1p5wich Town losses

[BroadstairsR 2,162]

Accounts, assets and goodwill .... the three tenets of any business purchase.

Accounts at Portman Road ..... zero.

Assets ..... limited, mainly the training ground. Over-sized stadium needing attention and constant upkeep. Pitch ... ditto. They don't even have undersoil heating apparently.

Goodwill (=support) .... moderate. Should increase this season, but the ceiling has lowered over recent years.

They paid £30 million for that.

Potential? I suppose that has a place but I wouldn't lend a single dime on that liklihood with regards ITFC. That Mr. Soccer even mentions  Premier League existence as 'eventual' for the club demonstrates just how little he knows of the English game.

This is not a Man. City, Chelsea or even Leicester style takeover. There are no multi-millions waiting to be poured in. It is more a dreamlike approach, shrouded in bull****e, without the slightest realisation of the "steep and thorny road to heaven" that will be involved.

 

[Badger 2,405]

1 hour ago, BroadstairsR said:

They paid £30 million for that.

 

Yes, I thought that Evens got a remarkably good deal in the circumstances. He also got some of ITFC's land I believe, as well as a significant share in the new company that he sold to. 

[dylanisabaddog 4,913]

15 hours ago, Badger said:

Yes, I thought that Evens got a remarkably good deal in the circumstances. He also got some of ITFC's land I believe, as well as a significant share in the new company that he sold to. 

He already owned the training ground. I think he has 5% of the new company 

[Graham Paddons Beard 2,431]

2 hours ago, dylanisabaddog said:

He already owned the training ground. I think he has 5% of the new company 

Correct . 
The lack of understanding on this is quite stark. Hating the Binners is perfectly valid , but inventing reasons why this is terrible deal are pointless. 

The pension fund holds over a billion USD. The investments of the fund will range from liquid cash , to higher risk investments. The fund will know that some of the riskier investments will be successful and others won’t . That will be part of their risk strategy . 

The new company buying the Binners is using debt funded by a pension fund . The repayment will be a mix of fixed interest (remember when we owed money to Axa? It was at 5% fixed - at the time a healthy return for them) and possibly a success fee although that’s unlikely . Why do people think Axa (a pension provider) loan money? 

The deal sees the debt ITFC owed “satisfied” and was a substantial part of the deal. Evan’s has released the debt ie written it off. This was my original point .  
 

So new owner has purchased the club (the point about assets is a fair one - so these debts will be unsecured most likely) for £30m but what this money has done is provided control of ITFC. The club has money to spend via the pension fund funded money. Rumours are this is a further £40m but FFP will play a part .  
 

These geared purchases happen all the time , the money used can come from a variety of sources - in this case Pension Fund , but also VC money .
 

Now it all depends on results . It looks to me like they are buying players to get out of the third tier . In my opinion that’s the easy bit . 
 

the far more difficult bit is promotion to the prem. you need players , a manager , money , infrastructure and you have to stay in line with FFP. You are competing with parachute and other “wealthy”clubs . 

Bristol City is an interesting benchmark, for obvious reasons. 

Edited July 3, 2021 by Graham Paddons Beard

[dylanisabaddog 4,913]

21 minutes ago, Graham Paddons Beard said:

Correct . 
The lack of understanding on this is quite stark. Hating the Binners is perfectly valid , but inventing reasons why this is terrible deal are pointless. 

The pension fund holds over a billion USD. The investments of the fund will range from liquid cash , to higher risk investments. The fund will know that some of the riskier investments will be successful and others won’t . That will be part of their risk strategy . 

The new company buying the Binners is using debt funded by a pension fund . The repayment will be a mix of fixed interest (remember when we owed money to Axa? It was at 5% fixed - at the time a healthy return for them) and possibly a success fee although that’s unlikely . Why do people think Axa (a pension provider) loan money? 

The deal sees the debt ITFC owed “satisfied” and was a substantial part of the deal. Evan’s has released the debt ie written it off. This was my original point .  
 

So new owner has purchased the club (the point about assets is a fair one - so these debts will be unsecured most likely) for £30m but what this money has done is provided control of ITFC. The club has money to spend via the pension fund funded money. Rumours are this is a further £40m but FFP will play a part .  
 

These geared purchases happen all the time , the money used can come from a variety of sources - in this case Pension Fund , but also VC money .
 

Now it all depends on results . It looks to me like they are buying players to get out of the third tier . In my opinion that’s the easy bit . 
 

the far more difficult bit is promotion to the prem. you need players , a manager , money , infrastructure and you have to stay in line with FFP. You are competing with parachute and other “wealthy”clubs . 

Bristol City is an interesting benchmark, for obvious reasons. 

I agree with all of that but the bit about getting out of League 1 is perhaps a bit understated. I suppose you're right in that it's easier than getting out of the Championship but try telling Sunderland and Portsmouth it's easy. 

The other problem they have is that the players they are buying to get out of L1 may be good L1 players but that is a very different thing from being a top Championship player. We won it last season with a first 11 which would cost around £100m to buy from scratch. The rumoured £40m is probably enough to get you halfway up the table. 

[Graham Paddons Beard 2,431]

4 minutes ago, dylanisabaddog said:

I agree with all of that but the bit about getting out of League 1 is perhaps a bit understated. I suppose you're right in that it's easier than getting out of the Championship but try telling Sunderland and Portsmouth it's easy. 

The other problem they have is that the players they are buying to get out of L1 may be good L1 players but that is a very different thing from being a top Championship player. We won it last season with a first 11 which would cost around £100m to buy from scratch. The rumoured £40m is probably enough to get you halfway up the table. 

I agree with all of that . I sincerely hope it all goes pear shaped . 
Slightly different for Portsmouth and Sunderland who are/ were hogtied by huge player contracts - as a result of being in the prem for such a long time and no contingency for relegation. Same for Wigan , Bolton and Blackburn. None of these clubs have ever got over the financial impacts of these . 

Fingers crossed the bloke from Bristol City carries on with his extremely average record of mid table chumps . 

Edited July 3, 2021 by Graham Paddons Beard

[Badger 2,405]

34 minutes ago, Graham Paddons Beard said:

Correct . 
The lack of understanding on this is quite stark. Hating the Binners is perfectly valid , but inventing reasons why this is terrible deal are pointless. 

I don't think anyone is saying that it is a bad deal for ITFC, the point that is being made is that it was a remarkably good deal for Marcus Evans and probably an overpayment by Gamechanger. 

Evans cleared most of his debt, but has the same equity in Gamechanger as the 3 who led the consortium + he gets to keep part of the training ground, which I believe is likely to be developed + gets a reported £35 million to £40 million. This is a lot to pay for a club which has very few assets - it does not own its Stadium (which is run down and in need of repair) and has given away part of its training ground as part of the deal.

Compare this to the purchase of Sunderland AFC for a reported £30 million including a 49,000 seater modern stadium and state of the art training facilities. It is a club with greater size and potential imo. 

Who do you think got the better deal - Gamechanger or Louis Dreyfus?

 

Compare this to the sale 

[Graham Paddons Beard 2,431]

7 minutes ago, Badger said:

I don't think anyone is saying that it is a bad deal for ITFC, the point that is being made is that it was a remarkably good deal for Marcus Evans and probably an overpayment by Gamechanger. 

Evans cleared most of his debt, but has the same equity in Gamechanger as the 3 who led the consortium + he gets to keep part of the training ground, which I believe is likely to be developed + gets a reported £35 million to £40 million. This is a lot to pay for a club which has very few assets - it does not own its Stadium (which is run down and in need of repair) and has given away part of its training ground as part of the deal.

Compare this to the purchase of Sunderland AFC for a reported £30 million including a 49,000 seater modern stadium and state of the art training facilities. It is a club with greater size and potential imo. 

Who do you think got the better deal - Gamechanger or Louis Dreyfus?

 

Compare this to the sale 

I’ve no idea I’m afraid Badger . I don’t know anything about the Sunderland deal. 

[Badger 2,405]

5 minutes ago, Graham Paddons Beard said:

I’ve no idea I’m afraid Badger . I don’t know anything about the Sunderland deal. 

"The new share structure will reportedly see Louis-Dreyfus take 59% of the club, with Juan Sartori, Stewart Donald and Charlie Methven retaining minority shareholdings. Initial indications are that, following the deal, club will be debt-free and that the Stadium and Academy will remain the main tangible assets of the club and that, as a result of the deal, Donald and Methven will no longer have any say in key decisions at the Stadium of Light."

https://www.sportingferret.com/2021/02/19/sunderland-takeover-approved-what-next/

Louis Dreyfus is reported to have is reported to have paid £30 million for this compared to £35 million to £40m gamechanger paid for ITFC which doesn't own its own ground and has lost use of part of its training land as part of the deal. They have very few tangible assets.

I think that it is pretty clear that Gamechanger overpaid and that Evans got a good deal in the circumstances. Where this leaves ITFC is anybody's guess but at least they are released from the purgatory of their previous existence and have hope for a period.

[Graham Paddons Beard 2,431]

5 minutes ago, Badger said:

"The new share structure will reportedly see Louis-Dreyfus take 59% of the club, with Juan Sartori, Stewart Donald and Charlie Methven retaining minority shareholdings. Initial indications are that, following the deal, club will be debt-free and that the Stadium and Academy will remain the main tangible assets of the club and that, as a result of the deal, Donald and Methven will no longer have any say in key decisions at the Stadium of Light."

https://www.sportingferret.com/2021/02/19/sunderland-takeover-approved-what-next/

Louis Dreyfus is reported to have is reported to have paid £30 million for this compared to £35 million to £40m gamechanger paid for ITFC which doesn't own its own ground and has lost use of part of its training land as part of the deal. They have very few tangible assets.

I think that it is pretty clear that Gamechanger overpaid and that Evans got a good deal in the circumstances. Where this leaves ITFC is anybody's guess but at least they are released from the purgatory of their previous existence and have hope for a period.

Well let’s hope the Binners maintain their momentum 😂

[Michael Starr 519]

This is the thing. Yes, the majority of their debt was written off, but the "business" has been running at almost a million a month debt for the last 5 to 6 years. Add to that the fact that their revenue is currently severely depleted. I hope the new owners have deep pockets. They'll need to sink in a million a month just to stay afloat in league one. We are so lucky with our business model. Sure, it's annoying that we sell our best players but we are in such safe hands right now.

[vos 155]

Aviva wrote off about 20 million. It cost them little as it was an investment they made via one of their corporate bond funds. So it was their investors who lost out. Evans wrote off about 100 million but I would imagine that some of that was set off against tax bills for his other companies.. Badger suggests that lending the money at 10% is a nice little earner. Yes it is but the slight snag is that recent history shows they have been unable to pay any interest and you lose your original investment. As the story goes if it looks too good to be true IT IS. Returning to my earlier theme, I understand an investment company is prepared to take on some risks, but in the current football market its going to take some time for ITFC to return to the Premiership - if ever !!!

[BroadstairsR 2,162]

Its a brilliant deal for the binners on the basis that their situation could hardly have been worse. They have been on a downward trajection for the best part of fifteen years and more and it was becoming drip, drip towards oblivion. Especially if Evans decided/had need to pull the plug. "Released from the purgatory of their previous existence" ... like it Badger.

Annual losses, annual decline. 

 With a bit of cash available now they clearly have a chance of reversing this, but what exactly would constitute success for the investors?

Mr. Soccer can blow all the hot air he likes about his dream of Premier League football for the club, but there's not a single football fan in the country who would lack awareness of the cost of achieving this. Then there is the little matter of return on investment.

The Pension Fund could own the Moon as far as I am concerned but it still wouldn't make investing millions upon millions in that club anything less  than very high risk to the point of being irresponsible. What slice of that Moon would be required to make ITFC a permanent fixture at the top table?

Already the binners seem to have twigged that this is not the money pit they had first envisaged:

"It looks clear now that we are not going to be waving the cheque book and signing up the cream of L1/2 talent as was thought not long back." TWTD.

For some reason I am always reminded of John DeLorean when thinking of Brett Johnson. At leat DeLorean knew something about cars, whereas Johnson's knowledge of the finances involved in English "soccer" seems sparse. As for Berkeley and O'Leary are they involved in it for the love of the English game, Ipswich Town or because they smell some gain or other from somewhere?

Quite frankly, and just from the investment point of view, there seems something fishy about the whole business, the fact that Evans retains a share perhaps enhances this view, whilst the comparison with Sunderland might confirm it.

@GPB:

"Fingers crossed the bloke from Bristol City carries on with his extremely average record of mid table chumps ."

Didn't that club have some similar investment a few years back, and wasn't it supposed to become the latest success story, initially investing a bit of cash on half-decent players and talking of ground expansion? That all has, indeed, fizzled out ..... and wasn't Ashton involved in that failure?

Edited July 3, 2021 by BroadstairsR

[Badger 2,405]

On 03/07/2021 at 11:23, vos said:

Badger suggests that lending the money at 10% is a nice little earner. Yes it is but the slight snag is that recent history shows they have been unable to pay any interest and you lose your original investment. As the story goes if it looks too good to be true IT IS.

Sorry for the late reply, I have just seen this. What I actually said was:

On 02/07/2021 at 13:59, Badger said:

2. The interest charged - many clubs are borrowing money at well above the rate that you or I would pay (e.g. Burnley, Southampton)- so it is quite a profitable business. I'd lend at nearly 10% if I had guaranteed call on the assets if it went t*ts up - wouldn't you? 

The underlined part was absolutely crucial. The big lenders now insist on collateral for loan - for example, MSD have loaned Southampton £78.8 million at 9.14% (at an annual cost of 7.2 million a year in interest alone). This loan has as security the St Mary's stadium, their training ground at Park Farm and other buildings hat belong to the  club - this would more than cover the risk of default. 

It is just one of many  examples of clubs with rich owners, which some on here aspire to, making the club worse off not better.

https://www.theguardian.com/football/2021/feb/22/sign-of-the-times-how-english-clubs-are-turning-to-high-interest-us-loans

I was also at pains to point out my opinion that Gamechanger had overpaid for ITFC precisely because they had fewer assets to sell if if went wrong, comparing it to Sunderland with huge physical assets who were sold for less.

[chrismakin 13]

On 03/07/2021 at 10:50, Badger said:

"The new share structure will reportedly see Louis-Dreyfus take 59% of the club, with Juan Sartori, Stewart Donald and Charlie Methven retaining minority shareholdings. Initial indications are that, following the deal, club will be debt-free and that the Stadium and Academy will remain the main tangible assets of the club and that, as a result of the deal, Donald and Methven will no longer have any say in key decisions at the Stadium of Light."

https://www.sportingferret.com/2021/02/19/sunderland-takeover-approved-what-next/

Louis Dreyfus is reported to have is reported to have paid £30 million for this compared to £35 million to £40m gamechanger paid for ITFC which doesn't own its own ground and has lost use of part of its training land as part of the deal. They have very few tangible assets.

I think that it is pretty clear that Gamechanger overpaid and that Evans got a good deal in the circumstances. Where this leaves ITFC is anybody's guess but at least they are released from the purgatory of their previous existence and have hope for a period.

 

Just to add a bit of an overview. as there seems to be some confusion.  The 'lost part of training ground'  part isn't entirely correct, the land itself is split into two, M.E purchased both parts, 1 being the training land we use now and 1 he was due to build properties on, as a club that part of the land was never part of ITFC.      I see it mentioned about our monthly losses -  thankfully the new owners plans and execution has enabled us to remove a large part of that financial problem with the release or sale of pretty much 3 squads worth of contracted players, how on earth M.E let it get that big is crazy, but that's how it was.      There will be some fans getting all excited, as anyone would,  but the majority just want it run correctly and differently to how it has been for 14 years, and the signs are there off the field already, that's key.  What ever happens on the pitch happens,  but hopefully we can get our derby's back and you guys can kick our ****'s again. At lease that means we've made it back to what ever league you're in.  

[Graham Paddons Beard 2,431]

1 minute ago, chrismakin said:

 

Just to add a bit of an overview. as there seems to be some confusion.  The 'lost part of training ground'  part isn't entirely correct, the land itself is split into two, M.E purchased both parts, 1 being the training land we use now and 1 he was due to build properties on, as a club that part of the land was never part of ITFC.      I see it mentioned about our monthly losses -  thankfully the new owners plans and execution has enabled us to remove a large part of that financial problem with the release or sale of pretty much 3 squads worth of contracted players, how on earth M.E let it get that big is crazy, but that's how it was.      There will be some fans getting all excited, as anyone would,  but the majority just want it run correctly and differently to how it has been for 14 years, and the signs are there off the field already, that's key.  What ever happens on the pitch happens,  but hopefully we can get our derby's back and you guys can kick our ****'s again. At lease that means we've made it back to what ever league you're in.  

F3ck off Chris. No one gives a shiney ****e what you think . 

[cambridgeshire canary 6,707]

3 minutes ago, chrismakin said:

 

Just to add a bit of an overview. as there seems to be some confusion.  The 'lost part of training ground'  part isn't entirely correct, the land itself is split into two, M.E purchased both parts, 1 being the training land we use now and 1 he was due to build properties on, as a club that part of the land was never part of ITFC.      I see it mentioned about our monthly losses -  thankfully the new owners plans and execution has enabled us to remove a large part of that financial problem with the release or sale of pretty much 3 squads worth of contracted players, how on earth M.E let it get that big is crazy, but that's how it was.      There will be some fans getting all excited, as anyone would,  but the majority just want it run correctly and differently to how it has been for 14 years, and the signs are there off the field already, that's key.  What ever happens on the pitch happens,  but hopefully we can get our derby's back and you guys can kick our ****'s again. At lease that means we've made it back to what ever league you're in.  

'And then I said things are lookng good for Ipswich Town'

[horsefly 4,298]

27 minutes ago, chrismakin said:

What ever happens on the pitch happens,  but hopefully we can get our derby's back and you guys can kick our ****'s again. At lease that means we've made it back to what ever league you're in.  

I just don't see us ever dropping into league 1 again, so you're just going to have to wait for Kings Lynn to join you.

[chrismakin 13]

38 minutes ago, Graham Paddons Beard said:

F3ck off Chris. No one gives a shiney ****e what you think . 

xx

[FenwayFrank 2,459]

On the subject of league 1, I see that Sunderland are being linked with free agent Alex Pritchard

[Badger 2,405]

56 minutes ago, chrismakin said:

 

Just to add a bit of an overview. as there seems to be some confusion.  The 'lost part of training ground'  part isn't entirely correct, the land itself is split into two, M.E purchased both parts, 1 being the training land we use now and 1 he was due to build properties on, as a club that part of the land was never part of ITFC.      I see it mentioned about our monthly losses -  thankfully the new owners plans and execution has enabled us to remove a large part of that financial problem with the release or sale of pretty much 3 squads worth of contracted players, how on earth M.E let it get that big is crazy, but that's how it was.      There will be some fans getting all excited, as anyone would,  but the majority just want it run correctly and differently to how it has been for 14 years, and the signs are there off the field already, that's key.  What ever happens on the pitch happens,  but hopefully we can get our derby's back and you guys can kick our ****'s again. At lease that means we've made it back to what ever league you're in.  

If you are run properly you have natural advantages (size of fan base) which should mean that you are promoted sooner rather than later. The problems tend to occur when owners respond to the fans ambitions by abandoning financial discipline, which you indicated is what happened.

Your ground capacity is slightly larger than ours (though without owning the ground your commercial operation is likely to remain smaller), so in time you should be competitive in the Championship as well assuming that there isn't a legacy of debt to carry around. As we have found, if you sell over 25,000 tickets on a regular basis you should always be in the top half of the championship and if you build properly further promotion is likely. It is the demand for "quick fixes" which tends to cause trouble: in essence clubs gamble their future away by spending unsustainably.

[wcorkcanary 4,334]

33 minutes ago, Badger said:

If you are run properly you have natural advantages (size of fan base) which should mean that you are promoted sooner rather than later. The problems tend to occur when owners respond to the fans ambitions by abandoning financial discipline, which you indicated is what happened.

Your ground capacity is slightly larger than ours (though without owning the ground your commercial operation is likely to remain smaller), so in time you should be competitive in the Championship as well assuming that there isn't a legacy of debt to carry around. As we have found, if you sell over 25,000 tickets on a regular basis you should always be in the top half of the championship and if you build properly further promotion is likely. It is the demand for "quick fixes" which tends to cause trouble: in essence clubs gamble their future away by spending unsustainably.

Brilliantly  put , Badgero.