Takeover / Investment - A Different Take

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Nads said:
Selling club assets to cover short term finances would be a recipe for absolute catastrophe.
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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.
 
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Kittenmittons said:
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.
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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
 
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Kittenmittons said:
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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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
 
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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Yes we all know this and that's why they are looking for investment, SD has been totally open on this point.

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

Ronnie
 
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 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.
 
DH4 said:
The very fact that the club is needing a loan proves that it is not living within it's means. Adding further debt oes not make the problem better, it merely exacerbates it. Eventually you end up like Coventry.
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It was something they looked at when they first took over the club, it turned out it wasn't needed.

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.
 
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.
 
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Kittenmittons said:
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.
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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.
 
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TheJasper said:
it’s not as straightforward as that
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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.
 
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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
 
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Chunksafc said:
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
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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.
 
TheJasper said:
it’s not as straightforward as that
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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
 
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