Everton "special" Talksport 9:00pm Monday 10th Aug 2015

[BluePeadar]

With our game being the early kick off Saturday, maybe we will get some attention on BT Sports as well with all that's happening. Although they'll probably just talk about Liverpool the whole morning.

You know it mate.

 

[The Equaliser]

Really hope that this issue is now being forced into the public domain properly and finally there might be some answers.

That this lot tried to flog the 'deal of the century' to the fanbase with the Kirby stadium proposal tells you everything you need to know about them. It took the actual government to see past it otherwise we could already be in the Championship. I fail to see how anyone could be supportive of them after that fiasco. Surrender the city to the RS for a cheap out of town alternative which local residents were dead set against ? The ultimate capitulation from 'the greatest Evertonian ever'.

The transfer guy on SSN informs me that we have the lowest spend do far in this window of any PL team. It's just embarrassing at this stage.

 

[evo1878]

The carrot of retail millions from DK was definitely the carrot that attracted Earl(or Earl/Green if you feel the urge) and when DK failed Earl really just wanted to profitise his 'investment' either straight away or by sitting on it until the opportune moment. I think this is less true of Woods, who is there because he is big mates with Bill K and will support him, or fall on his sword with him, whatever. The monkey on Bills back is Earl, and I suspect that if the selling price is/was on the high side, this would be down to Earl wanting more. Its possible that if Earl could be tempted to sell his shares, at whatever cost, the sale of the club would become a lot easier. So...just find a potential buyer who will buy out Earl at a premium, but get the rest of the shares at a fair rate, and you're home and dry !! Ha Ha !!

Or is it conceivable that Earl and /or Green are behind VIBRAC and have been getting such a handsome return on his / their investment comfortably every season that his / their equity investment is now effectively a shot to nothing so whatever he/they sell for its pure profit cos they've already had their investment back by now and they might as well wait and keep the revolving VIBRAC loan. Feel free anyone to tell me they know who is behind VIBRAC ?

 

[davek]

I think you present the arguments and dilemma facing the existing Board and potential investors looking at Everton very well mate.

As has been demonstrated for the last 16 years, the Board and major shareholders have not felt it necessary to invest capital in the club, rationalising that a combination of sweating existing assets (the stadium) to the nth degree, rising broadcasting revenues, availability of debt, clever and successful player trading combined with a successful youth/academy programme, moderate “success” on the pitch and an ever loyal fan base is sufficient to see a rise in value of the club’s equity.

My argument today is that we are reaching an inflection point where the larger clubs not only have a massive advantage in terms of assets, but have income streams growing so fast that the previous model deployed by the Board cannot be sustained. We cannot continue to defy the odds, over-achieve relative to income and expenditure, keep pulling rabbits out of the transfer hat and academy forever – the laws of probability just do not allow it.

Hence there’s a real danger of the top of the Premiership getting so far away from us financially that no-one would invest the capital required to bridge the gap (it could be argued we are already at that point) and even worse a couple of bad seasons could see us a genuine relegation candidates or worse.

The effect on the value of the equity would be significant if the above occurs. Thus, for the Board, for possibly the first time in 15 years, there’s an inherent risk in doing nothing. No longer is doing nothing an almost risk free way of making your “investment” grow in value.

The only way to mitigate that risk is to invest capital in the team, stadium and commercial enterprises associated with the club or allow others to do so.

The first priority would be to invest further in the team to mitigate the reduced performance risk and attempt to close the performance gap with the bigger clubs.

The second priority is a higher income producing stadium. Now debt model doesn’t work as the interest payments swallow the increase in revenues as far as a new stadium or stadium redevelopment is concerned, thus the capital required can only come from equity, loans at less than commercial rates or public/joint development subsidies.

Thirdly working capital is required to allow the effective running of commercial operations to increase future commercial revenues, create brand awareness etc, etc.

So to conclude, from my prospective the club owners have gone past the point whether they can consider the incremental returns achieved by an injection of capital, they are at the point where if they don’t invest, or allow others to invest alongside or sell completely they run a very real risk of losing the returns they have “earned” to date.

Persuasive. But can you clarify: are you also saying that, though this crossroads has been arrived at, and the risk you refer to is a major consideration for them now, managed stagnation is also a way they could proceed? I wasn't sure in your radio piece last night that this was your view because you got cut across at that point.

Personally, I think they'd brazen out a slip down the pecking order - piling their eggs into the basket of staying in the three ring circus of the Premier League with all its cash and leave it to prospective new owners to figure out a way to make the great leap forward.

 

[atrottel]

Personally, I think they'd brazen out a slip down the pecking order - piling their eggs into the basket of staying in the three ring circus of the Premier League with all its cash and leave it to prospective new owners to figure out a way to make the great leap forward.

That was kind of what I was implying in my post.

As long as they can be relatively sure that relegation is not in the picture (and, to be honest, our relative income vs smaller PL/promoted clubs should give us an inherent advantage) then what would be stagnation in our eyes would be financially successful decisions. As with many other areas of life these days, what we consider to be cynicism or asocial behaviour is perceived as logical pragmatism.

I honestly think - and here I am not referring to any illness but just the passage of time that affects us all - that it is going to take a generational change to effect any major shift at board level.

 

[The Esk]

Persuasive. But can you clarify: are you also saying that, though this crossroads has been arrived at, and the risk you refer to is a major consideration for them now, managed stagnation is also a way they could proceed? I wasn't sure in your radio piece last night that this was your view because you got cut across at that point.

Personally, I think they'd brazen out a slip down the pecking order - piling their eggs into the basket of staying in the three ring circus of the Premier League with all its cash and leave it to prospective new owners to figure out a way to make the great leap forward.

Sadly I was not able to get onto that point last night, my mobile cut off and besides Stan was already off on a tangent.

I do not believe the Board are yet considering the points I made above. In order to move on and get the investment required we must argue the reasons why and point out the consequences for them of not doing so.

There's an inherent danger in leaving the investment to the next owners if future owners feel too much is required to catch up.

We may be at that inflection point now, if we are still in the same position half way through the next premier broadcasting deal we will almost certainly see a reduction in the value of the club despite the higher revenues solely because the capex for new owners will be too high.

 

[Steve Wigan]

Or is it conceivable that Earl and /or Green are behind VIBRAC and have been getting such a handsome return on his / their investment comfortably every season that his / their equity investment is now effectively a shot to nothing so whatever he/they sell for its pure profit cos they've already had their investment back by now and they might as well wait and keep the revolving VIBRAC loan. Feel free anyone to tell me they know who is behind VIBRAC ?

The Vibrac office is in the 'same building' as the office Robert Earl uses to handle his Everton shares. Draw from that what you will , bearing in mind that Vibrac are in the business of lending money to football clubs. In fact I got to the above information through google, the link being a loan of 60 million which West Ham had agreed with Vibrac. That must be why they're buying so many players ! The same link quotes Evertons loan as £13, renewable annually, but possibly not this year. Fulham owed Vibrac £16 million until the new owner came in and paid it off.

 

[riddick]

The problem with the board wanting to 'maximize' their profits is that you have to leave something on the table for the next owner to come in. Its like a lot of companies that have investment groups, they take care of them for ~5years and then move on, but they have to be able to show the NEXT owner theres more to be made by investing in it.

If they sit around and just take all the fn Sky money and then the rights get renegotiated down, what the hell is going to make ANYONE want to jump in to purchase the club at the price they are likely asking..

 

[evo1878]

The Vibrac office is in the 'same building' as the office Robert Earl uses to handle his Everton shares. Draw from that what you will , bearing in mind that Vibrac are in the business of lending money to football clubs. In fact I got to the above information through google, the link being a loan of 60 million which West Ham had agreed with Vibrac. That must be why they're buying so many players ! The same link quotes Evertons loan as £13, renewable annually, but possibly not this year. Fulham owed Vibrac £16 million until the new owner came in and paid it off.

Thanks Steve. Yeah I got that association too with my own research. It's a very tempting connection to make but sadly not conclusive. I do think understanding the ownership of VIBRAC is key to understanding the 'true' ownership of Everton FC and the structures that finance it. My point is that If for example as quoted before that Earle bought his shares for £9m, then the amount of money VIBRAC have already received in interest above a commercial bank rate (ie what he would've got putting it on deposit) is greater than £9m. De facto if he is behind VIBRAC then his equity has no longer cost him anything and he is not motivated to sell so long as VIBRAC keeps lending money to Everton?

 

[atrottel]

If they sit around and just take all the fn Sky money and then the rights get renegotiated down, what the hell is going to make ANYONE want to jump in to purchase the club at the price they are likely asking..

It might seem a bit simplistic to compare the two, but in a way it's similar to buy-to-rent. You take the income and either spend it or put it against what you paid to buy the property. At some point it is 'paid off' either through revenue or through sale proceeds (likely way past that point with EFC with any sale proceeds). But there is no real point in looking at anything else than what you get when you sell, not what you might have got two years' previous or two years in the future.

A future purchaser would then look at the potential income and capital growth versus sale price in the same way as the original buyers did.

 

[Tramps_mate]

Or is it conceivable that Earl and /or Green are behind VIBRAC and have been getting such a handsome return on his / their investment comfortably every season that his / their equity investment is now effectively a shot to nothing so whatever he/they sell for its pure profit cos they've already had their investment back by now and they might as well wait and keep the revolving VIBRAC loan. Feel free anyone to tell me they know who is behind VIBRAC ?

Iv thought this. There will be murder if there's a link..

 

[Steve Wigan]

Thanks Steve. Yeah I got that association too with my own research. It's a very tempting connection to make but sadly not conclusive. I do think understanding the ownership of VIBRAC is key to understanding the 'true' ownership of Everton FC and the structures that finance it. My point is that If for example as quoted before that Earle bought his shares for £9m, then the amount of money VIBRAC have already received in interest above a commercial bank rate (ie what he would've got putting it on deposit) is greater than £9m. De facto if he is behind VIBRAC then his equity has no longer cost him anything and he is not motivated to sell so long as VIBRAC keeps lending money to Everton?

Fact is, theres nothing wrong with what he's doing, if in fact that what he is doing. And whatever Vibrac make out of Everton(and Fulham and West Ham for that matter) is presumably for the benefit of all Vibrac employees/directors. There are many companies similar to Vibrac in BWI/Cayman Islands etc., taking advantage of tax breaks and if Everton needed to go down that route, one can see why they would go with a company that one of their directors was associated with. The kind of loan Vibrac etc. provide,tailored to football clubs needs, is quite common, and a lot more than the three clubs mentioned here use this kind of facility. I think its one reason some clubs seem to spend a considerable sum over and above you would expect...its the same money, just being repaid every year then being borrowed again.

 

[evo1878]

Iv thought this. There will be murder if there's a link..

Certainly could be the smoking gun. Although all it will ever prove is our Board / Chairman preferred to borrow from their mate at a higher rate than a bank?

For me, tho I forget what it is, but It's the in commercially high interest rate that's always made me suspicious. I know there's guys on this forum who are more knowledgeable about it. So can anyone clarify?

 

[Minimeister]

Anyone know what time the Everton part's on?

 

[Muppet Basher]

Remember this leaked last time ?
Bet they are at it again.