Season 2011-12
The Mail Bag
12 Interested Parties!
48 Comments: I was trawling the net looking for any updates on the mysterious "Interested parties" looking to purchase our club.
I came across this BBC sport article and was amazed to read the following:
"But BBC Sport understands that Jain's was only one of a dozen initial approaches made to the club in the past 12 months."
The full story is here ;
http://www.bbc.co.uk/sport/0/football/15653928
A paragraph for anyone who believes that any potential buyer would go public reads; "The club is always receptive, responsive and professional, which means we respect the confidentiality agreements which prevent either side from disclosing the interest."
It might be possible these 12 "parties" cannot come up with the required £600m they need to buy the club. That's the latest figure Greg O'Keefe of the Liverpool Echo quoted on TalkSport recently.
I wish someone could pressurise the club into giving the answers why we have not been sold. Let's instigate a fans group, something like a Blue Union ? maybe they can get some information on the sale!
Kevin Tully, Posted 08/02/2012 at 10:38:36
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SIX HUNDRED MILLION? Liverpool were bought for £435m by the first set of Yanks and then £300m by the next. Either the journo or BK's valuation is bonkers. I know which I've got my money on.
I haven't posted for a while because the subject of the sale has been massively divisive and I believed given the current run of form it was better to stick to positives (not that there have been any until the transfer window shut).
This is the one area that I believe the Blue Union should really focus on, a pressure campaign to get the club to come out publicly and name a price. Forget the interim board (as much as I'd like to see it happen) and focus on forcing the club out into the open with regards to price.
Some of the figures bandied around have been laughable, others argue a higher price drives away the Venky's of the world and thus means any buyer must be able to take the club forward.
I believe when the wash is finally done everything will come out. We will finally see who owns what at Everton Football Club, and the water won't be clean.
However back to point. I see no need for another splinter group to form to ask these questions, the BU are doing a great job thus far, they merely need the support of a large consensus of fans.
Six thousand plus are voting with their feet at the moment, surely it won't take long for Bills house of cards to fall, and then we will see exactly what is behind all the conspiracies.
This is the one area that I believe the Blue Union should really focus on, a pressure campaign to get the club to come out publicly and name a price. Forget the interim board (as much as I'd like to see it happen) and focus on forcing the club out into the open with regards to price.
Some of the figures bandied around have been laughable, others argue a higher price drives away the Venky's of the world and thus means any buyer must be able to take the club forward.
I believe when the wash is finally done everything will come out. We will finally see who owns what at Everton Football Club, and the water won't be clean.
However back to point. I see no need for another splinter group to form to ask these questions, the BU are doing a great job thus far, they merely need the support of a large consensus of fans.
Six thousand plus are voting with their feet at the moment, surely it won't take long for Bills house of cards to fall, and then we will see exactly what is behind all the conspiracies.
Luke, a poor effort at sarcasm on my behalf re; the Blue Union, completely agree the BU should be keeping the pressure on these liars at the club.
It is just amazing that there could be 12 different parties viewing us and yet none have taken us on! The board must be asking too much to sell. They must be! Everybody who is anybody asks why we haven't been taken over and it is all very frustrating.
I believe the £600m , was actually a "total outlay" required , ie £150m to buy club , £50m to remove debt , £100m on new squad and £300m for new ground !
£600mill????
Is this how it works now..... Hicks and Gillette fantasy figures in the press then the banks step in?
If that's the deal hurry up Barclays pull the rug.
Is this how it works now..... Hicks and Gillette fantasy figures in the press then the banks step in?
If that's the deal hurry up Barclays pull the rug.
How is a new stadium cost and a random figure for investment in the squad complicit in the sale price?
Granted, I'm not bothering to read the article... but why £100m? And all this to be spent in just a couple of seasons? Soon enough you can only spend what you bring in, and we can't cover wages for £100m worth of talent.
But if its only £150m plus debt required then that sounds a good place for BK to start, and that's surely to come down in negotiation.
Granted, I'm not bothering to read the article... but why £100m? And all this to be spent in just a couple of seasons? Soon enough you can only spend what you bring in, and we can't cover wages for £100m worth of talent.
But if its only £150m plus debt required then that sounds a good place for BK to start, and that's surely to come down in negotiation.
Richard Larnder provided an accurate valuation of the club not too long ago.
He made a compelling case for the club going for next to nothing.
It appears an expert in that field and Greg O'Keefe, who must live in a field (next to a pylon???) are about £600m apart.
I know whose opinion I'd take.
He made a compelling case for the club going for next to nothing.
It appears an expert in that field and Greg O'Keefe, who must live in a field (next to a pylon???) are about £600m apart.
I know whose opinion I'd take.
I think the £600 million figure is about right to an extent. There is no point selling the club to anyone who isn't going to invest in the squad and build a new stadium ? otherwise we would be in exactly the same position as we are in now.
The only issue I would have would be the sale price of £150 million. I think if that is the price to buy the club, then paying the debt should be included in that figure.
So I would say that the minimum investment that needs to be guaranteed by any investor is around £80 million to buy the club, £50-70 million to pay off the total debt, £100 million for players and £300 million for the stadium.
I think it is the total investment required that is putting off investors. If anyone has the money to build a stadium and buy players, they wouldn't baulk at the asking price of the club because they would be that rich it wouldn't matter.
I think we have had approaches by people who want to buy the club for cheaper than the price Bill is asking for and also have no intention of investing at the levels required.
We don't just need an investor who is classed as a billionaire ? we need someone who has cash of at least £500-600 million spare. I saw an interview with Alan Sugar not so long ago. He is a billionaire but only has about £100 millio in cash. That would be no use to us...
The only issue I would have would be the sale price of £150 million. I think if that is the price to buy the club, then paying the debt should be included in that figure.
So I would say that the minimum investment that needs to be guaranteed by any investor is around £80 million to buy the club, £50-70 million to pay off the total debt, £100 million for players and £300 million for the stadium.
I think it is the total investment required that is putting off investors. If anyone has the money to build a stadium and buy players, they wouldn't baulk at the asking price of the club because they would be that rich it wouldn't matter.
I think we have had approaches by people who want to buy the club for cheaper than the price Bill is asking for and also have no intention of investing at the levels required.
We don't just need an investor who is classed as a billionaire ? we need someone who has cash of at least £500-600 million spare. I saw an interview with Alan Sugar not so long ago. He is a billionaire but only has about £100 millio in cash. That would be no use to us...
sorry, lost it with the spelling towards the end
Totally unsaleable even at 20% of that figure.Kenwright`s struck with it until the bank says `Enough`!
They were asking 180 to 200 million 18 months ago so I guess the Keith Harris quoted 150 million has come down a bit.
However I agree with Phil #409 they have got no chance of a valuation like that with no fixed assets and a balance sheet net liability of around 45 million.
The only value is in goodwill and valuation of the players minus the net liability which to my mind means EFC are currently worth a big fat 0.
I would spice the deal up for Kenwright and "friends of Everton" by offering what they paid for the shares which is 20 million which is generous given the way they have stripped the club bare over the last 12 years.
We just need enough external pressure to make it happen.
However I agree with Phil #409 they have got no chance of a valuation like that with no fixed assets and a balance sheet net liability of around 45 million.
The only value is in goodwill and valuation of the players minus the net liability which to my mind means EFC are currently worth a big fat 0.
I would spice the deal up for Kenwright and "friends of Everton" by offering what they paid for the shares which is 20 million which is generous given the way they have stripped the club bare over the last 12 years.
We just need enough external pressure to make it happen.
Speaking as a lay man on financial affairs could someone more enlightened on such matters explain why so many wealthy individuals or groups knowing nothing about football have spent fortunes buying into the sport.
There is no a pot of gold to be had and in many cases it ends up in bad feeling and tears.
Much of Blue Bill's personal history has been linked with Everton so on that basis I can understand why he got got involved but why all the foreigners?.
There is no a pot of gold to be had and in many cases it ends up in bad feeling and tears.
Much of Blue Bill's personal history has been linked with Everton so on that basis I can understand why he got got involved but why all the foreigners?.
Dick.. you can buy foreign players and lets just say a lanky centre forward.. sell them on for huge profits and pay no tax on them and trouser the money.. Just give a cheeky chappie grin to the jury, and you walk away..
If you were to purchase a large amount of real estate in London on which a football stadium was built, the potential for future profit would be great also...
Oh and betting on football is huge in some countries..
If you were to purchase a large amount of real estate in London on which a football stadium was built, the potential for future profit would be great also...
Oh and betting on football is huge in some countries..
The Board will have done well just to get their money back, considering the state of the club now. Anybody that'd be daft enough to offer more isn't the sort of person we need running the club, no matter how rich they are.
Assuming Earl paid c.£12m for 25% 7 years ago, that valued the club at around £50m.
If you're Earl you're probably going to want a 50% return on your investment which puts the value up to £75m on today's market.
Considering you'd be buying a business with an £80m turnover and player assets of say £80m, I think it's a bit too idealistic to say the club should be available for nothing based on its balance sheet.
Yes, the club has debt, but debt is only a problem if it's not servicable hence, e.g. you buy a house with a mortgage and not pay everything upfront.
If you're Earl you're probably going to want a 50% return on your investment which puts the value up to £75m on today's market.
Considering you'd be buying a business with an £80m turnover and player assets of say £80m, I think it's a bit too idealistic to say the club should be available for nothing based on its balance sheet.
Yes, the club has debt, but debt is only a problem if it's not servicable hence, e.g. you buy a house with a mortgage and not pay everything upfront.
Martin, the debt is not serviceable as we are losing money each year unless we sell assets. It's like saying you can pay off the mortgage on your house if you sell your house.
Nick, it's fine in theory to say that a price can be negotiated down but when your first reaction to hearing the price is 'you must be fucking joking' then you would not even consider talking to the clowns that have made up the ridiculous number.
Nick, it's fine in theory to say that a price can be negotiated down but when your first reaction to hearing the price is 'you must be fucking joking' then you would not even consider talking to the clowns that have made up the ridiculous number.
Kevin, it would be interesting to find out the timescale these 'interested parties' appeared... eg, Just before a BU protest? Just before season ticket renewal time? Just before half-season ticket sales?
Let's be pragmatic guys not starry eyed optimists. Everton FC is a middling Premier League team with no assets at all apart from an aging and badly performing squad with a tactically inept manager and a dwindling group of match day supporters that needs at the very least a new Ground, a new Manager and a massive injection of new players. Oh and Billy Liar wants to retain the Chairmanship too.
Who in their right mind would buy us?
Who in their right mind would buy us?
The could be another way if the current board of directors agreed to a new rights issue to sell more shares, then only £400 million would be needed in total.
Martin #456, according to this source http://www.toffeeweb.com/club/business/shares.asp#owners it seems Earl paid £9M for his shares.
"Paul Gregg and family later sold their approximately 8,146 Everton shares, making around a £2M profit on their £7M investment in the Club."
This values the Club at £54m by your calculations but again raises the question of why should somone who has not contributed anything to increasing the value of the club (but rather has done the opposite) receive any profit on his shares?
"Paul Gregg and family later sold their approximately 8,146 Everton shares, making around a £2M profit on their £7M investment in the Club."
This values the Club at £54m by your calculations but again raises the question of why should somone who has not contributed anything to increasing the value of the club (but rather has done the opposite) receive any profit on his shares?
Eric (487) I think the reason why the Greggs made a profit is they bought at a discounted price, as did all of TBH.
Steavey (486) a rights issue for that amount of money would be out of the question. For one thing, the amount would have to be under-written to raise a certain amount of money irrespective of how much it is subscribed to. No board member has ever put their own money in, ergo here is your problem. A much smaller amount has been mooted in the past and for the same reason will not fly. Plus, given the perception of this board by a proportion of the fanbase, why would they feel inclined to invest in their continued perceived mismanagement of the club?
Luke (372) I don't get the argument of a high price keeping a Venky-type out of the club. Firstly, that would also yield a fantastic return for major shareholders who've done next to nothing, and secondly, no smart investor will go for that. You could argue that one who was stupid enough to pay £150m is exactly like a Venky (no idea of running a sports business) and would have £150m less to spend on the project.
Contentious I know, but I remain convinced EFC would represent a bargain at a realistic price to the right investor. That right investor would have the plan to:
a) Develop a new stadium complex with attendant infrastructure to increase matchday revenue, and attract greater sponsorship
b) Put funds in place for sustainable team building (no silly fees or wages)
c) Overhaul the commercial operation of the club. A huge opportunity.
Do all of this and it is possible that a 5-10 year investment plan would leave them with an asset worth more than they had invested.
As I've maintained before, all of this is possible due to the expansion of the overseas TV deal, leading to increased exposure of the league in new and expanding markets. As members of that league, we have singularly failed to tackle this. BK is a smart operator, he knows most of the fanbase is passive and narrow in their horizons. Therefore statements like "only Newcastle fans buy shirts" etc. strike a chord.
Football has seen a transition over the last 2 decades from relatively small businesses with loyal customers and a relatively small turnover, to multi-million or even billion pound businesses, with a global fanbase of corporates and individuals, and the celebrity culture that has followed. The management of these clubs has changed to suit. Sadly, we're still run like the corner shop.
Steavey (486) a rights issue for that amount of money would be out of the question. For one thing, the amount would have to be under-written to raise a certain amount of money irrespective of how much it is subscribed to. No board member has ever put their own money in, ergo here is your problem. A much smaller amount has been mooted in the past and for the same reason will not fly. Plus, given the perception of this board by a proportion of the fanbase, why would they feel inclined to invest in their continued perceived mismanagement of the club?
Luke (372) I don't get the argument of a high price keeping a Venky-type out of the club. Firstly, that would also yield a fantastic return for major shareholders who've done next to nothing, and secondly, no smart investor will go for that. You could argue that one who was stupid enough to pay £150m is exactly like a Venky (no idea of running a sports business) and would have £150m less to spend on the project.
Contentious I know, but I remain convinced EFC would represent a bargain at a realistic price to the right investor. That right investor would have the plan to:
a) Develop a new stadium complex with attendant infrastructure to increase matchday revenue, and attract greater sponsorship
b) Put funds in place for sustainable team building (no silly fees or wages)
c) Overhaul the commercial operation of the club. A huge opportunity.
Do all of this and it is possible that a 5-10 year investment plan would leave them with an asset worth more than they had invested.
As I've maintained before, all of this is possible due to the expansion of the overseas TV deal, leading to increased exposure of the league in new and expanding markets. As members of that league, we have singularly failed to tackle this. BK is a smart operator, he knows most of the fanbase is passive and narrow in their horizons. Therefore statements like "only Newcastle fans buy shirts" etc. strike a chord.
Football has seen a transition over the last 2 decades from relatively small businesses with loyal customers and a relatively small turnover, to multi-million or even billion pound businesses, with a global fanbase of corporates and individuals, and the celebrity culture that has followed. The management of these clubs has changed to suit. Sadly, we're still run like the corner shop.
Matt, I wasn't complaining about the Greggs making a profit but rather Martin's suggestion that Earl and the other board members deserve to have one.
Eric (497) I was merely stating that all of the original TBH members bought at a discount.
I honestly think that the board will do well to get any of their investment back, let alone make a profit. Therein lies a problem. A new owner who's best for Everton, or the major shareholders, could be sat at two ends of the spectrum. And it's only human nature to want to make a return (certainly avoid a loss) ? whether you are the self-appointed biggest fan in the world is immaterial.
I honestly think that the board will do well to get any of their investment back, let alone make a profit. Therein lies a problem. A new owner who's best for Everton, or the major shareholders, could be sat at two ends of the spectrum. And it's only human nature to want to make a return (certainly avoid a loss) ? whether you are the self-appointed biggest fan in the world is immaterial.
On Saturday I was attending a party here in Vienna. I tried, unsuccessfully, to find a Rapid Vienna fan in order to discuss Jelavic. Nevertheless I did meet a guy called Edwin, who works in the world of finance with strong links to the oil rich Middle East. He admitted to not knowing much about football and not really supporting any team. When pushed he said Millwall ? which confirmed his earlier statement!
The interesting point to this story concerned Everton. He informed me that he had been approached by a businesswoman from Abu Dhabi, who had heard that Everton were for sale. As Edwin's only contact in the football world was Mike Ashley, the owner of Newcastle United, he contacted him. Ashley advised Edwin to warn her off as Everton were overpriced! Whether or not that is true, with friends like that who needs enemies!
Then Edwin asked me about Everton's management. I told him that our chairman was a fan and theatrical impresario. He told me that although Ashley is a fan and owns Newcastle, their chairman is not a football guy, but a businessman. He reckoned that, as a result, Newcastle are a well run club.
Finally I asked Edwin to contact me if he received any more potential offers, so that I can put them in touch with Keith Harris.
The interesting point to this story concerned Everton. He informed me that he had been approached by a businesswoman from Abu Dhabi, who had heard that Everton were for sale. As Edwin's only contact in the football world was Mike Ashley, the owner of Newcastle United, he contacted him. Ashley advised Edwin to warn her off as Everton were overpriced! Whether or not that is true, with friends like that who needs enemies!
Then Edwin asked me about Everton's management. I told him that our chairman was a fan and theatrical impresario. He told me that although Ashley is a fan and owns Newcastle, their chairman is not a football guy, but a businessman. He reckoned that, as a result, Newcastle are a well run club.
Finally I asked Edwin to contact me if he received any more potential offers, so that I can put them in touch with Keith Harris.
What is this obsession in the media with adding the cost of debt on to the price of buying the club? It should be taken off!
The Board has chosen to finance the club through debt rather than equity and this will be reflected in the price someone is willing to pay.
If you borrow £100m to buy a £100m asset, you're not going to be able to sell that business for £100m.
It makes no sense!
If Kenwright is valuing the club in this way, effectively asking someone to buy his house and pay off this mortgage, then it's hardly surprising we haven't been sold.
The Board has chosen to finance the club through debt rather than equity and this will be reflected in the price someone is willing to pay.
If you borrow £100m to buy a £100m asset, you're not going to be able to sell that business for £100m.
It makes no sense!
If Kenwright is valuing the club in this way, effectively asking someone to buy his house and pay off this mortgage, then it's hardly surprising we haven't been sold.
£600 million ?? Shares worth £45 million tops. Squad ??? would this come into it ??
Debt will always be there doesnt need paying off. Ground yes £250 million tops
recession dont forget. So I think the right buyer would only have to fork out £300 million tops
Debt will always be there doesnt need paying off. Ground yes £250 million tops
recession dont forget. So I think the right buyer would only have to fork out £300 million tops
And Michael, don't forget that your £250 million for ground improvements can be spread over a number of years and even be self-financing!
I agree Eric :-)
I don`t, for one minute, think Everton are near the abyss but if the bank did step in (as at LFC) and set about finding a buyer... what price would THEY be looking for?
The truth of the matter to why the club hasn?t been sold is simple, it isn?t for sale!
Old Bullshit Bill believes he is the only person alive who knows best for the club!
Old Bullshit Bill believes he is the only person alive who knows best for the club!
Eric #497. At no point did I suggest they 'deserve' a profit.
My point was Earl is a business man, he will want a profit. Whether he paid £9m or £12m he will want a return on that investment.
My point was Earl is a business man, he will want a profit. Whether he paid £9m or £12m he will want a return on that investment.
Richard, we if your house was reposessed by the bank they would sell it for the value of the outstanding debt, and isn't that what RBS sold our neighbours for?
Martin, Earl is a businessman and so should know that the value of shares can go down also, and that he could even lose all his investment.
Not all investments make money.
Martin, Earl is a businessman and so should know that the value of shares can go down also, and that he could even lose all his investment.
Not all investments make money.
QPR changed hands with £35 million for 66% shares valuing the club around 54 million in todays market (with a club turnover around the £20-25 million mark).
We have to be valued at at least £100-£150 million based on that?
We have to be valued at at least £100-£150 million based on that?
Dan, how is the share value of one company related to the share value of another? eg. can you tell me how much Apple is worth only by looking at the share value of Microsoft?
If you are comparing the companies you have to look at the debt and asset value and the management.
QPR are managed better than Everton.
If you are comparing the companies you have to look at the debt and asset value and the management.
QPR are managed better than Everton.
Ok, er, here's an idea as a variation on the 'bank stepping in and selling to the highest bidder theme': the shareholders put their shares up for public auction. Set a reserve, and away they go. At least we'd all get to know who the 'interested parties' are (if any) and what the existing market (again, if any) values us at...
Eric - yes share values can also go down, but why would you sell if your investment had decreased unless you were desperate for the cash?
Surely you'd hold on to them until the value increased? which lets face it, is what it looks like he's doing - waiting for the right offer for him.
I'm not saying this is the best thing for the club, it's just the situation we're in.
Surely you'd hold on to them until the value increased? which lets face it, is what it looks like he's doing - waiting for the right offer for him.
I'm not saying this is the best thing for the club, it's just the situation we're in.
Eric, is this is the same QPR that recently had a wage bill of 19 million, even though their ENTIRE turnover was only 17 million? Read this:
http://www.sabotagetimes.com/football-sport/queens-park-rangers-wheres-all-the-money-coming-from/
If you think QPR are well managed, then you clearly know very little about football financing.
http://www.sabotagetimes.com/football-sport/queens-park-rangers-wheres-all-the-money-coming-from/
If you think QPR are well managed, then you clearly know very little about football financing.
Dan,
QPR were in the premier league and guaranteed a massive increase in turnover. That's regardless of performance.
QPR were in the premier league and guaranteed a massive increase in turnover. That's regardless of performance.
Dan, entire turnover of 17 million?
That article mentions 40-45m income from Sky and league placings, plus 20m from gate receipts, and a wage bill of 84% of income (not including gate receipts).
PLUS they have 2 very wealthy owners who are intersted in INVESTING money into the club and BUYING players.
That article mentions 40-45m income from Sky and league placings, plus 20m from gate receipts, and a wage bill of 84% of income (not including gate receipts).
PLUS they have 2 very wealthy owners who are intersted in INVESTING money into the club and BUYING players.
Dan, we have massive debts. QPR don't.
Martin, yes that is the situation which its why we need to force them into action and sell up sooner. We're probably only a few years away from total meltdown based on our current business model.
Everton can't afford to wait for Bill and co to get their best price.
Martin, yes that is the situation which its why we need to force them into action and sell up sooner. We're probably only a few years away from total meltdown based on our current business model.
Everton can't afford to wait for Bill and co to get their best price.
You do understand the word recently I assume Eric?
Investing money? Or increasing the debt?
Sorry Dan, I didn't see the word recently in that article you linked to, can you point it out?
QPR Holdings vice-chairman Bhatia, who describes the club as ?debt-free?, ?Cash is now being provided by the owners with no burden being placed upon the club and we felt that was the best way"
QPR Holdings vice-chairman Bhatia, who describes the club as ?debt-free?, ?Cash is now being provided by the owners with no burden being placed upon the club and we felt that was the best way"
Excellent Eric. So your interpretation of 'good' business management, is a fiscal model that is completely unsustainable (around 85% wage to turnover ratio), and can only survive by eternal private funding.
The Eric Myles school of business is now officially open!
The Eric Myles school of business is now officially open!
Dan, the guy quoting that figure in the article you linked to got his sums wrong. Based on the figures in that article their wages to earnings ratio is actually nearer 62% which as you know is less than the Premiership average and less than our own.
Its probably just a simple typo - 60, instead of 600
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369 Posted 08/02/2012 at 15:42:38
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"What I know to be absolutely the case is the first question asked by us in these discussions is never 'how much?' but always 'what are your thoughts, intentions or plans for Everton's future?'