Takeover / Investment - A Different Take

This is it, in a nutshell. We should absolutely never be doing this while there is any alternative. Particularly if our owner is acknowledging that he owes £20m+ to the club. Let's get that back before we start selling off assets of any kind, really. We're in sever danger of becoming another Coventry if we go anywhere near this.

 

Agreed. They always say pay off your highest interest rate costs first (if your mortgage is 2% but you're paying 5% on credit card purchase, it's obviously sensible to pay the credit card off before you start overpaying on your mortgage).

Same very simple premise here, there's £20m that you owe the club which isn't charged interest, or you can keep that and take out something that will be charged interest and which eventually might cost £30m. If he doesn't do the former I'd be wanting to know why

 

I disagree, everything should be considered. They thought there would be a shortfall so they looked into the possibilities of raising funds like all business would. They clearly didn't mortgage the stadium and they certainly never considered selling the whole thing as you stated.

Ronnie

 

Yes we all know this and that's why they are looking for investment, SD has been totally open on this point.

Ronnie

 

They are not selling club assets, they discussed it then decided against.
They are actively looking for investment to take the club forward.

Ronnie

 

The very fact that the club is needing a loan proves that it is not living within it's means. Adding further debt does not make the problem better, it merely exacerbates it. Eventually you end up like Coventry.

 

It was something they looked at when they first took over the club, it turned out it wasn't needed.

Ronnie

 

I’m aware of that mate, was just expressing my standpoint that it should not be considered, at any point.

 

They literally took a loan out last season.

 

Did they use the stadium as collateral?
I've never stated they wouldn't take out loans just that they didnt consider selling the SOL as was claimed on page 1.

Ronnie

 

If I was to sum up what I have gleaned from above....

If we get stuck in this turd division, we will have to cut costs drastically as our main income will be ticket sales..that will be difficult..we do not have many(any) players who we could sell for a big ticket

Donald is not rich enough to plug the gap between income and expenditure...

We are desperate for new investment... which may or may not be forthcoming.

 

Perfect summary Sunderpitt and we still own the SOL.

Ronnie

 

They considered 'releasing money' from the SOL as late as May this year, and that was while projecting a profit in the upcoming season. What happens next year when they foresee a £5m loss?

I really do not think we should be releasing equity, funds, or mortgaging with the SOL/AOL while there are other alternatives. It is a finite source of funds, there are only so many times you can finance based on assets before you own so little that you are effectively not in control of them.

 

The ONLY thing the club has as a positive is the fantastic facilities that it owns such as a magnificent 49,000 capacity stadium and the fanbase to potentially fill it . Once you start risking that, you may as well resign from the league and merge with South Shields, absolutely stark raving bonkers to risk losing our home.

 

it’s not as straightforward as that

 

Selling club assets reeks of Thatcher's selling off of the utilities. "Selling the family siver back to the family", no the family already owned it in the first place. The "oligarchs" tend to come in and cream off the money anyway. And you are left outside your old front door with a suitcase wondering what happened.

 

Great to see some debate about the financial state of the club without any abuse. But going back to my original point. If you were a non safc fan looking to invest, you wouldn't do it now would you

 

It depends on whether the value next year (assuming promotion) increases more than the amount that would be needed to cover the shortfall.

 

I would say we are an ok investment, but I would absolutely not be investing a majority stake while accepting someone who'd been at the company for less than 18 months insisting that they call the shots.

They may also be wary about putting cash into the business, if they don't have a substantial say over how it is used and there aren't significant limits on what can be done with it. That basically would preclude them taking more than 25% of the shares, assuming SD/CM/JS would always be aligned.

 

I never suggested it was or is.
I am suggesting an example of potential revenue that could entice those that have the power to change the rules.
Local govts all over the world have form for changing the rules on land that were previously sacrosanct.
If you seriously believe a piece of land that houses a football club training facilities will be forever safe from development or alternative use you must have posters of shirley temple plastered on your wall