Fitness Matt

Exactly. Abramovich owns Chelsea because he owns the shares in Chelsea. Therefore, he's a shareholder that dividends are paid to.

And for Nostromo - as for only plcs paying dividends...how exactly are the investors in non-plcs supposed to get a return on their investment if not through dividend payments?

retired_bsine

Non-PLCs not paying dividends?

If anything, non-PLC's pay HIGHER dividends in general, especially those recently gone private from public via private equity, etc.

Just ask the private equity guys enriched up the *** from these dividends.

As for football, Roman or other private owners may or may not choose sizable dividends for any given year.

But, guess what? Those dividends will be paid out at some point.

retired_zoe77tb

lol, i read that as "pirate owners"...

retired_ehoff15

Nope, any limited company can pay out dividends to the shareholders, not just plc's. </BLOCKQUOTE>

i know that. what i meant was i was waiting for the first person to suggest only PLC give dividends so i can laugh at him.

retired_richcoble

They could do, as long as they had adequate funds sitting in the profit and loss account (retained earnings) on their balance sheet in their financial statements, they could pay out a dividend to the shareholders. If I had £12 million sitting in my retained earnings from previous years profits, I could declare and pay a £2 million dividend if I were the directors, despite making a £3 million loss, to keep the shareholders happy.

canaduse

Or a dividend can be financed out of debt, happens all the time in the corporate world.

Just means you borrow more to pay the dividend. In this case that debt would be from another source other than Roman A.

retired_roshawnda82

For what it's worth the English company law position is as follows:

Both Private Companies and Listed Companies can pay dividends in any or all years where there are sufficient distributable profits.

The mechanism for doing so is that the board get together and declare an appropriate dividend which then must be approved by the shareholders by an ordinary resolution at a general meeting.

The dividend is only then paid after the final accounts for the year to which it relates are completed and so dividends paid will be a year behind.

Dividends can only be paid if there are 'profits available' which means only if profits that have been kept within the company (i.e not distributed through dividends') exceed the total amount of debts fallen due to date.

Private Companies are less likely to declare a dividend than public companies because often there are only one or two shareholders who will also be directors too and so they can instead pay themselves an agreed salary as a wage to live on and plough most of the profits back into the company to try to grow it. Most owners of private companies therefore are aiming to increase the size of the company to a point at which it's value is sufficient for them to sell it for good money on exit.

Public Companies are much more likely to pay regular dividends and in fact most investors (shareholders) in public companies would expect a dividend to be paid.

Re Chelsea well if the Company (whatever it's called e.g. Chelsea Ltd etc) made a loss the last few years then it can't pay a dividend as there would be no profits. If in the year in question that Nostromo referred to in the opening post Chelsea made a profit, then Chelsea can decide to pay a dividend to it's shareholder(s) i.e. Abramovich.

In terms of business strategy, I'm sure Abramovich intends to get his £400m back at some stage, and this is reflected in the appointment of Kenyon with a 5 year strategy to break even. Soon after the team breaks even, and when all the investment in youth and facilities etc at Chelsea comes on stream, then the Company will be in a position to start to pay a dividend to Abramovich. Moreover, if anyone ever wants to buy Chelsea then Abramovich might get the remainder of his money back there too. That's how businesses work. Investors invest to receive dividends and in the hope that their holding will increase in value.

zib

Exactly. Abramovich owns Chelsea because he owns the shares in Chelsea. Therefore, he's a shareholder that dividends are paid to.

And for Nostromo - as for only plcs paying dividends...how exactly are the investors in non-plcs supposed to get a return on their investment if not through dividend payments? </BLOCKQUOTE>

isn't the role of the moderator is to moderate? i don't recall 'attitude' being part of the jd. but thanks for the feedback anyway.

but since you made such an intelligent point, why didnt watford pay shareholders dividend...or man city?

please dream up something on that and share it with us

thanks in advance

zib

made a loss. started with 110 m, finished the season with 52m...then paid out divs on that.

retired_taustin

Any owner of any company is entitled to keep a share of the profits, whether it is a single owner or many (in the case of a PLC).

Why should it be a bug when the owner(s) of a club decide they want to earn an income? No manager in real life has access to every penny that the club earns. The board and the ownership have to make a living too, and paying out "dividends" reflects this.