| Can anyone explain to me how the consortium is likely to fund the purchase/plans 23:19 - Mar 3 with 2714 views | nodge_blue |
It seems to me that they are going to buy the club not with their own money but borrowed money.
So thats 20 mil of debt straight off I think as Evans price?
And that debt will be a debt owed by the club and not the consortium as such?
Then they need 6 mil a year to fund the current "hole" in our finances. So lets call that 30 mil for 5 years.
Then they want to have some fund for new players - lets say thats 10 million.
Then theres the interest now on the debt at 5% a year.
Before you know it the club has 60 mil of debt again. And 3 mil of interest a year accruing.
Is there anyone who knows otherwise how this will likely work? |  |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 23:28 - Mar 3 with 2656 views | Marshalls_Mullet |
No one knows, lots of guess work.
I suspect the main exit strategy will be based on the hope of selling a side challenging for promotion to the prem at an increased price. |  |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 23:35 - Mar 3 with 2620 views | nodge_blue |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 23:28 - Mar 3 by Marshalls_Mullet |
No one knows, lots of guess work.
I suspect the main exit strategy will be based on the hope of selling a side challenging for promotion to the prem at an increased price. |
Yeah I guess that’s the exit strategy but it’s how they pay for it in the meantime.
I give us a 10 percent chance of reaching the Pl in the next 5 years.
So are we talking 60 plus mil of accruing debt in 5 years with actually us being in the championship still in all probability? [Post edited 3 Mar 2021 23:39]
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 23:38 - Mar 3 with 2603 views | Marshalls_Mullet |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 23:35 - Mar 3 by nodge_blue |
Yeah I guess that’s the exit strategy but it’s how they pay for it in the meantime.
I give us a 10 percent chance of reaching the Pl in the next 5 years.
So are we talking 60 plus mil of accruing debt in 5 years with actually us being in the championship still in all probability? [Post edited 3 Mar 2021 23:39]
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God knows!
I've no idea how I would even try to put a business plan together for running a football club in the championship, it's a financial timebomb of a league. | |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 08:00 - Mar 4 with 2384 views | tractorboy1978 |
Not sure until we get further details but what you've described there is Evans 'business model'. The US guys can and will run it far better, far slicker and more commercially.
There is no reason they can't build a financial model that is almost self sustaining - invest in infrastructure (scouting, analytics, recruitment) and then trading players at a profit, look to maximise commercial revenues etc. Getting us going on the pitch again will be crucial though - if they can stick an extra 5-8k on the weekly gate that's a whole load more revenue for a start. [Post edited 4 Mar 2021 8:06]
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:21 - Mar 4 with 2321 views | nodge_blue |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 08:00 - Mar 4 by tractorboy1978 |
Not sure until we get further details but what you've described there is Evans 'business model'. The US guys can and will run it far better, far slicker and more commercially.
There is no reason they can't build a financial model that is almost self sustaining - invest in infrastructure (scouting, analytics, recruitment) and then trading players at a profit, look to maximise commercial revenues etc. Getting us going on the pitch again will be crucial though - if they can stick an extra 5-8k on the weekly gate that's a whole load more revenue for a start. [Post edited 4 Mar 2021 8:06]
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My post was a back of the fag packet thing that I honestly would like anybody who has experience of commercial buyouts to say if it was wide of the mark.
I don't think its an Evans model. Its about the finances needed to run our club.
We recently have over run our budget by 6 mil a year if everything is believed (and Ive no reason to say its shouldn't be).
I doubt actually that the bond loan (if thats what it is) would even be as cheap as 5% a year given that we are in the junk bond category status I should think as a footie club in league 1.
I got some stick in the other thread about me supporting his email. Fair enough. i knew I would when I posted it.
But all of this is me saying that we are wishing away a guy whose financial support has been more of a gift - and welcoming blindly anyone new - even though their business model sounds likely to be very detrimental to the club unless we reach the PL. | |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:30 - Mar 4 with 2292 views | soupytwist |
I asked a similar question yesterday, before the email from Evans and was told that this had been discussed ad nauseam -
Does anyone know how the possible takeover will be funded? by soupytwist 3 Mar 2021 14:44One thing I haven't seen discussed is whether the takeover will load a pile of debt onto the club as happened recently at Burnley and was how the Glaziers took over Man Utd. Or are the potential investors using their own money, or money they're borrowing themselves?
That could make or break it for me.
More on the Burnley takeover here - https://www.theguardian.com/football/2021/feb/02/burnley-us-takeover-has-left-club-90m-worse-off-and-loaded-with-debt
You've articulated some of my fears much better than I did. We are potentially swapping an owner who has many faults but does seem to have essentially given the club a load of money for a group of people who could be operating via debt on commercial terms. Whole different ball game. |  | | |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:34 - Mar 4 with 2269 views | nodge_blue |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:30 - Mar 4 by soupytwist |
I asked a similar question yesterday, before the email from Evans and was told that this had been discussed ad nauseam -
Does anyone know how the possible takeover will be funded? by soupytwist 3 Mar 2021 14:44One thing I haven't seen discussed is whether the takeover will load a pile of debt onto the club as happened recently at Burnley and was how the Glaziers took over Man Utd. Or are the potential investors using their own money, or money they're borrowing themselves?
That could make or break it for me.
More on the Burnley takeover here - https://www.theguardian.com/football/2021/feb/02/burnley-us-takeover-has-left-club-90m-worse-off-and-loaded-with-debt
You've articulated some of my fears much better than I did. We are potentially swapping an owner who has many faults but does seem to have essentially given the club a load of money for a group of people who could be operating via debt on commercial terms. Whole different ball game. |
It is but people don't like to hear that.
I get the its a new blank page. And I also get that the owners will be invigorated.
But the realties of not securing promotion would bite hard and deep very quickly.
Posters on here will soon be moaning about us not buying new players etc - because they are financing the loan terms. | |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:39 - Mar 4 with 2245 views | George03 |
Exactly my worry. They are not going to be in the position to wipe the debt off like Marcus is said to do. |  | | |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:42 - Mar 4 with 2226 views | MrTown |
Cannot see it working in my opinion. Lending money, with repayments and interest.
Yet the club loses around £700k per month.
Can't see it ending well. |  |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:45 - Mar 4 with 2207 views | JakeITFC |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:21 - Mar 4 by nodge_blue |
My post was a back of the fag packet thing that I honestly would like anybody who has experience of commercial buyouts to say if it was wide of the mark.
I don't think its an Evans model. Its about the finances needed to run our club.
We recently have over run our budget by 6 mil a year if everything is believed (and Ive no reason to say its shouldn't be).
I doubt actually that the bond loan (if thats what it is) would even be as cheap as 5% a year given that we are in the junk bond category status I should think as a footie club in league 1.
I got some stick in the other thread about me supporting his email. Fair enough. i knew I would when I posted it.
But all of this is me saying that we are wishing away a guy whose financial support has been more of a gift - and welcoming blindly anyone new - even though their business model sounds likely to be very detrimental to the club unless we reach the PL. |
I don't think you need to worry about the club's status in terms of being a junk bond - the money will be lent to the people raising the capital, not the club.
Your OP is largely correct from my reading of it - we will now have a debt that is much smaller than the ones owed to Evans but infinitely more expensive as it will actually have to be serviced. There are lots of ways for us to improve our revenue streams (with promotion being the main one) but ultimately not many clubs are able to run a sustainable model at Championship level and it is especially difficult with the millstone of debt around our necks.
I think that it is right to have excitement about this takeover because the club is dying in front of our eyes and the prospective owners look to be the right type with a genuine football background and success, but it has to be tempered with the realism that a lot of football clubs in our position have been bought in recent times, and there are a lot of bad news stories that have come from them. |  | | |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:58 - Mar 4 with 2156 views | Superfrans |
One of the early stories on the takeover was that it would be funded from cash from the pension fund of a US state's police/fire service. Don't ask me how they do this exactly, there will be other people on here with more knowledge of that. But that's what one of the early stories said. |  |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 10:03 - Mar 4 with 2139 views | nodge_blue |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:45 - Mar 4 by JakeITFC |
I don't think you need to worry about the club's status in terms of being a junk bond - the money will be lent to the people raising the capital, not the club.
Your OP is largely correct from my reading of it - we will now have a debt that is much smaller than the ones owed to Evans but infinitely more expensive as it will actually have to be serviced. There are lots of ways for us to improve our revenue streams (with promotion being the main one) but ultimately not many clubs are able to run a sustainable model at Championship level and it is especially difficult with the millstone of debt around our necks.
I think that it is right to have excitement about this takeover because the club is dying in front of our eyes and the prospective owners look to be the right type with a genuine football background and success, but it has to be tempered with the realism that a lot of football clubs in our position have been bought in recent times, and there are a lot of bad news stories that have come from them. |
A good balanced post. Thanks.
It still seems to me though that in the short term (say 1 year) the debt must be the selling price + the budget deficit + some transfer budget. So pretty much 30 mil after 1 year. | |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 10:15 - Mar 4 with 2098 views | nodge_blue |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:58 - Mar 4 by Superfrans |
One of the early stories on the takeover was that it would be funded from cash from the pension fund of a US state's police/fire service. Don't ask me how they do this exactly, there will be other people on here with more knowledge of that. But that's what one of the early stories said. |
Yes Phil wrote that.
I worked in financial services for many years. The source of the money is pension fund money if Phil is correct.
Thats all fine. I think its likely to be in the form of a bond loan. Which will charge a level of interest in comparison to the risk.
Jake posted below that the risk is likely to be assessed against the consortium rather than the club - which would suggest the consortium would underwrite the risk. That may be correct. I don't know. It still may be that the pension fund wants to know the purpose of the investment and charges a rate based on that.
But all of that is detail that Im completely guessing about.
Which is why I did the back of the fag packet thing which I think is a most likely scenario as a way of saying that Evans financially at least isn't so bad. | |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 10:19 - Mar 4 with 2078 views | Radlett_blue |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:34 - Mar 4 by nodge_blue |
It is but people don't like to hear that.
I get the its a new blank page. And I also get that the owners will be invigorated.
But the realties of not securing promotion would bite hard and deep very quickly.
Posters on here will soon be moaning about us not buying new players etc - because they are financing the loan terms. |
Indeed, then the club or owners run out of money, another administration beckons & we try to rebuild again from scratch in the 3rd tier after a relegation & points deduction. Of course, that's assuming the new regime gets us back to the 2nd tier, which any decent manager should be able to do under Evans. |  |
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 10:29 - Mar 4 with 2055 views | tractorboy1978 |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 09:21 - Mar 4 by nodge_blue |
My post was a back of the fag packet thing that I honestly would like anybody who has experience of commercial buyouts to say if it was wide of the mark.
I don't think its an Evans model. Its about the finances needed to run our club.
We recently have over run our budget by 6 mil a year if everything is believed (and Ive no reason to say its shouldn't be).
I doubt actually that the bond loan (if thats what it is) would even be as cheap as 5% a year given that we are in the junk bond category status I should think as a footie club in league 1.
I got some stick in the other thread about me supporting his email. Fair enough. i knew I would when I posted it.
But all of this is me saying that we are wishing away a guy whose financial support has been more of a gift - and welcoming blindly anyone new - even though their business model sounds likely to be very detrimental to the club unless we reach the PL. |
The big thing is going to be how good they are at generating revenue. Under Evans, we have NEVER looked to grow the club by being smarter, more innovative, and looking at it from the perspective of increasing revenues. Commerically, we have been run atrociously in comparison to many similar sized and indeed smaller clubs. His first few years he was just haemorrhaging cash. In recent times, everything has been about cost cutting - and key areas at the club (other than 1st team squad) really are operating at almost bare bones. You cannot grow a club with that strategy.
Under Evans, we've had no sustained recruitment plan - to buy smartly, develop and sell on for big profits. Arguably only Cresswell and Webster fit this mould. And Wickham is the only academy player that's gone on for a substantial fee. Mings and Waghorn were punts that we were fortunate with. For all the talk about it in '5 point plans' we've got delivered it at all. Getting this side right would change the financial dynamics for a start. [Post edited 4 Mar 2021 10:35]
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 10:44 - Mar 4 with 1989 views | PrideOfTheEast |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 10:19 - Mar 4 by Radlett_blue |
Indeed, then the club or owners run out of money, another administration beckons & we try to rebuild again from scratch in the 3rd tier after a relegation & points deduction. Of course, that's assuming the new regime gets us back to the 2nd tier, which any decent manager should be able to do under Evans. |
It's fairly obvious that short-term success is important. If we didn't get promoted this year or next then I see little incentive for them to remain interested so it's great if Evans is both retaining a stake and doing proper reverse DD on these people - very difficult with this sort of structure incidentally because he won't know them, lots of people involved with different priorities. | | | |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 12:18 - Mar 4 with 1888 views | nodge_blue |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 10:29 - Mar 4 by tractorboy1978 |
The big thing is going to be how good they are at generating revenue. Under Evans, we have NEVER looked to grow the club by being smarter, more innovative, and looking at it from the perspective of increasing revenues. Commerically, we have been run atrociously in comparison to many similar sized and indeed smaller clubs. His first few years he was just haemorrhaging cash. In recent times, everything has been about cost cutting - and key areas at the club (other than 1st team squad) really are operating at almost bare bones. You cannot grow a club with that strategy.
Under Evans, we've had no sustained recruitment plan - to buy smartly, develop and sell on for big profits. Arguably only Cresswell and Webster fit this mould. And Wickham is the only academy player that's gone on for a substantial fee. Mings and Waghorn were punts that we were fortunate with. For all the talk about it in '5 point plans' we've got delivered it at all. Getting this side right would change the financial dynamics for a start. [Post edited 4 Mar 2021 10:35]
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Did you listen to the podcast with the guy from the Athletic on it?
Hes a journalist that is dedicated to following club buy out stories.
It was very interesting.
He said that the Americaan consortiums in particular think that they can better maximise commercial opportunities. But largely thats not been proven right. How much more commercial opportunities can you squeeze out of a league one football club. we are not attractive to anyone overseas commercially. We are only attractive to people who follow ITFC and thats pretty much squeezed dry.
A sustained recruitment plan is reliant on good recruitment fullstop. We have bought plenty of players. Very few have been worth selling on for big money. But again theres only so many good players out there like Mings. And other clubs are doing the same thing. Thinking that we can turn on a tap like that clearly isn't easy. Its hardly what you can "plan" for. [Post edited 4 Mar 2021 12:18]
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| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 12:37 - Mar 4 with 1819 views | WeWereZombies |
| Can anyone explain to me how the consortium is likely to fund the purchase/plans on 10:29 - Mar 4 by tractorboy1978 |
The big thing is going to be how good they are at generating revenue. Under Evans, we have NEVER looked to grow the club by being smarter, more innovative, and looking at it from the perspective of increasing revenues. Commerically, we have been run atrociously in comparison to many similar sized and indeed smaller clubs. His first few years he was just haemorrhaging cash. In recent times, everything has been about cost cutting - and key areas at the club (other than 1st team squad) really are operating at almost bare bones. You cannot grow a club with that strategy.
Under Evans, we've had no sustained recruitment plan - to buy smartly, develop and sell on for big profits. Arguably only Cresswell and Webster fit this mould. And Wickham is the only academy player that's gone on for a substantial fee. Mings and Waghorn were punts that we were fortunate with. For all the talk about it in '5 point plans' we've got delivered it at all. Getting this side right would change the financial dynamics for a start. [Post edited 4 Mar 2021 10:35]
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Not sure you can call Waghorn a 'punt', he made fifty seven appearances for Rangers in the Scottish Championship and Premiership and scored twenty seven goals in two seasons. But, although prolific, the scoring was intermittent. McCarthy saw an opportunity to nick in and sign a player who the Rangers management were a bit puzzled by but who was a well established talent. |  |
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