Value of the club

[tom cavendish 0]

For those that are critical of Delia and Co for of the value they have put on the club

"Evans acquired an 87.5% stake in Ipswich Town in December 2007, a package that included taking on £32m of existing debt and investing £12m into the club"

So Evans is covering £44m + what he has paid for shares + an extra £5m of debt.

Delia & Co quoted £56m which included £20m investment for the team (that PC said he would invest), £20m debt, and £16m for shares. Seems a good deal in comparison to what Evans has paid for Ipswich.

[ricardo 7,400]

[quote user="tom cavendish"]

For those that are critical of Delia and Co for of the value they have put on the club

"Evans acquired an 87.5% stake in Ipswich Town in December 2007, a package that included taking on £32m of existing debt and investing £12m into the club"

So Evans is covering £44m + what he has paid for shares + an extra £5m of debt.

Delia & Co quoted £56m which included £20m investment for the team (that PC said he would invest), £20m debt, and £16m for shares. Seems a good deal in comparison to what Evans has paid for Ipswich.

[/quote]

But Evans bought the debt for about £4 million then lent the club another £8 million repayable at 7% pa. So thats a nice little income of £500,000 a year gauranteed. A nice little earner for Marcus wouldn''t you think?

In addition to that, the £32 million debt is accumulating interest that will eventually be repayable should the Town ever get back to the Prem.

Its win win for Marcus wouldn''t you say?

[Flipside 0]

I think I can remember the £32m debt was settled for £12m, so it only actually cost him £24m. Anyone confirm this?

[ricardo 7,400]

[quote user="Flipside"]I think I can remember the £32m debt was settled for £12m, so it only actually cost him £24m. Anyone confirm this?[/quote]

No, its as I stated in the post above.

[Jim Smith 2,339]

He didn''t take on the debt in the sense he owes it to a bank. As is stated above he bought the debt so it is now owed to his company rather than Morley and he bought it for a fraction of its value.

 

The genuine comparison would be how much he had to pay/inject for his shareholding.

[Flipside 0]

Just confirming my memory is crap, thanks Ricardo[^o)]

[Hairy Canary 707]

This is a fair point but it''s also reasonable to remember that times have changed very significantly since then and we are not worth anything like £56m in the current climate.

[BigFish 1,988]

[quote user="Hairy Canary"]This is a fair point but it''s also reasonable to remember that times have changed very significantly since then and we are not worth anything like £56m in the current climate.[/quote]

Not sure how many times it will need to be said before it sinks in BUT IT WAS NEVER £56m for the club. That figure would be the total liability of the shares, debt & £20m team building. Control of the club could be gained for as little as £8m if you could prove you could support the £10k a day that would need just to cover the losses.

[lappinitup 629]

[quote user="ricardo"]But Evans bought the debt for about £4 million then lent the club another £8 million repayable at 7% pa. So thats a nice little income of £500,000 a year gauranteed. A nice little earner for Marcus wouldn''t you think?

In addition to that, the £32 million debt is accumulating interest that will eventually be repayable should the Town ever get back to the Prem.

Its win win for Marcus wouldn''t you say?[/quote]Nearly right Ricardo. He bought 87.5% of the ordinary shares for £3.9m giving him ownership, preferential shares at £8.1m yielding £564,000 pa. and the £32m debt he bought from NU for aprox £6.5m accruing £2.4m pa.

Not surprising no-one knows what he looks like is it?

[The Fish Seller 0]

Ricardo and Flipside are right. Ipswich still owe the £32m just not to the original creditors but to Marcus Evans. He bought the debt of £32m for just £4m and agreed to lend the club a further £8m for team strengthening.For his money he got:87.5% of the Club shareholding.circa £500,00 pa interest repayments from the Club.He can of course withdraw any or all of the money he has lent the club as it suits him.He is also able to withdraw the £32,000,000 plus substantial interest under certain criteria if I remember rightly one such criteria being that Ipswich stay in the Prem for more than one year.He could also liquidate every last asset of the Club to recoup any money loaned and as much as the club are worth towards that £32m plus interest debt now owed to marcusevans pretty well whenever he wanted.I note that Ipswich are disconcertingly vague about true debt levels at the Club, could this be because he doesn''t want to burst the scummers bubble until it''s time to close down the club for good? Some of them still think the £32m debt was wiped out when ME took over.[:D][:D]

[ricardo 7,400]

[quote user="lappinitup"][quote user="ricardo"]But Evans bought the debt for about £4 million then lent the club another £8 million repayable at 7% pa. So thats a nice little income of £500,000 a year gauranteed. A nice little earner for Marcus wouldn''t you think?

In addition to that, the £32 million debt is accumulating interest that will eventually be repayable should the Town ever get back to the Prem.

Its win win for Marcus wouldn''t you say?[/quote]Nearly right Ricardo. He bought 87.5% of the ordinary shares for £3.9m giving him ownership, preferential shares at £8.1m yielding £564,000 pa. and the £32m debt he bought from NU for aprox £6.5m accruing £2.4m pa.

Not surprising no-one knows what he looks like is it?

[/quote]

Thanks Lap, I couldn''t remember the exact figures off the top of my head.

Looks even worse than I suspected.

[Badger 0]

[quote user="The Prisoner"]Ricardo and Flipside are right. Ipswich still owe the £32m just not to the original creditors but to Marcus Evans. He bought the debt of £32m for just £4m and agreed to lend the club a further £8m for team strengthening.For his money he got:87.5% of the Club shareholding.circa £500,00 pa interest repayments from the Club.He can of course withdraw any or all of the money he has lent the club as it suits him.He is also able to withdraw the £32,000,000 plus substantial interest under certain criteria if I remember rightly one such criteria being that Ipswich stay in the Prem for more than one year.He could also liquidate every last asset of the Club to recoup any money loaned and as much as the club are worth towards that £32m plus interest debt now owed to marcusevans pretty well whenever he wanted.I note that Ipswich are disconcertingly vague about true debt levels at the Club, could this be because he doesn''t want to burst the scummers bubble until it''s time to close down the club for good? Some of them still think the £32m debt was wiped out when ME took over.[:D][:D][/quote]I imagine this is the sort of deal that prospective buyers of City would want - I don''t think Smudger et al would mind as long as they saw the back of the current board.

[Jim Smith 2,339]

So just to be clear then an 87.5% stake in Ipswich Town was worth £3.9 million. Much more realistic sum and not a million miles off what someone else paid for their controlling stake in a similar sized club up the road (albeit one with a few more assets and a bit less debt).

 

As I see it the biggest irony is that Ipswich''s biggest advantage in attracting an investor was that their debts were so big and they had so few assets (i.e. they were such a shambles) that there was never any realistic prospect of their debt being paid off hence Morley were prepared to do a deal with Evans, cut their losses and run. Unfortunately because we have more assets and a better structured debt our banks would be much less likely to do that as they could probably recover most of their money if we went into admin. Consequently, we are actually less attractive to investors because we have been better run! If we hit really dire financial straits then we would become much more attractive as could be picked up on the cheap! Bit sickening really!

[mockystickwell 0]

I''m not after an arguement or hear to wind anyone up, BUT you boys have seriously got your yellow tinted glasses on!

ME today has pledged even more cash to get us to the premier league!

What ever debt is repayable at what ever %, this his cash and the money invested in the squad  getting us up is his risk only! Including the 12mill he put in initially.

The debt that ME bought wasn''t 32 mill more like 12  and that is what we have to repay.

And finally, who would you rather have own your club, Evans ( Invisible but putting in the cash) or Delia (loveable cook/loudmouth and limited Investment)

[ncfcstar 292]

[quote user="mockystickwell"]

I''m not after an arguement or hear to wind anyone up, BUT you boys have seriously got your yellow tinted glasses on!

ME today has pledged even more cash to get us to the premier league!

The debt that ME bought wasn''t 32 mill more like 12  and that is what we have to repay.

[/quote]Both wrong, and Evans has not pledged anything if you read the article in the EADT, it''s just the board placating the fans, as they obviously have done in your case.

[mockystickwell 0]

Maybe.

But I would still rather be in our position financially at the mo than yours and many others in this division.

Evens wouldn''t invest in a business and purposely try and bankrupt it. His ultimate aim surely is to have a sucessful footie team in the prem rather than a Leeds or leicester on his hands that no-one wants.

[Chabal 0]

[quote user="The Prisoner"]Ricardo and Flipside are right. Ipswich still owe the £32m just not to the original creditors but to Marcus Evans. He bought the debt of £32m for just £4m and agreed to lend the club a further £8m for team strengthening.
For his money he got:
87.5% of the Club shareholding.
circa £500,00 pa interest repayments from the Club.
He can of course withdraw any or all of the money he has lent the club as it suits him.
He is also able to withdraw the £32,000,000 plus substantial interest under certain criteria if I remember rightly one such criteria being that Ipswich stay in the Prem for more than one year.
He could also liquidate every last asset of the Club to recoup any money loaned and as much as the club are worth towards that £32m plus interest debt now owed to marcusevans pretty well whenever he wanted.
I note that Ipswich are disconcertingly vague about true debt levels at the Club, could this be because he doesn''t want to burst the scummers bubble until it''s time to close down the club for good? Some of them still think the £32m debt was wiped out when ME took over.[:D][:D]
[/quote]

 

Er, the value of the club is that there''s £40m of sdebt attached to it. If he liquidated every last asset as you put it, he would get back a fraction of his investment and we would be bankrupt and the debt itself would disappear, leaving Mr Evans feeling rather foolish!

[The Fish Seller 0]

[quote user="Chabal"]

 

Er, the value of the club is that there''s £40m of debt attached to it. If he liquidated every last asset as you put it, he would get back a fraction of his investment and we would be bankrupt and the debt itself would disappear, leaving Mr Evans feeling rather foolish!

[/quote]

Well yes I can see where you are coming from but tell me who nearly all of this £40m of debt is owed to exactly? As owner I consider Marcus Evans to be in a prime position to see that his creditors get paid except HMRC, the ambulance people and all those creditors such as suppliers who aren''t covered by the football leagues umbrella of course. He just needs to sit back 3 or 4 years doing nothing more than claiming tax relief and his £500k pa dividends then once he''s got £4m''s worth of these he can sell the club lock stock and barrel that''s properties, players, and every other asset and if he can clear £6m on the lot he enters profit. Or instead of liquidating he could sell the club outright either with his debt still attached or without. He could actually give the club away if he left the debt attached and secure himself a very tidy income on interest and capital repayments or he could put the club on the market at a price to reflect it''s true value, he''d make a profit and somebody would get themselves a Champs club debt free for a fraction of what our club is ''valued'' at.

[vos 155]

The book value of the Club per last accounts is £15 million. However this was inflated by about £2 million because of revaluation of the hotel in which we have a stake. In the present climate that figure would be realistically reversed making the value more like £13 million.

The big big problem with football clubs is that their main asset is the ground. If they go bust how do they deal with this ?? Unlike a normal business the ground is a unique asset appealing to a very limited market. In Norwich there is clearly no other sports club who would be interested or indeed have the sort of money required. So if the lender wanted to get most of his money back he would have to knock it down for alternative use but the cost of doing this would be astronomical. In that scenario most of Norfolk would probably erupt. Ultimately therefore the lender will have little alternative other than to do a deal with someone and possibly write off a large proportion of the debt i.e as with Ipswich Town. It is because of this background that a major high street lender will not touch football clubs with a bargepole as obviously whichever they jump they will court a large amount of bad publicity.

In the light of the credit crunch which has some way to go yet, coupled with the fact that the Club cannot make a profit due to excessive players wages - what is the likely value. I would guess that ultimately for sentimental reasons Peter Cullum will get it for around £5 million and the lenders will welcome him with open arms on the basis that in view of his background wealth he is more likely to be in a position to keep up the loan repayments rather than the present regime, who to be fair have done their best in financial terms. Hopefully we will then be able to take on a decent manager who will motivate the team and we will get somewhere. Finally,and not very nice to say this, but ticket prices need to be increased for certain categories.

 

[Mr.Carrow 378]

Interesting post Vos, but can you please explain what you mean by "excessive player wages"?  Most articles relating to this subject seem to put "excessive" at well over 50% of turnover.  Ours was about that when we got promoted, but for the next three seasons was 29%, 36% and 31% respectively.  There is no figure given for the last financial year in the accounts, but even if we generously assume that it was the same as the previous year- when we still had a £7.1m parachute payment- it would be about 40% of turnover, which as far as i am aware is far from excessive in relation to other clubs.

[vos 155]

Thanks Mr Carrow. As you will appreciate I was mainly basing my reply on value of Club.

The points you make are very relevant. As per 2008 accounts the turnover was £19.2 million and total salaries were £13.5 m. I think it would be reasonable to say players wages etc were around £11  making the percentage around 60% which is high. However we do not have precise figures. These figures tend to justify, amongst other things,  my theory that gate receipts should be higher. I hear of several season ticketholders who get very reasonable terms by paying up front. As a pensioner paying for casual games I often pay £10 which is probably on the low side for entertainment in general. To be fair to the Club they will say the pricing is about right in that they more or less fill the ground on most occasions.

A normal business should look to make a consistent steady profit to fund further improvements/expansion and put away a bit for a rainy day. The problem with football clubs is if the supporters hear there is a bit of cash about they want it spent on the squad. Very average footballers are still paid far too much.

[Mr.Carrow 378]

Vos, player wages were £9.1m and £7.4m respectively in the two parachute payment seasons (as stated in black and white in the accounts).  Why on earth would they have gone up to £11m the season the parachute payments ended?  The club apparently had players on "tiered" contracts which dropped after promotion and again after parachute payments ended, so i would say if anything they would have dropped.  This is the trouble with having a club which tries to blame all it`s problems on player wages, but then decides not to actually give fans a figure to decide if that`s the case or not.

I would politely suggest that you have a look at the `06 and `07 annual reports, note the overall wage bill, then subtract the stated player wage bill and then ask yourself (or someone at the club......) what on earth all those extra wages are paying for.

[Thirsty Lizard 3,183]

Mr Carrow, I think you''ve probably overlooked a rather large point when you claim that player wages last season "would have dropped if anything". Just think for a moment how many players we had on loan last season and how much their wages would have been!

Martin Taylor, Ched Evans, Ryan Bertrand, Mo Camara, John Hartson, Alex Pearce, James Henry, Mathew Bates and Keiran Gibbs all came on loans (most of these were for a period of about six months) and Matty Pattison initially came on loan before joining for about £500,000.

Bearing in mind that loan deals these days often involve a loan payment fee and agents fee as well as paying the players actual wages its pretty obvious that we''re talking a very large sum of money here on top of the players we already had contracted at the start of the season!

[Mr.Carrow 378]

[quote user="Thirsty Lizard"]

Mr Carrow, I think you''ve probably overlooked a rather large point when you claim that player wages last season "would have dropped if anything". Just think for a moment how many players we had on loan last season and how much their wages would have been!

Martin Taylor, Ched Evans, Ryan Bertrand, Mo Camara, John Hartson, Alex Pearce, James Henry, Mathew Bates and Keiran Gibbs all came on loans (most of these were for a period of about six months) and Matty Pattison initially came on loan before joining for about £500,000.

Bearing in mind that loan deals these days often involve a loan payment fee and agents fee as well as paying the players actual wages its pretty obvious that we''re talking a very large sum of money here on top of the players we already had contracted at the start of the season!

[/quote]

At last years AGM Roeder stated that the loans were not as expensive as people think and represent 15% of the wage bill.  People seem to want it both ways- when posters criticise the loans, the response is they are far cheaper than buying players and represent reasonable value for money, when people accuse the board of lacking ambition the response is the loans are extremely expensive.  You have to bear in mind that a loan for the "owning" club is a good thing if the player isn`t in the first team squad, therefore they would be happy to compromise in order for their player to get games and experience.

Also, i believe loan wages are included in the overall wage bill but fees etc. are not.

[Grando 270]

All of this debate is very interesting, but the bottom line is that Ipswich are in a much better league position than us, with a much stronger squad of players.

[The Fish Seller 0]

[quote user="Thirsty Lizard"]

Mr Carrow, I think you''ve probably overlooked a rather large point when you claim that player wages last season "would have dropped if anything". Just think for a moment how many players we had on loan last season and how much their wages would have been!

Martin Taylor, Ched Evans, Ryan Bertrand, Mo Camara, John Hartson, Alex Pearce, James Henry, Mathew Bates and Keiran Gibbs all came on loans (most of these were for a period of about six months) and Matty Pattison initially came on loan before joining for about £500,000.

Bearing in mind that loan deals these days often involve a loan payment fee and agents fee as well as paying the players actual wages its pretty obvious that we''re talking a very large sum of money here on top of the players we already had contracted at the start of the season!

[/quote]2005-2006 - ''Player wage bill reduced by £1.6m''2006-2007 - ''Player and staff costs reduced by £1.5m''2007-2008 - ''wage bill across club down from £14.4 to £13.6m''(All sourced from offy site).

[vos 155]

We are playing a bit of a guessing game here as we are not in possession of all the facts. Mr. Carrow - have looked at 06/07 accounts and I would  assess that non-players wages are around £5 m i.e not sure how much of social security relates to players. This makes 08 players wages at around £8m. For comparison purposes I think turnover should be adjusted to £16m - I believe we should take off catering which is significant and exceptional for obvious reasons and a large factor in the overall wages bill. So I accept my original figure players salaries to t/o was high and is more like 50%. As another poster suggested the cost of loan players jumped up last season.

Whatever the percentage I still maintain players wages are excessive. Somebody on another thread stated that Sibierski was on £25k a week of which we are currently paying £15k a week. Can you believe that after his loan spell as a striker he could cost us around £100k per goal !!! I assume most other players are earning similar amounts, but at the end of the day the Club still cannot generate a profit (and not a lot of entertainment !!!) Compare his salary with the local skilled engineer who may be getting around £30k a year and his company consistently makes a modest profit.

Yes, I accept the entertainment business is slightly different, but very average players are grossly overpaid. Why because of the Sky money - and who pays them - idiots like me !!!

[Mr.Carrow 378]

I agree that player wages are ridiculous vos, but we are not in a position where we can opt out.  I invest in oil companies and i`m afraid that if a board of one of those companies came out and said something along the lines of  "oil rigs and skilled workers are extremely expensive, therefore we`ve hired a team of local layabouts and purchased some shovels", they wouldn`t last past the next AGM.

From all the evidence i have seen the percentage of NCFC`s turnover spent on player wages is extremely low compared to other clubs, and in my opinion the club continually harping on about it (whilst not providing a figure for us to make our own minds up) is a blatent attempt to deflect from the real problem that non-football costs have gone through the roof and are unsustainable.

[vos 155]

I hear what you say Mr. Carrow. I suppose its what they call "the market rate" or "rate for the job". It could well be that non-players wages are over the top and this is usually because at the top end they are very well paid and it filters down the system. Roger Mumby never comes over to me as a shrewd tough businessman in the style of - dare I mention the name - Robert Chase. I believe the Turners backed off because they could not get the support of other Board members to achieve numerous economies.