@the esk
Although I understand the concept of injecting capital into a business, I'm not really sure what the business rationale is for doing it in the case of Everton (as opposed to the fan rationale).
Let's assume, for the sake of argument, that the board members bought their shares for a total of xx million (say 50 million). The club now has an independent market worth (note not any presumed asking price but what it is worth) of, say, 150 million. At the moment therefore if all the shareholders cash out they receive a profit of 3x their initial investment.
IF they inject capital into the club of, say, 150 million to build a new stadium, they therefore reasonably have to expect that this will increase the value of the club to 150 million (what it is worth without that investment) plus the 150 million (investment) plus a reasonable profit on the 150 million investment (as a return for risk and using that money when it could have been placed elsewhere).
So we now have a notional worth for the club of 300 million + say 15 million.
Is a new or improved stadium (as opposed to increasing TV revenue, which currently just 'happens' without investor involvement) ever going to increase the worth of the club to that amount?
It's a similar argument to building a new stadium/revamping Goodison anyway. How long is it going to take for the costs to be covered by increased revenue? Again, given the size of proposed stadia and the size of potential crowds and the resistance of local fans to ticket price increases, the purely financial case for that investment is questionable.
So we have a board, where the main financial backers (Earl plus anyone who may or may not have fronted up any of Bill's cash) are currently looking an a steady increase in the capital value of their investment because of the growing amount of general Premier League marketing revenue and TV rights revenue which will happen whether they are active or whether they sit on their hands.
Do they double their investment and exposure in the club - by the 150 million investment - to provide a marginal and arguable increase in value in the total investment?
So that is solution a) or b) - board invest or outside investor comes in with capital injection.
Solution c) is that the board sell up and new investors take over. Again, what is the rationale for the board to sell? They are sitting on a healthy increase on their initial investment. The only way it currently looks like going is up. The risk to that investment has been tiny over the last few seasons and, even at a minimal level of revenue investment in wages and players, it looks like relegation is little more than an unlikely scenario.
So the threats to their investment would come from a drying up of TV revenue (possible but unlikely), relegation (again possible but unlikely) or a minor hit to revenue from a highly unlikely scenario of 35,000 fans following davek's example and staying at home on match day.
What possible inducement is there for a change in the current situation (outside a Manchester City or West Ham scenario)?
That's why I have to agree with the dismaying conclusion that the esk came to when asked: the current state of affairs will continue as it has been (because there is no valid business reason for the board to act in any other way).
(My economics exams were a very long time ago, so I may well be misunderstanding some vital aspect of capital or revenue or return on investment!)
