TOPIC: The Club is for sale - How much should it cost the purchaser?

I don't know the answer to this, but if the club had no debt, what would it be worth?

I appreciate it's "whatever someone would pay", but forget that for a moment. If the club's true worth is more than AJ's debt, why should that debt be a stumbling block?

So, for arguments sake, let's say the true worth is £2 million and AJ is owed £1.8 million, the purchaser pays £2 million - it's no relevance to him where his purchase money goes. Obviously, this is very simplistic reasoning and certainly many other factors would come into play, future investment for example, but in principal, is it right?

I have no idea if £2 million is a realistic figure or not but considering the money being bandied about in the game, it doesn't sound a lot (to me anyway) for a league football club with potential

In my post before I said I'd expect a buyer to be found easily in the £2-2.5m range if the Trust wasn't there so I think in principle you are right and I don't think it is a lot for someone to pay.

carwash wrote:
Apart from a club in debt, losing half a million a year and either no or very few saleable assets what would they be getting for their £2.5 million? Personally i dont think the club is worth anything at the moment. Even debt free its still a loss making business with no saleable assets thats badly in need of investment so why would anyone pay £2.5 million for something worth nothing?

Maybe, but it is a Football League club and that in itself must have a value

I think in a normal year the club might lose £200k-300k. For £2.5m you would get a ready made football league club with a chance of promotion next season. The 'investment' point is arguable. A new buyer may not have a radically different philosophy from the current owners in terms of spending money. The Trust is the big stumbling block but without the Trust it is entirely feasible to have a buyer come in and own the club for 4 years costing him maybe £1m before selling it on to someone else for what he paid. In the meantime his club has the chance of cup games with the big boys or finding a star player who could be sold. For someone with a few million to spend then it could be very interesting.

Is it what the fans would want? Probably not but on the other hand it may not work out to be that terrible either.

£0

carwash wrote:
But for the Story writeoff wouldnt the club have lost £650k last year?. Id say thats more the norm as player sales and cup runs have to be classed as extra.

carwash wrote:
I think you need to start to live in the real world CW Fan ownership is here to stay and within 5 years will be law of the land as will stadiums being listed as assets of community value by supporter groups meaning that if i club was put up for sale you would have to offer it to the supporters first and give them 6 months to raise the funds.to buy it.Clubs with proper Trusts are already doing this to secure their clubs for their communities for ever.

Any potential purchaser or investor who has the good of the club at heart and whos not in it for the money or to acquire the assets has nothing to fear from supporter ownership and should embrace it and see it as a way of reducing operating costs which can then be used to support team building.

bluestblue wrote:
Of course it does and even more so if it owns its own ground

I believe as a club Carlisle United and its assets along with its golden share in the FL is currently valued at just over £4m

NORTHERNSOUL wrote:

Why do you believe that?

Dancingbear wrote:
Its in the latest set of accounts its the figure that doesnt take into account the cost of replacing the ground.

NORTHERNSOUL wrote:
Would that figure not realistically be a lot less after the floods though?

It was the present incumbents who said it was for sale so by definition it is not for sale.

All these opinions seem to reinforce my original point that if the club is worth more than AJ's debt, why is that debt in itself a stumbling block, as it is persistently quoted as being?

bluestblue wrote:
Because if you pay £2 million to buy the club and have to pay Jenkins off its cost you £4 million. Plus what itd cost to sort things out. Why would anyone in their right mind do that?

Dancingbear wrote:
The floods would have very little impact on that value

The value is based around the fact that its owns a golden share in the league and all that brings with it as well as the fact that it owns a ground [ which you need to carry out your business } and therefore any new purchaser wouldnt have to spend say min of 15m to build a new one to allow it to carry out its business of playing professional football.In theory you have a ground suitable for that activity for the next hundred years in reality the value is already decreased because to maintain the status quo improvements would have to be made in the near future

bluestblue wrote: I'd say that was highly optimistic and based on flawed assumptions. Do you really think that someone would pay £4m for a club in the bottom tier, which loses more than £500k in an average year, and owns a ground that is falling to pieces and costing the club more and more every year just to keep it at league standard. Where are the assets that equate to £4m? Is that the recently flooded ground? or our star studded squad perhaps?

NORTHERNSOUL wrote: NS much as I like your fan ownership idea... and I would support it at say £25 per month (largely because i'm an idiot when it comes to this club) .... the floods have damaged the value of the ground.... it was classed as protected floodplain prior to the floods, which would mean that you may have potential buyers to build houses etc. After the defences failed there would be very little confidence from potential buyers and they would all use it as a valid reason to force the price of the land down if they were still interested. Given the likelihood that the ground maintenance costs will soar year after year unless we have a major rebuilding project, which we couldn't possibly fund as fans, the ground would very quickly become a massive drain on funds rather than a key asset.

I hope your idea gets off the ground, I really do, but the practicalities make me highly dubious that it would succeed. I love the ideology behind it and also believe that the club should be at the heart of the community... BUT some of the logic and rationale being used to justify how it would be a massive success are a bit deluded.

Northernsoul. Can you please clear up one thing for me? This "membership" fee, is that instead of the cost of a season ticket or on top of the cost of a season ticket? Feel free to call me a thick chunt if you like.

Northumbrian wrote:
Leaving the fan ownership aspect to one side

The 4m value of the business isnt really affected by the floods or even by a possible reduction in the value of the land as a result of them. Things that would affect it would be if say we were no longer able to get insured for a flood risk, if the floods became a regular occurance or if the council told us the flood risk made it unsafe for football to be played at the ground.

I take what youre saying about the facilities decaying and the cost of maintaining them increasing and that is reflected in the value decreasing each year. Other factors affecting it which have seen it decrease from about 6m 3 years ago were our relegation to league 3 , reduced turnover and the increasing liabilities.

The playing side doesnt really come into it so long as the cost of providing it keeps within certain percentages which under the financial protocols they must.

Bruntonpasty wrote:
No i wouldnt do that

So just to explain as quickly and simply as i can

You buy your membership of the sporting club [ £300 paid by dd over 12 months £25 a month ] Which the sporting club would then "invest" in the football club

This then entitles you to various discounts on everything you buy at the club from your season ticket down to a twix throuout the season[ at the club the discount would be circa 20% ] and from various other outlets from housebuilders down to MacDonalds which would mean that over the year you would re coup your club membership outlay of £300 with the money you save on the purchases that you make.

You would then purchase your season ticket or pay on the day as you choose recieving the discount that youre due at the point of purchase using your smart sporting club membership card.

Meaning that you would pay no more than under the current arrangements and quite possibly save yourself more than the £300 club membership fee on your purchases over the year.

Dancingbear wrote:
No.Jenkins payment would come out of the purchase price, see my original post

bluestblue wrote:
For a good idea of its value look at how much Jenkins, Nixon and Pattinson paid for it.
The state of the ground and the club has deteriorated a lot since then.

Swansea was sold a few years ago for £! to a bloke called Petty. He lost a fortune and had to make a forced sale for £20,000 to the Swansea Trust.

bluestblue wrote:

So your valuing the club at £200k plus Jenkins debt?. Nixon and Pattisons shares would be worth about £30 to £40k each, do you think theyd sell them for that?.

Personally if i was buying the club and the debt id be offering £1 per share and thats being generous.

Flatcap wrote:
But we all know why the four of them were given the club for a pound each dont we

Because he paid less than that to acquire it and to basically stop the guy who he robbed it from getting it back and getting his hands on the books to expose what had gone on.before and During his tenure.

And as for Swansea anyone whos forced to sell a football club for 20k shouldnt of been allowed anywhere hear it in the first place.

Nixon isn't going to accept that, he probably gets more than that per year from his FA roles.

Have I missed something? Have they put the club up for sale?

Flatcap wrote:
I posted a link on here last night to the documentary about all that. Decent watch...

2s 6d

I would offer a £1 and negotiate the debts to 40p in the £1 with a contingency to go to 50p tops. Take it or leave it.