Private equity

[Bruce Wayne]

Just wondering what people's thoughts are about private equity buying up some of our biggest brands?

 

[FCConnecticut]

Sounds like economic imperialism to me, can't be good.

 

[Dylan]

Not good. That is really the epitome of the giant faceless corporation.

 

[Rob]

Explain private equity to me.

As I understand it, its a collection of people forming a "club" to increase the money they make by putting their money together.

 

[Bruce Wayne]

That sort of thing Rob yes.

http://en.wikipedia.org/wiki/Private_equity

 

[FCConnecticut]

I think you are thinking of a Holding Company though I suppose it could be applied as well. Generally, I think of it as opposed to public equity, stocks and bonds. Private equity is when I invest directly and buy a portion becoming a partner or part owner. More common with start ups who need seed money but English Football has become the fad for foreign investment by the billionaires boys club. A direct reversal of the previous trend by football clubs to get listed on the exchange to raise money, now they are buying the stock back and going private again. In the US there is one pro team that is publicly held, the Green Bay Packers, all of the rest are privately held. Private companies are not required to make their books public since they are not public entities.

 

[Bruce Wayne]

It's for this reason that I ask. I wondered if those that were in favour of the club being bought were also against private equity buying up well known brands.

 

[gordonjblair]

I think it very much depends on the nature of the purchase Bruce. When people say Private Equity, images of ruthless asset strippers and faceless money men in for a quick buck tend to spring to mind. With a brand as emotive as a football club however, another option is common. The fan as owner (our own Club being a case in point) I'm sure BK could have sold up to Carson Yeung, or that dodgy Thai mobile phone salesman-come-despotic tyrant that's just bought Citeh, and made a fine profit out of it.

The fan as owner has different priorities (we hope) and tends to be more concerned with the long term welfare of the club rather than the fast buck

 

[Bruce Wayne]

This is what I think too Blair, and why I'm not so keen on getting bought out by any Jonny Come Lately. People naturally assume these people are owner fans too and will waste millions buying the best players etc. rather than people who are only investing because you can make money out of football now.