Latest Takeover Rumour. The Moores / Noell one

[Toffeelover]

PS. This is getting like a vote on the EU, do we or don't we. The difference is we do not get a vote on the club takeover.

 

[caught]

Everton need investment at the point of acquisition and require the reinvestment of future profits to make good the shortfall of the last decade and a half, not a structure that takes cash out the business.

That's the message the Board and shareholders should be giving to would be suitors.

Thanks for your input here, which is particularly helpful to clueless people like myself.

One question re. the quoted bit above: while I understand that this is the kind of owner we want, is it realistic? Would an individual investor or consortium with no otherwise strong affiliation with the club be likely to see significant benefit in what I imagine is quite a long-term plan? Is this model something similar to what FSG are doing across the way?

Apologies if you've already addressed this.

 

[D410]

The sale of the club should be taken out of the hands of the current ownership and conducted by a large corporate banking institution who's remit should be to find a deeper pool of buyers who are offering to inject capital into the club and not via any leveraged debt buyout.

 

[Toffeelover]

The sale of the club should be taken out of the hands of the current ownership and conducted by a large corporate banking institution who's remit should be to find a deeper pool of buyers who are offering to inject capital into the club and not via any leveraged debt buyout.

I think that is what happened to Liverpool to get Gillette and Hicks out.

 

[D410]

I think that is what happened to Liverpool to get Gillette and Hicks out.

I personally don't trust the ownership to do what in the best interests of the club over there own individual and extended network of "friends of Everton football club".

It needs a clean sweep from the top of the stairs down and the leeches both in the light and the shadows need to find another victim to suck the life out of somewhere else.

 

[njligernj]

One question re. the quoted bit above: while I understand that this is the kind of owner we want, is it realistic? Would an individual investor or consortium with no otherwise strong affiliation with the club be likely to see significant benefit in what I imagine is quite a long-term plan? Is this model something similar to what FSG are doing across the way?

Apologies if you've already addressed this.

FSG care about winning. They may spend more some years than others and go through "rebuilding" phases but in general they have a history of "trying" and they have a history of winning things. One of the FSG directors is considered by pretty much everyone to be one of the best owners in sports: Jeff Vinik. He has invested tens of millions into a stadium he doesn't even own, he spends to the cap, took his team to the final last year ... these guys are GOOD. They have about as good a resume you could ask for short of "I have billions and will spend billions on this team for fun."

Doesn't mean they don't also want to make money. But they have an established history of trying to win things as part of the process.

I'm not saying FSG are perfect -- they have issues -- but to put it in perspective our prospective owners have nothing remotely close to FSGs accomplishments on their resumes.

We don't need anyone new to do what the prospective owners will do. Their resume isn't good enough to take the risk and unless they are investing their own money the deal isn't good enough to take the risk.

There are lots of options that would give us roughly the same amount of investment and debt as these owners likely would -- only if we do it ourselves that money goes into the club instead of just being used to acquire the club.

If the TV money has changed the equation here then maybe some of our "genius" billionaires on our board will realize that if other people think they can make money with Everton maybe they can too. While I'm no fan of anyone using the team for profit, if that's the only play we have then it might as well be our current owners as they don't have to pay 200m first.

 

[The Esk]

Thanks for your input here, which is particularly helpful to clueless people like myself.

One question re. the quoted bit above: while I understand that this is the kind of owner we want, is it realistic? Would an individual investor or consortium with no otherwise strong affiliation with the club be likely to see significant benefit in what I imagine is quite a long-term plan? Is this model something similar to what FSG are doing across the way?

Apologies if you've already addressed this.

I doubt you're clueless!

It's a good question, and the answer is, given it has happened to the likes of Chelsea and Manchester City, albeit for different reasons, and again very differently for Liverpool but with I think hugely beneficial owners, why would the ideal buyer not be attracted to Everton?

So what is the profile of an ideal investor for Everton? Obviously an enormously wealthy individual who want to acquire good real estate within the English Premier League, there's a number of them about, the world has not run short of billionaires who could throw £500 million at a football club.

Secondly, and perhaps more realistically there's a group of investors (FSG would fall into this category) who are primarily sports investors, know the business, critically know how media rights work, how to extend sporting brands globally, and have sufficient resources to acquire and recapitalise the club from their own resources, taking a medium to long term view (5 years as a minimum, probably much longer) as to the value creation opportunity that exists at Everton. If they manage to attract an affiliate of Everton along the way, all the better.

Thirdly there's a group of investors who see the relative value in Everton vis-a-vis Everton's peers, and can invest or pool investors, who with the aid of debt secured against future income, acquire the club, build a functional stadium and then sell the club at a higher asset price benefiting from the leverage they have used within a 3-7 year time period typically, or as United have done part sell the club by re-floating and start to draw down dividends from the expected cash flows of the future.

Of the three types there's more of the third than there is of the second or first - the question remains which type will the board chose assuming they have a choice to make.

 

[caught]

FSG care about winning. They may spend more some years than others and go through "rebuilding" phases but in general they have a history of "trying" and they have a history of winning things. One of the FSG directors is considered by pretty much everyone to be one of the best owners in sports: Jeff Vinik. He has invested tens of millions into a stadium he doesn't even own, he spends to the cap, took his team to the final last year ... these guys are GOOD. They have about as good a resume you could ask for short of "I have billions and will spend billions on this team for fun."

Doesn't mean they don't also want to make money. But they have an established history of trying to win things as part of the process.

I'm not saying FSG are perfect -- they have issues -- but to put it in perspective our prospective owners have nothing remotely close to FSGs accomplishments on their resumes.

We don't need anyone new to do what the prospective owners will do. Their resume isn't good enough to take the risk and unless they are investing their own money the deal isn't good enough to take the risk.

There are lots of options that would give us roughly the same amount of investment and debt as these owners likely would -- only if we do it ourselves that money goes into the club instead of just being used to acquire the club.

If the TV money has changed the equation here then maybe some of our "genius" billionaires on our board will realize that if other people think they can make money with Everton maybe they can too. While I'm no fan of anyone using the team for profit, if that's the only play we have then it might as well be our current owners as they don't have to pay 200m first.

I doubt you're clueless!

It's a good question, and the answer is, given it has happened to the likes of Chelsea and Manchester City, albeit for different reasons, and again very differently for Liverpool but with I think hugely beneficial owners, why would the ideal buyer not be attracted to Everton?

So what is the profile of an ideal investor for Everton? Obviously an enormously wealthy individual who want to acquire good real estate within the English Premier League, there's a number of them about, the world has not run short of billionaires who could throw £500 million at a football club.

Secondly, and perhaps more realistically there's a group of investors (FSG would fall into this category) who are primarily sports investors, know the business, critically know how media rights work, how to extend sporting brands globally, and have sufficient resources to acquire and recapitalise the club from their own resources, taking a medium to long term view (5 years as a minimum, probably much longer) as to the value creation opportunity that exists at Everton. If they manage to attract an affiliate of Everton along the way, all the better.

Thirdly there's a group of investors who see the value in Everton vis-a-vis Everton's peers, and can invest or pool investors, who with the aid of debt secured against future income, acquire the club, build a functional stadium and then sell the club at a higher asset price benefiting from the leverage they have used within a 3-7 year time period typically, or as United have done part sell the club by re-floating and start to draw down dividends from the expected cash flows of the future.

Of the three types there's more of the third than there is of the second or first - the question remains which type will the board chose assuming they have a choice to make.

Thanks both. Answered my questions plus a little more.

I have wondered about how attractive an investment we really are. The case of Chelsea was, I think, partly down to location and circumstance, while City were effectively gifted a stadium. LFC have been very good at self-marketing, much better than ourselves, which I imagine was part of the attraction for FSG (the 'storied' club narrative fits with the likes of the Red Sox etc.)

The big worry, and I suppose that this has been the case for over fifteen years, is that the board are simply poor salespeople in this instance. Of course, I know that's not exactly an original observation.

 

[The Esk]

I have wondered about how attractive an investment we really are.

I think on the basis of what we could be, what potential we have commercially and football-wise, what development opportunities exist, the potential for marketing the Everton story, our history, stature and values we represent a very attractive investment to people who understand the space, can manage the business properly and exploit the opportunities.

 

[caught]

I think on the basis of what we could be, what potential we have commercially and football-wise, what development opportunities exist, the potential for marketing the Everton story, our history, stature and values we represent a very attractive investment to people who understand the space, can manage the business properly and exploit the opportunities.

Agreed. Can you have a full marketing strategy up on the GOT homepage by the end of the week?

 

[atrottel]

I think on the basis of what we could be, what potential we have commercially and football-wise, what development opportunities exist, the potential for marketing the Everton story, our history, stature and values we represent a very attractive investment to people who understand the space, can manage the business properly and exploit the opportunities.

Do you not think that this limits the pool of potential investors quite substantially?

BK has been (correctly) criticised for the time it has taken him to not find an investor. But as someone said earlier even City had to go through their Shinawatra stage and Chelsea had Ken Bates of all people.

 

[The Esk]

Do you not think that this limits the pool of potential investors quite substantially?

BK has been (correctly) criticised for the time it has taken him to not find an investor. But as someone said earlier even City had to go through their Shinawatra stage and Chelsea had Ken Bates of all people.

Yes I think it clearly does, but I do not think that is a bad thing to be honest. It's critical that whoever becomes the next owner does things correctly for the interests of the club, not just a function of financial engineering.

Having said that time is also a critical issue if we want to become truly competitive on the pitch. The window of opportunity is closing steadily.

 

[hallamblue]

I would add Manchester City, Chelsea, Everton, Liverpool, Newcastle United and the likes of Crystal Palace, Southampton, Leicester City, Stoke City (assuming they all stay in the Premiership) will all be profitable at the operating level over the next 5 years.

Manchester City are currently minus approximately £1 billion since the owners took over, Chelsea about the same. Liverpool owe their owners over £100 million. Newcastle will probably be relegated and worth nothing. Southampton only make a profit as they sell players every year, their profit in total was half what they made in sales, so without sales they lose about £30 million a year. Stoke are minus about £300 million since Peter Coates took over.

Football clubs do not make money for owners. Luckily for most of those you mention they have rich benefactors.

 

[The Esk]

Manchester City are currently minus approximately £1 billion since the owners took over, Chelsea about the same. Liverpool owe their owners over £100 million. Newcastle will probably be relegated and worth nothing. Southampton only make a profit as they sell players every year, their profit in total was half what they made in sales, so without sales they lose about £30 million a year. Stoke are minus about £300 million since Peter Coates took over.

Football clubs do not make money for owners. Luckily for most of those you mention they have rich benefactors.

Let's revisit this in 2020

 

[hallamblue]

Let's revisit this in 2020

No need, we all know what will happen. Transfer fees and wages will go up, clubs will compete against each others, players and agents will get richer, football clubs will continue to lose money.