Everton takeover rumours

[hibbo'sclass]

If I knew what leveraged actually meant, or rather the implications of it anyrate, I would offer an opinion.

Seems to have been not too shabby at United.

*cue leeds/portsmouthetc etc*

Looking at it simplisticallyis all mate.

Thing with United is they did it and are one of the leading brands in the world with mega-income outside of football so could heap debt onto the club no problem.

What concerns me is that is FFP has kicked in albeit somewhat diluted so realistically profits need to be as high as possible in order to improve squad and wages and as you mention is what has happened to other clubs where the owners have laden them with debt. Remember our patron Saints Hicks and Gillett who nearly brought the RS down.

Implications are higher amounts of interest paid due to higher debt and weaker balance sheet again due to higher debt.

 

[hibbo'sclass]

I'm also disappointed this isn't to reinstate any rumors. I'm with @ilikecheese

To be honest I made a tongue in cheek post on the Board thread and it probably would be a mercy killing!!!

 

[Chang Elephant]

Both the initial takeover rumour of last month and the re-hash of the Daily Star quoted sources in the City, in one case London (from memory) and the Star was New York I believe. Does this mean that any potential buy-out will be leveraged?
Thoughts ?

I'd liken our ownership situation to Leeds, infected by dodgy dealing chairman ken Bates for many years (ownership of the club uncertain/concealed offshore....ring any bells ?) and when he finally sells up it's to some other pond creature from the type of circles he does business with i.e. Massimo Cellino.

Given Kenwright's tenure I expect probably something even worse than him as next owner (possibly introduced by "friends" Earl and Green) as next to take their place in line for sweating the assets of the club without investing, quite likely starting with the leveraged buyout you suggest.

 

[roydo]

Looking at it simplisticallyis all mate.

Thing with United is they did it and are one of the leading brands in the world with mega-income outside of football so could heap debt onto the club no problem.

What concerns me is that is FFP has kicked in albeit somewhat diluted so realistically profits need to be as high as possible in order to improve squad and wages and as you mention is what has happened to other clubs where the owners have laden them with debt. Remember our patron Saints Hicks and Gillett who nearly brought the RS down.

Implications are higher amounts of interest paid due to higher debt and weaker balance sheet again due to higher debt.

I have no idea mate.

About ifs and buts that is.

 

[The Esk]

Eager to see what comments ESK leaves, if any

I would say that broadcasting revenues now provide such a strong covenant that a leveraged bid (assuming there is a bid) is entirely possible. From the investor's point of view it's an attractive structure, can be very tax efficient and certainly gears the returns of the equity holders assuming the business (club) succeeds. Having said that, because Everton are so heavily reliant upon broadcasting revenues and therefore survival at least, in the Premier League, the likely levels of leverage offered would be fairly low. Nevertheless entirely possible.

From the fans point of view it is the worst possible form of buy out financing as witnessed over at Manchester United.

 

[njligernj]

I would say that broadcasting revenues now provide such a strong covenant that a leveraged bid (assuming there is a bid) is entirely possible. From the investor's point of view it's an attractive structure, can be very tax efficient and certainly gears the returns of the equity holders assuming the business (club) succeeds. Having said that, because Everton are so heavily reliant upon broadcasting revenues and therefore survival at least, in the Premier League, the likely levels of leverage offered would be fairly low. Nevertheless entirely possible.

From the fans point of view it is the worst possible form of buy out financing as witnessed over at Manchester United.

Possible but for all of BK's faults (and I vehemently want BK out) I genuinely don't believe he'd sell us out by letting someone leverage buyout.

While he may have lowered his standards from prior years (Sheikh Mansour?!?! No thanks good ol' BK will keep Everton going just fine thank you very much) I don't think he'd do something like that.

He's always said a prospective owner must be willing to buy the team outright and debt free, clear the current debt, and build a stadium. Maybe now they don't have to promise to build a stadium -- but the idea they wouldn't do any of the three things he previously saw as deal breakers seems a stretch.

 

[The Esk]

Possible but for all of BK's faults (and I vehemently want BK out) I genuinely don't believe he'd sell us out by letting someone leverage buyout.

While he may have lowered his standards from prior years (Sheikh Mansour?!?! No thanks good ol' BK will keep Everton going just fine thank you very much) I don't think he'd do something like that.

He's always said a prospective owner must be willing to buy the team outright and debt free, clear the current debt, and build a stadium. Maybe now they don't have to promise to build a stadium -- but the idea they wouldn't do any of the three things he previously saw as deal breakers seems a stretch.

All true but the new owners do not have to leverage straight away, could easily do it 6 or 12 months down the line.

 

[deipnosophist]

Is it possible, the latest PL TV deal (to May 2019) represents 'peak insanity'? And would not leveraged 'investors' possibly be thinking toward that possibility. As the old aphorism goes : it's only when the tide goes out you can see who's been swimming with no shorts.

 

[SerenityNigh]

Is it possible, the latest PL TV deal (to May 2019) represents 'peak insanity'? And would not leveraged 'investors' possibly be thinking toward that possibility. As the old aphorism goes : it's only when the tide goes out you can see who's been swimming with no shorts.

In every voluntary transaction, the buyer and seller both think they got a good deal

 

[deipnosophist]

In every voluntary transaction, the buyer and seller both think they got a good deal

yes, but what I was nodding toward was that contemplations toward surety (or otherwise) of future income streams might derail getting to the voluntary transaction (ie contractually concluded) stage.
disclaimer : I have absolutely no idea as to the sustainability of the TV monies beyond 2019.

 

[SerenityNigh]

yes, but what I was nodding toward was that contemplations toward surety (or otherwise) of future income streams might derail getting to the voluntary transaction (ie contractually concluded) stage.
disclaimer : I have absolutely no idea as to the sustainability of the TV monies beyond 2019.

All you need is an underwriter as eager/foolish as the buyer

 

[ilikecheese]

Flaccid.

 

[The Esk]

Is it possible, the latest PL TV deal (to May 2019) represents 'peak insanity'? And would not leveraged 'investors' possibly be thinking toward that possibility. As the old aphorism goes : it's only when the tide goes out you can see who's been swimming with no shorts.

Interesting as I have had sight of a private report into the future of PL broadcasting revenues.

Given that the PL is nowhere near reaching saturation levels of coverage in China and viewing figures in the US are projected to rise exponentially, plus other markets (India, Africa and middle east) then it's fair to assume peak values are quite some way off.

 

[hibbo'sclass]

Interesting as I have had sight of a private report into the future of PL broadcasting revenues.

Given that the PL is nowhere near reaching saturation levels of coverage in China and viewing figures in the US are projected to rise exponentially, plus other markets (India, Africa and middle east) then it's fair to assume peak values are quite some way off.

So am I right on thinking that overseas is the future growth, which if the current allocation system is used is beneficial to the likes of ourselves as it's shared equally?

 

[SerenityNigh]

Interesting as I have had sight of a private report into the future of PL broadcasting revenues.

Given that the PL is nowhere near reaching saturation levels of coverage in China and viewing figures in the US are projected to rise exponentially, plus other markets (India, Africa and middle east) then it's fair to assume peak values are quite some way off.

While this is most likely, any unforeseen event(s) that disturb income growth will destabilize any/all leveraged ownership structures that assume the underlying value