which had been so effective in the championship the the prior year, was being put to the sword by superior opponents with superior rosters. So it was interesting news then, to put it one way When it was announced that Velocity Sports Partners, which had then by then become the dedicated sports investment arm and subsidiary of ALK Capital, had completed a majority acquisition of RCD Espanyol, a club in Barcelona that plays in La Liga. The buying range was reported to be between 130 million and 200 million Euros. Now, there are many reasons. why ALK and their subsidiary velocity would make this kind of acquisition. First one is risk diversification. You basically split your club performance risk in half by buying a second club. It's just a basic not all your eggs are in one basket, argument. You know, if we talk as we talked about T V income declines fifty five million pounds if you drop from the EPL to the championship. If you're in one club, that's an enormous thing. If your second club stays in the top flight, you are able to split some of that risk. The second one is is well known, but that's the recruiting pipeline. And so many clubs do this where you can nurture talent in one place or another and trade them between clubs. You look at Man City setup, for example, but there are many others throughout Europe where this is happening. But secondly, the other advantage of that, which is is more relevant to a to this specific setup and and kind of a post-Brexit world. A multi club model with a club in Spain helps clubs bypass significant recruitment hurdles in a way that's still compliant. So British clubs are strict strictly prohibited from signing overseas players under the age of 18 after Brexit. Spanish clubs can freely sign sixteen and seventeen year old continental players. So without getting too much in the nitty gritty there, you've got a an ability to be able to essentially go out and do something that you can't do if you're solely a UK club. This is something that's proven across other groups as well. The other big reason you do this is around, first of all, your exit options. So if you're looking to sell, you're selling multiple clubs, or you can decide to pass off different parts of your portfolio and sell them off at different times. But before even thinking about selling, just thinking about positioning and raising capital. When you go and raise money for a business, you're thinking about what your corporate narrative is. When you're raising money for a single club, your story is the club. It's about the town of Burnley. It's about Burnley FC and everything that goes with it. If you're raising into two clubs, you're raising around a portfolio or to use a buzzword, a platform. And when you fundraise into a platform, you've got a broader thesis and an idea. The pitch is different. It's a broad play with exposure across one industry but to multiple markets. And multiple different revenue lines and and different ideas, which is appealing to a lot of investors because again, you're not putting all your eggs into a single thing. For example, if you go and look at Velocity Sports Partners website, you can see how they're positioning themselves as a corporate entity. In January of this year, they launched VSP Studios, which is an original content arm, including premium behind the scenes athlete driven storytelling and creator collaborations. In twenty twenty four, they invested in a VR software developer. And their thesis now, which is partly ALK's thesis, is to advance elite football through data-driven innovation, community engagement, and sustainable long-term growth. That's so much broader and so much more ambitious than developing Burnley FC on its own. Also, the money that you raise now does not sit at the club level, it sits at the platform level and then can be dispersed accordingly. And also dispersed in a way that is not as clear and transparent to fans of the club themselves. So when Check it's launched a sports private equity vehicle in April of 2025 with a $1.2 billion target in terms of money raised and when it was reported to have taken a significant stake in LK itself later that year, reported, if that happened, then the money didn't go into Espanyol or Burnley, it went into this platform. And so There's no shares issued at the club level. There's no equity injection. The reserves for the club essentially remain unchanged. There's no wrongdoing there. It's just a different and more opaque organizational structure. And it's not an organizational structure that you can easily explain to your everyday fans. Or more importantly, easy point easily point to with your fans and say, here's how we're clearly investing money in our goals, in our shared goals, and our shared vision for this club. So if we move forward again to the summer. we see some more significant actions from Burnley after being relegated from the Premier League this summer that's just gone. There are three district distinct moments over this last summer that, in my opinion, really detract from the trust that fans have in Burnley ownership and continue to separate out these kind of divergent causes of the institution and its custodians and the club's fans. Let's start with the release of New Financials, which began in April of this year, but perhaps culminated from a narrative and media perspective in September after there was significant reporting from many outlets, including the Swiss Ramble, the Esk, the Burnley Express, and more. So I'm not doing any new reporting here or even relitigating. I'm just laying out the facts from those financials. The fine the most recent financials of Burnley revealed a few interesting pieces. The first is that Burnley's external debt is skyrocketing. And its expensive debt, 142 million pounds. According to the Swiss Ramble, that's the fourth highest external debt in English football, with reportedly exorbitant interest rates, an estimated blended average of approximately 10%. Just that, so just that debt structure every year drains around 14 million pounds a year just to cover the cash interest expenses. 81 million pounds is reportedly still owed to the club by its parent company. The wage bill as they came down for the Premier League was completely unsustainable, something we'll get into in a second. And something that's not unique to Burnley. That's something that that often happens in moving down. and then the interesting thing for me, which wasn't reported on a lot, is there was this four million pound management fee, which was paid under contract to an affiliate that was not named. And twenty four twenty five was not the first year a management fee was paid. In this relationship. Previously, those numbers were one and a half million pounds, two and a half million pounds, and one and a half million pounds. So it was the largest amount by far. But what exactly is a management fee? I have am lucky enough to, in my corporate experience, having experienced a management fee in the past, and it's kind of a known instrument in different financial worlds that is sometimes mistrusted by the operating companies themselves, unless there's a clear rendering of services. In Is a way in which directors can be paid for their expertise or their work or their knowledge or their relationships or whatever those contributions to the to the entity might be without holding a specific role at the company and without being on the company's actual books. And in this particular year, this last year, four million pounds represents 5.6% of turnover in a year where the club lost 28.5 million pounds after tax. So directors receive nothing from the club. They're not on the payroll. So directors like Alan Pace own ALK and sit on the board. But you've got other directors like Hunt, who runs day-to-day business operations since August 2023. His pay likely comes through that fee, which means that part of that four million pounds is is presumably real work that he's doing to run that club. But it's not a clear way of seeing that work. And supporters cannot see how much. Of that is services, how much is margin, and and what that relationship looks like. Also, based on the Burnley websites governance section, there's no independent, non-executive, non or or audit or remuneration committee that looks at this. And so if that's true, then nobody at the club is placed to really test whether that four million pounds is fair, because those who could are on both sides of the transaction. So again, this is not something that is that is Necessarily it was nefarious, but it is something that's not transparent and is difficult to potentially explain to fans. And so questions would remain for supporters there. That financial news led to a lot of investigation by those outlets I mentioned. A lot of hand-wringing from supporters. Again, not in a way that the club was necessarily going to go out of business, but in a way that it was difficult to understand exactly what was happening here. And the transfer window was a Also a highly fraught time where they came down with a lot of expensive players on their books and a lot of business that had to happen. In July 2025, Burnley's books showed that 85 million pounds was owed to it by other clubs for transfers performed, and 111 million was owed to other clubs. So if you add that deficit in to the other financial factors that we just went through and the fact that they've been relegated. This last summer was a really critical transfer window for Burnley. And in many ways it was a great success because they were able to turn over a lot of players and extract massive value from a lot of their signing and development projects. Players like Esteve, Fleming, Jaden Anthony, Joe Warrell. They got a lot more for these players in their in their trades than they than they paid to buy them. And so as a trading operation, this really works. they were able to triple a a number of of I'm not gonna get into the you can go see all these numbers out there, but like they were able to triple the number of transactions. Some of them they were able to triple in in just one year. And so financially, this was the right thing to do in order to right size the business. But as we sit here today and Burnley's just above the relegation zone in the championship and they've essentially gutted their roster, is that the right thing to do in terms of of keeping a A club that can continue to to push for promotion. If you look at an example like Ipswich Town last year, that was able to really keep a lot of its roster outside of Liam DeLap intact and then go back and get that promotion straight away. This was a very different situation. So the transfer window wraps up. They sell a bunch of players. They then wait a really long time to hire a manager. They finally settle on Nikki Hayan on July 10th, which is almost two and a half months after firing Scott Parker on April 30th. And they'd gone through a number of different candidates through that process who seem to be preferred by ownership, but may not have wanted to come to the club for different reasons. They then finally start the season, and as we all know, doesn't go to plan. Zero wins in the first eight. And then perhaps even worse, we have the exit of James Holroyd. Holroyd on paper seems to really fit what ALK, VSP, and Burnley are trying to do. 14 years at Adidas, and that's part of the VSP sort of perspective. We want to be a brand. Fourteen years at Manchester United, and then he's gone after a year. And it's reported by the iPad and others that this is because of his working relationship with Alan Pace. And he's gone from the club's governance page where Matt Williams, the COO and club secretary, now appears to head club governance. So, where does that leave us now as we sit here from both the Burnley fan perspective and Burnley ownership perspective? It brings us to this point where I'm sitting here earlier today and I'm scrolling through the homepage for Velocity Sports Partners, and it opens with this rolling video. It's called The Future of Football. Culture, performance, strategy, innovation. In the background, there's a guy mowing a pitch at Burnley's training ground, which incidentally was a training ground built under Mike Garlic or renovated under Mike Garlic, using that same careful financial management that his ownership model was supposed to was supposed to really be. And then you scroll down and there's a section called Why Football Needs a New Model. And VSP there lists out four problems with the modern game. But there's one in particular that as I was putting this story together really caught my attention. It says culture and fan connection are often treated as secondary. And I think that's a really interesting thing for Velocity to say, because having spent all this time looking at Burnley, I'm not sure they've quite understood what that means. Let's go back to the beginning again. In twenty twenty, ALK acquired a club that had spent years punching above its weight. It had done so through a relatively conservative financial model. And a coherent sporting identity and an extraordinary relationship with its supporters. And ALK looked at that club and they saw something different. They saw a business that could grow, a club that could be commercially transformed, that could use data and investment and international recruitment to establish itself in the Premier League and eventually become part of something much bigger. And there's nothing inherently wrong with that ambition. In fact, I think it's worth acknowledging that the alternative isn't necessarily attractive either. Football clubs can't just stand still. The economics of the game are changing rapidly. The gap between divisions is enormous, as we saw by the state of the of the football report that came out this week. And a club like Burnley needs to find ways to continually compete with institutions that have vastly greater resources. But what I keep coming back to is this question of what exactly ALK thought they were buying in the first place. Because they weren't just buying a football operation or a Premier League broadcasting entitlement or a set of assets that could be improved and eventually sold off for a profit. They were buying an institution. An institution that had survived more than 140 years, two league championships, the brink of extinction, relegations, promotions, financial crises, and generations of people. Who kept coming back regardless of what happened on the pitch. And the remarkable thing about Burnley is that those people didn't need the club to be successful, to believe in it. In 1987, when Burnley were one game away from potentially disappearing out of the Football League, 16,000 people turned up at Turf Moor. The following season, crowds increased by almost 90%, despite the club finishing 10th in the fourth division. Think about what that tells you. The football wasn't great, the financial prospects were terrible. There was no obvious commercial upside. And yet the institution was strong enough to bring people back. That's an extraordinary asset. And I think it's an the kind of asset that in the football report that was released this week, they're talking about in terms of the heritage of a club and how to maintain that heritage. And that heritage is an asset that was created by the supporters, not by the people who own the club, who are truly just custodians of this thing for a set period of time, but by the supporters and the fans. Now compare that with the financial model that ALK has built to run this club. It's a model that used the club's own reserves to help finance its acquisition. It introduced substantial debt into a business whose revenues can collapse with a single relegation, that is subsequently expanded into a multi club platform with financial relationships between the club and its parent company that are difficult for ordinary supporters to understand. And again, I'm not saying that all of these decisions are necessarily wrong. Some may turn out to be very successful, and some may have been essential to keep Burnley competitive. But I think the question supporters are entitled to ask is whether those decisions are being made primarily to strengthen Burnley Football Club or to strengthen the investment proposition of velocity sports partners. Because those aren't always the same thing. And I think that's where the disconnect lies in this example. For a Burnley supporter, the club is the end in itself. The football, the history, the town, the community, Saturdays, at the ground, all the things that we've talked about today, that's what matters. For Velocity, the club is also a means to an end, an asset within a broader strategy with financial obligations and expectations that extend well beyond turf more. And the difficulty is when those two objectives come into conflict, it's not always clear which one wins. Look at the summer we've just had player sales, financial disclosures, management fees, debt, uncertainty around the manager, changes in leadership. Individually, you can make reasonable business arguments for many of those decisions. But collectively, they leave you wondering what the direction of the institution of Burnley actually is. And I think that's particularly damaging at Burnley because this is a supporter base that understands hardship. It understands relegation. It understands that it can't compete financially with the biggest clubs in England. What it needs, I would argue, is to understand that the people running the club are making decisions in the best interests of the institution and not simply in the investment. And in a funny way, that brings me back to Mike Garlic because here's the interesting thing. You know, Garlic now owns a collection of football clubs himself. He's doing this multi-club ownership thing too. And so the distinction isn't necessarily between the traditional local owner and the sophisticated international investment group, because both are participating in the same changing football economy. The distinction, to me, is what the ownership model is designed to achieve and how the individual club fits within it. Garlic's stated approach begins with the circumstances of each club, its revenues, its infrastructure, its capacity to sustain itself, and then works outwards from that. Velocity's proposition Appears to begin with a broader investment thesis and the individual clubs operate within that framework and try to achieve that thesis. Maybe that works. Maybe Burnley does become an established Premier League club, the commercial revenues grow, the international recruitment model succeeds, the investment pays off. But what if it doesn't? What happens if Burnley spends another five years in the championship or gets relegated further? What happens if the Premier League money doesn't return in that time? Can this financial model sustain the institution through failure in the same way that its supporters have done for so many generations? Because I think that's the test, not whether the owners can build a successful football business when everything goes according to plan, but whether they've built something that can survive when it doesn't. And so I think that's why things feel so off at Burnley. It's not simply that the club has debt or that it's selling players, or that supporters don't understand the financial structure. It's that the supporters have spent generations demonstrating a commitment to the club that exists independently of its of its success, while the ownership has constructed a model whose success appears increasingly dependent on the club delivering particular financial and sporting outcomes. And those are two very different relationships with the same institution. And they don't necessarily have to be incompatible, but making them compatible requires more than a promise about culture and community on a corporate website. It requires transparency about where money goes, independent scrutiny of the decisions being made, a willingness to invest in the club itself rather than simply using it as a foundation for a larger platform. And most importantly, I think it requires an understanding that Burnley Football Club is not valuable simply because of what it might become. It's valuable because of what it already is. And that I think is the thing that any owner of a club like Burnley has to understand. The supporters don't need you to guarantee success. They need to know that whatever happens, you're not putting the institution itself at risk in pursuit of it. Okay, before we wrap up, let's head around the ground, some other headlines from this week. we said at the top, we had two rounds of games this week, which was very exciting. And coming back from the international break with with Bang Bang one two. Wolves lost twice, first to Borough, then to Bolton. so they're in a a toughish spot going into this weekend. There were red cards aplenty. Stoke and Southampton had red cards on the weekend. Preston, Sheffield United two to Lincoln City yesterday, who hung around for a while, then crashed out to West Ham six zip at the end. That was worse than it looked. They really did hang in fairly well. But if you get a red card, if you're Lincoln City and you're playing West Ham and you get a red card three minutes in, it's gonna be an uphill battle for the rest of the time. I watched Portsmouth versus Sheffield United yesterday. Portsmouth went up two-nothing. And then commentators were saying it was all over. And then Sheffield United came roaring back, tied it up two two. Actually looked the more likely, I thought, for a while there. They had this really great push in the middle of the second half and looked the more likely to win it. But then the extra man kind of paid off for Portsmouth and John Massino's men pulled it out three two, massive game at Fratton Park. Everyone turned up midweek, it was fantastic. Wrexham lost two one on Tuesday to West Brom after being up one-nothing at home. And they're having plenty of questions asked about their fragility at the back. Watford looked completely lost. Lost 4-0 to Burnley, then 5-1 to Cardiff City. We must be on manager watch for Dionysie here. You know, anytime Sir Elton calls out the performance, that's not good. And the club is in some trouble. Watford's in some trouble. We'll go into more detail on that in the coming months, I'm sure. Blackburn Rovers are in ninth and have won both their games back after the break. They've won three of their last four. And so as we look ahead to this weekend, there's a couple of fantastic games. Burnley versus Wolves Friday night. That's must win for both teams. Wolves on a little bit of a slide. Burnley, we've just spent a lot of time talking about. that's a blockbuster in Burnley at Turf Moor. Birmingham versus QPR on Saturday, two surging teams that are both vying to be in the playoff race and promotion discussion. So a great test there. And there are actually there are just fascinating matchups all over the slate. West Brom versus Blackburn, Wrexham versus Preston, kind of a must win for for Wrexham there. Millwall versus Lincoln City. Can Millwall get find their mojo again a little bit? They're still sort of injury plagued, but again they're kind of sputtering coming out of the break. Lincoln City's just been hammered. by West Ham. But the game of the week is probably Swansea versus West Ham, which is gonna be a great test for Vitamatos and Swansea still top of the table, going up against Nuno and and West Ham and and all the greatness that those guys bring. So lots of fantastic games to be looking out for. Thanks so much for listening today. Go well and we'll see you all next week.