 | Forum
Thread | Evans Investment
at 20:09 4 Mar 2020
I don't know why I've been thinking about this today, (maybe it's the bothering sinking feeling of watching my club’s slow and painful continued demise), but for some reason, I have.
The East Anglian paper thingy did that exclusive interview with Marcus back in 2019 — which I looked back on. The one where he reassured everyone he had a plan — the interview its self was fairly unremarkable, but there was a line in there in which he said: "I would like to do everything I can 'within my plan' to try and make it succeed.”
I'm not really sure the article really got into real granular detail of ‘within my plan’ at the time, but anyway it confirmed in that interview that the club’s (at that time) £95m debt to him was effectively a personal loss, implying that the £5m odd he puts into the club every year is a loss to him, or maybe to his group of companies I guess.
So, this is what I was thinking about today. As others have pointed out on the face of it — it doesn't seem to make a lot of sense. Why would you sustain that loss each year and let it build up to quite frankly ridiculous levels now — I assume it might have hit £100m plus by this year... So I was thinking on the train if it was my business why would I do that?
The details around the original deal are not easy to find quickly online, but there does seem repeated mention of the interest that Town pay on the debt — between 5.4% and 7% possibly — let's say its in the middle around 6%.
So the club must be paying him something like £6m in annual interest payments on his loan — may be slightly more or less depending on how the original £30m debt, % of ownership, etc were treated, but it leaves me with a gut feeling that his ‘plan’ is something like this.
Stage 1.
Receive an annual £6m in interest payments from the club, lovely jubbly... and the greater the debt next year, the more in interest payments I get.
Stage 2.
Establish the final net financial position of the club at year-end — after player sales, other earnings, etc have been calculated — let's say for argument that player x was sold for 500k and the club still needs £5m of funding.
Stage 3.
Transfer the required £5m into the club to balance the books — which adds to the debt, on which I earn 6% next year — far more interest than I’d get in any bank right now.
Stage 4.
Bank the £1m leftover — maybe pay some tax on it next year if I haven't invested it somewhere else and it stays as cash.
Stage 5.
Tell the manager they need to manage with their existing resources, maybe put some investment into the academy, or a loan player possibly — but I'm still in credit overall.
Stage 6.
Pay myself a wage, or dividend, use the Marcus Evans branding as marketing spend benefit, maybe even use the club’s contacts for my commercial benefit, perhaps ticket sales, etc.
Result.
Net neutral - My 'cash cow' stays afloat — I take the remaining cash each year, and the wage/dividend and all the other commercial benefits — maybe I’ll pay to get the stand cleaned every 15 years to make my asset look nice if the locals complain too much.
Perhaps someone who is a shareholder with access to a balance sheet can tell me differently, which would be good to hear, but either way, based on these assumptions I can't see how he is not making money out of the club on a consistent basis.
It feels like Evans is slowly asset stripping the club while building up a debt position that only benefits him. The impact of which over a number of years seems clear to see...
Uppa Towen. |
| Forum
Thread | Fantasy Premier League?
at 14:11 3 Aug 2019
Sorry, may have missed it - is there a code for the Fantasy Premier League for TWTD this year?
uppa town |
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