Daily Mirror- Joe Lewis will sell the club....if he gets £1BILLION.

[Lighty64]

Not sure what you mean in bold? What did they re-invest?

I'm sure that 50m was actually just a low intrest loan

You might not think it, but eventually the stadium will mean we can compete in transfers and wages.

If you really think we could do that at the old stadium just think of all the players that left for wages

 

[Westmorlandspur]

You might not think it, but eventually the stadium will mean we can compete in transfers and wages.

If you really think we could do that at the old stadium just think of all the players that left for wages

And all the players we did not sign because we couldn’t compete on wages. Poch had Mane and Winaldum at his house discussing a move. Both took the money and ran........to Liverpool.

 

[Bing]

Not sure what you mean in bold? What did they re-invest?

I'm sure that 50m was actually just a low intrest loan

Taking out debt could still be viewed as investment by the owners.

Lets say the club is worth £1bn with no debt. The owners have an investment worth £1bn.

You then get a loan out for £50m. You now have a club worth £1bn and cash of £50m but you now also owe the bank £50m. You're investment is still worth £1bn. Maybe things work out and the stuff you spent the cash on is worth more than £50m in the long run. Or maybe not. That is risk and that is investment by the owners.

These loans will also have guarantees on the equity of the club i.e. if things go tits up and we can't pay the bank back they get owners equity stake.

This club won't be sold for a least 3 -5 years now. We have loaded up with debt and plan now would be to pay down that debt balance over the next 3- 5 years using the cash flows of the club and then sell which I think is a very realistic scenario.

Who would buy? Shrewd investor or oligarch looking for a play thing? The two are not necessarily mutually exclusive. As a relatively prestigious club with an incredible stadium based in London that has been prudently managed financially for over a decade we could make a very attractive investment for somebody looking for a low growth, relatively low risk cash generating business with a bit of glamour on the side.

 

[ValenciaYid]

Hopefully Levy and Lewis will sell up so the moaners can moan at some different names....

 

[carmeldevil]

Hopefully Levy and Lewis will sell up so the moaners can moan at some different names....

var bitchOnOwner = "Daniel Levy";
document.getElementById("currentOwner").innerHTML = bitchOnOwner + " OUT";

problem solved.

 

[CornerPinDreamer]

var bitchOnOwner = "Daniel Levy";
document.getElementById("currentOwner").innerHTML = bitchOnOwner + " OUT";

problem solved.

10 print: 'big titties'
20 goto 10

 

[Lilbaz]

Not sure what you mean in bold? What did they re-invest?

I'm sure that 50m was actually just a low intrest loan

It was converted into equity.

 

[HobbitSpur]

Taking out debt could still be viewed as investment by the owners.

Lets say the club is worth £1bn with no debt. The owners have an invedtment worth £1bn.

You then get a loan out for £50m. You now have a club worth £1bn and cash of £50m but you now also owe the bank £50m. You're investment is still worth £1bn. Maybe things work out and the stuff you spent the cash on is worth more than £50m in the long run. Or maybe not. That is risk and that is investment by the owners.

These loans will also have guarantees on the equity of the club i.e. if things go tits up and we can't pay the bank back they get owners equity stake.

This club won't be sold for a least 3 -5 years now. We have loaded up with debt and plan now would be to pay down that debt balance over the next 3- 5 years using the cash flows of the club and then sell which I think is a very realistic scenario.

Who would buy? Shrewd investor or oligarch looking for a play thing? The two are not necessarily mutually exclusive. As a relatively prestigious club with an incredible stadium based in London that has been prudently managed financially for over a decade we could make a very attractive investment for somebody looking for a low growth, relatively low risk cash generating business with a bit of glamour on the side.

If your asset value is 1bn and you take a loan out for 50m, the loan value is a liability against the value and therefore your value is 950m. As the loan is repaid then the liability will reduce and equally the value will increase.

If you do not use the money then you do have a cash reserve that could be offset against the loan, but would be a pointless exercise to borrow money and not spend. This would very simply put, place the value at 1bn (not taking into account interest)

Whatever you spend the loaned funds on does then become an asset too, unless there is any further financing while purchasing said asset which in turn then also becomes a liability too.

You would hope that any purchases made using borrowed funds would add value to the asset, at least for anything over the very short term, therefore increasing the value overall.

There are a number of times when football clubs have been bought when the Purchaser has purchased a debt (the amount due to outstanding creditors) with with IP/rights of ownership of the club itself being purchased for a nominal amount, as in the case of Ken Bates purchasing Chelsea for £1.

Or the worse case is when financing/lines of credit are used to purchase a club(asset) that was at that point completely unencumbered, as in the case of the Glazers purchasing Mancester United (which was an absolute travesty, should never have been allowed and even 13yrs on are still nearly 500m in debt, but that is for another thread)

 

[HobbitSpur]

To conclude the above.

So purchasing a club with a debt is not an ill-advised business decision, as long as the underlying structure is secure and the forward revenue/profit is valued at a greater amount to the liabilities and initial investment.

You would only purchase a house in need of renovation if you were confident that the value of that house would be higher in the future after renovation (or in the case of this thread the outstanding liabilities were paid off).

 

[piedpiper]

Great accounting lessons... Now with the reported wealth which Newcastle may be getting into, do we still maintain our honourable stance of doing it the right way?

What we have done as a club is great...but as many have pointed out at Enic is an investment firm. They are here for their return...they maintain a prudent approach to how they invest in the squad vs say the Liverpool owners who want to win trophies and dominate from that approach.

Its not lost on me regarding the stadium and training facility. But that was done with CLUB derived income and not money put in by the Owners ( like City/ Liverpool) as an example..... Yes im aware of the £ 50 million loan by JL.

I can't help but think as more Uber rich individuals buy clubs it just makes that top 4 positions more crowded. Yes we are future proofed with the stadium but does it truly allow us to compete for the title going forward when the playing field is uneven and will get even worse... Just look at Arsenal as an example of having their stadium but not being able to compete for players at the higher end.

Ive loved not buying trophies like City and Chelsea.... However something has to give eventually. I look at Atletico Madrid who also do it the rught way and i often compare us tobthem ad a well run club....but can they truly compete for players/trophies with the big 2 in La Liga..they just making up the mumbers i believe.

 

[yankspurs]

Great accounting lessons... Now with the reported wealth which Newcastle may be getting into, do we still maintain our honourable stance of doing it the right way?

What we have done as a club is great...but as many have pointed out at Enic is an investment firm. They are here for their return...they maintain a prudent approach to how they invest in the squad vs say the Liverpool owners who want to win trophies and dominate from that approach.

Its not lost on me regarding the stadium and training facility. But that was done with CLUB derived income and not money put in by the Owners ( like City/ Liverpool) as an example..... Yes im aware of the £ 50 million loan by JL.

I can't help but think as more Uber rich individuals buy clubs it just makes that top 4 positions more crowded. Yes we are future proofed with the stadium but does it truly allow us to compete for the title going forward when the playing field is uneven and will get even worse... Just look at Arsenal as an example of having their stadium but not being able to compete for players at the higher end.

Ive loved not buying trophies like City and Chelsea.... However something has to give eventually. I look at Atletico Madrid who also do it the rught way and i often compare us tobthem ad a well run club....but can they truly compete for players/trophies with the big 2 in La Liga..they just making up the mumbers i believe.

We are owned simply to make money for our owners. I mean, ol’ Joe’s gotta buy his art and build new yachts somehow.

Lewis has zero intention of investing in the club and has got zero interest in the club doing well unless it can make him money in a sale. Now that we’re this far, if we start winning things no one’s going to want to spend a few billion to buy him out. And he doesnt want that.

 

[HobbitSpur]

Great accounting lessons... Now with the reported wealth which Newcastle may be getting into, do we still maintain our honourable stance of doing it the right way?

What we have done as a club is great...but as many have pointed out at Enic is an investment firm. They are here for their return...they maintain a prudent approach to how they invest in the squad vs say the Liverpool owners who want to win trophies and dominate from that approach.

Its not lost on me regarding the stadium and training facility. But that was done with CLUB derived income and not money put in by the Owners ( like City/ Liverpool) as an example..... Yes im aware of the £ 50 million loan by JL.

I can't help but think as more Uber rich individuals buy clubs it just makes that top 4 positions more crowded. Yes we are future proofed with the stadium but does it truly allow us to compete for the title going forward when the playing field is uneven and will get even worse... Just look at Arsenal as an example of having their stadium but not being able to compete for players at the higher end.

Ive loved not buying trophies like City and Chelsea.... However something has to give eventually. I look at Atletico Madrid who also do it the rught way and i often compare us tobthem ad a well run club....but can they truly compete for players/trophies with the big 2 in La Liga..they just making up the mumbers i believe.

Yes we are owned by an investment firm. And the purpose of an investment firm is to make the highest returns on invested capital as possible.

Now this is completely my opinion and based on no ITK at all except my knowledge from my early career.

As with any investment there are certain criteria that it must meet and parameters that it should operate within.

One of the simplest criteria and at an extremely top level is 'Risk v Reward'

Now when ENIC took control of THFC it must have shown value and must have fitted into the strategy of their then portfolio of assets.

But in terms of investment it would have been crazy to throw shed loads of money into a weak and deteriorating infrastructure. The risk of investing any large amounts of money did not match any potential rewards at that point in time.

But to get to where we are now there must have been a strategic game plan in place even back then.

Fast forward 18 years we are now a powerhouse in the PL (for now at least), have a state of the art training centre and arguably the best stadium in the world. We have done this by shrewd accounting and sticking to the initial gameplan.

We are becoming a global brand and that in itself increases our wealth as an asset.

From an investors point of view (ENIC) the risk of putting in more money is far less in comparison to the rewards.

We can now start to bid at the big boys table when it comes to transfers. We can now afford to pay higher wages because the revenue will now allow it.

At the end of the day, it could be argued that any further investment from ENIC will show a return and truly increase the value of the asset.

To give an example. Look how much money Abramovich has pumped into Chelsea, there is no way that he would get close to that amount if he sold the club. But it doesn't matter, it was not an investment to Abramovich, more like a whimsical hobby.

 

[piedpiper]

Yes we are owned by an investment firm. And the purpose of an investment firm is to make the highest returns on invested capital as possible.

Now this is completely my opinion and based on no ITK at all except my knowledge from my early career.

As with any investment there are certain criteria that it must meet and parameters that it should operate within.

One of the simplest criteria and at an extremely top level is 'Risk v Reward'

Now when ENIC took control of THFC it must have shown value and must have fitted into the strategy of their then portfolio of assets.

But in terms of investment it would have been crazy to throw shed loads of money into a weak and deteriorating infrastructure. The risk of investing any large amounts of money did not match any potential rewards at that point in time.

But to get to where we are now there must have been a strategic game plan in place even back then.

Fast forward 18 years we are now a powerhouse in the PL (for now at least), have a state of the art training centre and arguably the best stadium in the world. We have done this by shrewd accounting and sticking to the initial gameplan.

We are becoming a global brand and that in itself increases our wealth as an asset.

From an investors point of view (ENIC) the risk of putting in more money is far less in comparison to the rewards.

We can now start to bid at the big boys table when it comes to transfers. We can now afford to pay higher wages because the revenue will now allow it.

At the end of the day, it could be argued that any further investment from ENIC will show a return and truly increase the value of the asset.

To give an example. Look how much money Abramovich has pumped into Chelsea, there is no way that he would get close to that amount if he sold the club. But it doesn't matter, it was not an investment to Abramovich, more like a whimsical hobby.

Agree with your assessment.. But i think our own support base undersells our brand identification. I live in a 3rd world country where i became a supporter long before the internet and where maybe 6 of our games were shown a year in the 80's on tv. So enic have not raised our profile.. What we had as a club pre Enic was acquisition of exciting talent In the 90's like Klinsman/ Romanians Popescu etc.

Yes i truly get what Enic have done with the stadium development but its now delivered and as fans we all knew that we would not compete whilst the stadium was being developed. However thats over and as a Supporter not a bean counter, i would like to see is us Compete on the field and go head to head with the big boys... Just like Liverpool have done. I got lambasted in December 2017 when i suggested that, they Liverpool, smelled of ambition. So i do want us to show that level of ambition.. I in No way advocate spending Chelsea levels of money. But buying shrewdly and selling on to reinvest etc.

 

[Flashspur]

Agree with your assessment.. But i think our own support base undersells our brand identification. I live in a 3rd world country where i became a supporter long before the internet and where maybe 6 of our games were shown a year in the 80's on tv. So enic have not raised our profile.. What we had as a club pre Enic was acquisition of exciting talent In the 90's like Klinsman/ Romanians Popescu etc.

Yes i truly get what Enic have done with the stadium development but its now delivered and as fans we all knew that we would not compete whilst the stadium was being developed. However thats over and as a Supporter not a bean counter, i would like to see is us Compete on the field and go head to head with the big boys... Just like Liverpool have done. I got lambasted in December 2017 when i suggested that, they Liverpool, smelled of ambition. So i do want us to show that level of ambition.. I in No way advocate spending Chelsea levels of money. But buying shrewdly and selling on to reinvest etc.

Good post but i’d argue Liverpool are spending Chelsea levels of money. Surprisingly Fenway is an investment company like ENIC is it not, concentrating on sports like baseball and football?

Perhaps ENIC’s hands have been tied with the stadium while Liverpool haven’t as their stadium work has been much less financially onerous. Remember the Spurs stadium started well over a decade and a half ago with the land purchases etc. ENIC have put a lot of money into this over a long period. They’ve been constrained for years and it’s only the luck of emerging young talent Rose, Kane, Winks and excellent purchases like Eriksen, Dier, Hugo, Toby and Jan etc on the cheap that have balanced the books along with regular one off sales like Bale and Walker.

When do the shackles come off from a spending perspective? Fenway have gone out and taken risks. Will ENIC do the same? Poch is certainly going to find out this TW!

 

[Gassin's finest]

var bitchOnOwner = "Daniel Levy";
document.getElementById("currentOwner").innerHTML = bitchOnOwner + " OUT";

problem solved.

 

[HobbitSpur]

Agree with your assessment.. But i think our own support base undersells our brand identification. I live in a 3rd world country where i became a supporter long before the internet and where maybe 6 of our games were shown a year in the 80's on tv. So enic have not raised our profile.. What we had as a club pre Enic was acquisition of exciting talent In the 90's like Klinsman/ Romanians Popescu etc.

Yes i truly get what Enic have done with the stadium development but its now delivered and as fans we all knew that we would not compete whilst the stadium was being developed. However thats over and as a Supporter not a bean counter, i would like to see is us Compete on the field and go head to head with the big boys... Just like Liverpool have done. I got lambasted in December 2017 when i suggested that, they Liverpool, smelled of ambition. So i do want us to show that level of ambition.. I in No way advocate spending Chelsea levels of money. But buying shrewdly and selling on to reinvest etc.

I cannot argue my point against yours as I said there is no actual fact in my posts just purely my thought and opinions so could be way off.

However you say that ENIC have not raised our profile, yet by your own admission we there were maybe 6 games a season when we were signing this 'exciting' talent.

Surely our global brand is far greater than it was back then which can only be down to ENIC.

I do not understand your argument.

 

[HobbitSpur]

Good post but i’d argue Liverpool are spending Chelsea levels of money. Surprisingly Fenway is an investment company like ENIC is it not, concentrating on sports like baseball and football?

Perhaps ENIC’s hands have been tied with the stadium while Liverpool haven’t as their stadium work has been much less financially onerous. Remember the Spurs stadium started well over a decade and a half ago with the land purchases etc. ENIC have put a lot of money into this over a long period. They’ve been constrained for years and it’s only the luck of emerging young talent Rose, Kane, Winks and excellent purchases like Eriksen, Dier, Hugo, Toby and Jan etc on the cheap that have balanced the books along with regular one off sales like Bale and Walker.

When do the shackles come off from a spending perspective? Fenway have gone out and taken risks. Will ENIC do the same? Poch is certainly going to find out this TW!

Fenway is a company that owns a number of Sports Franchises. It is not an investment company as such but its basis of success is geared towards trophy count rather than increasing N.A.V.

 

[skiba]

Agree with your assessment.. But i think our own support base undersells our brand identification. I live in a 3rd world country where i became a supporter long before the internet and where maybe 6 of our games were shown a year in the 80's on tv. So enic have not raised our profile.. What we had as a club pre Enic was acquisition of exciting talent In the 90's like Klinsman/ Romanians Popescu etc.

Yes i truly get what Enic have done with the stadium development but its now delivered and as fans we all knew that we would not compete whilst the stadium was being developed. However thats over and as a Supporter not a bean counter, i would like to see is us Compete on the field and go head to head with the big boys... Just like Liverpool have done. I got lambasted in December 2017 when i suggested that, they Liverpool, smelled of ambition. So i do want us to show that level of ambition.. I in No way advocate spending Chelsea levels of money. But buying shrewdly and selling on to reinvest etc.

What we had prior to Enic were mid table teams who faced relegation as much as they threatened Europe. Klinsmann and Popescu were here for one year before leaving and were the exception. Under Enic we've had talents such as VDV, Modric, Berbatov, Carrick, Davids, Bale and Eriksen to name just a few.

The business model of Enic is a simple one. Whatever the club makes is reinvested back into the club. They do not invest their own money nor do they take cash out of the club to line their own pockets. I think it's harsh to criticise owners for not investing their own money in football as at the end of the day it's their money and as fans we have no right to tell them how to spend their own personal wealth.

What is open to criticism is how the owners choose to spend the clubs own money and how they run the club. They decided to invest a significant amount of this money into building the new stadium to the detriment of the playing squad. Cynics will argue this is simply to increase the value of the club so they make more money when they sell. Supporters of Enic will argue that the stadium is essential in trying to close the financial gap to the top clubs so that we can compete with them on a consistent basis. Both arguments are valid and with the stadium now built I believe the next few years will show how ambitious the owners really are.

 

[Metalhead]

Hopefully Levy and Lewis will sell up so the moaners can moan at some different names....

Thing is that if we got super rich owners like they have at City then they would have less reason to moan; however, after two lean transfer windows, the signs are that we are going to see some decent action in the window. I'm sure that some will moan whatever happens though.

 

[ajspurs]

var bitchOnOwner = "Daniel Levy";
document.getElementById("currentOwner").innerHTML = bitchOnOwner + " OUT";

problem solved.

For someone who is currently studying JS I have to love this