Takeover / Investment - A Different Take

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West Winger said:
Because it’s a whacking great asset in the middle of a regeneration area. They may well only be able to rent it back to us but that just means the club is captive to whatever demands the landlord makes of them - otherwise we end up playing our games somewhere else a la Coventry and the owner can knock it down and build, I dunno, flats or something.

Then there’s the academy - right in the middle of prime green belt land where there’s already been developers sniffing round to build houses.
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I wouldn’t be overly confident about redevelopment of the Academy. It’s a hugely constrained piece of land.
 
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DH4 said:
Can't build houses on AOL land, green belt. They had trouble with South Tyneside council to build what they have now on the land.
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That is then this now.
There are pristine places all over the world that people thought were inviolate.
A few brown paper envelopes etc and new council and those covenants get booted.
 
Chunksafc said:
Didn't want to clog up the existing thread, but as I am in an optimistic mood today, I wanted peoples thoughts on a scenario I think my be unfolding or at least in my heads seems plausible about the whole investment / takeover.

Lets start with some facts that can be proven.

1. SD and CM have publicly stated that if we go up to the Championship we will need investment, be that internally or externally
2. SAFC have been actively looking for investment for the past few months
3. 3 very rich Americans have formed a Company using the SAFC address as its registered office
4. Point 3 can only be done with consent from SAFC

Now here comes my thoughts on it.

It has been widely acknowledged that without the Parachute Payments next season, not matter what division we are in, our outgoings far exceed our income

We realistically cannot sell the ground or academy, after all a football club needs somewhere to play and train. Closing more of the ground or the academy wouldn't really save enough money, they would still need to be looked after and would devalue quicker if mothballed.

If as we have been told by SD and CM investment talks are ongoing be that with the Americans or who ever, is it possible that in light of the financial mess we will be in next season, they are quite prepared to sit tight and wait and see what develops?

If we get promoted or stay in this division any investment is not going to be small, if I recall correctly the shortfall is around £15 million just to balance the books, that does not include any investment in players, staff or facilities.

In summary, why would you buy something now, when by waiting 6 months you could squeeze the existing owners even harder as you know they will de desperate for the money?
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Appointing Parkinson...is hardly encouraging for any new investor..imho
 
Chunksafc said:
I cant see how the council would give them planning to build where the stadium is. The AOL as mentioned is on Green belt land and would struggle for planning consent as well.

Selling may raise a few quid, but as you say your then beholden to a landlord. Surely they wouldn't be that daft?
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If they’re desperate for cash then why wouldn’t they.

There’s nothing to say they wouldn’t get planning permission now. Anything that can be shown to have an economic benefit and the councils would jump at the chance.
 
Chunksafc said:
so again adds weight to my theory that any investor will be happy to wait?
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I don't think that'll be the case to be honest.

Firstly, the price is low now. If they wait there's just as much chance that we might get promoted. SAFC in the championship would cost a fair bit more than SAFC in league one so hanging on would be a risk, especially given the fact we're hardly miles off the pace.

Then there's the issue that even if they wait and we don't go up, yes the price might have to drop, Donald might need to go, but that might attract rival investors. Maybe more people would be involved and there could be a bidding war of sorts, again reducing your chance of taking over and making profit.

Ultimately if I had the money and wanted to buy SAFC I'd be wanting to do it now. I'd get it pretty cheap whilst there's still a good chance of promotion which would immediately see my investment looking decent. In a league where hardly anyone spends I could also put in a comparatively tiny amount in January to try and ensure promotion. Additionally it would give me time to invest in staff ready for when we go up, rather than taking over in the championship and trying to do too much too quickly.

I like the positivity but I'm just really down about it, if the Americans don't take over (or invest) soon I think it's done
 
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West Winger said:
If they’re desperate for cash then why wouldn’t they.

There’s nothing to say they wouldn’t get planning permission now. Anything that can be shown to have an economic benefit and the councils would jump at the chance.
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Imagine building eg 500 houses on aol land.
The rates revenue would be an enticing inducement to rethink the planning zones etc.
 
I may be clutching at straws but I'm hoping that the deal is still on and just around the corner, despite them taking the seemingly cheap option for the manager. My reasoning is that they would never have announced the big-money investment first, getting all the fans excited and hoping for a big-time manager, only then to announce the cheap-option manager and face an even bigger backlash than they just have.

My theory is that any new investment wouldn't be used much this season. If it was used and spent on a new manager, it could perhaps have been a waste of money - storming the league clear at the top by 10 points has no more benefit (other than to our health!) than scraping into second. Also, the more money we spend this year, the less 3-year loss allowance we get under FFP in the championship.

The bad(ish) news before the good news?
Either that or they are waiting for this backlash to dissipate before the next lot of bad news!
 
HeatonMackem said:
Releasing equity by mortgaging it you mean? Not sure who would want to buy just some of it e.g. the north stand.
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Not quite how it works, but it's the same reason why an equity release company might purchase 25% of your home mate. Because the arrangement likely means that if we went bankrupt, they'd own the stadium, or if we/the stadium were sold in future, they'd make a big profit.

Simple.
 
Kittenmittons said:
Essentially, releasing equity by selling some of it. They said in the RR podcast on the 28th May (click this link) I've time stamped it but if it doesn't go, 1:13:38
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Thanks for the reply, I've listened to the part they mention looking at raising money from the stadium. I think they meant they considered taking a mortgage out to raise funds if needed, that's not really selling the stadium.

Ronnie
 
old lads fan said:
Thanks for the reply, I've listened to the part they mention looking at raising money from the stadium. I think they meant they considered taking a mortgage out to raise funds if needed, that's not really selling the stadium.

Ronnie
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Not selling the stadium but putting it up as colateral against a loan is much the same thing. It's like putting something in a pawn shop.
 
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DH4 said:
Not selling the stadium but putting it up as colateral against a loan is much the same thing. It's like putting something in a pawn shop.
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You make the payments like on any loan, that is not selling the club it's an age old way of raising cash.
At the end of the day they didn't have to go down that route because of the crowd numbers. no one expected a 30k plus average attendance and that's where any potential shortfall was covered.

Ronnie
 
Nads said:
Yeah it went on for years to get to where it is now even, and that actually improved the green belt.

No chance of that happening, you’re spot on.

The club own the land around the stadium though and I do remember reading that the rent to the Hilton alone is a big, big income.

Selling the lad could benefit as a kind of ‘advance’ on that rent but long term it would cost the club. We see this happening, we really would need to be thinking about getting the owners out.
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The club own surprisingly little land around the stadium, someone's put up the brochure for the redevelopment of sheepfolds
As to the hotel this is owned by a separate company which is controlled by Ellis Short
I understand
 
old lads fan said:
You make the payments like on any loan, that is not selling the club it's an age old way of raising cash.
At the end of the day they didn't have to go down that route because of the crowd numbers. no one expected a 30k plus average attendance and that's where any potential shortfall was covered.

Ronnie
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The question is what happens if we can't afford the loan for any reason, though. We've been close to administration a few times in recent years, that would potentially mean a third party taking ownership of the whole stadium, even if the original agreement was only for a part of it.

Anyway, it's not great that they considered it at this stage, rather than SD putting his hand in his pocket.
 
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old lads fan said:
You make the payments like on any loan, that is not selling the club it's an age old way of raising cash.
At the end of the day they didn't have to go down that route because of the crowd numbers. no one expected a 30k plus average attendance and that's where any potential shortfall was covered.

Ronnie
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It really isn’t. The club isn’t sustainable in this division no matter what Donald says. Once the parachute payments stop our income will drop by a huge sum. A few hundred extra ticket sales won’t cover it
 
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West Winger said:
It really isn’t. The club isn’t sustainable in this division no matter what Donald says. Once the parachute payments stop our income will drop by a huge sum. A few hundred extra ticket sales won’t cover it
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Absolutely right.

I worked out that 30k at an average of £25 head would bring in £17.5 million a season.

The average per head is far lower with concessions, and the fact that 23,000 of us are season card and as such pay a bit less.

Also, 30k isn’t guaranteed and will certainly drop without promotion. The crowds alone aren’t nearly enough to sustain the club.

The bigger worry is that we need a new shirt sponsor and kit deal. The last were negotiated at a far higher level, the kit deal was Premier League.

Selling club assets to cover short term finances would be a recipe for absolute catastrophe.
 
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