Usmanov

[catcherintherye]

How many times do we have to explain this to you
Listen closely and then report back to headquarters
An object or possession is only worth what someone is prepared to pay for it
You might value your house at 200,000 but if someone offers you 500,000 that’s what it’s worth
Can you see where this is going
No
I’ll explain further mare you still listening
Feel free to interrupt if I lose you
Usmanov offered way over the market price for Kronkes shares knowing full well Kronke would not sell
By offering this amount he now set a new value for Arsenal and told Kronke how much the club was worth in his eyes
Kronke wanted to buy Arsenal outright so he could incorporate it in the states ( basically means register it )
So now to buy Usmanov out he had to pay well over market price because Usmanov had set the new value
Kronke could not say no because he needed to incorporate Arsenal in America so he could use them and their cash flow as collateral for loans for his other sporting franchises

Any questions ????

Just a couple of added things on that. Everyone would have known he wanted to sell his shares. By making a counter offer he chaged the narrative.

Dont underestimate fan pressure on Kroenke if he let the offer stand. He knew he then had to act. All of it put pressure on him then to act.

As an aside, do you think these sponsorship deals are meant to help benchmark the clubs value at a higher level?

 

[GwladysBlue]

I wish The People’s Project stadium app would update and have Usmanov just tucking into a giant turkey leg in the tunnel club whilst signing cheques.

 

[catcherintherye]

Non


I wonder on the whole real estate front could there be a significant argument there as well mate.

It could be argued that maybe USM have already invested in the area, partners in the Liver Building maybe?

While the plans for the development of the North Docks as a whole could be argued is something that uniquely appeals to a business to be associated with and want to get in on the ground level. The development, regeneration and profile of the whole area could be bigger then just the stadium profile thus early and exclusive investment can be argued on that basis.

I mean it’s a billion pound project the whole area.

That's another fair point, namely that they have unique business interests so it represents an unusually high value to their shareholders. It would be very solid in a court of law if it ever came to that.

We will see if theres much outcry in the media about this. I suspect there won't be. It's not even massively clear if the PL will bother investigating.

The PL would be ok very shaky ground. It's not for bodies of clubs to start infringing on the markets right to dictate what companies value a sponsorship to be at.

As a final point, the renovation I saw as estimated at a 6.4 bn development. So the ground remains a substantially by quite small part of it.

 

[peteblue]

Look, he’s investing. We are incredibly fortunate to have two major investors. When he decides to go public, as he will, our club will grow enormously. Bill did a great job here.......

 

[catcherintherye]

If we want to really speculate here a scenario
Usmanov asks two of his Russian friends to pay 30 m got the right to bid on stadium naming rights
They do so with their OWN money cough cough
Russian A bids 30 m a year
Russian B bids 35 m
Usmanov bids 40 m as it’s market value
With a 5% increase per year for inflation
Sponsorship starts as soon as planning permission is granted

What is perhaps more interesting from this, is apparently the sponsorship for the ground has gone from 6 to 12 million. If that has gone through unscathed that's a real positive. For all the Kopites heads falling off (about the wrong thing on Rawk where they seem to think its 30 million p/a) this is far more dubious. Out of the blue, we have just had the sponsorship doubled.

If that gets passed, as a precedent that gives real flexibility to USM. At any given point it will be very hard for the PL to quibble a doubling of value (we may have to evidence it with only doing so every two years).

So if we get stuck again in 2 years for money, the 30 million fee can then become a 60 million fee (for example). The 12 they now pay can go to 24 etc. From a legal standpoint the PL cant build a legal case against this.

If we were to hit a target, say a top 6 finish then we could feasibly justify a bigger rise as well.

Anyway getting back to point. You may see some of the above. However I suspect you will see deals run for 5 years but with lots of flexibility in them. Embed an initial fee to get past the PL, then have easily achievable points by which greater sponsorship can be discussed as appropriate via reviews. Not automatic, but if needed for FFP we have that option.

As for Usmanovs mates/contacts, I'd anticipate we will see a fair bit of sponsorship and boxes being bought by Chinise/Russian companies in the new ground. They may also want to invest, hes a good man to get to know, especially with the ground being so close to a 6bn+ renovation.

A benchmark has bee set. If it gets through expect to work upwards. I make it that we now receive 22 million p/a from sponsorship.and potential 30 million from this ground move (it may be 10 million per year let's say) so that's 32 million p/a. I'd imagine repayments on a ground will be around 20 million p/a. So its the ground comfortable paid for before any additional come in.

 

[catcherintherye]

Look, he’s investing. We are incredibly fortunate to have two major investors. When he decides to go public, as he will, our club will grow enormously. Bill did a great job here.......

I don't think he formally invests Pete ( and always said as much) though interesting he opened up the possibility in hi latest FT article.

What's interesting though, with the money hes invested, is hes killed any potential investigations against him. If people ask about his interest in Everton it no longer has to be murky. He is a leading client and sponsor of the business. He can imput pretty much whatever clause he likes into said sponsorships (maybe he gets a box at the current or new ground, or a season ticket etc) and we are just looking after a valued client.

No ambitious journalist can really make much stick beyond that now.

 

[catcherintherye]

Could they do this with Megafon and USM? No idea how they are structured but they both independantly sponsor parts of the club so could they both go for sponsoring the stadium? Next year we might have a 20mill deal from megafon to be second in line for stadium naming rights. Hahahaha. So dodgy but I love it.

My understanding if it's an exclusivity arrangement would be they would have to first offer to buy the existing USM deal out, and the make a subsequent offer to Everton which they would be free to accept or reject ( we would have already been paid for the existing deal).

Logically it would be a mad thing to do. As it would look a bit like moving money between USM and Megaphon needlessly. However anyone who understands about money and the super rich know they quite like to do this, so its potentially a very handy way of doing it. Can help with tax, costs, making money harder to trace etc etc.

Of course for Everton, I would imagine there would be an expectation of a greater fee than the one we have secured for this deal, so in such a scenario it would likely be a potentially bigger fee. If we were to get a bigger fee in say 2 years, it wouldn't half allow us to spend a lot of money before that...

 

[Azza]

Based on 'market rate' of which UEFA investigate and determine. I assume they just estimate as they provide no documentation about how the process or their own valuations work.

But I imagine there's probably easy contractual work arounds.

e.g.

5 year stadium sponsorship with USM for £200m

2 years into the deal, it's cancelled and replaced by a £400m 5 year deal with Megafone. For example.

Looks like this could well be on the cards.


Finch Farm sponsorship is clearly a flexible / annual contract with USM. Otherwise they wouldn't have doubled it from £6m to £12m.

Taking into account greater turnover in future seasons, on field success, higher profile / marketability, then it's quite reasonable to assume that if there is a shortfall from such revenue stream then USM will be more than willing to make up that gap to an extent that's needed. Obviously they won't go abusing it right away as they'll want to club to naturally attract increased sponsorship revenue. Having USM sponsor everything to the max doesn't actually benefit USM in the long term given the profiles of it's holdings, but they'll need to in the short term in order for the asset of the football club and stadium to increase in value.

 

[catcherintherye]

There is a piece on here from the Wolves forum in which a poster who says he is involved in our stadium funding process in a small way
He called it complex and imaginative

Have you got a link to this?

 

[gwladysnight]

I don't think he formally invests Pete ( and always said as much) though interesting he opened up the possibility in hi latest FT article.

What's interesting though, with the money hes invested, is hes killed any potential investigations against him. If people ask about his interest in Everton it no longer has to be murky. He is a leading client and sponsor of the business. He can imput pretty much whatever clause he likes into said sponsorships (maybe he gets a box at the current or new ground, or a season ticket etc) and we are just looking after a valued client.

No ambitious journalist can really make much stick beyond that now.

Except all he had to do was buy Moshiri's shares.

Why promise to invest in Stadium rights but fail to actually invest in the Club .

 

[Coggy]

Except all he had to do was buy Moshiri's shares.

Why promise to invest in Stadium rights but fail to actually invest in the Club .

Lol.
Why not chill mate.
I think that greater financial minds are at work over this , than yours or mine. Or are you a WUM , or worse, , lad ?

 

[Neiler]

That's another fair point, namely that they have unique business interests so it represents an unusually high value to their shareholders. It would be very solid in a court of law if it ever came to that.

We will see if theres much outcry in the media about this. I suspect there won't be. It's not even massively clear if the PL will bother investigating.

The PL would be ok very shaky ground. It's not for bodies of clubs to start infringing on the markets right to dictate what companies value a sponsorship to be at.

As a final point, the renovation I saw as estimated at a 6.4 bn development. So the ground remains a substantially by quite small part of it.

Another thought struck me and this may be the ingenious part of all this. Bear with me though.

In FFP and PL financial regulations. Both Uefa and the PL allow you to write off revenue used to improve club infrastructure and stadiums.

Note tonight, Sasha made the point that this capital is going to be used and ring fenced for the Stadium Costs solely. These are deliberate purposeful words.

Will either the PL of FFP be arsed about sponsorship that will be used to improve club infrastructure and inevitably be written off under their regulations, I would suggest not in addition to the other points we shared.

I can also see Everton setting up a separate company, like Everton Stadium Ltd that will be a financial vehicle to administer ground related funding the ground. A separate entity to Everton football club.

Anyway you want to frame it it’s, 30 mill for old rope and to the benefit of Everton, however the ring fenced stadium wording might just be the genius framing of this capital for the stadium when it come to the attention of Uefa or PL regulation.

 

[Azza]

Another thought struck me and this may be the ingenious part of all this. Bear with me though.

In FFP and PL financial regulations. Both Uefa and the PL allow you to write off revenue used to improve clun infrastruture stadium.

Note tonight, Sasha made the point that this capital is going to be used for Stadium Costs solely. These are deliberate purposeful words.

Will either the PL of FFP be arsed about sponsorship that wil be used to improve club infrastructure and inevitably be written off under their regulations, I would suggest not in addition to the other points we shared.

I can also see Everton setting up a separate company, like Everton Stadium Ltd that will be a financial vehicle to administer ground related funding the ground. A separate entity to Everton football club.

Anyway you want to frame it it’s, 30 mill for old rope, however the it might just be genius frames g it as a capital for the stadium with regulation.

No anything you spend infrastructure doesn't count towards FFP.

They already have one - Everton Stadium Development Limited

 

[catcherintherye]

Except all he had to do was buy Moshiri's shares.

Why promise to invest in Stadium rights but fail to actually invest in the Club .

He did buy his shares.

And the answer is FFP. The main difficulty is going to be ensuring we dont fall foul of regulations. Mich easier with sponsorship. Avoids scrutiny too.

 

[Neiler]

No anything you spend infrastructure doesn't count towards FFP.

They already have one - Everton Stadium Development Limited

That’s my point they went out of their way to say this money was ring fenced for the ground.