Mark Attanasio

[GMF 1,043]

4 hours ago, Feedthewolf said:

While we're on the subject of land around the ground, does anyone know anything about any of the land/facilities outlined in yellow on the image below? Obviously I can see a lot of the warehouses contain existing businesses, but do we think there's any scope for purchase/development of any of this land for additional club-related infrastructure?

 

Maybe! 😉

[Capt. Pants 5,144]

Looking at that overhead shot the logistics of building around/above the hotel look a bit challenging if the service road and access to the stadium has to be maintained. 

Assuming the hotel actually makes money it wouldn't exactly be cheap to acquire and potentially demolish part or all of it.

[Feedthewolf 5,913]

1 hour ago, GMF said:

Maybe! 😉

Many thanks for the extensive, informative and unambiguous response, Gary. Just what I was after.

😛

 

[GMF 1,043]

13 hours ago, Feedthewolf said:

Many thanks for the extensive, informative and unambiguous response, Gary. Just what I was after.

😛

 

Laurence Scott Group. Involved with engineering and electrical motors, I believe.

[Lazza 69]

I worked for Laurence Scott many years ago (30+ 😱). Those are workshops, not warehouses. They make very large electric motors & gearboxes. I used to run CNC milling machines and lathes in there. I would have been roughly where the "M" of "Electric Motor Shop" is on that image. REAGIT I think is an engineering training centre and is a related business. It's been on that site since 1883!

[Feedthewolf 5,913]

59 minutes ago, Lazza said:

I worked for Laurence Scott many years ago (30+ 😱). Those are workshops, not warehouses. They make very large electric motors & gearboxes. I used to run CNC milling machines and lathes in there. I would have been roughly where the "M" of "Electric Motor Shop" is on that image. REAGIT I think is an engineering training centre and is a related business. It's been on that site since 1883!

Thanks for that. Can't imagine either of those firms would be in any hurry to sell up and shift out, then!

[essex canary 630]

1 hour ago, Lazza said:

I worked for Laurence Scott many years ago (30+ 😱). Those are workshops, not warehouses. They make very large electric motors & gearboxes. I used to run CNC milling machines and lathes in there. I would have been roughly where the "M" of "Electric Motor Shop" is on that image. REAGIT I think is an engineering training centre and is a related business. It's been on that site since 1883!

Indeed. My grandfather worked there. I guess it is how he got the job of erecting the hands on the City Hall Clock. Hands off our heritage!

[GMF 1,043]

On 20/11/2024 at 10:33, Feedthewolf said:

Thanks for that. Can't imagine either of those firms would be in any hurry to sell up and shift out, then!

If they own it, rather than rent, which is likely given the time they’ve been there, I suspect that alternative accommodation would be expensive, whether to rent or buy.

[littleyellowbirdie 3,147]

What are the prospects of Dolly and Scruffy's dog grooming studio selling up? 

[Parma Ham's gone mouldy 2,476]

On 22/11/2022 at 15:42, GMF said:

Michael Bailey has previously suggested that the MF shareholding cost MA about £3.5m - if so, that’s approximately £30ish per share. I have no idea where he got that info from, or, indeed it’s accuracy.

The conversion of the C-preference shares to 10% of the ordinary shareholding, well north of £100 a share, but throw into the mix the possible future acquisition of D&M’s shares, probably for something similar to the initial purchase, then the average share price tumbles considerably.

I leave it to others to decide if that’s a good deal, or not. 😉

Well, was it?

Parma

[GMF 1,043]

26 minutes ago, Parma Ham's gone mouldy said:

Well, was it?

Parma

Happy New Year to you, too, @Parma Ham's gone mouldy. 

The world has changed somewhat since my post over two years ago, especially as there’s since been an allotment of ordinary shares, and not forgetting a significant chunk of D-pref and E-pref shares.

[essex canary 630]

Happy New Year to everyone. 

The World may well have changed in many ways over the last 2 years but we are still no nearer to getting a clear answer as to whether Attanasio got a good deal.

Bearing in mind the first question at the AGM concerning a £43 million foregone equity gain on the part of D&M we can only assume that @Parma Ham's gone mouldyresponse would be 'YES' 

[Parma Ham's gone mouldy 2,476]

On 22/11/2022 at 16:18, Parma Ham's gone mouldy said:

Indeed @GMF

I have referred multiple times in the past to ‘the elephant in the room’ of the asset gain - intentional or otherwise - of Delia & Michael’s shareholding. 

I am in the corporate finance world and this was always going to be an issue. One way or the other. 

They had either:

1. made a paper fortune and not leveraged it even for a new training ground 

2. decided to ‘hand it on’ as a trustee type, without ‘claiming the gain’ , though thus leaving the benefit for the new incumbent to win 

3. at the same time diluted everybody else’s value  via their ‘generosity’

I imagined a mechanism whereby had they realised the gain, they might have incorporated some form of fan ownership or Barca membership-style scheme. 
 

This would have been a wonderful legacy, though fabulously generous and not at all expected or obligated. 

Taking full whack would look like profiteering - particularly while Tifosys bonds had to be issued and funded by the fans to replace the training ground portacabins. 

These paper gains can be leveraged. 

Or you take a halfway house of ‘not a huge sum’ though someone ‘with the interests of the club at heart’ who will ‘drive it forwards’ (what else would you say?). 

You wait 25 years for another Delia, then none come along at once.

Parma 

Instead they allowed for a ‘free’ transition - without taking a penny as they had promised @essex canary - and sat back as Attanasio took debt on ‘for the club’ (and onto the club) which only he could then realistically convert or refinance (more accurately).

Some of this debt has been ‘sold’ to the club and generates £6m interest per year and counting for Attanasio related companies. 

Attansio now owns the lot and the reported-estimated £43m equity has slipped quietly into his future pension fund. 

Delia will get a plaque, though his risk is super low and his input elegantly offset by his gain and ownership of the whole capital asset.

Attanasio is liquid and Delia and Michael never were. He might do ok, he might sell all or some. My guess is that he’ll sell off chunks at increasing prices over time, retaining overall asset control in the group. In effect selling off say 40% whilst the 60% remains worth significantly more than he will actually ever put in. All whilst having a bit of sport and - crucially - having achieved buy in to the wider SSG game. This is his real driver. 

This - he - is never what Delia intended, but the music had stopped. Cash-only self-sustainability - based on a restrictive proforma-style only-what-cash-we’ve generated already - was putting us too far behind the curve of even our current peers. Capital projects drifted into ‘always tomorrow’ territory. 

I was delighted that Delia and Michael’s extraordinary generosity was formally recognised and numerated at £43m. I suspect others were too. 

It was manoeuvred into the only show in town. There was significant ‘mission creep’ from the early flirting introductions. The red in tooth and claw American capitalists barely had to show their teeth at any point. 

Let’s be clear though. Given what they wanted and why they did it, the buy in was so, so low and on such soft, soft terms. They did their homework all right. ‘I looked at clubs for 10 years’ he said. Oh yes. 

And chose carefully. 

Parma 

Edited January 3 by Parma Ham's gone mouldy

[dylanisabaddog 6,187]

1 minute ago, Parma Ham's gone mouldy said:

 @essex canary

I was delighted that Delia and Michael’s extraordinary generosity was formally recognised and numerated at £43m. I suspect others were too. 

 

For goodness sake, it wasn't generosity. The club had a short term loan in excess of £70m which it couldn't repay and couldn't transfer into a long term debt with a financial institution. That debt was repayable at the latest by 30 June 2025. Even if we sold the entire first team squad and replaced them with free transfers we wouldn't have raised £70m in cash (it would have taken a transfer profit of around £140m to do that). 

We could have mortgaged the land and stadium but the decontamination costs on the strip next to the river were higher than the sale receipts. And of course there are doubts surrounding the latest flood warnings. 

In short, Delia and Michael gave the club away because they had no choice. The alternative was liquidation. 

[PurpleCanary 6,455]

I am less interested in whether Attanasio engineered a good deal, which I guess in crude terms means getting the club on the cheap, than on what happens from now on.

Does the deal mean he has more spend-on-the-club liquidity than he expected? And if so, would he use that or not?

Noting the intriguing notion put forward by @Parma Ham's gone mouldy that he might offload off chunks profitably while keeping control, does the deal make it easier or harder for him to sell up totally in the future?

Does he intend to take the club private, not least on the basis that such a move might make a future sale easier?

At the AGM Attanasio said he hadn't known about the fans who bought into the club to get it out of the ITV Digital mess and now felt short-changed, and would look into it. Has he or will he, and if so will he do something about it?

A Happy New Year to all? Well of course. But the question is - will it be a Happy New Era?😍

[dylanisabaddog 6,187]

@PurpleCanary he didn't get it on the cheap. He paid what it was worth. In effect we were in the same position as Ipswich except Delia got a slightly worse deal than Evans. 

It may sound harsh but Smith and Jones left the running of the club to 2 people unqualified to do so. They lost everything for their trust in the wrong people. A fool and their football club are easily parted. 

[TIL 1010 5,297]

18 minutes ago, dylanisabaddog said:

 

It may sound harsh but Smith and Jones left the running of the club to 2 people unqualified to do so. They lost everything for their trust in the wrong people. A fool and their football club are easily parted. 

No truer words said.

[PurpleCanary 6,455]

20 minutes ago, dylanisabaddog said:

@PurpleCanary he didn't get it on the cheap. He paid what it was worth. In effect we were in the same position as Ipswich except Delia got a slightly worse deal than Evans. 

It may sound harsh but Smith and Jones left the running of the club to 2 people unqualified to do so. They lost everything for their trust in the wrong people. A fool and their football club are easily parted. 

To be clear, I didn't say he got the club on the cheap. The word "whether" was in there.

[GMF 1,043]

I’m sorry, but this notion that D&M decided to forego an equity gain of £43m is absolute nonsense.

An equity gain is something you only realise when you sell. D&M still own all their 327,000 shares. Even if they had decided that they wanted out back on day one, the initial buy out price was £25.00, which would have realised £8.17m. That was never going to happen.

MA initially acquired a 21% stake, at £25 a share, for £3.3m. He increased it to 40% with an additional £4.875m spend, and now he’s about to acquire another 2.4m shares, for £13.1m.

That’s an 85% stake for £21.359m for a total of 2,792,874 shares. That’s an average of £7.64 a share.

Anyone still want to question whether it was a good deal?

[BigFish 2,330]

12 minutes ago, GMF said:

I’m sorry, but this notion that D&M decided to forego an equity gain of £43m is absolute nonsense.

An equity gain is something you only realise when you sell. D&M still own all their 327,000 shares. Even if they had decided that they wanted out back on day one, the initial buy out price was £25.00, which would have realised £8.17m. That was never going to happen.

MA initially acquired a 21% stake, at £25 a share, for £3.3m. He increased it to 40% with an additional £4.875m spend, and now he’s about to acquire another 2.4m shares, for £13.1m.

That’s an 85% stake for £21.359m for a total of 2,792,874 shares. That’s an average of £7.64 a share.

Anyone still want to question whether it was a good deal?

Nice Maths @GMF, it is a pleasure on here, occasionally it happens, when we get an objective post from someone who knows what they are talking about :-).

A football club like Norwich for under £30m, who would have thought?

[Parma Ham's gone mouldy 2,476]

‘That’s an 85% stake for £21.359m for a total of 2,792,874 shares. That’s an average of £7.64 a share.

Anyone still want to question whether it was a good deal?’

Indeed @GMF

Now go back to the start. What happened did indeed make it all a fait accompli. Though imagine if this deal had been offered at the start? And with the £6m per annum of interest payments? And re-financing? And full ownership?

At £7.64 a share???

We are where we are because one side knew where they were going and the other side ‘believed’. The rest is corporate engineering. I know because I do it.

I take @dylanisabaddog and @TIL 1010’s observations too. 
 

Parma 

Edited January 3 by Parma Ham's gone mouldy

[essex canary 630]

27 minutes ago, GMF said:

I’m sorry, but this notion that D&M decided to forego an equity gain of £43m is absolute nonsense.

An equity gain is something you only realise when you sell. D&M still own all their 327,000 shares. Even if they had decided that they wanted out back on day one, the initial buy out price was £25.00, which would have realised £8.17m. That was never going to happen.

MA initially acquired a 21% stake, at £25 a share, for £3.3m. He increased it to 40% with an additional £4.875m spend, and now he’s about to acquire another 2.4m shares, for £13.1m.

That’s an 85% stake for £21.359m for a total of 2,792,874 shares. That’s an average of £7.64 a share.

Anyone still want to question whether it was a good deal?

Agreed the first sentence. 

Using the recent  sale of 85% of West Brom for £60 million as a guide though around £20 million equity gain for their 53% may be reasonable.

Then again West Brom's P&L deficit for 2018-2023 was only half of NCFC and they do have the highest stadium in the country so are unlikely to be flooded..

Pity the AGM couldn't be used to inform us rather than begin with an unsubstantiated question then continue with nonsense concerning academic studies about value added to the local economy. Then again posters seem more concerned about Newsquest's communication strategies rather than NCFC'S.

[......and Smith must score. 1,637]

12 hours ago, essex canary said:

Happy New Year to everyone.

Except everyone at NCFC natch.....

[GMF 1,043]

2 hours ago, dylanisabaddog said:

For goodness sake, it wasn't generosity. The club had a short term loan in excess of £70m which it couldn't repay and couldn't transfer into a long term debt with a financial institution. That debt was repayable at the latest by 30 June 2025. Even if we sold the entire first team squad and replaced them with free transfers we wouldn't have raised £70m in cash (it would have taken a transfer profit of around £140m to do that). 

We could have mortgaged the land and stadium but the decontamination costs on the strip next to the river were higher than the sale receipts. And of course there are doubts surrounding the latest flood warnings. 

In short, Delia and Michael gave the club away because they had no choice. The alternative was liquidation. 

It may seem pedantic, but D&M haven’t given anything away, except majority control, as they still have their shares.

Debt is only a problem if it can’t be repaid, or refinanced. NCFC were always going to refinance.

Clearly, there was the dire need to inject new capital. Michael Foulger saw what was happening (forget the personal stuff, that’s a sideshow) hence his decision to sell his stake. But he did so on the understanding of a significant equity injection by his purchaser.

[shefcanary 3,061]

All good discussion on here today (well nearly all?!). My view is that we still have to take Attanasio and his past MO as the saving grace here as we look forward - it took more than a decade to turn the Brewers into the multi-billion enterprise it is today so is he "all in" to repeat this in Norfolk? 

Did Delia & Michael deserve to miss out on the opportunity to achieve a bigger gain so far? Yes, I agree with @dylanisabaddog here, they put too much faith into the Executive without having the appropriate Corporate Governance (yes you knew it was coming 😉  ) on the Board to advise them that they were not managing the club effectively. However as @GMF has pointed out, Delia & Michael still have an opportunity to generate a gain with their remaining shareholding in the future. One assumes Tom will also guard their legacy on inheritance if they do not sell up before they pass. I still think they could have pushed harder for a more legal form that bound Attanasio in to the club long term, but understand the difficulties of personal tax for them that such a move would have presented.

Does the deal mean that other minority shareholders have effectively been short changed? It depends on your point of view, most (like me) have a shareholding for non-financial reasons as supporters, so it comes with that support. I will retain my shares as long as I am legally able to and am not looking forward to make a gain. An alternative view (you know who's) would suggest that Delia & Michael wiped out value in minority shareholdings with the lack of stewardship they showed post-Covid, and thus the club owes a moral payback to them in some form. It is interesting that Attanasio is already commenting on this, but will it change his strategy towards the minorities in the long term? Perhaps, when stadium development calls for some fundraising, a cheap entry point and guaranteed gain might be made available to those shareholders? It's been done before and the appetite was certainly there. 🤔

Did Attanasio get the club on the cheap? Arguably yes, however it was never a competitive purchase. Attanasio gained control in a clever corporate finance manoeuvre over (for a takeover) a relatively long period of time (a la Arsenal), so he deserves any benefit he now enjoys. Will he as @Parma Ham's gone mouldy has speculated seek to crystallise some of the gain sooner rather than later? Sure, he could do, but I'm placing faith in his MO to date and trust he is in this for the medium to long term, only resorting to a more short term strategy should he be unable to provide the finance required to keep the show on the road. His prudent approach to date implies this is unlikely unless performance on the pitch dictates otherwise - both good or bad.

But recognise this. At the end of the day, the deal was not just about the £21m direct cost of shares, it also includes the cost of Webber's dash for EPL status at all costs and the loans required to bail the club out, £59m of which have been wrapped up in the acquisition. So from Attanasio's point of view, I think he would consider that adding everything up (the payments for shares, the loans written off, the cost of legals etc.) he has seen an outlay of c.£100m, which is about right for a Championship club with the profile of Norwich. The fact he is now enjoying returns on his investment of £7-10m p.a. which seemingly will only increase if his "buy low / sell high transfer & sweat the assets more" strategy continues, suggests payback within five to ten years (a la the Glazers at Manure, FSG at Liverpool) is perfectly feasible.

So ultimately a good reason for Attanasio to stick around.

I'm still on board for the journey.

[dylanisabaddog 6,187]

46 minutes ago, GMF said:

 

Debt is only a problem if it can’t be repaid, or refinanced. NCFC were always going to refinance.

Clearly, there was the dire need to inject new capital. Michael Foulger saw what was happening (forget the personal stuff, that’s a sideshow) hence his decision to sell his stake. But he did so on the understanding of a significant equity injection by his purchaser.

I'm sorry but who on earth would lend a Championship football club that sort of money? The club makes significant losses every year and the liabilities were probably in excess of the true value of the assets. No one in their right mind would lend using the land value as collateral. 

There is a good reason the club went to Attanasio. There wasn't anywhere else to go. 

As for Foulger, do you really believe this was a sideshow? 

https://www.thegrocer.co.uk/news/banham-poultry-rescued-from-administration-saving-1000-jobs/572455.article#:~:text=Norfolk-based Banham Poultry has,in feed prices%2C administrators said.

[essex canary 630]

The minority shareholding in the Club was to support local ownership rather than what we are now moving to. Maybe there is some value in it being retained or redesigned but if so Norfolk Group should consult fully on its nature. Barcelona's arrangements don't appear to be good ones from a financial control perspective.

[BigFish 2,330]

The elephant in the room here is while a lot of people in football make a lot of money, football clubs generally don't. They are largely vanity project, trophy purchases. The goodwill portion of the price of a club vastly outweighs the tangible value. S&J ran the club pretty well, but lacked the resources to underwrite the downswings. The idea the the Americans can take out £7-£10m per season and the team remains competitive on the pitch is really for the birds. More likely at some point in the future there will need to be a capital injection, and that is before anyone looks at capital investment in the ground.

Edited January 3 by BigFish

[Up and Away 119]

6 minutes ago, BigFish said:

The elephant in the room here is while a lot of people in football make a lot of money, football clubs generally don't. They are largely vanity project, trophy purchases. The goodwill portion of the price of a club vastly outweighs the tangible value. S&J ran the club pretty well, but lacked the resources to underwrite the downswings. The idea the the Americans can take out £7-£10m per season and the team remains competitive on the pitch is really for the birds. More likely at some point in the future their will need to be a capital injection, and that is before anyone looks at capital investment in the ground.

Indeed. Most championship owners invest around £10m per season into the club, rather than take money out. Will be interesting to see how much MA actually takes out of the club.

Any future capital injections will likely be heavily dilutive to minority owners. The minority holders in IP1 went from 12% at the time of the US takeover to less than 1% in three seasons. 

[Parma Ham's gone mouldy 2,476]

5 hours ago, BigFish said:

The elephant in the room here is while a lot of people in football make a lot of money, football clubs generally don't. They are largely vanity project, trophy purchases. The goodwill portion of the price of a club vastly outweighs the tangible value. S&J ran the club pretty well, but lacked the resources to underwrite the downswings. The idea the the Americans can take out £7-£10m per season and the team remains competitive on the pitch is really for the birds. More likely at some point in the future their will need to be a capital injection, and that is before anyone looks at capital investment in the ground.

Indeed @BigFish, we are talking about limited supply assets here. Delia and Michael majority owned such an asset.

There are 92 clubs in the league and I believe around 40 of them are now owned or have significant American ownership. Why would that be? Altruism? Or a different game being played out over the pond as I have long indicated? 

In that context a ‘weak P&L’ (monthly losses-profits on trading) is not critical as it would be for a ‘normal’ business. 

Norwich City’s ‘Balance Sheet’ was very strong in any case: owned their own stadium, owned their own training ground, owned additional development land, a full squad of playing assets  worth many tens of millions just for basic, tangible starters. 

Like it or not, Delia and Michael - until recently - owned a majority of all those assets. They could do what they wanted with them. Sell them, leverage them, manipulate them. 

Yes I know, they wouldn’t. Fans, continuity, legacy, connection…..indeed. But it is ‘just’ an asset. 

Lenders can lend without collateral - lending on belief- or the more classical ABL (Asset Based Lending). Despite what some on here think, football clubs are almost gold-plated assets. They incredibly rarely go bust. They often get preferential treatment, sweetheart deals, time to pay, soft bail outs, other white knights appear - as Delia did - when the ‘**** hits the fan’.

Norwich were an exceptional purchase due to our exceptional recent corporate history. Again, like it or not, what Delia and Michael did was extraordinary. They could afford to buy the  asset, but could never really afford to run it. They put all they could into owning it, and they tried to operate it without much free cash, investment or liquidity. 

Frankly that they managed like this for 25 odd years is quite incredible. Self-sustainability was so anathema to the football zeitgeist and reality of global interest and investment into sporting assets (the game goes far beyond ‘soccer’) that it was great skill or luck that it lasted as long as it did. It was perhaps fortunate timing of premier ascents as big money rolled in, or great soft skills in attracting the right people and creating great loyalty via their decency. Choose your interpretation. 

Nevertheless we are talking about a scarce business asset. One with a strong list of assets of its own. No borrowings (until recently note!) and a record of being not far away from the top level. To assume that such an asset has no value because it loses money pcm lacks a wider global perspective. 

The only ‘risk’ that really matters to fans is a drop in sporting performance. I have long feared that self-sustainability would lead to a form of modern-day Crewe Alexandra-style feeder-club-for-Manchester City due to serious sporting decline. Though of course our ‘asset’ filled the rafters even in the third tier. Thus - under self-sustainability - there is no need to ever sell, you just have to accept sporting decline (or the elevated risk of it versus your peers).

As for the recent debt, a few questions:

1. Who benefited?
2. Who encouraged?
3. Who acted in character and who acted out of character?

We have been part of a little soap opera here. Though only one side really knew the script. 

I have seen this play before: 

Parma

 

Edited January 3 by Parma Ham's gone mouldy