| An objective view on business ownership 20:18 - Sep 5 with 15369 views | jackanuck |
OK. Here goes. I've had this user ID for years but have never posted. I used to be on JackArmy years ago. I used to read and post all of the time but for the last few years I come on to the forums a lot less because in my opinion, it's gone really down hill.
I'm a lifelong fan of the club, mid thirties, expat and never owned a season ticket at the Vetch because I couldn't afford it. I'd go to most home games - 2/3 I'd say and always sat in the East Stand with my dad or go on the North Bank with my friends or if I was on my own. I moved away the year we went in to the Liberty and have been back to watch 1-2 games a year most seasons since then. I listened to every game on the radio through PalTalk after I left, until we hit the big time. I was really devastated when we were going to get relegated because I was worried I wouldn't be able to watch the Swans anymore. As it's turned out, The Championship seems to be hitting the big time too and so far I haven't missed a single game on TV/Internet. All in all, I'm a pretty happy chappy.
Why have I come back on the forum? It really irks me that our fans are being divided by the subject of who owns our club. I know it's not something I can fix with some silly little post on the forum, but for my own therapy, I just have to get this out there for a few people to read. Everyone's entitled to their opinion, and I don't expect I'll change anyones thoughts, but theres a few things I want to get off my chest in the hope that we can bind together as a fan base. A lot of what I read (the majority) makes out that everything is black or white. Like most things in life, the situation at Swansea City is far from left or right, but aptly somewhere in the middle.
First of all, I've been hearing for years and years from every premier league broadcast (like a lot of us) the Swansea success story. THE FANS OWN THE CLUB. This is not technically true. (It's a bit like saying I own Apple Inc. because I have some shares) It would have been true to say that the Swansea Supporters Trust owns a non-majority share of the club. Regardless, I've always been really proud of this and I would let the inaccurate statements made by TV pundits slide. However, I think there is a large camp of fans on this forum that do not understand when they read things like "the board sold our club...." This isn't true, the board sold their majority shares in our club.They earned those shares with money and by dedicating a large part of their lives to the success of the club for the past 15 years. Our trust still owns their minority shares. It's as factually true as it ever was that our fans (The Swansea City Supporters Trust) still own the club. I think this is a really valuable thing and I hope that our trust never dilutes or gives away it's shares in our club. It is my hope that in the future, there will be no one entity (other than the Trust) with a greater than 50% share in our club and while a million miles away from that scenario at the moment, I'd love to see the Trust get in to the drivers seat one day.
As someone who is frustrated that are club is in the majority ownership of strangers, I ask my self this question. Why did the trust not make moves to purchase shares from the rest of the board of directors / owners so that the Fans could own the majority share? You should ask this question too because it trumps all of your other questions. If you want the fans to won the club, they need to pay for it. They can't expect it to just be handed to them in a sweet heart deal by investors (Jenkins et al) who put their money at risk all those years ago.
I realize the answer to this question could be multi-faceted. For example, maybe they wanted to but couldn't afford it. Maybe they just didn't want to because they didn't want the risk exposure. Regardless of the reasons, it is important to understand accountability and for me, if we are to ask the question about why our club is in the hands of strangers, the obvious answer is - It's because the fans did not purchase the shares required to own the majority of the club. There may be incredibly good reasons for why the trust didn't do what was necessary, but it doesn't alter the fact that the failure of the trust to acquire 51% total shares is why the club was in a position to sold to foreigners.
My second blurb is about the basics of business. I am a business owner. I have founded, raised debt and equity finances and exited businesses within the past 5 years and know my way around East Coast VC's (Venture Capitalists) I'm sure i'm not alone and am among a small minority here who understand these 'ventures'
It really pisses me off when I read one liners on here from people who are Anti Ownership, Anti Board who deem everyone with an objective opinion to have their head up the arse's of Jenkins/Levein/Kaplan etc. It's simply not true. The difference between me and many of those posters is that I have a moral (and legal) compass to not fabricate bull-shit about the owners to make it appear that they are thieves and people who are taking advantage of the club. Yes, the purpose of most businesses is to make money to pay their annual burn and in most cases, to make a profit. That doesn't automatically make all owners bad. It's my opinion that this ownership group made a few big mistakes that they've since confessed too. With the exception of Jenkins, I don't think they are more qualified than anyone else to get the club back to where it needs to be, but it's obvious to anyone who has ever been involved with buying and/or selling they aren't going to go anywhere. Why?
VALUATION. So I can make sure I've expressed myself and how important this is, I'm going to say it a few more times! VALUATION VALUATION VALUATION!!!!
If you know what Valuation is, feel free to check out of this thread now. If you don't, this is possibly the missing link to answer to all of your uncertainties about what is happening and what's about to happen, probably for the next 5 years.
I'll start with a basic and made up case study.
If a theme park has 10 rides and 50,000 annual visitors and generates 1 million pounds per year with a NET Profit of around $200,000 per year, you could argue it's worth (has a valuation of) about 1 million pounds as an investment to a new buyer. That buyer would make the money back on their investment in approximately 5 years. The original owner could cash out now, or he could do a lot of work and invest more capital to make his investment worth more and cash our later. He could also give away % of his ownership and a fraction of the million pound so he can keep some skin in the game.
Our owners intention (in my opinion) is to increase the overall valuation of Swansea City and then sell the club on. I am explaining this in such simple terms because there are people on the forum who say things like, "why would they be here if not to rip the beating heart out of the club and steal all of the money" NO! If they did that, the club would be completely worthless. They would never in an entire decade be able to rip out enough money to cover their original investment from this club. The only way for them to profit is to improve the club on and off the field and sell it again for a higher price. The Club's current Valuation is probably 30 pennies on the poind to where it is if we're in the premier league. When selling it in the future, all the clubs negative attributes will be attached to the due-diligence that a buyer will do including debt, bloated salaries, deal fees etc. I am absolutely sure that they do (YEs said DO!) take a salary from the club or in the very least, have an attachment to deal fees but that is absolutely normal among ownership / venture capitalists.
Right now, there's a few die hard board-haters doing calculations on players sales to prove that they've already made their money back. All I can say is, this is futile. You don't have the books. Any money they are currently taking out of the club would be trivial 'icing on the cake" deal fee amounts and wouldn't in any scale contribute to what you currently see as trying to claw back their investment in our club by "bringing down the house" They are simply bringing our clubs burn rate inline with our annual revenue forecast now that we've lost a huge amount of revenue. If this concept is lost on you, all I can ask you to do is enrol in a very basic night school or internet course on business management. No different to running your own household, your income has to be equal or greater than your outgoings, or else your fiscal value is less than zero.
It pisses me off immensely that these American's didn't understand the history and culture that has been built within our club, especially during the past 15 years. They admitted as much in that BBC article the other day. It kills me that they were ignorant, bold and naive enough to that Idiot of an American Manager, Bradley, in charge of us. I'm so frustrated that we took big gambles on player signings in the last couple of years that haven't worked out. I do believe we are on the right track, they've learned from their mistakes and have placed trust in the right people to get the playing side of the club back on track. However, I'm also smart enough to know that as fans, we are having to live with their mistakes. Overall I think they are stupid idiots and pretty typical of the east coast VC's I've interacted with in the past. However, I don't think they are doing anything dishonest and I don't think they are going to continue to purposefully ruin our club. If they are smart, they'll open up a good channel of communication with the supporters trust and see them as the future, rightful owners of a majority stockholding in Swansea City Football Club, potentially helping the trust to acquire the loans it might need to reach the clubs future valuation, if we can cement ourselves once again as a top half premier league side with a good academy.
Overall, I just want our fans to be less divided. I'm open to constructive criticism on my thoughts and most of all, I want to be optimistic for the future.
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| An objective view on business ownership on 19:23 - Sep 6 with 2179 views | TheResurrection |
| An objective view on business ownership on 18:31 - Sep 6 by Shaky |
In fact the actual amount on the line is probably a shade over £23 million; don't suppose you have that in the piggy bank either then?
No need to feel bad about it though. Because the reality is that there aren't many around who would like to buy a business where they have to pony up £23 million to a disgruntled shareholder with a very strong legal case, and that has signed over the next 2 year's revenue to the bank.
Hence why the value of the non-Trust shares in Swansea City is quite likely negative, currently.
And for those who take an interest in the technicalities of valuation this is based on what is known as a break up valuation. This a opposed to a cash-flow or earnings based valuation, because non of those are positive. |
He keeps saying that.
He keeps on getting it wrong.
Fraud. |  |
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| An objective view on business ownership on 20:52 - Sep 6 with 2139 views | Nookiejack |
When the judge rules in favour of the Trust, if a combinatiom of the Yanks and selling shareholders don’t pay up - could the judge then rule that their shares are transferred to the Trust - so that the Trust takes control of the club?
I assume the judge will rule that they have to buy the Trust’s shares on the same terms that the Selling Shareholders received.
So if Shaky’s £23m estimate is right the Trust would receive between £16m to £18m and be left with 5% residual stake.
The Trust could easily then contribute to bridging loans. (As per the other thread).
If they don’t pay up like the Oyston’s don’t appear to be doing - then maybe Trust then will take full control of the club. Bye bye Jenkins and Dineen forever. | | | |
| An objective view on business ownership on 21:21 - Sep 6 with 2113 views | Shaky |
| An objective view on business ownership on 20:52 - Sep 6 by Nookiejack |
When the judge rules in favour of the Trust, if a combinatiom of the Yanks and selling shareholders don’t pay up - could the judge then rule that their shares are transferred to the Trust - so that the Trust takes control of the club?
I assume the judge will rule that they have to buy the Trust’s shares on the same terms that the Selling Shareholders received.
So if Shaky’s £23m estimate is right the Trust would receive between £16m to £18m and be left with 5% residual stake.
The Trust could easily then contribute to bridging loans. (As per the other thread).
If they don’t pay up like the Oyston’s don’t appear to be doing - then maybe Trust then will take full control of the club. Bye bye Jenkins and Dineen forever. |
The judge has wide latitude to rule in these cases, and if the shareholders refuse to pay up I am pretty sure he would have scope to award the Trust their shares and give then control.
Furthermore, I would have thought Stevie boy and Jase have in mind to threaten just that in their forthcoming tete a tete sans les avocates.
Not sure they would actually go through with that and significantly less so after I got the information that they are putting up short term loans.
However, what happens if the Trust do end up taking a controlling stake in the medium term?
And here I must say I find it hard to imagine any good outcomes, with the club urgently in need of a refinancing and in effect mortgaged up to the hilt.
Not good. [Post edited 6 Sep 2018 21:37]
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| An objective view on business ownership on 21:55 - Sep 6 with 2076 views | NeathJack |
| An objective view on business ownership on 21:21 - Sep 6 by Shaky |
The judge has wide latitude to rule in these cases, and if the shareholders refuse to pay up I am pretty sure he would have scope to award the Trust their shares and give then control.
Furthermore, I would have thought Stevie boy and Jase have in mind to threaten just that in their forthcoming tete a tete sans les avocates.
Not sure they would actually go through with that and significantly less so after I got the information that they are putting up short term loans.
However, what happens if the Trust do end up taking a controlling stake in the medium term?
And here I must say I find it hard to imagine any good outcomes, with the club urgently in need of a refinancing and in effect mortgaged up to the hilt.
Not good. [Post edited 6 Sep 2018 21:37]
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In regards to the court possibly awarding the Yanks shares to the Trust, what would happen if the Yanks "sold" their shareholding to another Delaware company in the meantime? |  | | |
| An objective view on business ownership on 22:02 - Sep 6 with 2069 views | Shaky |
| An objective view on business ownership on 21:55 - Sep 6 by NeathJack |
In regards to the court possibly awarding the Yanks shares to the Trust, what would happen if the Yanks "sold" their shareholding to another Delaware company in the meantime? |
I am not 100% certain, bu I would assume the liability is passed on to the new legal owner, with basic due diligence guaranteed to uncover the pending legal action by the Trust.
However, it could quickly get very messy, as would having to pursue legal action in Delaware if Kaplan were to refuse to pay up. | |
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| An objective view on business ownership on 22:29 - Sep 6 with 2038 views | Elmo |
| An objective view on business ownership on 22:02 - Sep 6 by Shaky |
I am not 100% certain, bu I would assume the liability is passed on to the new legal owner, with basic due diligence guaranteed to uncover the pending legal action by the Trust.
However, it could quickly get very messy, as would having to pursue legal action in Delaware if Kaplan were to refuse to pay up. |
Given your expertise - if you were the Financial Affiliate to the Trust:
- would you be far more all over the financials - historical and forecast ?
- what are your top 3 priorities ? | | | |
| An objective view on business ownership on 22:57 - Sep 6 with 2024 views | Nookiejack |
| An objective view on business ownership on 21:21 - Sep 6 by Shaky |
The judge has wide latitude to rule in these cases, and if the shareholders refuse to pay up I am pretty sure he would have scope to award the Trust their shares and give then control.
Furthermore, I would have thought Stevie boy and Jase have in mind to threaten just that in their forthcoming tete a tete sans les avocates.
Not sure they would actually go through with that and significantly less so after I got the information that they are putting up short term loans.
However, what happens if the Trust do end up taking a controlling stake in the medium term?
And here I must say I find it hard to imagine any good outcomes, with the club urgently in need of a refinancing and in effect mortgaged up to the hilt.
Not good. [Post edited 6 Sep 2018 21:37]
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Thanks Shaky
I am more positive about the club’s financial position - so this could leave the Trust in Control of the club. | | | |
| An objective view on business ownership on 23:06 - Sep 6 with 2018 views | Nookiejack |
| An objective view on business ownership on 15:34 - Sep 6 by jackanuck |
You really can't boil down my original post in to a two liner like that. Not accurately anyway.
Sincerely, I'm not perfect and I don't expect I can bring about Planet Swans peace in my time. Right, Wrong or indifferent, these were just my words right now.
By the way, since you bring it up, let me clarify for anyone that didn't know that a very high volume of US businesses are registered in Delaware (as well as Nevada). I myself have worked with a founder who registered his creative services business in Delaware even though he'd never set foot in the state. I suspect Levein and Kaplan have never been to Delaware either! However, this is nothing unusual. [Post edited 6 Sep 2018 15:35]
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What will heal all the divisions is if the Yanks get together with the Selling Shateholders and offer to buy the Trust’s shares on the same terms as the Selling Shareholders.
Why don’t the Yanks and Selling Shareholders continue to split the club? | | | |
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| An objective view on business ownership on 23:09 - Sep 6 with 2014 views | Nookiejack |
| An objective view on business ownership on 23:06 - Sep 6 by Nookiejack |
What will heal all the divisions is if the Yanks get together with the Selling Shateholders and offer to buy the Trust’s shares on the same terms as the Selling Shareholders.
Why don’t the Yanks and Selling Shareholders continue to split the club? |
Why don’t the Yanks and Selling Shareholders do this and by not doing so - continue to split the club.
It is time for the club’s wounds to be healed so make an offer for the Trust’s shares on same terms that the selling shareholders received or hand over the keys to the club to the Trust. | | | |
| An objective view on business ownership on 08:07 - Sep 7 with 1932 views | awayjack |
| An objective view on business ownership on 21:21 - Sep 6 by Shaky |
The judge has wide latitude to rule in these cases, and if the shareholders refuse to pay up I am pretty sure he would have scope to award the Trust their shares and give then control.
Furthermore, I would have thought Stevie boy and Jase have in mind to threaten just that in their forthcoming tete a tete sans les avocates.
Not sure they would actually go through with that and significantly less so after I got the information that they are putting up short term loans.
However, what happens if the Trust do end up taking a controlling stake in the medium term?
And here I must say I find it hard to imagine any good outcomes, with the club urgently in need of a refinancing and in effect mortgaged up to the hilt.
Not good. [Post edited 6 Sep 2018 21:37]
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Some interesting scenarios. Personally I don’t expect Yanks to relinquish control whilst there are still parachute payments and players to sell. There’s still the potential to raise another £70m in player sales next year. Sell those on loan - maybe £20m for 2 Ayews, Baston, plus say another £25m for higher earners like Bony, Montero, Naughton, Dyer, Carrol, Ollson, Narsignh. Our emerging stars like McBurnie, Rodon, VDH, Celina, Roberts, James, Fulton could get another £30m if they carry on as they’ve started the season. So still potential to get another £70m+ from selling any remaining players of value. If the Yanks are in full control by issuing shares to dilute Trust, it would make it easy to get funds out with fees and dividends. Maybe then sell what’s left back to HJ, MM and co.
Hypothetically if the Trust do somehow get control of the club (I don’t see how with no money?) I think the fans would look very differently on player sales. Just as a example if Trust/Fans we’re in control, and we had to sell likes of McBurnie, Celina, VDH to clear the legacy debt / financial position, I think fans would be supportive. |  | | |
| An objective view on business ownership on 10:35 - Sep 7 with 1884 views | Shaky |
| An objective view on business ownership on 22:29 - Sep 6 by Elmo |
Given your expertise - if you were the Financial Affiliate to the Trust:
- would you be far more all over the financials - historical and forecast ?
- what are your top 3 priorities ? |
i am already all over the financials :-)
If I were the finance affiliate I would have only one priority; to safeguard the continuation of professional football in Swansea, and from that perspective this means ensuring the club has adequate financial resources.
However, to fully set out my thoughts on that, and the main scenarios as i see them, requires more time that i can spare today, but I'll try to post something in the next few days. | |
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| An objective view on business ownership on 10:38 - Sep 7 with 1881 views | Shaky |
| An objective view on business ownership on 08:07 - Sep 7 by awayjack |
Some interesting scenarios. Personally I don’t expect Yanks to relinquish control whilst there are still parachute payments and players to sell. There’s still the potential to raise another £70m in player sales next year. Sell those on loan - maybe £20m for 2 Ayews, Baston, plus say another £25m for higher earners like Bony, Montero, Naughton, Dyer, Carrol, Ollson, Narsignh. Our emerging stars like McBurnie, Rodon, VDH, Celina, Roberts, James, Fulton could get another £30m if they carry on as they’ve started the season. So still potential to get another £70m+ from selling any remaining players of value. If the Yanks are in full control by issuing shares to dilute Trust, it would make it easy to get funds out with fees and dividends. Maybe then sell what’s left back to HJ, MM and co.
Hypothetically if the Trust do somehow get control of the club (I don’t see how with no money?) I think the fans would look very differently on player sales. Just as a example if Trust/Fans we’re in control, and we had to sell likes of McBurnie, Celina, VDH to clear the legacy debt / financial position, I think fans would be supportive. |
Have a look at this:
https://www.transfermarkt.co.uk/swansea-city/kader/verein/2288/saison_id/2018/pl
In particular the contract expiry dates.
My opinion is you are being hopelessly optimistic. | |
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| An objective view on business ownership on 10:43 - Sep 7 with 1876 views | Elmo |
| An objective view on business ownership on 10:35 - Sep 7 by Shaky |
i am already all over the financials :-)
If I were the finance affiliate I would have only one priority; to safeguard the continuation of professional football in Swansea, and from that perspective this means ensuring the club has adequate financial resources.
However, to fully set out my thoughts on that, and the main scenarios as i see them, requires more time that i can spare today, but I'll try to post something in the next few days. |
Tidy - look forward to your thoughts, as I'm sure will many | | | |
| An objective view on business ownership on 11:26 - Sep 7 with 1851 views | awayjack |
Yes £70m may we’ll be optimistic based on firesale prices in last window. Broad assumption we’ll be competetent at extending player contracts. Estimates were:
J Ayew £9m per loan clause
A Ayew £8m per loan clause
Baston £3m per loan clause
Montero £4m - small risk for PL team that need quality impact if he’s fit
Bony (if fit) £4m to some desparate PL/Turk club and we have ‘option’ to extend
VDH, Rodon, Ollson - £15m - average £5m each - defenders at premium so if Rodon continues more
Naughton, Carrol, Dyer, Narsignh, Fulton - £10m - average £2m each for basic players
Ollson, Nordfelt - £5m - £2m-£3m each for internationals and premium on keepers
Roberts £5m - if he signs extended contact..
McBurnie £10m - if he carries on scoring..
Celina £6m - proving quality
Asoro / James / Grimes - £5m - what we paid £1m-£2m each for for potential
Even if you knock another 30% off still at £60m or do. Principle is same - why would Yanks exit for low value if they can get £60m (or even £40-50m for remaining players?
I know finacial details are vague, but assuming the £45m from sales in Jan and £55m parachutes cover reduced cost base this season, they could potential ‘invest’ to dilute the Trust - no big risk as they’ll have control - and get another £50m or so out via fees and dividends within company and PL regulations. We may be left with an uncompetitive squad but not sure that worries them if they get most of the £65m they paid. | | | |
| An objective view on business ownership on 11:40 - Sep 7 with 1846 views | Shaky |
| An objective view on business ownership on 11:26 - Sep 7 by awayjack |
Yes £70m may we’ll be optimistic based on firesale prices in last window. Broad assumption we’ll be competetent at extending player contracts. Estimates were:
J Ayew £9m per loan clause
A Ayew £8m per loan clause
Baston £3m per loan clause
Montero £4m - small risk for PL team that need quality impact if he’s fit
Bony (if fit) £4m to some desparate PL/Turk club and we have ‘option’ to extend
VDH, Rodon, Ollson - £15m - average £5m each - defenders at premium so if Rodon continues more
Naughton, Carrol, Dyer, Narsignh, Fulton - £10m - average £2m each for basic players
Ollson, Nordfelt - £5m - £2m-£3m each for internationals and premium on keepers
Roberts £5m - if he signs extended contact..
McBurnie £10m - if he carries on scoring..
Celina £6m - proving quality
Asoro / James / Grimes - £5m - what we paid £1m-£2m each for for potential
Even if you knock another 30% off still at £60m or do. Principle is same - why would Yanks exit for low value if they can get £60m (or even £40-50m for remaining players?
I know finacial details are vague, but assuming the £45m from sales in Jan and £55m parachutes cover reduced cost base this season, they could potential ‘invest’ to dilute the Trust - no big risk as they’ll have control - and get another £50m or so out via fees and dividends within company and PL regulations. We may be left with an uncompetitive squad but not sure that worries them if they get most of the £65m they paid. |
Did you check the list I linked to?
Bony, VDH, Rodon, Ollson, Narsignh, Fer, + more all out of contract next summer.
Naughton, Montero, Carroll 1 year further to run.
Certainly the first team has already been heavily butchered, but what does the club actually intend to do with all these imminent contract expiries?
There's a lot of work left to do, and contract extensions also cost money. | |
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| An objective view on business ownership on 12:22 - Sep 7 with 1827 views | awayjack |
| An objective view on business ownership on 11:40 - Sep 7 by Shaky |
Did you check the list I linked to?
Bony, VDH, Rodon, Ollson, Narsignh, Fer, + more all out of contract next summer.
Naughton, Montero, Carroll 1 year further to run.
Certainly the first team has already been heavily butchered, but what does the club actually intend to do with all these imminent contract expiries?
There's a lot of work left to do, and contract extensions also cost money. |
Yes like I said assumes we do competent job at extending contracts of valuable players.
- Rodon and Roberts as examples on low wages and feel strong connection to the club. So increase wages and extend their contacts not too much of a stretch even for this lot if there’s an extra £7-£8m on sales value.
- We also already have options to extend a few like Bony for another year.
- We’d still get discounted amounts for players out of contact from Clubs desperate to retain PL status or push for promotion. So for example likes of West Ham or Villa pay £3m-£4m for Montero in Jan versus wait until he’s out of contact.
There’s a risk we lose the key point in the detail. Some posters suggested the Hedge Fund may sell to the Trust or MM and Co at a low exit value - as low as £10m. My question is why would they sell at low values whilst they can sell more players and distribute the proceeds. Even if it’s only £40m for the whole lot, they inject say £10m in new shares to dilute the Trust - low risk as they can pay these funds back on exit - then use dividends/offshore management fees with little challenge to distribute any excess is from players sales and parachutes. | | | |
| An objective view on business ownership on 14:39 - Sep 7 with 1805 views | Shaky |
| An objective view on business ownership on 12:22 - Sep 7 by awayjack |
Yes like I said assumes we do competent job at extending contracts of valuable players.
- Rodon and Roberts as examples on low wages and feel strong connection to the club. So increase wages and extend their contacts not too much of a stretch even for this lot if there’s an extra £7-£8m on sales value.
- We also already have options to extend a few like Bony for another year.
- We’d still get discounted amounts for players out of contact from Clubs desperate to retain PL status or push for promotion. So for example likes of West Ham or Villa pay £3m-£4m for Montero in Jan versus wait until he’s out of contact.
There’s a risk we lose the key point in the detail. Some posters suggested the Hedge Fund may sell to the Trust or MM and Co at a low exit value - as low as £10m. My question is why would they sell at low values whilst they can sell more players and distribute the proceeds. Even if it’s only £40m for the whole lot, they inject say £10m in new shares to dilute the Trust - low risk as they can pay these funds back on exit - then use dividends/offshore management fees with little challenge to distribute any excess is from players sales and parachutes. |
My analysis is still showing net debt (operating and non-operating) of £48 million after the conclusion of this summer's firesale, and that is using inflated sales prices according to the recent BBC interview with Kaplan.
Of that I reckon somewhere around £10-15 million is sustainable (primarily season ticket advance payments and PAYE) but the rest would be due for repayment in the medium term. | |
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| An objective view on business ownership on 15:02 - Sep 7 with 1798 views | Badlands |
| An objective view on business ownership on 22:25 - Sep 5 by jackanuck |
HI Lisa,
Forgive my ignorance if what I'm about to say is stupid. But If my house is worth 500k and I have a 360k mortgage added to it's value, that would make my house worth 860k. Hence why I chose different language in my post. Please feel fee to correct me if I'm off. |
Eh!
If your house is worth £500K it is worth £500K
If you have a mortgage on it of £360K the property is still worth £500K
On the other hand
If your house is worth £500K it is worth £500K to you if you have no mortgage.
If you have a mortgage on it of £360K the property is still worth £500K but only worth £140K to you.
and
On the other hand
If your house value fall to £300K it is worth £300K to you if you have no mortgage.
If you have a mortgage on it of £360K the property is still worth £300K but you still owe £360 i.e. you are during the period your house is worth £300K £60K in debt beyond the value of your assets.
At this pain you do some serious pruning or make sure you have a paddle! |  |
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| An objective view on business ownership on 17:52 - Sep 7 with 1763 views | awayjack |
| An objective view on business ownership on 14:39 - Sep 7 by Shaky |
My analysis is still showing net debt (operating and non-operating) of £48 million after the conclusion of this summer's firesale, and that is using inflated sales prices according to the recent BBC interview with Kaplan.
Of that I reckon somewhere around £10-15 million is sustainable (primarily season ticket advance payments and PAYE) but the rest would be due for repayment in the medium term. |
Dividends are paid out of reserves, yes tricky without 2018 accounts but just to help me understand:
P&L Reserves on 31/7/17 were £19.5m positive.
2017 - reported income £127m, ops costs £125m - huge but modest profit before player sales.
2018 - income estimate £125m - lower PL position but higher commercial revenue.
2018 - cost estimate £120m (as assume!) - still huge like 2017 but relegated so no big PL bonuses.
2018 - big Aug17 profit of sale of Siggy/Llorente late window (Aug17) for reported £60m. Both at low amortised cost values in accounts, so £45m profit after fees.
2018 - July18 player - sold Fabs mostly profit £6m.
So - maybe I’m missing something - but 2018 accounts should show decent profit of £50m due to mostly to player sales, say £40m after tax.
So unless logic is way off P&L reserves at 31/7/18 of £60m or so.
Post balance sheet adjustments? August 2018 - £40m of sales but modest profit after losses on Clucas (£6m), Mesa (£4m) and Baston (£4m) versus profit on Mawson (£12m), Fernandez (£5m) and Bartley (£4m). In any event no major hit on P&L reserves.
2018/19 - Who knows the true cost position is but if the huge player cuts and suggestions from K+P is we’ve taken medicine to cut costs to cover the £50m reduction in income. So in theory operating income less costs break even, or let’s say £10m loss.
So back to hypothesis - rather than a cheap exit, why wouldn’t the owners sell any remaining players with value between Jan-Jul19. If this is £40m and we take a hit on Bony (£10m) and Ayews offset each other, potential profit on 2018/19 of £20m or post tax from selling any players of value. P&L reserves up to £80m for nice big dividends.
Future state maybe an uncompetitive squad, but costs be low again to match reduced parachutes in 2019/20, but then exit cheaply for another £10m or so and let whoever buys - maybe the Trust - worry about it. | | | |
| An objective view on business ownership on 19:51 - Sep 7 with 1736 views | Shaky |
| An objective view on business ownership on 17:52 - Sep 7 by awayjack |
Dividends are paid out of reserves, yes tricky without 2018 accounts but just to help me understand:
P&L Reserves on 31/7/17 were £19.5m positive.
2017 - reported income £127m, ops costs £125m - huge but modest profit before player sales.
2018 - income estimate £125m - lower PL position but higher commercial revenue.
2018 - cost estimate £120m (as assume!) - still huge like 2017 but relegated so no big PL bonuses.
2018 - big Aug17 profit of sale of Siggy/Llorente late window (Aug17) for reported £60m. Both at low amortised cost values in accounts, so £45m profit after fees.
2018 - July18 player - sold Fabs mostly profit £6m.
So - maybe I’m missing something - but 2018 accounts should show decent profit of £50m due to mostly to player sales, say £40m after tax.
So unless logic is way off P&L reserves at 31/7/18 of £60m or so.
Post balance sheet adjustments? August 2018 - £40m of sales but modest profit after losses on Clucas (£6m), Mesa (£4m) and Baston (£4m) versus profit on Mawson (£12m), Fernandez (£5m) and Bartley (£4m). In any event no major hit on P&L reserves.
2018/19 - Who knows the true cost position is but if the huge player cuts and suggestions from K+P is we’ve taken medicine to cut costs to cover the £50m reduction in income. So in theory operating income less costs break even, or let’s say £10m loss.
So back to hypothesis - rather than a cheap exit, why wouldn’t the owners sell any remaining players with value between Jan-Jul19. If this is £40m and we take a hit on Bony (£10m) and Ayews offset each other, potential profit on 2018/19 of £20m or post tax from selling any players of value. P&L reserves up to £80m for nice big dividends.
Future state maybe an uncompetitive squad, but costs be low again to match reduced parachutes in 2019/20, but then exit cheaply for another £10m or so and let whoever buys - maybe the Trust - worry about it. |
Yes, you seem to be completely missing depreciation (£1.4m) and amortisation (£24.2m) in 2017 taking total operating costs to £151m, not £125m as you state.
FWIW, i have amortisation rising to £34.4m in 2018 with the big signings of Bony, Clucas, Mesa, as well as Ayew for half a year.
I also have the wage bill higher with those additions certainly not offset by Siggy/Llorent's departure, and Sanches and Tammy also to pay for, while the regular annual management sacking was also a feature in 2018.
Overall I am forecasting a small loss for the year. | |
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| An objective view on business ownership on 19:59 - Sep 7 with 1728 views | waynekerr55 |
| An objective view on business ownership on 15:02 - Sep 7 by Badlands |
Eh!
If your house is worth £500K it is worth £500K
If you have a mortgage on it of £360K the property is still worth £500K
On the other hand
If your house is worth £500K it is worth £500K to you if you have no mortgage.
If you have a mortgage on it of £360K the property is still worth £500K but only worth £140K to you.
and
On the other hand
If your house value fall to £300K it is worth £300K to you if you have no mortgage.
If you have a mortgage on it of £360K the property is still worth £300K but you still owe £360 i.e. you are during the period your house is worth £300K £60K in debt beyond the value of your assets.
At this pain you do some serious pruning or make sure you have a paddle! |
Or sell it to some gullible twÄts who would pay you and take the liabilities
Sound familiar? |  |
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| An objective view on business ownership on 08:57 - Sep 8 with 1629 views | awayjack |
| An objective view on business ownership on 19:51 - Sep 7 by Shaky |
Yes, you seem to be completely missing depreciation (£1.4m) and amortisation (£24.2m) in 2017 taking total operating costs to £151m, not £125m as you state.
FWIW, i have amortisation rising to £34.4m in 2018 with the big signings of Bony, Clucas, Mesa, as well as Ayew for half a year.
I also have the wage bill higher with those additions certainly not offset by Siggy/Llorent's departure, and Sanches and Tammy also to pay for, while the regular annual management sacking was also a feature in 2018.
Overall I am forecasting a small loss for the year. |
Correct. I didn’t attempt to calculate amortisation as most of this is on players, so it’s included in player sales / profit. For example the £40m in sales in recent window per my fag packet only shows small profit as offset on losses by deducting the amortised costs/ intangible values on the balance sheet. So if for example there’s another £30m+ charged in amortised costs in 2018, then the profit on £40m proceeds last window would be higher.
Total intangible assets (players) was circa £70m at 31/7/17. We’ve since sold £100m of players , and spent £40m on replacements, so the amortisation this year (2019) should compartively small. The only remaining players with £10m+ cost are Bony / Ayew, so net value be small, maybe SS low as £25m. The potential profits will come from players that cost us little - McBurnie, VHD, Rodon, Roberts etc.. if contracts are sorted.
You have a far more detailed model than my fag packet calculations. What do you think our P+L reserves will be on 31/7/19 if we sold most of remaining players for £40m in January19? | | | |
| An objective view on business ownership on 09:03 - Sep 8 with 1621 views | Shaky |
| An objective view on business ownership on 08:57 - Sep 8 by awayjack |
Correct. I didn’t attempt to calculate amortisation as most of this is on players, so it’s included in player sales / profit. For example the £40m in sales in recent window per my fag packet only shows small profit as offset on losses by deducting the amortised costs/ intangible values on the balance sheet. So if for example there’s another £30m+ charged in amortised costs in 2018, then the profit on £40m proceeds last window would be higher.
Total intangible assets (players) was circa £70m at 31/7/17. We’ve since sold £100m of players , and spent £40m on replacements, so the amortisation this year (2019) should compartively small. The only remaining players with £10m+ cost are Bony / Ayew, so net value be small, maybe SS low as £25m. The potential profits will come from players that cost us little - McBurnie, VHD, Rodon, Roberts etc.. if contracts are sorted.
You have a far more detailed model than my fag packet calculations. What do you think our P+L reserves will be on 31/7/19 if we sold most of remaining players for £40m in January19? |
I hesitate to make a guess at the full P&L for 2019, but after the most recent player movements I make the net book value of the player registrations £61 million right now.
Sell them for £40m and there is obviously a £20m loss to be added to x, being the loss I expect the club to generate with Bony still on the books. | |
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| An objective view on business ownership on 09:07 - Sep 8 with 1619 views | Shaky |
BTW remember that the what counts is the net book value of player player sales for the purposes of (re)calculating amortisation and carrying values, not the headline selling prices.
And in the case of all player sales they were relatively small with the exception of Mesa and Clucas, that both generated accounting losses. | |
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