Why didn't they buy us?

[growler]

The guys who bought Man City, why did they not buy us? If you look at what they paid for Man city and what they will spend on players to get them to a good level, why not buy a bigger name in us, and actually attract the kind of players you want (Kaka would have joined liverpool for example).

 

Build the stadium and the club is also self funding a lot quicker.

 

Just doesn't make any sense.

 

If the Dubai people wanted it, they could have then bought from these guys down the track.

 

Same for the guy looking to buy portsmouth, the money required to get them to a good level is horrendous and I can't get the numbers to add up.

 

What are people's thoughts on this?

[Rimbeux]

Lot of work to do, lot of money to buy shares, lot of funding to find for the stadium. We were looking for people with a business plan, City found a billionaire club who wanted a toy, glad it wasn't us.

[Cooger]

At Man City they have the stadium and the expectations are lower.

 

Here they would have to finance and build a new stadium which is 350 million +. Then they have to purchase the club, this is another 200 million plus. Then there is the debt they would inherit.

[Kvarme Ate My Food]

At Man City they have the stadium

 

I reckon that was hugely important.

[growler]

Cooger, if someone buys us, the price would include the debt. so they would buy us for 400mil, pay off the debt (or some of it), give rafa 100mil for players, and finance the stadium.

 

I still see the money them putting in would be less for our brand than it would be to build man city over 5 years.

 

chelsea are surely an example of that? They are still not truly regarded as a 'great' club.

[Cooger]

Cooger, if someone buys us, the price would include the debt. so they would buy us for 400mil, pay off the debt (or some of it), give rafa 100mil for players, and finance the stadium.

 

I still see the money them putting in would be less for our brand than it would be to build man city over 5 years.

 

chelsea are surely an example of that? They are still not truly regarded as a 'great' club.

 

Yes ther price would include the debt, but it needs to be considered ibn the equation.

 

I agree they won't have the brand that we do. However Man City do have a big fanbase (unlike Chelsea).

[carrafan]

Maybe our owners didnt want to sell, unless a silly price was offered.

Edited June 7, 2009 by carrafan

[Rimbeux]

Cooger, if someone buys us, the price would include the debt. so they would buy us for 400mil, pay off the debt (or some of it), give rafa 100mil for players, and finance the stadium.

 

I still see the money them putting in would be less for our brand than it would be to build man city over 5 years.

chelsea are surely an example of that? They are still not truly regarded as a 'great' club.

 

Really? What you add up for us is comfortably more than the £700m Abramovich has spent at Chelsea

 

Anyway, it's academic, I'm really not bothered we haven't been taken over by a billionaires club as a toy

[Ethan]

Maybe they had a look at our books and though ohhhh f*** that s***

[Rimbeux]

Maybe they had a look at our books and though ohhhh f*** that s***

 

 

Well City were bordeline insolvent as a club, they needed input to cover the wages

[Maldini]

By now our debt is about 3 times our worth. That's why.

[fyds]

By now our debt is about 3 times our worth. That's why.

Well that's the biggee - our debt on paper is just about 3 times our paper worth, maybe a bit less.

 

What this leads to next is how you define 'worth' - what are we worth to the right investor as an internationally reknowned global brand - in sporting terms, one of the very biggest? Balancing that over a given period of time to conduct thie vision, against the overall cost and a realistic business plan is what will eventually decide how sellable we are and to whom.

 

The first thing any new owner would want to do, bearing in mind they know a stadium is needed but that certain revenues are all but guranteed is to hammer down the actual purchase price.

[growler]

My point is, as an investor, why pay 80mil for a club and then 350-400mil on players, facilities etc which has no return, rather than pay 400mil for liverpool, maybe 100mil for players and know that the revenues are already that much higher.

 

As for value, if the mancs are worth nearly a billion and arsenal came in at about 600mil based on recent share trades (I think), surely a club like ours should be worth about 500-700 at least?

 

Our value IS high. It was moores who sold it on the cheap.

 

Look at it another way; based on our operating profit before cost of debt, how much could we borrow if the profit we had was to go on interest payments? that debt - the cost of the new stadium is the delta for the new owners, assuming they can carry the cost of the purchase.

 

Back to the original though, why spent what will be hundreds of millions on building a brand that will take many years to build to a recognised brand, rather than buy an established one.

[boohog]

By now our debt is about 3 times our worth. That's why.

 

Our debt is 330m. So that would make the value of the club 110m.

 

Our EBITDA was 37m for the 07/08 accounts and we generated a bottom line of over 15m cash after interest payments. Even in this market the club is worth substantially more than 110m. More like 250-300m and that's not even taking into account the major bump in revenues we are going to get from this seasons 2nd place finish doubling next year's CL revenues.

 

Even if you take the bogus debt figure that includes G&H's loans of 420m, you are saying we are worth 140m. Still miles off in my opinion.

[Falconhoof]

Really? What you add up for us is comfortably more than the £700m Abramovich has spent at Chelsea

 

Anyway, it's academic, I'm really not bothered we haven't been taken over by a billionaires club as a toy

 

We are now the toy of two potless chancers. I'd rather be the toy of some multi billionaire who can build the stadium.

[Maldini]

Our debt is 330m. So that would make the value of the club 110m.

 

Our EBITDA was 37m for the 07/08 accounts and we generated a bottom line of over 15m cash after interest payments. Even in this market the club is worth substantially more than 110m. More like 250-300m and that's not even taking into account the major bump in revenues we are going to get from this seasons 2nd place finish doubling next year's CL revenues.

 

Even if you take the bogus debt figure that includes G&H's loans of 420m, you are saying we are worth 140m. Still miles off in my opinion.

 

Those figures are from 10 months ago though. I'd be surprised if our debt hasn't increased in the last ten months considering they increased it by about £70m from July '07 to July '08. I'm repeating myself here, but the circumstantiol evidence would suggest that. The world's economy has collapsed in the last 10 months, Hicks defaulted on a loan in America and Gillett has been trying to sell his assets over there.

 

We're worth what someone will pay for us, which doesn't seem much at the moment.

[fyds]

Those figures are from 10 months ago though. I'd be surprised if our debt hasn't increased in the last ten months considering they increased it by about £70m from July '07 to July '08. I'm repeating myself here, but the circumstantiol evidence would suggest that. The world's economy has collapsed in the last 10 months, Hicks defaulted on a loan in America and Gillett has been trying to sell his assets over there.

 

We're worth what someone will pay for us, which doesn't seem much at the moment.

Which is the hard truth G&H may be forced to except either very soon, or at the next renewal.

[Sir Tokyo Sexwale]

Maybe our owners didnt want to sell, unless a silly price was offered.

it was. They still said no. Because they're c****

[David Hodgson]

I reckon that was hugely important.

 

Absolutely.

 

The real price on the ticket to buy us is enormous. Althought the crerdit crunch has decimated the price G & H can expect to sell for, the cash cost of the stadium has effectively risen, as the gearing once available simply isn't there.

 

I'm guessing but I think anyone who wants to buy us tomorrow has to factor in £350m to take out the RBS, £200m towards the stadium cost, and to make it all worth it, factor in, say, £100m towards improving the playing staff. That's a big cheque of about £650m needed, in uncertain times. Maybe a buyer could persuade the RBS to stay in for the odd £100m, but it's still a lot of dough to find, especially when the return is a long way off because of how long it would take for the stadium to really start paying back.

[honourablegeorge]

I'm increasingly convinced that the only way out of this is administration.

[David Hodgson]

I'm increasingly convinced that the only way out of this is administration.

 

Doesn't that lead to massive points deductions ?

[Hassony]

Doesn't that lead to massive points deductions ?

 

I think its a football league rule, I am not sure its applicable in the premiership

[honourablegeorge]

Doesn't that lead to massive points deductions ?

 

Ten, I think.

 

The level of debt is too high for any bidder to relistically consider us (it'll be well over £400m by the time we refinance), and even if they could get over the purchase price together, plus a profit for f***with and f***wit, they then have to build a £250M stadium (conservative estimate there) to make the whole thing approach viability.

 

Call it SEVEN HUNDRED MILLION QUID. And we don't generate enough cash as it stands to cover half that - we made a £42M net loss. With a refinanced debt, that loss will grow next year. Adding to the borrowings in order to build the stadium, would probably double that loss, or more.

 

So if someone did buy us, take on all that debt, and borrow the stadium cash, they'd be making £60/70/80M losses for the years that the stadium was under construction, as more and more of the loans were drawn down.

 

I don't know much about finance - but I don't see how a takeover could make sense to anyone at this stage.

Edited June 8, 2009 by honourablegeorge

[surf]

Absolutely.

 

The real price on the ticket to buy us is enormous. Althought the crerdit crunch has decimated the price G & H can expect to sell for, the cash cost of the stadium has effectively risen, as the gearing once available simply isn't there.

 

I'm guessing but I think anyone who wants to buy us tomorrow has to factor in £350m to take out the RBS, £200m towards the stadium cost, and to make it all worth it, factor in, say, £100m towards improving the playing staff. That's a big cheque of about £650m needed, in uncertain times. Maybe a buyer could persuade the RBS to stay in for the odd £100m, but it's still a lot of dough to find, especially when the return is a long way off because of how long it would take for the stadium to really start paying back.

 

I think it would take a little more, perhaps £700m or £800m if you include getting the stadium built. Given the extra revenue a bigger stadium would bring in (£40m to £60m a season) it's a fair price to pay and should see the buyer get a return on his investment.

 

I've been saying we're worth £800m for years. If G&H had got their act together and got the stadium built for £400m or so then added to the money they spent on buying the club (£220m) they'd be in a much more profitable position than they are now.

[Mr Makaveli]

Well that's the biggee - our debt on paper is just about 3 times our paper worth, maybe a bit less.

 

What this leads to next is how you define 'worth' - what are we worth to the right investor as an internationally reknowned global brand - in sporting terms, one of the very biggest? Balancing that over a given period of time to conduct thie vision, against the overall cost and a realistic business plan is what will eventually decide how sellable we are and to whom.

 

The first thing any new owner would want to do, bearing in mind they know a stadium is needed but that certain revenues are all but guranteed is to hammer down the actual purchase price.

 

As a club we turned a profit this year though(Kop holdings are in the red completely because of the crazy loan they took out in order to buy the club, but our actual financials are sound with plentty of room for expansion... unlike almost every other club in the world.). The debt aside, with investment that profit can be turned into a far greater figure.