Cullum (again I am afraid)

[The Lucky Nine 0]

So Cullum replies….

 

http://www.eveningnews24.co.uk/content/news/story.aspx?brand=ENOnline&category=NewsSplash&tBrand=ENOnline&tCategory=NewsSplash&itemid=NOED12%20Nov%202008%2017%3A14%3A37%3A417

 

however this all still seems a bit strange.  He wanted £20 million worth of new shares, but our board did not want that, why on earth not! Was it because it would devalue their holding?  Somehow I think the board are protecting their own interests and not the clubs!  I wish we had had this information before the AGM, then further questions could be asked.

 

 

[chicken 0]

Wouldn''t this in turn suggest that Cullum was telling porkies at the time of the original newspaper article when he said he had made an offer to "buy" the club?Am I also not correct in saying that he said he wanted some level of controll as well? This all whiffs a bit to be honest.

[paul ncfc 0]

Could someone with a financial background explain  the "in''s and out''s" of this ,because I am more confused than ever now.

[mr carra 0]

He wanted £20m of new shares but he also wanted control, so Delia and MWJ would lose control without selling their shareholding.  That means Cullum could rack up huge debts and render their shareholding worthless without them (as minority shareholders) being able to do anything about it.

Delian and MWJ''s hardly unreasonable point of view is that they have a fair amount of their money tied up in the club - they don''t want to lose control of it without getting at least some of it back by having their shareholding bought out i.e. if you want control you buy them out.

 

If Cullum had been prepared to buy £20m of new shares without demanding control I''m sure a deal could have been done.

[rtfm 0]

If Cullum purchased £20m of new shares how would that work in respect to the percentage he would own without having to make a full offer for the club?

[Tim Allman 1]

The NCFC board had one chance with Cullum, and didn’t take it, and realised far too late what needed to be done. Whether it was an offer or not is irrelevant. It was a chance to get involved with the richest NCFC fan in the world.

The NCFC board had one chance with the Premiership, and didn’t take it, and realised far too late what needed to be done. Chance blown.

The NCFC board had the opportunity to remove Worthington as manager, and didn’t take it, and realised far too late what needed to be done. It cost us a year of parachute payments.

All City fans are now living with the consequences of the board’s inaction and procrastination.

 

[KeelansGlove 0]

I am pleased this has been reported. its clear that this was cullums idea all along and whilst some think the idea is crazy I think it makes a great deal of sense.

So Delia and Michael retain there shares and become minority shareholders (in a club 20M better off) worse case scenario this is about twice as much as had been put into the club over the last 10 years so should be able to fund the club for the next 20 !

I honestly think administration is a possibility in the future (not tomorrow but if we continue as we are then attendances will dry up and league one is the likely result with 2 seasons)

So does owning a large minority share in the club mean they have blown the investment they made ?

No if you look at the valuations of premier league clubs who is to say that investing the 20M could not see us replace say Bolton as a regular fixture in the premier league gaining that revenue to pay off the debt and if Newcastle is worth £250 M there is every chance that Delia could still sell her shares for a reasonable profit in the future.

I dont know exactly how we got here but the last 12 years have not been a success however you measure them. Debt has trebled and we have no playing assets and most of the land investments owned by the club have been sold off.

I would guess that a large proportion of the money invested over the last 10 years has gone to pay off various failed managers, certainly not invested in players. Unless we are paying significantly higher wages than our competitors in this league, which I very much doubt we should be able to compete with most clubs in this league for players. We cannot.

It makes me laugh when people suggest Cullum a likely asset stripper (he is a bit late on that one) 

Delia and Michael want the club to succeed im sure of that, they have just done a terrible job of making it happen over the last 12 years.

I really do get annoyed when people say that there would be no club without them thats nonsense , Mr Watling would have passed the shares onto others that may well have appointed better managers who bought better players but who knows.

They pretend to be for the fans yet keep us in the dark and dont tell us important information or try to spin things to make them look better.

and this makes them sacred cows who cannot be questioned ,

Reminds me a bit of Animal Farm !

I wanted to keep Delia and Michael with any new investment , now I would just like to see the back of them if league 1 awaits they are not the ones to bring us back.

 

[Puzzy magnet 0]

Allman - spot on.

I would add another to that list of failures too; they left it too late to look for investment. Speaking to Harris in the midst of a recession is two years too late.

[kdncfc 0]

I seem to remember Cullum saying that he didn''t want control of the club but he did want one of his people on the board, can''t really see that was much to ask for when you consider the track record of our board with regard to getting their priorities all wrong when spending money. If I was bunging out 20 million I''d want to make sure it was spent in the right place.

If Delia is true to her word and only has the clubs interests at heart I don''t really see how she could turn this offer down, her shares would still have a worth and as a previous poster has said they could increase in value if we were promoted which would be a thousand times more likely to happen if we had 20 million to spend.

If Mr Harris fails to find a buyer within a few months I wouldn''t be at all surprised if the club go back to Cullum with begging bowl in hand to bail them out, I just hope it isn''t to late.

[Jim Smith 2,317]

I''m not a financial or corporate expert but the way I see it if he had £20m worth of shares it would give him control of the club. Delia and Michael currently have "control" of the club with about £9m worth of shares. Unless therefore he was talking about buying some sort of preference shares then he would not need to make an offer for Delia and MWJ''s shares because his £20m worth of shares would give him a controlling stake. The money would be injected into the club as capital. So as he seems to be saying it is correct to say he has never made them an offer (and I presume does not intend to now) to buy their shares.

I don''t know how feasible it is to just issue £20m worth of new shares but in essence yes presumably the issue was that Delia and MWJ would have gone from having a controlling interest in the Club with a real value to having a minority interest with a lot less value (in fact I presume it would only have real value if we went up and the vlause of NCFC increased and a market was created for the trading of our shares) overnight had the new shares been issued. They would still have a big stake in the club but no real control over the key decisions. I presume also those of us who hold small shareholdings would have seen them diluted similarly but i don''t suppose most of us would care!

I assume that had their been a change of control of this ilk we would still have had to agree with the banks for the loans to continue in place although PC does not appear to have ever regarded that as a major problem.

I really don''t know where I stand on this now. On the one hand I don''t expect Delia and MWJ to walk away with nothing or voluntarily sign away millions of pounds worth of equity but on the other hand I remain hugely disappointed that when this guy was publically proclaiming his interest it does not appear it was possible to have meaningful discussions to try and get him on board, even if his initial proposals were not acceptable. As Tim says above can''t help but think we may have missed a trick and its all a bit too late now with what has happened since to the economy. It would have been helpful if all of them had (been able to) come out and clarify all this at the time the original story broke!

[chicken 0]

[quote user="Lol Morgan"]Allman - spot on. I would add another to that list of failures too; they left it too late to look for investment. Speaking to Harris in the midst of a recession is two years too late. [/quote]We are not in a recession yet - it may be we are rappidly approaching one but it has not been confirmed for certain that we are - and if so it is the begining not the "midst". As for two years too late - I would say that the best time to have looked for investment was when we were in the premiership and a more lucrative option - so you can add a couple on the that!

[Puzzy magnet 0]

The official figures lag behind the real economy. We are in recession, it just won''t be officially reported until the next growth figures are published. In reality, we are in the midst.

[Grando 260]

In reality Delia and Michael blew it by not engaging with Cullum.

[ca 1]

[quote user="chicken"]Wouldn''t this in turn suggest that Cullum was telling porkies at the time of the original newspaper article when he said he had made an offer to "buy" the club?

[/quote]

 

Wasn''t it the EDP who said that?

[The Fish Seller 0]

[quote user="chicken"]Wouldn''t this in turn suggest that Cullum was telling porkies at the time of the original newspaper article when he said he had made an offer to "buy" the club?Am I also not correct in saying that he said he wanted some level of controll as well? This all whiffs a bit to be honest.[/quote]I don''t recall reading anywhere that PC said he wanted to buy the club.He did however state that he was prepared to put £20m into the Club but would require control.This as the more astute of us worked out some time ago would have involved a new share issue as described in this article and indeed many times by certain posters here.Delia and Michael had the choice 60% of a failing Champs Club with no players and no money and net assets of £16m or 30% of a Champs Club with a £20m campaign chest and net assets of £36m plus the financial clout of PC to restructure existing finance. To say their minority shareholding would be worthless is just another of the red herrings thrown into the discussion pot at the time and still perpetuated maybe that''s the fishy smell  you''re picking up Chicken?Delia and Michael wanted to cut and run with their money, the PC offer kept them on board I think it''s clear that the offer was dead in the water because Delia and Michael would  not be able to cash in their chips and leave. I am more convinced than ever that D & M put their own priorities above those of the Club there can be no other explanation. 

[Empty Mirror 0]

It doesn''t make sense.

If Cullum was offering £20 million for £20 million worth of new shares, why did he talk about Delia and him having had a "wrangle" over valuation but being unable to agree?  That suggested that he was proposing to buy the club, which is certainly what was reported. 

Someone is not being entirely frank here.  I don''t know who.  

Whatever, it''s a crying shame that a way couldn''t be found to involve a rich City supporter.

[vos 155]

This looks to be a superb offer. £20 million straight to the manager to buy players. Delia/Hubby''s shares are worth about £5 million so clearly Cullum would have full control - quite understandably having injected that sort of money.It looks as if he would have then appointed suitable persons to run the company on his behalf.

Why on earth Delia turned this down is hard to understand particularly as she keeps emphasising their main priority is the future of the Club etc and their personal money situation is not the main issue.They could have left their money in and I suspect that within reason Cullum would have been happy for her to remain as some sort of figurehead. It really is unfortunate that Delia did not clarify this at the AGM, but if she had, and the facts are as we now understand them, I think there would have been a riot. The Board keep saying they want to be completely open. When are they going to practice what they preach.

[T 190]

Mr Carra is the one who has analysed the situation correctly. PC has confirmed what a number of people have been saying for a long based on quotes the original quotes from both sides.

NCFC like nearly all football clubs per the independant Deloitte report is now a loss making business which does not generate any dividends or interest payments for its shareholders. Therefore, the only way for shareholders to get their money back is to sell the shares to someone else. No one is likely to be interested in paying any significant amount of money for a minority interest in a business over which you have no control and does not give you any dividends or interest. Whilst, the PC deal was legally/mechanically possible he was effectively asking the existing shareholders to write off all the money that they had put into the club and not have any control over the amount they had put in. Anyone who knows anything about business deals would know that anyone would flatly reject such an offer. If people suggest that the existing shareholders were wrong for not giving away control of half their life time earning for nothing then I suggest they follow their principles and donate half their life time earnings to the club.

[Matt Juler 151]

I''m no expert, but this is my take on the situation...

Cullum wanted to buy £20M of shares. That would make him the majority share holder and I''m predicting would be sufficient for him to have to offer to buy all other shares. The total cost of all other shares is debatable, but lets use Delia''s original figure of £16M (including all other share holders). Therefore, total cost is now £36M. This takeover would then initiate the forced repayment of all outstanding loans/debts etc., in the region of £20M, so all of a sudden we''re back to the magic £56M. 

[T 190]

Yes - the existing shareholders wanted 16m for their shares for a business with 16m of net assets which the normal minimum valuation of a business whilst PC offered nothing - ie. they was a 16m difference in the share valuation. PC has a point from a pure business economic point of view but the value of a football is in its rarity/desirability factor so you look at what other clubs have been sold for - Newcastle are asking 300m, Spurs 500m - obviously premier clubs. I believe Hull were sold for 10m at a time that they were a smaller club than Norwich.

[Daphne 0]

T - thanks for your explanation - which has summarised what I vaguely understood. The original irresponsible reporting in the EDP got us all excited over something that was never going to happen.

I understand that that well-known supporter and local MP Charles Clarke was involved in the very early discussions with PC - perhaps he could follow Delia''s example and tell us exactly what went on?!

[nutty nigel 7,533]

I have stated over and over that my attitude toward Smith&Jones would change if I found out she had hung on for selfish reasons. I don''t believe that to be true but if it was proved so I would be more disappointed than most of you. But there is more to this than is being made out here by those who believe she has selfishly turned away a fortune. It''s the long term future of the club that''s at risk here. I am pretty sure Delia is hanging around for unselfish reasons, it''s not all about getting their money back otherwise why would they continually pledge more and more money now and in the future? We all know that 20m is no guarantee of promotion. And 20m in now would leave us in all kinds of trouble if it didn''t lead to promotion in the next couple of seasons. Whoever invests into the club has to be in it for the long haul. In fact they have to have the commitment of Smith&Jones because otherwise it''s not sustainable and the consequence is almost certain administration. Consider upping the player budget with a one off payment - what would happen once all those millions have gone into players pockets? The players would leave, the money would be gone, we would be skinter than we are now. The only way I can see a one off payment stabilising the future of the club would be if it was used to pay off the debt.

 

 

[Beauseant 0]

[quote user="Matt Juler"]

I''m no expert, but this is my take on the situation...

Cullum wanted to buy £20M of shares. That would make him the majority share holder and I''m predicting would be sufficient for him to have to offer to buy all other shares. The total cost of all other shares is debatable, but lets use Delia''s original figure of £16M (including all other share holders). Therefore, total cost is now £36M. This takeover would then initiate the forced repayment of all outstanding loans/debts etc., in the region of £20M, so all of a sudden we''re back to the magic £56M. 

[/quote]

 

Spot on Matt. The loans are conveniently not included if you want to create the " Delia asked for stupid money and made the nice man run away" argument.The fact is that they are a red herring if, as Cullum publicly stated, he would simply have restructured them, therefore the effective cost was £16M plus whatever he wanted to put into the transfer budget.Is £16M unreasonable given the land assets of the club? I suppose it depends on which side of the "Delia is a witch" argument you come down on!

[First Wazzock 902]

He''s not the messiah, he''s a very naughty boy. [:P]

[KeelansGlove 0]

With respect T it is not as clear cut as you make out. If PC had put 20M into the club for new shares and gained control Delia and Michaels shares would have been devalued as would my own. If this investment would have meant that we became a premier league club even a smaller one the valuation could be into the sorts of figures quoted for Newcastle and Spurs , lets say 100M with the potential for shares to double or more in value allowing Delia and Michaels shares to be worth more than they are now and if there were to be any potential takeover in the future as we know any potential buyer would be duty bound to make an offer for all shares.

It may be the norm for individuals to have control in football clubs but it is not neccesarily the case for other businesses , a shareholding reflects the value of the company and if Norwich City are not succesful this value goes down, regardless of if the shareholding is a majority or minority.

The alternative will probably be sharply reducing revenues due to falling season ticket demand and possible administration which correct me if im wrong would wipe out any value to the shares at all.

I am still not sure if any meeting has ever taken place face to face (the club have been careful to keep this from us) which is one of my main issues with this whole affair. If Mr Cullum had been asked to come to Carrow Rd for a game and discussions had been held at length and no compromise could be found then fine I would have had more respect for Delia and Michael. Perhaps they could have convinced him to buy a percentage of the shares they own whilst creating new shares to cover the balance.

We will never know , and whilst there is always the outside chance Orville will find someone to give them an escape route can anybody really say being owned by some billioniare who doesn''t know where Norwich is would be preferable to having Cullum on board with Delia and Michael ?

Anybody who can honestly say we are in better shape now than we were when they arrived, please enlighten me. 

[KeelansGlove 0]

Nutty what makes you so sure Delia is hanging around for unselfish reasons ? Can you imagine her being able to sell her shares for anywhere near her valuation in the current climate with a huge debt and no players ??

The reason they have continually pledged more and more money is because if the downward spiral we are in continues administration follows and shares are not worth the paper they are printed on.

Btw Beausant I think you will find that the current board has stripped the club of almost all saleable assets and any that remain have little value in todays economy.

Colney is Worthless farmland and even if they wanted to dismantle Carrow Rd there is no requirement for additional housing in the area that is already oversupplied and I cannot imagine planning would ever be approved in my lifetime.

[Blofield Canary 11]

Even in todays financial climate there would be plenty of people willing to buy the Carrow Road site for future developement. If you are a property developer with a bit of money it''s the perfect time to buy. There is no reason at all why you wouldn''t get planning consent. With consent already granted all around the ground the precedent is set for future developement.

 

[Yellow Rider 0]

[quote user="T"]

Mr Carra is the one who has analysed the situation correctly. PC has confirmed what a number of people have been saying for a long based on quotes the original quotes from both sides.

NCFC like nearly all football clubs per the independant Deloitte report is now a loss making business which does not generate any dividends or interest payments for its shareholders. Therefore, the only way for shareholders to get their money back is to sell the shares to someone else. No one is likely to be interested in paying any significant amount of money for a minority interest in a business over which you have no control and does not give you any dividends or interest. Whilst, the PC deal was legally/mechanically possible he was effectively asking the existing shareholders to write off all the money that they had put into the club and not have any control over the amount they had put in. Anyone who knows anything about business deals would know that anyone would flatly reject such an offer. If people suggest that the existing shareholders were wrong for not giving away control of half their life time earning for nothing then I suggest they follow their principles and donate half their life time earnings to the club.

[/quote]

T,

Whilst I agree with your comments the problem is that this is contrary to the constant propaganda peddled by the club and Delia Smith! If she wants to get her capital back that she has put in then I (and I suspect most other fans) would have no problem with that whatosever when considering the service and money she has donated in her tenure.  However, what we get told time and time again would have you think otherwise.

When she first came on to the Board, she said .....''I know I will probably never see the money again'', and currently, ''I will stand aside and only want what is in the clubs best interests''. Now the perception of that (to me at least) is that she would be prepared to GIVE her shares away. Clearly we now know that is not the case so why not have the decency to tell us so!!

Interestingly, I raised this issue with ND recently at an SCG meeting when I said that ''Delia Smith will sell her shares at some stage''.  His reply was quite blunt and pretty withering and it was...''How do you know that? She may well simply gift or bequeath them away''. I must admit I couldn''t respond to that as I could only conclude that he knew a lot more about what might be happening than I did. Recent events though have confirmed surely that ''giving'' her shares away is not on the agenda.

Smith is putting the ''blame'' for the collapse in the PC talks squarely at his door because ......''he never made an offer'' when what she really means is ....''he would not pay me for my shares'' so the door was slammed in his face. Exactly whose ''interest'' was that serving may I ask??     

[Show Me What You Gooot! 0]

One reason I''m glad Cullum came out and said this is to put to bed the ridiculous notion that he wanted their shares for nothing. Its been such hard work trying to get people on here to understand this wasn''t the case at all.

[WeAreYellows49 0]

[quote user="Paint Me Yellow"]One reason I''m glad Cullum came out and said this is to put to bed the ridiculous notion that he wanted their shares for nothing. Its been such hard work trying to get people on here to understand this wasn''t the case at all.[/quote]

Agreed, but some will even now say he wanted the club for nothing.