FPP to take full control
- Thread starter Whiteleas Wanderer
- Start date
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After the relentless flak I've taken, and am still taking daily on RTG, I should really stop putting my neck on the block.
After all it's been declared, time and again, that the FPP takeover is dead and not responding to CPR. At which point the totally predictable pretend Sunderland supporters have raced to say they were right all along and I was wrong. Jardine, despite rarely posting, was all over the board posting his endless smilies.
So yes, I should've learned my lesson and crept off in abject humiliation ...
... but here we go again
I've just come off the phone from the chap who's told me for months 'don't panic they're still here' ...
... and he's just said 'don't panic they're still here'!
I should've learned my lesson by now and spared my blushes but I know there are decent people who'll appreciate me throwing myself on the barbed wire.
I'm liking the 'don't panic' bit. Very hitchikers guide to the galaxy. Be typical Sunderland though if the SOL was now demolished to make way for a Vogon hyperspace bypass mind.
Kenyon!
He was trying to put a consortium together to take over nufc. Appears ashley chased him.
You are right he did a great job.
By all accounts a very ruthless and results orientated type of bloke.
No bad thing but for those he like the ' oh he gets us' 'twaddle, he is not your man.
He gets Peter kenyon..full stop.
I got pilloried by a few for this but a few months back I pointed out that ( based on info from an insurance industry publucation) Donald's net worth was put at 8m. I believe this was also reprinted in local press when he took over.
Even if that didnt include his family home his maximum worth can only be 10m. Yes most of us would like to be worth that but in football club circles it is a pittance. He's worth less than what we borrowed from fpp.
His defenders can slice and dice the money stuff any way they like but to say he was punching way above his weight when he took us over would be a gross understatement.
Not getting promotion last season was a massive kick in the guts and clearly something he hadnt factored. The purchase of grigg was folly of the highest order especially getting shot of the man who would have likely fired us to promotion ( maja )
People praising him because he has cut costs is barmy. It was textbook takeover blarney.
Telling us all he was going to stop the piss take, get rid of the fat etc etc.
Dead easy to peddle a few middle managers and cleaners, wind down contracts etc. Oh and cut maintenance costs etc.
Frankly he has done nothing that a remotely competent businessman couldnt or wouldnt do, but guess what, we are still a shambles and it pains me to say it. He is Bain lite.
He is little more than a tyre kicking chancer but then again for all that , even if he halves the selling price he will walk away with a few million more than he put in.
Nice work if you can get it.
Ok, the Krankies are in. Send me the bank details. Me, Mrs K and Seaman K (RAN). Worked it out as $43.47. Easy, this running a football club lark innit?
Very simply, he (and Juan) paid £40m to Ellis £15m of their own dosh and £25m which they borrowed from SAFC and still owe. Think Ellis later knocked a bit off so was more like £37m total.
A new buyer of the club would buy Madrox, not the club itself - certainly not without ensuring that the loan was paid back first. Or the price reflected writing it off. The point is that if someone buys the club from Madrox for £35m, £25m of it immediately would have to be used to repay the loan to the club. Leaving £10m, ie SD and Juan have lost £2m overall.
The FPP loan is another thing to consider, but if there was a headline that someone has bought SAFC for £45m, it would still mean that SD has lost money. The debts that Maddox has would have to be paid back before he can get his money out. So the real price he needs is £50m, which isn’t happening in this division.
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.
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.
and FPP did not invest in the existing management team. They got introduced to FPP as they were looking for buyers like any other business. Generally these things operate through investment banks. If you work in a private equity firm, you are constantly being asked by bankers if you would like to look at this or that. If you are trying to sell a business you get one of these banks to find you a bunch of potential buyers. Not much different to an estate agent in a way.
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
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
Excellent post.
It was sad to see how some people, all too happily and quickly, accepted the 'red herring' as the definitive 'nail in the coffin' ...
... it really makes me doubt that these people are Sunderland supporters at all.
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I believe I came up with the figure of £15m in a post yesterday. I imagine if someone paid £35M for the club SD would use £10M to pay FPP. So that would leave £25M to pay albeit they could just throw it back in and pay an extra £15M for the club? What I hadn’t factored in was the £25M pound para payment which went to ES. Does SD have to pay that back? If so, FPP could have covered the cost of the club with the loan money?
The imponderable is the loan or 'rope with which to hang himself' as it's know in the Smug household.
How much has been spent and on what, if it's an asset that's one thing as it can be included in the sale ...
... but if, as @Bob Cheval believes, it's like sand running through Donald's fingers it's lost in running costs and gone forever.
I don't believe the theory that FPP would loan money with minimal interest/charges, what would be the point?
I don't understand this ' it keeps them at the table' routine either ...
... what does that even mean?
As I said a while back - probably over the road - it means Del Boy has been shafted by the Dell Boys! We maybe somewhere close to the final screw being turned on the chandelier scene.
Our problem is that FPP don't have to do anything ...
... they've spun the web and can just sit back and watch Donald thrashing around.
Yep and you’re right the loan has to be paid back on top of the cost of the club unless it can be proven that it has been spent on an asset, increasing the value of an asset (both of these options will mean depreciation potentially) or the money hasn’t been spent but either way there will be charges to pay back.
And judging by our January signings - that asset is not going to be a player seeing as they were all either loans or deals to the end of this season.
In one hand, the sand of the loan is slowly dripping through his fingers. In the other is the sand of Donald’s ability to break even. Which one will run out 1st?
Posts like this don't help anything or anyone. I provided an opinion from a professional who is paid to do this for a living. We still have no tangible evidence of things progressing with FPP.
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