FPP to take full control

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Also re: sand running through Donald's fingers, the club is not projected to make a loss this season. It is not running through his fingers until the end of this season at the earliest, at which point he has to commit to a path with it of spending it or paying it back.

His problem is that if he wants to stay, he also wants FPP to continue their deal and potentially loan him more money, which means he would ideally like to use the loan for it's intended purpose and then pay it back out of club profits. If there are no bids that get anywhere near his valuation, then he's going to have to stay and were going to have to get used to it, because he clearly can't afford to take a 50% loss on what he paid/owes.

The fact that FPP are basically positioning themselves to walk away and what looks like one of Methven or Donald is giving quotes that say they're the most likely buyers, to me, is a sign that things are not going well on that front.
 
Yep. That's it, most people accept (me included) that there is a chance anything can happen. FPP are tied to us financially until they're not, so ruling them out categorically is never possible.

What I will say is that I don't think it's a coincidence that FPP closed off the Ltd company on Thursday, and Donald went into damage control mode the day after, saying they were the most likely bidders. The most logical interpretation of those events is that FPP are showing signs of walking away - whether people believe that is 4D chess is up to them - and Donald is in negotiations with another party who he cannot drive the price up with unless FPP seem to be interested.

I read it as 'I've spent a week telling these lads they have to add another <X> million to their bid because the yanks are minutes from completing, and now they've undercut my position'
 
Kittenmittons said:
Yep. That's it, most people accept (me included) that there is a chance anything can happen. FPP are tied to us financially until they're not, so ruling them out categorically is never possible.

What I will say is that I don't think it's a coincidence that FPP closed off the Ltd company on Thursday, and Donald went into damage control mode the day after, saying they were the most likely bidders. The most logical interpretation of those events is that FPP are showing signs of walking away - whether people believe that is 4D chess is up to them - and Donald is in negotiations with another party who he cannot drive the price up with unless FPP seem to be interested.

I read it as 'I've spent a week telling these lads they have to add another <X> million to their bid because the yanks are minutes from completing, and now they've undercut my position'
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I can see how you interpret this but i'm a devious old bastard.

I would therfore disagree with your sentence in red. To me the most logical interpretation is that they're calling SD's bluff.

It would take a matter of days to reopen the Ltd company and they also have the option of buying Madrox.

We know that FPP have done due diligence and it has been alluded to that 10 days ago they were going through the books. SD is after a price, FPP don't agree with his valuation and aren't budging. FPP close down the LTD company and immediately after that a story breaks stating that SD will reduce his price.

He's a small fish and the big fish have just scared the **** out of him.
 
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Bob Cheval said:
The closure of the FPP UK company is a red herring. It would take 5 mins to set a new one up or they could buy Madrox rather than SAFC. It’s irrelevant.

Let’s assume the bulk of the FPP loan is still sitting in the bank account and can be paid back without issue. No one would buy SAFC without making sure Madrox pay back the £25m they owe the club. So any bid is always going to be £25m less than the headline number in terms of what goes to SD/Madrox.

So there are two scenarios:

1. SD finds someone willing to buy Madrox for £40m. Leaves £15m for Madrox which is probably a £2m profit all in.

2. He doesn’t find someone to do that.

It’s not a coincidence that his asking price is also his ‘get out at even price’. People often make this mistake of thinking the value of something is what they paid for it. Wanting the value to be £40m is not the same as it being £40m

As per one of my previous posts, SD put in £12m of his own money. Regardless of his exact overall wealth, that clearly would have stretched him and to lose it would be pretty serious. If you own your own business, then even it is ‘worth’ £40m, that doesn’t mean you have £40m of cash to hand. He likely had to borrow some funds to get the cash together. Plus the loan from the club itself.

But what is very obvious is that he is not willing or able to risk further losses. Hence the loan from FPP which finances the running of the club for a couple of years and means that his potential losses can’t grow.

So right now, his breakeven price is probably just under £40m. The longer he doesn’t sell, the more the FPP funds get used up and the breakeven starts to creep higher.

So for him it is all about whether he can get out.

1. Sell now for £38m and break-even.
2. Get promoted and sell for £45m (he hopes) and make a £7m profit.
3. Fail to get promoted and accept he has to take ) £35m or less and lose a chunk of his initial investment.

FPP obviously had a valuation of the club which did not match SD. It might match if they get promoted. It might match if they don’t get promoted (as SD will realise he has no options).

But in the meantime, SD will be desperate to find someone to pay enough right now to get him out without a loss. Which is his right. But I doubt he will to be honest. If it looks like SAFC will get promoted, SD won’t want to sell this season. If it looks like they won’t, a buyer would not want to pay £40m. That is why SD is asking for promotion bonuses and the like but asking and getting are not the same thing.

In the background, FPP can just wait it out. If someone out-bids them, fine. If not, it comes to them at their price. But time is on their side.

In answer to other posts, of course they won’t be hands on. Private equity people never are - they bring in someone to run it for them.
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Excellent post and exactly as I see it, including the amount of profit. The cost was £37m, that is a fact in the Madrox accounts. It doesn't matter how much of that the shareholders have actually paid. If they sell for £35m, the shareholders will receive back £2m less than what they have paid in (SD will get back 74% of £2m less than what he's put in to be precise).
 
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HeatonMackem said:
Excellent post and exactly as I see it, including the amount of profit. The cost was £37m, that is a fact in the Madrox accounts. It doesn't matter how much of that the shareholders have actually paid. If they sell for £35m, the shareholders will receive back £2m less than what they have paid in (SD will get back 74% of £2m less than what he's put in to be precise).
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In a nutshell the yanks are saying. This is our offer, take it or leave it.
 
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Ozzymac said:
So for my simple maths.

SD wants 40m
10m if that goes back to FPP leaving 30m
Less whatever SD has taken out of the club (not sure on exact figures)

Basically SD wants enough to cover his outlay to date which including the FPP loan is around 35m. Makes sense as that's what he's lowered his asking price to.

So for any other buyer out there SD needs 35m whereas FPP can have the lot for 25m if they leave their own loan in the company accounts
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While the £9m loan is unspent and sat in the bank, it is irrelevant. They will use that unspent cash to repay the loan.
 
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Kittenmittons said:
Yep. That's it, most people accept (me included) that there is a chance anything can happen. FPP are tied to us financially until they're not, so ruling them out categorically is never possible.

What I will say is that I don't think it's a coincidence that FPP closed off the Ltd company on Thursday, and Donald went into damage control mode the day after, saying they were the most likely bidders. The most logical interpretation of those events is that FPP are showing signs of walking away - whether people believe that is 4D chess is up to them - and Donald is in negotiations with another party who he cannot drive the price up with unless FPP seem to be interested.

I read it as 'I've spent a week telling these lads they have to add another <X> million to their bid because the yanks are minutes from completing, and now they've undercut my position'
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Which effectively keeps the price lower for any other buyer which in turn keeps FPP's bid competitive (whatever that bid may be) with the added complication of FPP having the right to authorise any other buyer unless the loan is paid back? Is that a fair assumption?
 
Ozzymac said:
Bloody hell smug, if 30,000 chip in just shy of 700 quid each (2 season tickets) we'd come up with 20 million.

Open it up to the worldwide fan base (928k on twitter alone) it's 21 quid each.

We can sell shirt sponsorship on a game by game basis. I'm sure you'd cough up a couple of grand to have "smug in boots" plastered on the shirt. 44 games in a season at lets say 3 grand for the weekly shirt sponsorship is 132,000 a season in shirt sponsorship (probably don't get much more than that now in league 1). Imagine how much someone would pay to have "Shearer's a ****er" or "6 in a row" on the shirts. Could auction the naming rights on ebay and make a killing.

Anyone that leaves before full time gets pelted with pease pudding on the way out (would add to the atmosphere). We'd sell out in no time.

This has got legs <party>
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Great in theory but in practice?

Imagine trying to get agreement between 928K shareholders on anything (even with elected reps).

Then getting them to 'cough up' for player transfers!
 
Lozza80 said:
Clearly the price all hinges on what division we are in , so not sure why sd put a timescale of 2 months for the club to be sold , he is just adding more weight onto them already heavy shoulders
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Sunderland Till I Die series II iirc
 
Owld Feller said:
Do they?

I, genuinely, don't understand how that balances out with appointing Presidents who seem to be elected based upon their promises to provide funding to buy players x,y & z.
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Not sure what you mean. How what balances out? They're run like a sporting club. The socios pay about 140 Euro a year in order to have vote. Then there's season ticket money, advertising, TV money that the elected President can spend. I'm sure there are behind the scenes shenanigans going on but that's the basic principle.
 
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The Norton Cat said:
Not sure what you mean. How what balances out? They're run like a sporting club. The socios pay about 140 Euro a year in order to have vote. Then there's season ticket money, advertising, TV money that the elected President can spend. I'm sure there are behind the scenes shenanigans going on but that's the basic principle.
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From memory aren't most of the German clubs fan owned as well. I'm sure i heard something about that a few years ago.
 
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Ozzymac said:
From memory aren't most of the German clubs fan owned as well. I'm sure i heard something about that a few years ago.
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Yeah, they have the 50+1 rule. Where slightly more than half has to be fan owned. I believe there are one or two exceptions. Possibly Wolfsburg and Bayer Leverkusen who are essentially works teams.
 
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