In today's market

[sherwoodmag]

The Toon is worth £350 million,Instead of offering the full amount with clauses just give the fatman what he wants with no strings and get rid of him,you will get your money back with tv rights.

[Kal]

Not if you have to replace most of your team you won't. More TV money = higher price and higher wage for players.

[Andy1981_2]

The Toon is worth £350 million,Instead of offering the full amount with clauses just give the fatman what he wants with no strings and get rid of him,you will get your money back with tv rights.

It's not that simple mate - for one, the TV deal only applies to teams in the PL, which we might not be in a few months time. Granted, with investment we'd expect to come back up, but there's no guarantees - Villa have spent a fortune since going down but still look like they'll be lucky to come up through the playoffs. Because of FFP in the Championship, your spending is restricted by your turnover, and that'll drop massively upon relegation. There's also the second key issue of the infrastructure at the club needing to be overhauled. Our training facilities and academy are literally decades behind the times. There's a side that look like they could be playing in League 1 next season that have better facilities than us. Thirdly, Ashley has sold off tangible assets that came with his purchase of the club, like the land surrounding the ground. This is important because it limits the potential for development. That doesn't necessarily mean expanding the stadium - if you've been to Stamford Bridge you'll see the development of that whole area into revenue-generating streams for the club (there's hotels, bars, restaurants, music venues, etc. all owned by the club and bringing in income; ultimately they can all be sold off as prime real estate).

The club simply isn't worth the price Ashley is asking because there aren't assets present to that value. The main assets of any football club are the contracts of the players, and the fact is our players aren't worth that much. The next major asset is the stadium, and we don't own that. So, in the event of the collapse of the TV revenue, there's little against which to insure the financial risk of the investors (whoever they ultimately are). There are clubs that could be bought for a lot less, who have similar-sized stadiums (think Leeds, Sunderland, Aston Villa) who do have those assets in place already. That means for an objective investor you'd have to limit your risk in accordance with the alternative investments you could make in the market. There's two main reasons the asking price of our club is as high as it is: the projected increases in TV revenue (which is vulnerable to some future innovation like the emergence of a Spotify for football), and the debt owed to the current owner. For all Ashley is lauded, and rightly in some ways, for his financial management of the club, he has failed to reduce the overall debt of the club even during profitable periods. At the same time he has overseen a relative drop in commercial revenue, which has further hindered our ability to clear those outstanding debts. This would be forgivable if the money had improved the infrastructure of the club, or if it had been invested in such a way as to improve the squad, but he has done neither in his tenure. As such, he's added no actual value to the thing he bought. That's a massive shame for everyone involved, and is ultimately the cause of the current stand-off with Staveley, who understands the size of the monetary (and time) investment required to allow us to progress within the FFP rules.

Long and short of it is I don't think she'll buy the club, because she knows nobody else will pay Ashley's asking price and that he won't drop the price. We're stuck with him I reckon.

[toonlegend]

I thought we owned the stadium, but not the land

you wouldn't have a mortgage on something you didn't own??

if he hasn't increased the value since he bought the club, then it can only be worth 150 million tops.

[Zippity]

They've offered £250 million, he wants £350 million.

ffs, man-has no-one seen American Pickers???

Clearly the price is £300 mil.

[Andy1981_2]

I thought we owned the stadium, but not the land

you wouldn't have a mortgage on something you didn't own??

if he hasn't increased the value since he bought the club, then it can only be worth 150 million tops.

Yes, to be more accurate we don't own the land... but the value of the stadium upon the financial failure of the club is essentially nothing in the absence of another sports team wanting to relocate to Newcastle or somebody wanting to start a totally new club and locate it there. If we owned the land, it'd be a valuable asset as it could be sold to developers. And that's what you're leveraging your investment against - the worst case scenario. That sets your risk level. The other end is set by the club's potential value.

Ashley hasn't increased the value of the club, but that doesn't mean the value of the club hasn't increased. The TV deals have got bigger, so the potential revenue for the club has increased. But that's contingent upon being in the PL, and it's far from certain that that's where we'll be next season.

We're a relatively poor investment because the previous owners mismanaged our finances so badly. Ashley failed to do due diligence, so massively overpaid for us, but now he is insisting that he gets back what he put in, plus a bit of profit. We're not worth that amount because our lowest value (just the saleable assets in the event of administration) is probably still around what Ashley initially paid for the club ten years ago, and our highest valuation only rings true if we somehow escape relegation this and beyond without any substantial investment. If we were regularly making tens of millions of profit and never at risk of relegation, you'd figure that into your valuation of the club. But we don't always make a profit, and that's without the kind of investment level you see most clubs need to make in their first team just to stay in the top flight. And when we get relegated, we lose tens of millions. So they could buy a club this season which has about £150m wiped off the value of it virtually overnight from the loss of a TV deal, asset depreciation in terms of players making it clear they want out, and so on.

Staveley knows all of this, and that's why she's playing hardball. She's hoping Ashley wants out more than he wants to make his money back. However, I think that fundamentally misunderstands the kind of person he is (I believe pboro/ghost/occult has made a similar point somewhere in the discussions I've read on here over the last few weeks). If she wants it, I think she'll have to overpay. But the potential for the club can be realised if the buyer is someone who has billions to spare. Man City was in a much worse state than us when they were bought by Shinawatra, but he had the cash to funnel into the club (before his arrest and the subsequent sale to the new owners). Ashley was bang on in his interview - it requires heavy investment to turn a football club into a global brand capable of reaping huge financial rewards. But he was also disingenuous when he said he doesn't have the kind of money to do that. He does, he just doesn't have the desire to leverage his SD shares and take that chance.

[occult]

Andy, this is very impressive stuff. Have you worked this out yourself or do you have a source of information? It sounds like the latter especially when you refer to Staveley's motivation.

Whatever the case is, this seems to confirm my belief that what NUFC needs is not a shrewd investor hoping to make a return on his -or her -investment but someone with megabucks who just wants a hobby and who's prepared to throw as much money as needed to make this club a success. A Sheikh Mansour or Abramovich for example.

[pboromag]

she wont over pay or pay the asking price whch has neverchanged by the way so its not like ash has moved the goal posts
he has made the transaction very easy
its 300 mill take it or leave it
and you can pay in installments

here backers pulled out
she realises if she pays the asking price getting a eturn for her backers will be hard

she is like ash a buisness women
this is an investment
not like city chelsea etc where the owners hrow money at it

[Andy1981_2]

here backers pulled out
she realises if she pays the asking price getting a eturn for her backers will be hard

she is like ash a buisness women
this is an investment
not like city chelsea etc where the owners hrow money at it

You're partly right, but you've got the cart before the horse in terms of how investment works. The new owners would have to throw money at us in order to realise any potential return. There's no serious money to be made the way Ashley runs the club at the moment, which is also why Ashley wants out. Ashley's greatest return has come in terms of the benefit to the SD share price since he bought the club. It was a contributing factor in increasing that share price as much as 700% just a few years ago, but it has rapidly declined in recent years due to investigations about its working practices (and the relegations have hurt the real-world value of the advertising SD gets for free at the club). Ashley's shares are, still, worth 3 times what they were when he took over the club, though his holdings have changed (i.e. what he owns, legally, on paper) in the same period, so it's hard to know just how much better off he actually is. He hasn't really taken any money out of the club directly because he hasn't figured out a way to generate enough cash at the club to do so.

My understanding is that Staveley would have access to more than enough money to push the club forward - around a £1-2bn investment fund - but, as you say, she's a business woman (representing other very serious business people) and overpaying for a football club is no way to start off on the right foot (e.g. Mike Ashley)! The funds are there, but why waste the first £100m-150m? That's a lot of money to ask investors to write off at the outset. More to the point, the potential for the club can probably only be realised with a further £1bn or so of player investment, and there's still no guarantees even then - it would require Rafa to bring in the right players etc. I believe, as do the people she represents, that he could do it, but we all have to be realistic and realise that we're not operating in a vaccuum - other clubs already have serious investment, and offer very serious competition to NUFC. And theoretically, another PCP could come and buy Leeds, Villa, Sunderland, or whoever, at any moment and then suddenly we're not talking about breaking into the top 6... it's the top 7, top 8, top 9, or whatever. And being the 9th most well-known club in the country isn't really going to realise that initial return and inspire the brand associations she's gambling on getting. Moreover, we can only spend within the rules of FFP, so a lot of investment would need to be made off the field to increase turnover. Her contacts in China and the Middle East would help massively with that, but those are deals that are yet to be made and, in the long term, absolutely dependent upon success on the pitch.

It's a very complicated situation, and a very high risk one from an investment point of view. The nature of the investment group makes it harder to retain backers as the deal gets more expensive. The Reuben brothers would/will get back on board, I suspect, if the deal was resurrected at roughly the same price as the last offer. The current Staveley PR campaign is, in part, an attempt to make that happen - if Ashley is the villain of the piece, the Reuben brothers' other (specifically, retail) investments in the region will likely increase in value if they're perceived as saviours. Staveley is also crafting a nice narrative for herself in the process, and understandably so. If the deal gets done I'll be massively surprised; at the same time, however, unlike you, I think if they do complete the takeover then they ultimately will invest heavily in the club. That still won't guarantee success, and we'll all still be here moaning about something, but it would certainly get us beyond anywhere we'll be under Ashley since his approach will never change. And yes, it's his right to do what he wants with his business etc., but for every season he under-invests, that business gets further from having its true potential realised, and falls further away from the overinflated asking price he needs to demand to recoup what he overpaid for us in the first place.

[pboromag]

The reubens wont come back in at what ash wants

i think one brother wanted it the others are investors and dont see the returns they want in the prem

you cant forcast in footy and it is purely speculation
they cant make things happen they wont be in control

stavely hasnt got the money everyone thinks she had

she is hawking us around to anyone and eveyone

i dont think they will invest heavily in the club as the returns needed would be a gamble dependent on results and other peoples perfprmances etc

as a cash return buisness which is what they will be looking for they will notice footy isnt controllable like other buisness is

she is a chancer

trying to broker a deal with no money and no control