Just looked it up and you are right. Sale price not disclosed but given gross written premiums were £10m per year (according to press release), sale price would have been somewhere around that number at a rough guess. But no idea if SD was 100% shareholder or just majority. Then there is tax, etc. Maybe that got him an extra £5m cash in hand? I am just guessing. But will be in that sort of ballpark.
Who is Bob Cheval on RTG? No offence, just pointing out that MSD are based in Florida, and you're citing a friend who is in Santa Monica, which is in California... Smug, you seem to know who he is? Any reason you say he's one of the most honest messageboard posters you've seen, given he just created an account to do this? Again, just questions, don't take offence at me asking. I don't disagree with some of what you've said Bob, but I think there is a case where they don't come on board if we're still in league one when their point of exercising the options is at hand. It's a risky proposition even at £10m because it relies heavily on the right appointments, and as we've seen many times in other clubs and our own, successful businessmen do get it wrong sometimes (Man Utd, Everton, Arsenal, Short etc). Also, do we know what proportion of the club's shares they would take on would be at that point if they convert? Clearly not a majority or Donald would be indicating they could have owned it for that price. It's clear Donald needs at least £40m (I made it £43m to get a profit) and as I said a while back, the problem is the way this has been financed which means that Donald is left with outstanding liabilities, I just can't see how they would pay the amount he needs. I don't see them taking it on for £10m because I think Donald would rather pay off the loan (given this can be done with club funds) and maintain a bootstrapped club that is 'profitable' but essentially ran at the lowest possible outlay.
Have never been on rtg, have never been on here either. Like I said, I got interested in SAFC from the Netflix series. I have no connection to that area (originally from Cheshire) and now work abroad, have been in finance for two decades and have a lot of contacts in private equity space. I have no ax to grind beyond getting annoyed at the nonsense being spouted about SD having bought the club for nought. So I decided to step in - probably unwisely but I have no dog in the fight so I don't really care whether people listen or not. It is possible that SD will pay off FPP with £10m from his own pocket and keep SAFC on life support for evermore but it is not clear to me why he would. Football clubs are not cash-generators, they are black-holes unless you are in the Premier League. It's like running a crap Formula One team. A rich mans hobby. SD can't get SAFC to the PL, he never said he could. His best shot is getting out evens but at this point, a £10m loss as worst case is a good deal for him. That is what the FPP deal does - it puts a floor under his losses. He can't lose more than he has already lost. He must have realised the disaster he had bought after a few months and FPP could clearly see it too. That is why the deal was to give him some time to get back to flat. But if he can't get there, he will hand the keys to FPP. That is what the 'loan' means. It is 'if you can do something with this cash, you can get rewarded. If not, it's ours'. You are correct to state that SD needs £40m sale price to break-even. But SAFC isn't worth that. That is the whole point. But what he has done is to put all the liabilities into the holding company (Madrox). So SAFC itself can't go into administration, only Madrox can go bust. That is how he has ring-fenced his losses whilst protecting the club. Note that the FPP loan was conditional on it being used as an equity injection into SAFC. It's not a loan in the traditional sense, it's a loan into the holding company with stringent conditions on the use of funds. The funds have to be used to increase the value of the only asset the holding company owns, I.e. SAFC. Which is exactly what you would insist on if you were going to be the future owner of that asset. Basically, SD is down £10m, Satori is down £3m, CM is down nothing other that time spent (but clearly has realised scope for a profit is zero). FPP have a £10m exposure to something which (assuming no other hidden disaster) is probably worth at least that debt-free. The parachute payments are a red-herring. SAFC used to owe £25m to Ellis Short, now Madrox owe £25m to SAFC. If Madrox go bust, that money isn't 'lost' because Madrox falls into the hands of FPP. It's just owing money to yourself, doesn't matter in the round. But it does matter under football league rules as a club going bust carries a heavy penalty. An owner (or holding company) going bust does not. So SD has been quite smart in making sure SAFC are unsulated from the worst case scenario. That scenario involves him losing £10m, SAFC being unaffected and being handed over to 3 billionaires. So the fans should be thanking him. A better scenario involves him losing less money and SAFC being promoted and then handed over to three billionaires. Relax.
What makes you believe that the part in bold is true, given that it is contrary to what Donald himself has said?
They do, but fair enough if they have offices elsewhere. It's not a dig btw, never met you and never seen you so more interested because I assumed there was a prior relationship with smug. Anyway, I think you're right on FPP generally tbh, but I'm not sure you're getting Donald's situation right. He has the club making money right now in league one (projected £5m profit) and can likely break even in future at absolute worst as a mid-table club at this level. I think his chances of losing £10m are slim, certainly not with Sartori, whereas if they get us promoted, the chances of making £40m are decent. Leeds went for £45m in the championship, for example. Basically I think that as long as he's not incurring material losses and keeps debts to 'paper', he can go on a while longer. Not easily, but 18 months isn't too big a stretch with £10m of someone else's money to play with. If he gets it right, he gets his cash. Gets it wrong, I think he'd judge it as it comes.
Just call him Mandy .... Mandy Rice-Davies earned her place in the ranks of famous quotes when asked in court whether she knew that Lord Astor had denied having sex with her. She replied: "He would, wouldn't he?"
Never met Smug, never will (no offence to him). Odds on SAFC making a profit is virtually nil. Any sale price would first have to go towards paying off Madrox debts so if Leeds went for £45m in the Championship, no chance of SAFC going for £40m in League One. Which makes odds of SD making any money very low. Selling SAFC for £40m does not make him £40m. It would make him 74% of £5m or thereabouts.
What people say and what the reality is don't always line up. It's like an investor putting £10m of funding into your club before a transfer window and you say it is to fix a lift and the speakers. Doesn't make it true.
Yeah this is something I've said for a while on here and taken a lot of flak for, so I agree. This is why I was somewhat uncomfortable with the situation of the 'paper debt 'because people seem to think there are no repercussions, but clearly it'll be a sticking point, and likely was this time around if I'm reading what you're saying correctly? One thing though, we are technically projected to make a profit this season (with some parachute payments, but also some legacy payments that may offset somewhat). Whether we can continue that in future seems to be predicated on whether we try to be a Championship club or a League One club in terms of expenditure. If we're doing things properly, I agree we shouldn't make a profit, but I think it's possible that he can keep up lip service of ambition while not losing much. Interesting stuff this, a lot of it correlates with what I was saying in the 'if you were Donald' thread yesterday evening, that in all honesty we do realistically need Donald to get things going and push on into the Championship if we're to maximise this opportunity.
Something I would say about him 'overpaying' which I think is a good point @Bob Cheval - I think you're right, and the reason he overpaid is because it is a paper debt, and I think there's one scenario that you didn't account for the other week: He could write-off or reduce the debt, because he controls both entities. It is perfectly legal as the controller of SAFC to write off the Madrox debt, or at least it was until he passed oversight of that to FPP! That's why I think he 'overpaid' - they said the other week that in 2018, nobody else was willing to pay cash up front and pay parachute payment cash to Short, and that's because Donald and co intended to create a debt that in their mind, could be written off in a pinch if it couldn't be paid. Other people would have had to take on a debt that was to other parties and would have had to service that as a priority and without the ability to write it off, as it would have been to a third party. Even if it seems materially the same (they could have used parachute payments to service some of it) I think it's different to control one entity in a loan relationship as opposed to both. I also agree with the post you made last week that this will take time assuming it happens, that's why I think we need to be patient and realise that we can't force Donald out, all we can do is hope that he spends the money he's in control of wisely on the playing front, and appoints the right people to aid him doing that.
Lol no I’m just useless with my typing on my phone!! So much that it’s started autocorrecting “for” to “fir” as it’s one of my most used words!!!!