The Phantom Investor

[BigFish 1,988]

[quote user="Canary Wundaboy"] But it would

make a positive difference, given the comparative lack of any wealth or

investment from our current owners. Sure you need bottomless pockets to

become Man City, Chelsea or Man United, but moderate investment of a

few hundred million would be enough to establish a mid-table EPL side,

along with all the extra money that then brings in. By

comparison, our owners are investing nothing, so we''re having to sell

our best players which in turn reduces the likelihood of success on the

pitch and all that follows... It does make me

sad when people try and explain away this kind of investment in other

clubs when we are in such dire need of it. We''ll just never get it while

Delia clings on to power over her train set.[/quote]Help me please, I have ripped this comment from the Barnsley thread because it seems worth a thread of its own and it is a common theme that crops up on here. Perhaps some of the resident fag packet accountants on the board could clarify the questions this prompts........1. CW considers a moderate investment of a few hundred million (!!) would do the trick, anyone know what our competitors have/are investing?2. Is this even within the FFP rules?3. How much would an investor need, I seem to remember Purple, my favourite FPA, saying there are 600,000 £100 shares in circulation so that seems to indicate £60 million just to buy the club?4. Smith & Jones, I understand, own just over half the club, would the other shareholders be willing to sell up?5. Getting to the "next level" probably requires the replacement City Stand and Colney''s refurbishment - any ideas on cost?6. Could any investor build up a holding to put pressure on S&J?7. The squad is well short of "mid-table" quality - what investment in fees and wages would be required?8. Would the club even be profitable/sustainable after all this, or would it require continuing investment?

[king canary 7,654]

1. An investment of a few hundred million is not moderate but it also isn''t needed. Essentially what we need is someone with enough to underwrite some structural investment (Colney improvements particularly) and to allow us to operate slightly above our means- whether that is sustaining a higher wage budget or being able to reinvest money made from player sales.

2. I believe FFP allows us to make losses of up to £6m a year, so we probably couldn''t spend £20m without making any sales but we could reinvest our money from sales or run a wage budget that leads to some loss making.

3. No idea

4. Not sure it really matters- buy Delia & MWJ shares and you''ve got the controlling stake. You could even argue that someone who is serious about trying to buy the club could start by trying to hoover up shares from the smaller share holders to build up a decent sized % stake.

5. Nope- I don''t think we''d need to blow up Colney but it sounds like it needs some work.

6. See question 4- I think it is possible, particularly if an interested party could buy out someone like Foulger.

7. Impossible to tell really

8. Not at Championship level but then almost all Championship clubs run at a loss.

[Rogue Baboon 0]

Re. 1...

Wolves have bottomless pockets. The wealth of the Fosun group dwarfs anything seen in football, even Man Citys wealth, I believe - I think its somewhere around $40billion

[norfolkngood 1,087]

We just need someone willing to put some money in so we do not have to sell every Transfer window that would be enough for me

We look like we might lose the best players in the next two transfer windows and that is just to plug the shortfall of income

if we were to have a owner willing to take that short fall

we could be something to get us up instead of selling as soon as we get someone half decent

selling a player to a bigger team will always happen here but to sell to service a debt that is growing and not putting it back into the team is what gets me

[BigFish 1,988]

[quote user="Rogue Baboon"]Re. 1...

Wolves have bottomless pockets. The wealth of the Fosun group dwarfs anything seen in football, even Man Citys wealth, I believe - I think its somewhere around $40billion[/quote]The question is more about how much they spend, rather than how much they could spend. Marcus Evans could spend, but doesn''t seem to??

[king canary 7,654]

Hugely dependent on turnover I believe- so as far as I know we could make a loss of about £6m p/y.

So lets say we had an income of £25m, outgoings of £20m we could then spend that £5m + £6m on whatever.

I may be wrong about this though, I don''t count myself as a FPA.

[norfolkngood 1,087]

i agree we could have bill gates buy us but it it is only what he is willing to put into the team

But having said that our Owners are not putting in much if anything in yearly and that is only getting worse if Tom gets the club as he has not the wealth of Delia

[Bill 1,788]

I looked up the word investor (which is the same as han hinvestor)''is a person that allocates capital with the expectation of a future financial return''Could someone please explain how, where and when this financial return is made.....................an example as well might help

[Rogue Baboon 0]

Investor buys Norwich. Invests money in to playing squad and infrastructure. Norwich get promoted in 2 years.

Instantly the club is now turning over 2-3 times more per year, potentially covering the investors original investment within a year.

Should the investor look to sell the club will also be worth massively more (look at Ashley/Newcastle)

[Bill 1,788]

[quote user="Rogue Baboon"]Investor buys Norwich. Invests money in to playing squad and infrastructure. Norwich get promoted in 2 years.

Instantly the club is now turning over 2-3 times more per year, potentially covering the investors original investment within a year.

Should the investor look to sell the club will also be worth massively more (look at Ashley/Newcastle)[/quote]err, noThe extra income goes on wages, as has been seen everywhere else - so there is almost nothing to repay the ''hinvestor'' unless you are Blackpool.Who would then buy something where supposedly the ''profit'' has already been creamed off.If it hasn''t then why would the original hinvestor sell i there was to be money made out of his investment further down the line.The figures quoted are that Mike Ashley has spent around £260m on NUFC. If that is what he gets from a sale then he has made a loss simply because the loans have been interest freeSo perhaps an example elsewhere, that does show an investor benefiting - though I would have thought that given the constant talk on here we would have to assume all investors have made piles of money..... unless there is another reason

[king canary 7,654]

Southampton are the most obvious example.

As far as I can see they bought the club for £14m, put in about £40m in loans that were turned into shares and recently sold 80% of the club for £210m.

The thing people seem to miss is that for any owner or investor to make a profit on a club they generally need that club to be successful. There isn''t much use in buying a Championship club and staying there.

[TCCANARY 263]

[quote user="king canary"]Southampton are the most obvious example.

As far as I can see they bought the club for £14m, put in about £40m in loans that were turned into shares and recently sold 80% of the club for £210m.

The thing people seem to miss is that for any owner or investor to make a profit on a club they generally need that club to be successful. There isn''t much use in buying a Championship club and staying there.[/quote]Marcus? Is that you?

[king canary 7,654]

@TC

I think Evans came in thinking he could make a quick buck- throw £10/20m at the club, get them promoted and sell them. When that didn''t work out he lost interest.

[Bill 1,788]

[quote user="king canary"]Southampton are the most obvious example.

As far as I can see they bought the club for £14m, put in about £40m in loans that were turned into shares and recently sold 80% of the club for £210m.

The thing people seem to miss is that for any owner or investor to make a profit on a club they generally need that club to be successful. There isn''t much use in buying a Championship club and staying there.[/quote]Until we see more it is perhaps more the exception that proves the pointTough this might suggest another reasonGao was alleged in Chinese media reports to have been implicated in the

corruption of Xu Maiyong, a notorious mayor in the booming Xiaoshan

province of Hangzhou, who was known as “Xu three more” due to his

outsized appetites for money, property and sex. Xu and Jiang Renjie, the

vice-mayor of Suzhou, were both convicted of accumulating huge private

wealth corruptly and executed by the Chinese authorities on 19 July 2011.

[shefcanary 2,444]

From an FPA.

1. Investment on top of buying control I think you mean - and if you look at other answers below, buying control under our current share ownership is not exactly easy to achieve. So if we restrict ourselves to investment, if you are looking at a post-parachute season, then that will be governed by 2. So to avoid going round and round in circles if the investor could cover the allowable losses under FFP, which in turn is averaged over a rolling three year period I estimate for a club our size we are only looking for an initial "no strings attached" investment of £20 Million.

2. Fairness under FFP rules is determined by the contractual obligations of income; the more that apparent investment looks like it is buying a service from the club, the more that can be invested. However this will be determined by the type of club you are and the "natural" turnover the club can generate. So Man City can sell naming rights and shirt sponsorship for many hundreds of millions a season now to Etihad on the basis of their current standing within football and thus how much people are prepared to pay for naming rights and shirt sponsorship. Go back 15 years and I doubt they could have got away with a similar £20 million as discussed in 1 above. However looking at our "natural" turnover in the championship, I think £30 million tops is likely, so losses of under 20% of this per year, averaged over three years, implies that £20 million is as much as could be invested (3 x 20% of 30M =18, rounded up to say £20 M).

3. The £60 million you quote is about right for 100% purchase, but the calculation is slightly astray. The number of shares is around 320,000 which at £100 per share is £32 Million. Then on top of that there is clearance of overdraft lending and introduction of working capital (an initial injection might just about circumvent FFP rules but care there), say another £10 Million, merchant banking and legal fees £10 Million, then a suitable profit to shareholders on their holding to secure the sale (why bother otherwise), say £8 million (£25 a share).

4. Yes, Smith & Jones only own just over 51%. To get full control there will be provisions within the Memo & Arts which mean a significant minority (this could be anywhere between 5 and 25%), can block a full takeover. Most shareholders are single share holdings from the 2003 Huckerby purchase era, so probably have no reason to sell, but how close they would be to the minority blocking interest I have no idea. This makes any major sales of shareholdings unlikely.

5. The investment in the City Stand was put at around £35 million, which included borrowing costs. If the investor paid for the capital injection themselves then it might be cheaper, but they would want something in return no doubt, especially if they were not in complete control of the club. For Colney it has been quoted most recently as a minimum of £2 million is required to bring it up to scrtach. What may be more pertinent may be the annual costs of running the academy, which I think currently makes losses of £1 million p.a. if looked at as a separate entity (before transfer fees received on ex-academy product). Jacob''s sale probably covers all losses to date and for a few years more, so a moot point?

6. An investor could build up to 30% of the shares before being required to make an offer to all shareholders. Doing so would take plenty of time, but would probably be apparent fairly quickly - this could lead either to the price per share rising, thus rendering this approach impossible, or could force major shareholders to come to the negotiating table. The Supporters Trust has been doing this I believe, so maybe they can give a clue as to the machinations involved and how long they think it could take.

7. That''s probably back to 1. and 2. above, although other clubs (say Cardiff) have managed this for a handful of millions. It depends on management more than money really but that is highly subjective so would not want to discuss a figure here at all.

8. Not sure what you are asking here. As others have stated, even in the PL you are unlikely to see a club as being significantly profitable, especially outside of the big four. As TV money increases so will wages required to secure the services of players, so at best break-even but that should preclude any future investment requirements. That is unless the club decides to buy more RVW''s and squander the riches! So back to the nature of the controlling interest of any investor.

If everything went smoothly for the investor, the sum of 1, 3 and 5 is over £100 million and CW is not far wrong. But achieving 100% shareholding is really unlikely and wastes everyone''s energies, so as I''ve said before, let''s get on with supporting the club in the ground rather than sniping from the sidelines.

Barnsley were lucky Cryne existed. I fear for them once this consortia starts to fall out with each other.

[Bill 1,788]

".. let''s get on with supporting the club in the ground rather than sniping from the sidelines.

"hear hear !

[Fromage Frais 10]

[quote user="Rhubarb"]I looked up the word investor (which is the same as han hinvestor)''is a person that allocates capital with the expectation of a future financial return''Could someone please explain how, where and when this financial return is made.....................an example as well might help[/quote]

It won''t be

In football, i can only see 3/4 risky business models which look like you may get profits.

a) Being massive like Manchester United/arsenal and spend less than what you get in.

b) being in the premier league and staying up whilst not spending the dough (works for maybe 2 years max as the players good enough to keep you there want more wages. This then catches up with you and down you go.

c) buying a medium-sized or sleeping giant club and getting them promoted to the premier league and then flogging them once you get there.

d) Being a well-run club and make money from player trading

Plan A will not happen as even teams in much larger cities do not meet this requirement. teams like Chelsea and Manchester City are happy to loose hundreds if millions trying to get to A.

Plan B been there and done that and failed

Plan C is what all the others are trying to do spending silly money. You''re not going to get someone who is going to want to pay what the club is worth and do this. Aston Villa went for 60/70 million £ apparently so how much are we worth?

http://www.skysports.com/football/news/11677/10287003/aston-villa-sold-to-chinese-company-owned-by-dr-tony-xia

With the team looking mid table maybe you better buying from someone in distress assuming you are going to have to completely overhaul the team anyhow.

The latest premier league club guesstimates value Brighton at 132 million in the premier league are we even worth 50 million outside it say Delia sells for 40 million and you have a real go at it how much would you have to spend to guarantee promotion and thus avoid financial fair play etc quite possibly 50 million again leaving a crappy return of 30 million once promoted......if you do

Plan d is where we are and you are only as good as your recruitment team if they are good then you may challenge for the playoffs. This is the prudence with ambition model.

Then that just leaves the option of a crazy rich nutter deciding to waste hundreds of millions for no logical reason whatsoever.

[Fromage Frais 10]

Good example.

14 million is less than we would want for Maddison.

Unfortunately/fortunately we are doing well enough to not be a bargain.

Should we be relegated/dire financial stress and going for peanuts that is probably the time the folks will come out of the woodwork.

[Guest]

Apologies but I am not quite getting the assumption about money meaning success.

And if all football has been reduced to is how wealthy your owners are and how much they will invest over the top of the normal running costs, then I will be happy to follow my club even in L2 downwards as long as they play football.

Even if we were to get a new wealthy owner prepared to spend large sums then I don''t see how we develop from there.

How much is enough? Who do you bring in to spend it? Is the ground big enough to cater for all the hangers on who would attend? Does it spell the end for the youth scheme?

What would the ladies team be called (TIC)? Do we boo at home when we only draw?

Dinosaur I may be but this isn''t what it is about.

[Fromage Frais 10]

[quote user="keelansgrandad"]Apologies but I am not quite getting the assumption about money meaning success.

And if all football has been reduced to is how wealthy your owners are and how much they will invest over the top of the normal running costs, then I will be happy to follow my club even in L2 downwards as long as they play football.

Even if we were to get a new wealthy owner prepared to spend large sums then I don''t see how we develop from there.

How much is enough? Who do you bring in to spend it? Is the ground big enough to cater for all the hangers on who would attend? Does it spell the end for the youth scheme?

What would the ladies team be called (TIC)? Do we boo at home when we only draw?

Dinosaur I may be but this isn''t what it is about.[/quote]

I agree when its a spending contest why bother with the football.

I am so narrow-minded I do not even like the current model I would very much prefer to be like Athletic Bilbao

A limit of say 3/4 brought in players and the rest have to come through our academy. For coaches also

Maybe this football bubble has years to run but anything that needs outside money to keep it going is at risk of collapse.

[Bill 1,788]

[quote user="keelansgrandad"]Apologies but I am not quite getting the assumption about money meaning success.

And if all football has been reduced to is how wealthy your owners are and how much they will invest over the top of the normal running costs, then I will be happy to follow my club even in L2 downwards as long as they play football.

Even if we were to get a new wealthy owner prepared to spend large sums then I don''t see how we develop from there.

How much is enough? Who do you bring in to spend it? Is the ground big enough to cater for all the hangers on who would attend? Does it spell the end for the youth scheme?

What would the ladies team be called (TIC)? Do we boo at home when we only draw?

Dinosaur I may be but this isn''t what it is about.[/quote]Unfortunately it has become the latest rallying point for the hard of thinkingThe idea of City getting an hinvestor is one that is simple to bleat out and a covenient stick to bea the club with when their level of stupidity is not matched by the club.Certain cynics might suggest that a good number of these ''hinvestors'' have other reasons for using a football club to move money around - but going any further down that road might well set of the superstitious with their howls of ''conspiracy theory, giant lizards, burn the witch. four legs good, baa baa etc''

[norfolkngood 1,087]

Money helps But the right Manager is more important

we did not spend that big when lambert was here he got the right players in and got a team that gelled together

and he done it from league 1

also with this trust thing just say Tom takes over

he runs the club for a year and then get approached by a Foreign investor Tom is keen to sell as he does not have the funds but the Delia''s hand picked Trust do not want to sell to the Foreign investor as that would go against Delia''s wishes where would that leave us then ?

[shefcanary 2,444]

Swansea have gone backwards since they found an American hinvestor - there''s more to this football lark than money.

[nutty nigel 7,598]

But surely Swansea were the model we should aspire to. Or have their fickle wannabes moved on to Brighton or Watford?

[JF 694]

shefcanary wrote the following post at 21/12/2017 2:22 PM:

Swansea have gone backwards since they found an American hinvestor - there''s more to this football lark than money.

Of cause there is, but the money gives you a decent chance, there is far more that has to fall into place. Take the latest Barnsley billionaire takeover, it gives no guarantees of success or promotion but it has greatly improved their chances. Without the takeover they had realistically very little chance

[Canary Wundaboy 1,359]

Honoured that you made an entire thread about my post.

I remain of the opinion that when Delia passes the club to Tom, who has no business acumen or wealth to invest, we''ll spiral into League One and stay there until his position becomes untenable and he has to sell up, at which what sort of profit will he make from his mother''s shareholding I wonder?

Delia knows she''s trying to hold back the tide in terms of money in football but she''s daft enough to believe that the water won''t overwhelm the club eventually, she''s actually harming the club now by refusing to see the truth and adapt to it, she''s no longer doing the best thing for the club and instead should sell up and allow us to thrive.

[Guest]

I''m sorry but improves their chances of what.

All the top clubs are in the big cities with not only football to offer.

Barnsley could throw money at it but to be honest who is going to go and play for them that will guarantee they won''t get relegated?

The top players want a chance of Champions League for whatever reason, money I suppose, and I cannot envisage a situation where Barnsley will ever be in that position.

They will still probably lose money even if they reach the Prem and automatically put their coaching and playing staff under pressure.

[JF 694]

keelansgrandad wrote the following post at 21/12/2017 9:38 PM:

I''m sorry but improves their chances of what.

All the top clubs are in the big cities with not only football to offer.

Burnley, Swansea, Huddersfield, Brighton, Leicester, Southampton, Bournemouth. Why couldn’t a club like Barnsley with money follow in their footsteps???

[nutty nigel 7,598]

If Barnsley get to the PL they won''t follow in those clubs footsteps. They''ll replace one of them. That''s how it works. We had four recent reasons up there and now some of those have replaced us.

[JF 694]

Yes I get that but that’s what I mean. Swansea have spent 7 consecutive seasons there and their time may well be up for now. With money behind them there is no reason a Barnsley couldn’t do the same. Without the money they would have little chance