EVENING POST ARTICLE SWANSEA City could sell 30 per cent of the club to their potential American investors in exchange for around £30 million. But that cash would go directly to those shareholders who are willing to sell rather than into Swansea’s coffers. The proposal which has been discussed could then see John Moores and Charles Noell, the super-rich US businessmen who have held talks with Liberty chiefs, give Swansea favourable loans in a bid to help drive the club forward. Swansea sources have stressed to the Evening Post that at this stage, it is too early say whether the Americans will come on board. The club are not thought to have held any negotiations with Moores and Noell since before Christmas. But Swansea are expecting to have a better idea of whether the US investment is likely to happen after a meeting which is due to take place at some stage in February. Swansea’s Supporters’ Trust have made it clear they are opposed to the idea of foreign investors coming on board at the Liberty, and their 21.1 per cent stake in the club will not be for sale. However, the suggestion is that Swansea’s other shareholders will consider selling some or all of their respective stakes in the club. Depending on how many — if any — shares they sell, the likes of Huw Jenkins, Martin Morgan and Brian Katzen would receive a chunk of the £30 million it is likely to cost the Americans to buy into the club. At this point, Swansea say no firm decisions have been taken about what the way ahead would be if and when the shares are sold. But the Americans would then join the club’s board of directors, and the suggestion is they could then lend Swansea money in an attempt to help the club progress both on and off the pitch. If a deal comes off, it is understood Swansea would push through with a bid to buy the Liberty Stadium from Swansea Council as well as pressing ahead with plans to expand their 20,900-capacity home. A chunk of cash would also be spent on improving Swansea’s two new training grounds. There is work to be done at the Landore site as Swansea attempt to achieve category one status for their academy, with the erection of an indoor barn and classrooms on the to-do list there. At Fairwood, meantime, Swansea are still a long way from completing the top-class set-up they want for the first team, with offices, a gym and a swimming pool among the facilities which are still to be built. The American dollars may not be spent exclusively on off-field projects. Swansea could also use some of their money for squad- strengthening if required. However, the club say one of the key attractions of the potential new investment is that it will allow them to improve their facilities and infrastructure without dipping into the pot of cash which is currently used to pay for player recruitment and wages. None of Swansea’s shareholders has so far commented officially on the possibility of selling, but it is believed there is agreement in the boardroom — the supporters’ trust aside — that the Americans buying in would be a good thing. Morgan currently has the biggest share in the club (22.5 per cent) ahead of Katzen and the trust, who have matching stakes. Jenkins (13.2 per cent) is the next biggest shareholder ahead of Robert Davies (10.5 per cent), while Leigh Dineen and John van Zweden hold smaller stakes. Swansea confirmed last October that they were in discussions over the possibility of fresh investors coming into the club, with Jenkins stating that there was a need for them to catch up with their Premier League rivals financially. Jenkins has bemoaned Swansea’s lack of marketing prowess, and there is a feeling that the know-how and contacts Moores and Noell would bring would benefit the club. The Americans were previously in charge of Major League Baseball side the San Diego Padres. Gareth Vincent /[email protected]/ @Gareth_Vincent
Your thoughts please on; 1) 30% of the club? Is that a controlling stake (I'm pretty sure that it is), should the deal be structured differently? 2) Wealthy Americans steering the ship. Is this a good idea? How much involvement will Swansea people still have in decision making? 3) Is the Trust's hostile position the correct one? 4) If the deal goes ahead (without yet knowing the details) how do you see the future of this club? How far can we go? 5) Murky goings on. Are we proposing the purchase of the stadium with the help of the Bony money (and successive annual profits) specifically to increase the value of the shares so that some directors can cash in? Is that why he was sold off below market value? Or is it just a case of the board anticipating what would come next and lining up our ducks in preparation? 6) What would this mean to our club ethos, our principles?
Just emailed the Trust to see when if at all an announcement will be made to prove or disapprove the rumours .I could wait until Dai posts but he doesn't come on duty until 1600 hours or so .
Am I being thick here as I am not up on money matters, but how can this benefit our club in anyway other than those who sell their shares and line their pockets. We are debt free at the moment and then our board want to become beholden to a couple of Americans in the form of LOANS. Please someone explain to me how this can benefit anyone other than the Yanks and those selling teir shares and not in anyway Swansea City. If my feelings are correct and somone will tell me it actually sickens me.
No you're not being thick as these things are complicated and secretive. My guess is this. Yes the £30m goes straight to the directors and they get rich and party off into the sunset....as is their prerogative. They stumped up the cash when we were in the ****, risking their own money (to Morgan and Katzen I'm sure this was money they could have kissed goodbye to but to the others it was a big risk) and they own the shares so they can do what they like with them....good luck to them. The advantage (there are disadvantages! I'll let others discuss them in full) to the club would be that we would now have 2 blokes on board with serious cash who have agreed to loan interest free cash to the club in order to expand the business they now have 30% (the controlling interest) of. In short, it would be in their interests to grow the club to increase profits and the clubs value (their plan might be to sell us on down the line for a big profit....a risk/opportunity in the future?). So they would loan us money to do; "If a deal comes off, it is understood Swansea would push through with a bid to buy the Liberty Stadium from Swansea Council as well as pressing ahead with plans to expand their 20,900-capacity home. A chunk of cash would also be spent on improving Swansea’s two new training grounds. There is work to be done at the Landore site as Swansea attempt to achieve category one status for their academy, with the erection of an indoor barn and classrooms on the to-do list there. At Fairwood, meantime, Swansea are still a long way from completing the top-class set-up they want for the first team, with offices, a gym and a swimming pool among the facilities which are still to be built. The American dollars may not be spent exclusively on off-field projects. Swansea could also use some of their money for squad- strengthening if required." ...in order to further establish us as a Premier League club and make a return on their £30m investment. There is risk with this of course....essentially this was Vincent Tan's plan (but they were starting from a polar opposite position....we have wages under control, have consistently made a profit, have access to massive income streams [TV money] etc.)...it's also the situation at Newcastle (and umpteen other clubs, I reckon the vast majority of clubs). The problem comes if the owners have different objectives to the fans, make bad decisions and/or lose interest. Down the line we wouldn't be a cosy little club anymore. Whoever owns us at the time will hire and fire people at will as well as set budgets etc. Trunds. I'm not endorsing either view, just putting the case for the board and the Americans. It IS possible that this could be a good thing for the club. ....the flipside is that the trust's influence will dwindle away to nothing and the people making the decisions in future won't be Swansea fans but businessmen looking to grow the business until they reach a point where they feel happy to cash out....at which point we will be sold to some more businessmen etc.
While I disapprove, I do think we need people on the board who have experience in running big multi-million £££ business
1) depends on the voting structure, but it is not a controlling stake providing that the other 70% have their act together. 2) it may very well bring a rigor and professionalism to the management of the club - they could, but it is unlikely, that they would treat this as a toy. I would expect them to take this investment very seriously ... perhaps too seriously for those remaining in terms of the management controls they would probably want to implement. 3) The Trust is acting in their own interest. It is not hostile. They are entitled to retain their ownership position which should place them in a stronger position relative to the likes of stock sellers that will be diluting their holding through the sale. The Trust would be in a stronger position after this as the second largest share holder. 4) I think we would be in a position to move forward. It is likely that a new executive management team would be put in place. This would eliminate the cronyism that exists. 5) I think the leverage and collateral that the new investors would bring would be used to purchase the Liberty. 6) The investors are buying the club in part because of our historical ethos (not the downward trend we care currently experiencing). They would want to restore and build on that as part of the club's value proposition to customers and to attract the best players. From a sustainability point of view clubs like us, Everton and West Ham (clubs that I have looked at) and probably others are highly vulnerable to performance risk hitting a huge percentage of their revenue. Expanding the stadium, selling seats and much better marketing and brand building would help to diversify the club's revenue and lower this vulnerability.
I suspect that Huw would be more prepared to give GM the "benefit of the doubt", whereas the Yanks would be more concerned to not only protect their initial investment, but to increase its value. As such, they may be more likely to push for a change in the Manager's chair.
Great post, Yankee. I think that for a lot of fans it's very easy to look at the investors as another Tony Petty situation, but the reality is that these are guys with experience in running sports businesses, and doing it well. They will have contacts all over the place and will rapidly increase global sponsorship and advertising opportunities for Swansea City AFC, and will also stump up the capital needed to finish our training complexes and stadium expansion now, rather than later. While it means being in debt to them for now, it also means that we don't need to split our profits between infrastructure and squad development, we can keep our cash for squad development while our new board members and investors look after our infrastructure, while also growing the global brand of Swansea City AFC exponentially quicker and more effectively than we could have ever imagined. Our one and only risk is that if we do take on this debt is that we must not fall out of the Premier League. At least not for 2 or 3 years. After 2 or 3 years, we'll have earned something around £250m from TV rights alone (enough to have paid our investors' loan off and already be reaping the benefits and extra revenue from their 2 to 3 years of hard global marketing). We're technically more likely to achieve survival during this time as we can focus our revenue on our squad given that our investors loan has covered our infrastructure. So, in theory, we should have a better squad, a better training ground, and a better stadium. So we should survive indefinitely. Of course, this is football and, knowing us, we'll probably be relegated the first season the Yanks come on board. Once the investors are paid off - and let's face it, a £50-60m loan to buy/expand the Liberty and finish our training grounds is not that much while we're in the Premier League - then we effectively just have two Americans on our board. If they want to sell their shares and make a profit at any time, it's up to them. As long as we don't owe them money from their loan after they're gone. - Of course, I'm no business whizkid though, so please correct any of my potentially and probably warped business logic! I see it as two investments from the Yanks, firstly buying their shares (which will rise and fall with club success), and secondly their infrastructure loan which will be paid off with added interest. While I don't want us to piss away our past and what got us where we are today, we are now at a crossroads. Look for a good set of investors to help push us onto the next level, or keep going as we are and be happy with middle to lower Premier League finishes, occasionally flirting with relegation and maybe even being relegated. Our board and chairman are distinctly astute when it comes to appointments, proven time and time again. They aren't going to bend over to the first guy that comes along waving his cash with promises of a brighter future as many other clubs have done. Our board are Swansea fans, and I'm almost certain that unless they are 100% sure that they have the right investors, they would prefer to keep hold of their shares than risk the club. At least I'd like to think so...
BK I think the issue for me is we have no idea what owners/investors they will be. I know someone on here will know of some good ones out there, but I look at the demise of Blackburn, Villa under foreign take overs and you could even maybe bring Man Utd into that as well. Just because they asre good buisness men and their wealth shows that they are. Where is the knowledge of football and it is a different ball game to anything else. I am not against it even though it does make my stomach turn over, but how can we be sure they are good for our club.
The investors don't need knowledge of football per se, they can hire a top director of football to provide that expertise and experience. They will run the club as a business, expect returns from all departments, manage cash flow and investment properly ... and are very unlikely to let somebody like Bony go for the discount that City received relative the recent market. To respond other postings about how Monk would be treated under new owners and executive management - frankly is honeymoon would be well and truly over. He would have to perform and the new owners would solicit expert opinion from outside the club to assess the value he has delivered both qualitatively and quantitatively. So put this into perspective - listening to pundits on TV over here .... when Laudrup was fired and Monk appointed they were polite (they didn't call it the dumbest ****ing thing we;ve ever done). Now they're far more open and critical of current performance. Monk's stock has gone from hero to zero. How Monk is appraised by critical eyes in the industry is probably going to be one of the factors that they'll take into account.
My worry is that outside investment wont necessarily move you on to the next level, It can also take you backwards, just ask Villa and Blackburn fans.
