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Closed Ranks, Closed Doors, Closed Minds. Pt 2

By Christine Foster :  23/07/2009 :  Comments (10) :
As another season rushes up to the starting line, we can at least look back with some pleasure on most fronts within the club. The performance of the team last season, especially after such an appalling start, was excellent (trying really hard NOT to say “but” at this point)... but the FA Cup Final against Chelsea was a step too far.

Strangely enough, I look forward to the new season as a supporter but, as an Evertonian, I am apprehensive for our future. We have a good team... not a great one, but good. The problem is that money talks and I suspect that, once Man City get rid of Mark Hughes, they will become a real threat. I am really not into thinking that Aston Villa or Spurs are suddenly the major threat to us. I think we will be around 4th or 5th spot again but it will depend not just on the strengthening of the squad but how well we as supporters get behind them and realise that we are playing with one hand tied behind our back.

I will be at the first 6 matches of the season, home and away supporting the team. I just wish the club made me feel as proud. That’s really difficult to say, but...

Commercially the opening of a new store in a prime city location was pleasing to see and, in fairness to Robert Elstone, he has gone some way to improve our dreadful commercial management of recent years.

People say we are skint; less skint than many, more skint than some… but nonetheless skint. Well, sort of… by most normal business measures — but this is the Premier League. It’s all about debt management and access to funding; finding someone to stand as guarantor to that loan for transfer funding. (At any club, if you borrow money from a shareholder or financial institution, they want a pound of flesh just in case; nothing wrong with that either...)

It's obvious therefore that no director or shareholder wants to stand guarantor for any more debt within the club; so effectively we shop at the local Aldi supermarket of wannabe Premier League players (you can get some good stuff but you really have to dig for it and you get a lot of crap too with an absence of choice and a lack of overall quality).

So is it prudent debt management? Or a reliance on David Moyes to get the best out of the Aldi shopping trolley? It’s a risky strategy, banking on a threadbare squad with few overall stars but a good overall team. But that’s what I feel the club management are doing: buying time. Hoping for a silver bullet investor and praying for a profitable exit strategy.

Nothing wrong with that either. As businesses go, it happens everyday and EFC is no different. It’s a risky strategy, one which plays with the future of the club in the hope of a good return. Except of course they steer a course of wonderful duplicity of comment and deed. Say one thing and do another.

In the recent Shareholder Forum, it did make me smile to see that Robert Elstone actually commented in response to my last article on TW: Closed Ranks, Closed Doors, Closed Minds. Shows he reads some things too; I hope he understands the strong distrust many supporters have of many of the public offerings we are subjected to and the complete lack of professionalism in certain areas of the club's affairs. (Do they actually even care?)

He went to a great extent to state that the club wants open communication, but must have groaned audibly when his chairman slammed the door on legitimate questions.

It could have been handled so much better;all BK had to say was “That’s a commercially sensitive subject so please understand that we have a valuation of the club but as yet no serious investors have got into the details, but please be assured we will do as much as we can to maximise the clubs value.” He may have even thought that, I hope he did, but the words were petulant, dismissive and unprofessional. A real PR fuck-up.

PR is not synonymous with Everton Football Club. It hasn’t been for several years and under its current management most likely never will. No spin will ever suppress fact, no PR will ever mask truth, No spin will ensure lasting trust.

So is it an investor that’s sought or is it a buyout of shares?

Let’s face it, no-one will invest in the club without ownership of shares. So let’s clear this up once and for all, the ONLY way EFC will get new investment is for the major shareholders to sell to the new investor. As a minimum it would be 65% so effectively it’s the big three shareholders have to sell. The others will follow suit if the offer is right. If BK has been looking for an investor 24/7 without a trade-off in shares then he will wait 'til hell freezes over. Unless a famous Beatle suddenly has brain fade…

So reality is that there isn’t an investor willing “just” to invest in the club; the clubs ownership must change hands for this to happen. It’s a “no brainer”.

I don’t necessarily believe the spin that the club hasn’t had any approaches, or that we will pick and choose the colour of someone’s money. Which leaves us with a set of ongoing and significant problems: the price tag on the share holding as a starter, the covering of debt, the real “investment” required for the team and the location / choice of stadium.

As any real estate person will tell you, a house will always sell; the real issue is the asking price and the market price. If we have had no offers, it’s more likely that the club is overvaluing its price — wait, rephrase that; it’s the price the shareholders want for their shares. It’s a big hurdle and that’s before the term due diligence is ever mentioned.

I am not against EFC as a business being sold. I see the reality that it must happen and we will not have a say in who that buyer is. I am not against the shareholders maximising their investment, but when we are told that the board is being selective in who they are selling to, I am sorry but the most likely (only?) avenue for large-scale investment is from the Middle East.

So, if BK is saying that there aren’t any investors out there, it’s true. But it’s a buyout that’s required first, not an investor.

Reader Comments

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Ciarán McGlone
1   Posted 24/07/2009 at 11:10:52

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An interesting set of allegations and counter-allegatyions over this Nathaniel affair seems to add substance to the rumour that someone, somewhere has been filling Everton fans full of shit.
Dave Wilson
2   Posted 24/07/2009 at 12:42:16

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Would that be just the one person then Ciaran?

I’m getting paranoid, I no longer know which garden path to allow myself to be led up.
Ciarán McGlone
3   Posted 24/07/2009 at 13:04:38

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That would a ’royal’ someone Dave.

Don’t worry about the paranoia... it doesn’t mean they’re not after you!
Dave Lynch
4   Posted 24/07/2009 at 13:43:44

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For Christ sake !
Will somebody tell us something we don’t already know.
The whole sordid mess that is Everton football club has been done to death.
The same conclusion has been reached by all (ish).
In that.
We have no money.
We are lied too on an almost daily basis.
BK is out of his depth and singing from the land of the fairies.
DK will be the end of us.
Yada, Yada, Yada..............
I’m sorry but the whole thing has started to piss me right off.
I have no doubt it is all true and supporting this club at present, is like banging your head against a brick wall.
Jay Harris
5   Posted 24/07/2009 at 14:15:45

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Christine as always very eloquent and succinct but as Dave Lynch said all we’re doing now is depressing each other because nobody at EFC wants to listen.

BK and his buddies have their own agenda which NOBODY is allowed to question.

Robert Elstone who apppears to be a massive improvement on Wyness has no balls to stand up to any of them and as for the marketing/PR department the local kindergarten could do a better job.

The only thing that’s saving all their arses is Moyes and the squad’s overperformance and we dont know how long that can go on without proper support.

Kenwright has sold/mortgaged any assets we had, exploited his pals to be able to stretch it out a bit more but now even he must realise he has gone a bridge too far and needs to go sooner rather than later.
Dennis Stevens
6   Posted 24/07/2009 at 15:12:53

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One of the many things we don’t know is whether Kenwright, Woods & Earl are even working to the same agenda. For all we know one may be desperate to sell, another waiting for the decision on DK & the other wanting to see the project through to fruition or maybe not intending to sell at all. We just don’t know.

What is clear is that any potential buyer will find it easier to negotiate a deal to take over a club where a controlling interest is in the hands of one individual or organisation. This is bound to be an off-putting factor for any potential buyer.

Kenwright is the one who gets all the flak because, as chairman, he has the highest profile — but any sale depends on all 3 reaching agreement with any potential buyer & we don’t even know if they’re in agreement with each other.

Dave Wilson
7   Posted 24/07/2009 at 16:06:42

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Nice one Dennis, Every time someone points out another possible senario, its even more complicated and worrying than the last one!
Kevy Quinn
8   Posted 24/07/2009 at 19:43:12

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Dont mean to have a go, but this is the 1000th(approx) article like this so far this summer. The sooner the season starts and Ken can write his reviews etc the better. Between no signings of substance so far and reports of us being totally skint makes depressing reading. Think I'll log onto WillHill now and make myself skint just like Everton, or on the off chance I'll win a fortune and be the knight in shining armour that Christine refers to...
John Andrews
9   Posted 25/07/2009 at 08:08:46

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A nice article Christine but, as has been previously mentioned, not the first and most certainly not the last! I believe that, as long as BK is in control (?) of this club, then not an awful lot is going to happen until the decision on Kirkby has been made.

I would also remind folks that at the Kirkby enquiry Robert Elstone said that "Not one penny had been put into the club by the shareholders". This, in reality, is disgraceful and should be roundly condemned. Who is to blame? I already know who is to blame but unfortunately he will not go until the time is, allegedly, right for himself.

Michael Kenrick
Editorial Team
10   Posted 26/07/2009 at 18:00:53

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Dennis: interesting scenarios... you’re absolutely right — none of us really know. Bill could indeed be just a figurehead "I’m only the Chairman..."

However, what few indications there are out there suggest Jon Woods is in Bill’s camp. Earl meanwhile bought out Gregg; given the circumstances at the time, I can’t imagine that such a deal would have been struck without there being calmer waters guaranteed in the Boardroom as a result.

John, thanks for bringing up that Elstone quote: "Not one penny had been put into the club by the shareholders". This issue always has scope for tremendous confusion and judgmental condemnation. Let me try to explain.

An investor ’buys in’ to the Club by purchasing a raft of shares. The common parlance is he’s ’invested’ millions in the Club... indeed he has purchased a vested interest in how the club progresses as a financial entity, but in truth his millions have NOT been put into the club itself — they have gone to the person who held those shares before him, often at a vast personal profit to that individual. Such is the nature of ’investment’ in the capitalist system.

Now, the secondary question is: should those major shareholders continue to pump more and more of their own money into the club? And if so, by what mechanism? Issue more shares? Low interest loans? Or, as I believe is the case with EFC, as loan guarantors.

Put yourself in their position: I’m really curious to hear how you see that working.

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