Linking/comparing their ownership to a gambling session at a casino is misleading and naive. Of course there is an element of luck in their strategy but the odds are more favourable and more manageable. This so-called gamble of theirs has ran since 2010 and been mitigated by a number of factors, not least its interactions with their other business interests. As Chazz says, what have they lost?
Hull City has not cost the Allams anything because of the Premier League money. They stopped putting money in a long time ago. In fact the loans they made to pay off Bartlett's debt and fund Steve Bruce has made them millions in interest. Of course for Hull City to become a very good earner they need to get their loans repaid in full. The last accounts show they are still owed £50 million. Allegedly Ehab told the Supporters meeting they are hoping for player sales to bring in £20 million to reduce the debt to £30 million. Seems they have realised that there are more people with £30 million than £50 million. However if you sell the seed corn before selling the farm any purchaser has to buy their own corn. Give the Allams £30 million and then pay more to build your own team isn't a very attractive sales pitch.
I’m pleased someone has posted this, it correctly demonstrates just how dozy Ehab is. He thinks that if he trousers £20m from player sales, then asks a potential buyer for £30m instead of £50m, the club will have the same value to a buyer, but at a reduced £30m price tag, and he will have his hand snapped off. It’s financial illiteracy of the highest order. In theory, the Allams want to sell. But they are incapable of doing the things that will attract a buyer. They need to be honest with fans and more importantly with themselves - make it clear that they are staying but be honest that they will run the club on a break even financial footing (which is no bad thing). If they admit this to themselves, the stupidity of their supporter bashing mentality will become obvious. Which I suppose is why they don’t go there. But hey, at least our no concessions model is bucking the trend seen everywhere else in professional football. All those tiny crowds in the Premier League and Championship - wake up people!!
I can understand why they would want to crystallize any saleable assets to lower the debt to a lesser amount. But after that the well will run dry. No one will pay the remaining amount of the debt and the face a season of receipts falling even further. At some point they will be making losses on a week by week basis with no family silver to sell. If only they could see that a better strategy might be to : Retain the exellent manager they appointed and as many of the team as possible. Swallow their pride and revoke the membership scheme that has been so unpopular. Do a double swallow and bring back concessions.
You can see their reasoning for selling assets on and reducing the debt burden - the main problem with this is there are still a few fans who are going just to see these prized assets play, you sell them on and replace them with inferior and injury prone players you're probably going to see off what remains of the non-hardcore types. Until they can find a buyer (don't hold your breath btw) we'll be a death spiral, a race to the bottom.
But the Allams are saying you want championship players thencomeand support the team. Gates go down to say 6000 ok we'll pay the players less, 4000 ok we'll pay the players less as we aren't paying for your team. Yes the membership scheme is **** and should be reversed but they aren't going to do it. I think it's certain they will shut the east stand soon if they stay. Or the north, maybe, they like a move that lot!!
It's a death spiral Chazz, until they've gone the club's only going one way - everyone's entrenched and there's no budging on either side. A shell of a club is going to be old man Allams legacy.
From the minutes of the last Supporters Committee meeting: "MD asks if the asking price of the Club is in-line with the debt levels. EA states that it is roughly the same but that the Club tries to align the level of debt to the value of the Club and the squad value, and that these items are always factored in the spend and planning. EA states that any potential takeover is likely to be next season. EA confirms that talks are ongoing with new parties, but that these talks are in the early stages. EA states that if players were to leave, the Club value would drop and more people would be able to afford a lower price, but says that it works both ways and that if top-quality players come in, the price of the Club would rise accordingly." Does this mean that the quoted debt level is arbitrary and subject to change by the Allams in line with what they think the club is worth?
The club, like any other commodity, is only worth what someone's prepared to pay for it. It really is that simple.
I thought their last statement said the were owed 50 million and that is why the price of the club is 50 million, they just want the money they put in back. So you could say they haven't lost any money YET. They also claimed that they hadn't taken any pay. Somewhere else they said that they would soon be funding the club to 100,000 (?) a week.
Could we look at it a slightly different way...... Allams sell everyone possible and raise 20/25m and let's the players out of contract go, they then obviously replace with as little as possible for as less of an outlay as possible. The club asking price drops to 25/30m and is then sold clearing the debt to the Allams and leaving the club debt free and with new owners. The new owners then have a debt free club with no deadwood big earners on long contracts that the club has to pay for and that offer us very little as is often the case when new owners come in. They also have the full amount of FFP losses to play with to then sign their own quality players to put us in a very strong position to go back in the premiership within 1/2seasons. The new owner has spent possibly 50/60m total, we get promoted and they could then sell the club as a premiership club for a healthy profit or even stay, improve us further and reap the benifits? It's all obviously ifs/buts/maybes and what ifs but it's a view a potential new owners/investors could see and take
That first paragraph. After selling all our assets, our best players, because that's all we have left to sell. What idiot would then buy our club for 25/30m?
I think the Ehab has just said that the "debt" owed to the owners bares no resemblance to any actual profit or loss made, its just a number they have made up to justify the asking price of the club.
They are buying the club and it's place in the football league, an investor and or proper business man will just look at the risk reward and the risk of buying us at 25/30m and investing the same to potentially see a reward of 100m+ if we get promoted could be very attractive to someone wanting to make some serious money in a short time. Or they could go buy a club in debt with a huge expensive squad and massive wage bill that they would need to totally overhaul in both selling player and singing players. At a sensible price, we are a very very attractive proposition
Your last line is correct - the sensible majority would say that a club with all it's major assets disposed of isn't worth the figure you've plucked from the air.
It's not plucked from thin air, it's figure that have been quoted this week at the supporters meeting. Your looking at it from a fans POV and the new owner won't do that ( unless they are a Hull city fan ) they will look at it from a financial POV only with risk Vs reward and if someone can buy us debt free for 25/30m with the full FFP losses to play with and no high earners on long contracts. Then we are a very attractive buy
