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Ipswich's Chief Executive Officer (CEO)

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3 hours ago, Bonzo said:

Hi Badger, Your maths is sound. I agree that £400m is a bit rich. However while the deal was reported as a £40m deal it wasn't £40m in cash. The deal was £38.26M but that isn't all. Ipswich has three companies;

1. The Club.

2. The stadium.

3. The finance company.

The club was bough by a loan from the finance company (which is owned by the the Americans) however the Stadium is wholly owned by the same lot. The stadium is listed at a book value of £17.4m. 

This is a little convoluted but in effect the buyers look to have put in just over £20m in cash although that is in the form of loans. For a loan to be a genuine loan interest will be payable. 

The headline reported a £40m deal but it wasn't really that at all. More like £20m and even if the club goes bust they still have the stadium. Unpicking the accounts isn't that easy but it may be the case that the actual cash injected by the buyers was even less as they may have had some finance.

The pension fund will only be financially exposed to the cash they put in and not money they put in on finance raised against the stadium, so any return they make is a multiple of this figure and not the reported headline figure.

I hope you are all still awake.

Zzzzzzzzzzzz.

 

 

I'm not at all bored 😁 Do you have a link which gives more details?

I didn't think that Ipswich owned the ground - I thought it was Ipswich Borough Council?

 

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5 hours ago, Baracouda said:

How is that a contradiction. It's what Southampton employed to great success (Walcott, Bale etc), Us and Brentford are trying to make it work. Depends on how good your scouting and player development is. 

Southampton are over 100 million in debt!

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11 minutes ago, Badger said:

I'm not at all bored 😁 Do you have a link which gives more details?

I didn't think that Ipswich owned the ground - I thought it was Ipswich Borough Council?

 

They own the stands, but lease the land they stand upon. It's a long lease apparently, with a caveat restricting the area to sporting use.

Rather similar to caravan sites. The punter owns the unit, but leases the land upon which it sits.  

I wouldn't know who owns  those statues though, probably the club with all that pigeon mess on Sir Alf's head.

Edited by BroadstairsR

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18 minutes ago, Badger said:

Southampton are over 100 million in debt!

they lost 76m in the year affected by covid, but regardless of their debt. Their model is to lose money on a day to day basis and make it up with player sales. Although, they moved more away from that model when they were bought by the Chinese.

 

Edited by Baracouda

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4 hours ago, MrBunce said:

It's best to lay out the structure of the investment first.

Ipswich Town are now 87.5% owned by Gamechanger 20 Ltd (the remaining 12.5% owned by the legacy Ipswich Town Plc which is principally owned by Marcus Evans). Gamechanger is owned by the Org Az Secondary Opportunity Fund. This is an investment fund managed by investment adviser called ORG. The fund appears to be set up by ORG to invest assets on behalf of Arizona pension funds. There isn't much information on ORG, but they appear to be predominately focused on real estate investment (which makes the investment in Ipswich Town seem a little strange). ORG are listed as a consultant to the Arizona Public Safety Personnel Retirement System pension scheme (PSPRS) , again as a real estate adviser. The fund is listed as a real estate fund.

In that sense, the ultimate owner of Ipswich is now the pension scheme. But legally, and more accurately, it is the ORG fund that is the 'ultimate beneficial owner'. ORG will be looking to maximise the return on investment which will in turn be passed on to the pension scheme.

According to some quick searches the pension scheme has assets under management (AUM) of $13bn (relatively medium in size in pension scheme terms). The ORG fund has AUM of c.$200-300m. In that sense, the investment in Ipswich Town is puny for the pension scheme, although relatively significant for the specific ORG fund (ORG has several other investment funds).

So how can a pension scheme invest in a football club?

First, PSPRS is a 'defined benefit' scheme (DB). In short, it means that individuals get a set pension on retirement based on a formula - a defined benefit. These are often referred to as 'final salary' schemes (though few schemes are based on final salaries anymore). These schemes are now rare in the UK (the public sector is one of the few remaining defined benefit pension offerers). This is in contrast to 'defined contribution' schemes (DC) in which the employee gets as a pension what they've put in plus investment return (or loss!) These are the predominant schemes in the UK. The rules on what you can invest in as a DC scheme are much stricter than for DB schemes. This is because, if investments plummet the inidivudal loses out in a DC scheme. Pension schemes must invest in the interest of the pension scheme members. Therefore a DC scheme is much less able to invest in private equity (if at all). Even for DB schemes, UK regulations are now much stricter - certainly more so than the US.

PSPRS as a US DB scheme can more easily invest in private equity. In fact it does so. According to its website, 24% of its AUM is invested in private equity (i.e. investments into things like Ipswich Town). This is because it can have a long 'time horizon' to get a return on its investment (i.e. how long it can wait to make money) and private equity investments are riskier and therefore on balance are more likely to provide a higher return.

Moving on to management. Pension schemes are hands-off the management of the companies in their investment portfolio. As such they will have no involvement in the running of Ipswich Town. Investment funds (like ORG) also typically do not get involved in the operations of the companies they invest in. They are in the business of identifying investment opportunities - not running companies. It may be the case they are a more 'hands-on' manager, but that appears unlikely. It seems that Brett Johnson, Michael O'Leary and Mark Ashton will running things. ORG instead will be monitoring their investment and checking it is on track.

Moving to the investment / finance side, ORG can get a return through two ways: dividends/distributions; and sale (exit) of the investment. The first way can be through dividends or interest on loans. For Ipswich, the dividend route is unlikely - the club doesn't turn a profit so won't be able to pay dividends. Instead, the money would have to come from interest on loans. That interest would have to be paid out of operating income - i.e. money that would otherwise have gone on buying players, paying wages or investing in the ground.

The second way is via an exit - that is selling the club for more money than you bought it for. Private equity investors will typically buy in at a 'multiple' (of revenue, or profits or assets), they then seek to increase revenue/profits/assets and exit at the same (or possibly higher multiple). That doesn't quite work for football clubs as the pricing of clubs doesn't tend to marry well to financial metrics. In short, for ORG to get a successful exit they will want to increase revenue (principally via promotion, increased commercial income - see Ed Sheeran); reduce costs (staff redundancies, 'trim the fat'); and improve the assets of the club (here Ipswich Town is light on assets, they don't own the Portman Road land for example).

The economics for turning a profit on football clubs is generally awful. I saw Brentford mentioned above as an ideal investment outcome. For perspective, Brentford have racked up the best part of £100m in losses over the past decade. They made losses in each of those years (bar one where they sold the Griffin Park land and made a huge profit on player sales). As a reminder, the ORG investment fund has total assets of c.$200-300m - an investment of even half of Brentford's is not realistic unless PSPRS decides to give more money to ORG (again unlikely as the hundreds/thousands of investments PSPRS has compete against each other at any one time). Even Norwich, which balances the books generally makes losses in the Championship (albeit we usually have larger promotion bonuses).

So what do I think the plan is? Immediate promotion this year is the short-term goal. Long-term, I imagine ORG were interested in getting back the Portman Road land and the other real estate assets (ORG is a real estate investment adviser after all) - ideally at a cheap price. I also imagine the goal isn't promotion to the premier league (although that'd be great if it happened, it takes a huge investment). Instead, I'd imagine something more along the lines of Mick McCarthy's reign - get in cheap players, flog players at the peak of their market value and run the club on a purse string. This would hopefully keep Ipswich in the Championship and generate enough income to get those interest payments. With the club owning the real estate again and established in the Championship, they can then work on finding an exit.

A final word on Mark Ashton (as I think its important). My experience (when things go wrong) tells me to be vary wary of guys like him. I often refer to these (somewhat unprofessionally) as 'Todler CEOs'. That is they like shiny things, make reckless decisions and then get bored. They like doing M&A (or buying players, see how many players Ashton signed at Ipswich and at Bristol). They like their ego stroked (Ashton at Watford to disastrous effect, see the social media crap coming out at Ipswich). If I was a Town fan I'd be concerned with him at the helm.

Apologies for the very long post.

Excellent post @MrBunce thank you.

The sequitur question is why Ipswich? What is it about that particular distressed asset that caught the eye of ORG and offered a plausible ROI? 

I love America and have travelled widely across it, though Americans can be prone to an ‘evangelical punt’ and also do like a shiny new trend, and UK football clubs may be the zeitgeist. Nevertheless it still makes little sense even if it were a high return outside bet, which even in theory it does not seem to be. 

I certainly like your property-asset-collection-over-time theory, which would fit the over-arching model and provide an eventual out. As others have said, a common football finance model is to (almost) buy the overall asset (club) as a ‘client’ to lend money to, in order to generate a regular interest return. This I understand. Clubs can be cash generators in the short term (with generally some liquidateable assets like players), which ensures better-than-market interest return rates. Something akin to the Arsenal model currently. 

Again, I just don’t see this with Ipswich. Not because they are Norwich’s rivals, but because it makes no obvious commercial sense. So again, why are ORG involved? Is this really just a ‘fun punt’ the like of which would be frowned upon for Pension Fund Management Companies in the UK?

It is of course peanuts to the overall Pension Fund, though in terms of the actual vehicle used - ORG - it is on paper an entirely material investment. 

Parma 

Edited by Parma Ham's gone mouldy

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4 hours ago, Parma Ham's gone mouldy said:

Excellent post @MrBunce thank you.

The sequitur question is why Ipswich? What is it about that particular distressed asset that caught the eye of ORG and offered a plausible ROI? 

I love America and have travelled widely across it, though Americans can be prone to an ‘evangelical punt’ and also do like a shiny new trend, and UK football clubs may be the zeitgeist. Nevertheless it still makes little sense even if it were a high return outside bet, which even in theory it does not seem to be. 

I certainly like your property-asset-collection-over-time theory, which would fit the over-arching model and provide an eventual out. As others have said, a common football finance model is to (almost) buy the overall asset (club) as a ‘client’ to lend money to, in order to generate a regular interest return. This I understand. Clubs can be cash generators in the short term (with generally some liquidateable assets like players), which ensures better-than-market interest return rates. Something akin to the Arsenal model currently. 

Again, I just don’t see this with Ipswich. Not because they are Norwich’s rivals, but because it makes no obvious commercial sense. So again, why are ORG involved? Is this really just a ‘fun punt’ the like of which would be frowned upon for Pension Fund Management Companies in the UK?

It is of course peanuts to the overall Pension Fund, though in terms of the actual vehicle used - ORG - it is on paper an entirely material investment. 

Parma 

Thanks Parma.

Why Ipswich? Let me answer a different question that was posed here recently, why Crystal Palace? They recently had another(!) investor buy into the club - how do they keep getting so lucky? Well Palace are owned by pretty astute businessmen. They used their contact book to get in Blitzer and Harris to invest in the club several years ago. The latest investor, Textor was looking to invest in a club, the Palace investors looking to sell and the people running Palace are good businessmen. A case of the right man at the right time.

Ipswich Town is similar. Marcus Evans was publicly looking to sell. In fact, pretty desperately. He has run out of patience and was no longer going to put serious money in. Regardless of how things have turned out at Ipswich, he's a good businessman. You don't create just a profitable corporation like his through sheer luck. So he's going to be reasonable to deal with, professional. And ORG are looking for someone to buy. For better or worse, they've met some guys who they trust to run football clubs. They've already tried their hand in the US with Phoenix Rising (it seems to be working out). The next logical step is England - like you say it's the current zietgeist.

On the face of it though - it doesn't make much sense. Wearing my financial adviser hat - it seems like a very risky punt for a lot of the reasons you (and others) mention. However, there are some reasons why Ipswich.

First, as mentioned above, Ipswich were available. Sometimes that is the most important reason. Money burns a hole in a pocket. Another example (that has gone all awry) is Sheffield United - McCabe wanted to sell, a Saudi Prince was looking to buy...

Second, as much as it pains me to say, Ipswich aren't where they belong. It's pretty reasonable to say that they are punching well below their weight in League One. A little investment and they should easily be back in the Championship. An easy opportunity for a return.

Third, is cashflow. As touched on by another poster, OGR didn't actually need to front much cash to takeover the club. The majority of the deal 'value' was in Marcus Evans writing off debt - he even kept a stake in Ipswich, reducing the initial outlay. Very little cash needed to change hands. Compare to, say, Norwich, you are needing to spend a lot of cash to buy out Delia and the other shareholders before even thinking of investing in the club. In addition, as opposed to a Championship club, you can overhaul the playing squad cheaply and with most of the cost backloaded (see the ton of free transfers). Overall, the less cash you need to put in upfront, the easier to generate a higher rate of return.

Finally, my gut feel is the property is a key part. It's in effect an option. If things go well, Ipswich get promoted, then they can re-buy the property. If things don't go well, they haven't had to pay upfront for the expensive land in the initial deal. The other aspect is the owners of the Portman Road land (the Council) and Playford Road (Marcus Evans) are going to pretty professional to deal with (compare to, say, what happened with Wimbledon).

All that said - I still don't think this is a good deal - but I've seen worse. Would a UK pension scheme even consider something like this - no chance! Thinking of one of the pension schemes I work with, it's contoversial enough that they are investing even a tiny bit into private infrastructure. This would blow their mind.

My prediction is that the yanks and Ipswich Town fans are going to end up disappointed.

Edited by MrBunce
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5 minutes ago, MrBunce said:

Thanks Parma.

Why Ipswich? Let me answer a different question that was posed here recently, why Crystal Palace? They recently had another(!) investor buy into the club - how do they keep getting so lucky? Well Palace are owned by pretty astute businessmen (I've worked with one of them in the past). They used their contact book to get in Blitzer and Harris to invest in the club several years ago. The latest investor, Textor was looking to invest in a club, the Palace investors looking to sell and the people running Palace are good businessmen. A case of the right man at the right time.

Ipswich Town is similar. Marcus Evans was publicly looking to sell. In fact, pretty desperately. He has run out of patience and was no longer going to put serious money in. Regardless of how things have turned out at Ipswich, he's a good businessman. You don't create just a profitable corporation like his through sheer luck. So he's going to be reasonable to deal with, professional. And ORG are looking for someone to buy. For better or worse, they've met some guys who they trust to run football clubs. They've already tried their hand in the US with Phoenix Rising (it seems to be working out). The next logical step is England - like you say it's the current zietgeist.

On the face of it though - it doesn't make much sense. Wearing my financial adviser hat - it seems like a very risky punt for a lot of the reasons you (and others) mention. However, there are some reasons why Ipswich.

First, as mentioned above, is Ipswich were available - and that is sometimes the most important reason. Money burns a hole in a pocket. Another classic example (that has gone all awry) is Sheffield United - McCabe wanted to sell, a Saudi Prince was looking to buy...

Second, as much as pains me to say, Ipswich aren't where they belong. It's pretty reasonable to say, they are punching well below their weight in League One. A little investment and they should easily be back in the Championship. An easy opportunity for a return.

Third, is cashflow. As touched on by another poster, OGR didn't actually need to front much cash to takeover the club. The majority of the deal 'value' was in Marcus Evans writing off debt - he even kept a stake in Ipswich reducing the initial outlay. Very little cash needed to change hands. Compare to say Norwich, you are needing to spend a lot of cash to buy out Delia and the other shareholders before even thinking of investing in the club. In addition, as opposed to a Championship club, you can overhaul the playing squad cheaply and with most of the cost backloaded (see the ton of free transfers). Overall, the less cash you need to put in upfront, the easier to generate a higher rate of return.

Finally, my gut feel is the property is a key part. It's in effect an option. If things go well, Ipswich get promoted, then they can re-buy the property. If things don't go well, they haven't had to pay upfront for the expensive land in the initial deal. The other aspect is the owners of the Portman Road land (the Council) and Playford Road (Marcus Evans) are going to pretty professional to deal with (compare to say what happened with Wimbledon).

All that said - I still don't think this is a good deal - but I've seen worse. Would a UK pension scheme even consider something like this - no chance! Thinking of one of the pension schemes I work with, it's contoversial enough that they are investing even a tiny bit into private infrastructure. This would blow their mind.

My prediction is that the yanks and Ipswich Town fans are going to end up disappointed.

Ok @MrBunce ci siamo…mi quadra 👍🏽…grazie

Parma 

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27 minutes ago, MrBunce said:

Thanks Parma.

Why Ipswich? Let me answer a different question that was posed here recently, why Crystal Palace? They recently had another(!) investor buy into the club - how do they keep getting so lucky? Well Palace are owned by pretty astute businessmen. They used their contact book to get in Blitzer and Harris to invest in the club several years ago. The latest investor, Textor was looking to invest in a club, the Palace investors looking to sell and the people running Palace are good businessmen. A case of the right man at the right time.

Ipswich Town is similar. Marcus Evans was publicly looking to sell. In fact, pretty desperately. He has run out of patience and was no longer going to put serious money in. Regardless of how things have turned out at Ipswich, he's a good businessman. You don't create just a profitable corporation like his through sheer luck. So he's going to be reasonable to deal with, professional. And ORG are looking for someone to buy. For better or worse, they've met some guys who they trust to run football clubs. They've already tried their hand in the US with Phoenix Rising (it seems to be working out). The next logical step is England - like you say it's the current zietgeist.

On the face of it though - it doesn't make much sense. Wearing my financial adviser hat - it seems like a very risky punt for a lot of the reasons you (and others) mention. However, there are some reasons why Ipswich.

First, as mentioned above, Ipswich were available. Sometimes that is the most important reason. Money burns a hole in a pocket. Another example (that has gone all awry) is Sheffield United - McCabe wanted to sell, a Saudi Prince was looking to buy...

Second, as much as it pains me to say, Ipswich aren't where they belong. It's pretty reasonable to say that they are punching well below their weight in League One. A little investment and they should easily be back in the Championship. An easy opportunity for a return.

Third, is cashflow. As touched on by another poster, OGR didn't actually need to front much cash to takeover the club. The majority of the deal 'value' was in Marcus Evans writing off debt - he even kept a stake in Ipswich, reducing the initial outlay. Very little cash needed to change hands. Compare to, say, Norwich, you are needing to spend a lot of cash to buy out Delia and the other shareholders before even thinking of investing in the club. In addition, as opposed to a Championship club, you can overhaul the playing squad cheaply and with most of the cost backloaded (see the ton of free transfers). Overall, the less cash you need to put in upfront, the easier to generate a higher rate of return.

Finally, my gut feel is the property is a key part. It's in effect an option. If things go well, Ipswich get promoted, then they can re-buy the property. If things don't go well, they haven't had to pay upfront for the expensive land in the initial deal. The other aspect is the owners of the Portman Road land (the Council) and Playford Road (Marcus Evans) are going to pretty professional to deal with (compare to, say, what happened with Wimbledon).

All that said - I still don't think this is a good deal - but I've seen worse. Would a UK pension scheme even consider something like this - no chance! Thinking of one of the pension schemes I work with, it's contoversial enough that they are investing even a tiny bit into private infrastructure. This would blow their mind.

My prediction is that the yanks and Ipswich Town fans are going to end up disappointed.

Good posts, MrBunce. I would make a general point. Which is that football is littered with tycoons who have been very successful in whatever business it was, but then turn into blithering idiots when it comes to owning and running a football club.

Tony Fernandes is one of many. Brilliant in the Asian aviation industry but someone who for a long time at QPR seemed to be checking off a list of items on how not to run a club. And I think allied to this is the kind of 'dream' element associated with buying a club, which tends to lead to emotional decisions, including doing the deal in the first place.

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Thanks Purple. I was reflecting after my post about the Sheffield United saga and also about Sunderland. A classic example of what you mention. You can even see it in video form in the Sunderland Til I Die Netflix series. Collective losing of minds. 

Compare and contrast to the recent interview with Alan Bowkett in the Athletic. 

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Yes.

Very good research Mr. Bunce and what a house of cards it revealed. I had thought it £30m at cost, not £40m, and still thought it a bum deal.

I agree and think, as ever, property may well be at the root of the investor's/owner's/fund managers intentions (OGR?) They have continually talked of development of the Portman Road site, although the building of a hotel has been the only genuine mention so far. It is quite a big area.

"Finally, my gut feel is the property is a key part. It's in effect an option. If things go well, Ipswich get promoted, then they can re-buy the property. If things don't go well, they haven't had to pay upfront for the expensive land in the initial deal. The other aspect is the owners of the Portman Road land (the Council) and Playford Road (Marcus Evans) are going to pretty professional to deal with (compare to, say, what happened with Wimbledon)."

 

Assuming I have read it correctly, I have needed to highlight the sentence in your paragraph because of the mention of Playford Road still being owned by Evans. I seem to recall, from reading TWTD, that the training ground was included in the deal and that there were prolonged legal 'searches' regards this. An Ipswich supporter, who is a solicitor, was able to give constant updates on this.

(When you say "they can re-buy the property," who are you referring to the Council (lease,) Evans?  ... apologies.)

Presumably, then, the club's training ground (possibly the most valuable part of the purchase) is now vulnerable to development (housing) at the new owner's will unless there were existing caveats prohibiting this, planning restrictions or even a new clause written into the deal by Evans?  

Johnson talks of football and wears a blue and white scarf. Others involved in the deal may have alternative intentions.

By and large, the ITFC supporters seem to feel that they have got themselves a straight forward, big-moneyed investor who is going to pump their club with money and lead them to the promised land. Some see through it all, but the remainder could do with being exposed to your research and analysis.

Evans constantly assured the town faithful that he would only sell their club to creditable investors. I feel that he has hoodwinked them, again, and that their club now exists on a pile of sand. You seem more optimistic about the financial benefits that the new people could glean from the deal than I am able to be, but, for their sakes, we must hope you are correct. The alternative is dire.

There would seem to be a mountain to climb, which ever way you look at it. Climbers apparently climb Everest because it "is there." Many of us would see it as a senseless risk.

Why Ipswich? Because it was there. 

 

Edited by BroadstairsR

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Having read some of the stuff written by Bristol city and Ipswich fans recently o think part of the 'why ipswich' question might in fact be Mark Ashton. From what the Bristol city fans say, he first made contact with the guys behind gamechanger on brizzles US tour in 2019, Bristol was obviously unavailable as an investment at that point and I suspect Ashton since then has been looking for a way to get into bed with them and Ipswich is a suitable ego vehicle that he can come in and take total control of.

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On 03/09/2021 at 10:14, BigFish said:

Not sure this is actually true, I struggle to think of any owner that has made money from owning a football club- except the Glazers, and they United are an exceptional case. Tony Bloom is reported to have said he spent £200m of his own money getting Brighton into the EPL, and that club is probably worth £200m atm.

That leaves two options to get your money out. Find another mug which in effect is a giant Ponzi scheme or assett strip what you bought along the Burnley/Glazer model.

There is one way to make a small fortune out of owning a football club, that is start with a large fortune.

Surely Delia has made a profit as she been paid back the amount she put into the club and it's now worth considerably more than when she took over? The owners of Leicester? 

Wouldn't want the owners the small club down the road have but the only way they get their money back is to be successful on the pitch. If they are not they will sell it and move on.

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13 minutes ago, Kenny Foggo said:

Surely Delia has made a profit as she been paid back the amount she put into the club and it's now worth considerably more than when she took over? The owners of Leicester? 

Wouldn't want the owners the small club down the road have but the only way they get their money back is to be successful on the pitch. If they are not they will sell it and move on.

Delia lost money by investing in the club, because her loans were interest-free. So inflation in the period between the loans being made and then repaid means she is less well off. And if instead of lending the money to NCFC she had put it into a normal investment fund then at the worst she would have kept pace with inflation and probably bettered it.

The shares she bought could very well be worth more than she paid for them, but that is at the moment only a theoretical gain since to turn it into reality she would have to sell them to a would-be buyer, and I keep hearing from posters that as a matter of absolute and proven fact that is the one thing she will never do. Certainly if the Nephew Plan happens and the shares are gifted to Tom then she will end up overall in the red. Buying the club will have cost her money.

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D&M won't ever make a profit out of their ownership. They don't even expect their money back. They are not the slightest bit motivated by money which makes them such good custodians of our club.

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3 minutes ago, nutty nigel said:

D&M won't ever make a profit out of their ownership. They don't even expect their money back. They are not the slightest bit motivated by money which makes them such good custodians of our club.

Not saying she is but the club is worth £50 to £100m. So just pointing out her investment has made her a lot of money. That profit will transfer presumably to nephew Tom.

The was in response to,I quote "I struggle to think of any owner that has made money from owning a football club". 

Not having a pop or dig at our owners, far from it. Just pointing out a fact.

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5 minutes ago, Kenny Foggo said:

Not saying she is but the club is worth £50 to £100m. So just pointing out her investment has made her a lot of money. That profit will transfer presumably to nephew Tom.

The was in response to,I quote "I struggle to think of any owner that has made money from owning a football club". 

Not having a pop or dig at our owners, far from it. Just pointing out a fact.

That's a big assumption to make.

I'm going to wait and see (hopefully I will see).

So far THEIR investment has made them nothing. They are well out of pocket.

 

Edited by nutty nigel

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10 minutes ago, nutty nigel said:

That's a big assumption to make.

I'm going to wait and see (hopefully I will see).

So far THEIR investment has made them nothing. They are well out of pocket.

 

Even if the club is more valuable than when they purchased it, that is totally irrelevant if they don't sell it. And they have no intention of doing so because their ownership of NCFC has never been motivated by making money. They've only ever lost money by offering interest free loans and, at one stage, buying players out of their own pocket. See Cedric Anselin.

 

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20 minutes ago, Kenny Foggo said:

Not saying she is but the club is worth £50 to £100m. So just pointing out her investment has made her a lot of money. That profit will transfer presumably to nephew Tom.

The was in response to,I quote "I struggle to think of any owner that has made money from owning a football club". 

Not having a pop or dig at our owners, far from it. Just pointing out a fact.

Back in the mid-1970s you were far-sighted enough to buy a brand new Betamax video cassette recorder for £20. It is now worth at least £60 as a novelty-value collectible but you are so attached to it you have no intention of selling, and will leave it to your favourite grand-daughter. How then has buying  that Betamax made you 'a lot of money'?

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12 minutes ago, Beefy is a legend said:

Even if the club is more valuable than when they purchased it, that is totally irrelevant if they don't sell it. And they have no intention of doing so because their ownership of NCFC has never been motivated by making money. They've only ever lost money by offering interest free loans and, at one stage, buying players out of their own pocket. See Cedric Anselin.

 

Yes I get that BUT the assets she now owns are bigger than the investment she made and that profit will stay within her family till someone decides to cash in.... Good for her! One the few people that has seen a profit from the initial investment. And yes she has done a hell of a lot of good for the club.

It's just a reply to the question that was highlighted... Not attacking Saint Delia or questioning the buying of the club or anyones motives. It's all cool...👼

Edited by Kenny Foggo

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2 minutes ago, Kenny Foggo said:

Yes I get that BUT the assets she now owns are bigger than the investment she made and that profit will stay within her family till someone decides to cash in.... Good for her! One the few people that has seen a profit from the initial investment. And yes she has done a hell of a lot of good for the club.

It's just a reply to the question that was highlighted... Not attacking Saint Delia or questioning the buying of the club or anyones motives. It's all cool...👼

As and when someone from the Smith clan cashes in, and who knows when or if that might happen, there is no telling what the club might be worth at that time. 

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I think @Kenny Foggo is getting a rough ride here. There is an asset and it is worth vastly more than the outlay to purchase that asset, covering by many multiples any costs incurred in the process of doing so and since. Sustainability means that no further shareholder funds need to be injected. 

As pointed out, that is particularly unusual for football. 

One of the main reasons nobody comes to invest or buy out Norwich is that it would cost such a significant sum to obtain ownership of the shares necessary to ‘own’ the club - before a penny is spent on players, training grounds, stadiums et al. 

Even if you ‘loved’ the club and Delia and Michael saw you as a good custodian, you basically have to hand over £50m to change the name over the door without having any impact (yet) on the field. 

This is a very material position.

Parma 

Edited by Parma Ham's gone mouldy

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Fair point Parma but I don't think we can know any of that. 

The asset is testament to the job they have done as custodians.

But trying to second guess what D&M will do in the future through the eyes of how and what other clubs have done probably won't be prophetic.

What ever happens will fit in to their unique world view. Or pretty much unique in football.

I wouldn't mind betting theyd like to involve another "husband and wife team" at the club. But they certainly wouldn't be after their money.

 

 

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1 hour ago, Kenny Foggo said:

Not saying she is but the club is worth £50 to £100m. So just pointing out her investment has made her a lot of money. That profit will transfer presumably to nephew Tom.

The was in response to,I quote "I struggle to think of any owner that has made money from owning a football club". 

Not having a pop or dig at our owners, far from it. Just pointing out a fact.

I think you are seriously undervaluing the club there.... 

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2 hours ago, Kenny Foggo said:

Not saying she is but the club is worth £50 to £100m. So just pointing out her investment has made her a lot of money. That profit will transfer presumably to nephew Tom.

The was in response to,I quote "I struggle to think of any owner that has made money from owning a football club". 

Not having a pop or dig at our owners, far from it. Just pointing out a fact.

The club would sell for at about twice that - nearer £200 million than £100 million.

However, you main point is a good one - with a very long term horizon the chances of ITFC being a good investment increase, and if a pension fund can't think long term, who can? In effect they are buying a distressed asset, which given their crowd size etc, is likely to recover at some stage. At some stage they will resume their position as one of the top 30 clubs in the UK and who knows what other changes might take place to improve the profitability of established football brands?

The problem is that in the meantime they have to maintain "the brand" without losing shedloads of money, which is the norm in the championship. The most likely way to achieve this would be to adopt a model similar to ours - develop the commercial side of the business, seek to break even, develop and re-sell players and at some stage opportunities will arise. 

I can't understand why they bought ITFC rather than Sunderland though, who I would have thought were a better bet! (Proximity to London possibly?)

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2 hours ago, Kenny Foggo said:

Not saying she is but the club is worth £50 to £100m. So just pointing out her investment has made her a lot of money. That profit will transfer presumably to nephew Tom.

The was in response to,I quote "I struggle to think of any owner that has made money from owning a football club". 

Not having a pop or dig at our owners, far from it. Just pointing out a fact.

Problem with this axe grinding is it is not a fact. As any venture capitalist will tell you you have only made money when you realise your assets. Furthermore, it should be considered that S&J own little more than half of NCFC. That is without taking into account that if S&J had invested in other assets rather than a football club they would have received greater returns on that investment due to compound interest.

 

 

 

 

 

 

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23 hours ago, BigFish said:

Problem with this axe grinding is it is not a fact. As any venture capitalist will tell you you have only made money when you realise your assets. Furthermore, it should be considered that S&J own little more than half of NCFC. That is without taking into account that if S&J had invested in other assets rather than a football club they would have received greater returns on that investment due to compound interest.

 

 

 

 

 

 

If Badger is correct at £200 million, they still have the potential to do very well out of it leaving aside the substantially interest free investment. Then again if Covid19 had been Covid17 it could have been a very different story.  The same roller coater carries on into the future until of course a transfer of ownership crystallises a gain or loss for current shareholders.

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2 hours ago, essex canary said:

The same roller coater carries on into the future until of course a transfer of ownership crystallises a gain or loss for current shareholders.

Exactly my point, S&J are pretty much in the hole to the order of millions with zero revenue atm. I think @Badger might be a touch high at £200m, but not by much. Still worth noting that S&J own barely over half the club, so there are others, including a mumber of posters on here, sitting on paper profits.

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