Fans Buyout Feasibility

[Guest]

After hearing Mr Chansiri say that the fans should buy him out if they're not happy with how he's running the club, I was trying to come up with some numbers to see whether this is even a possibility.

 

Firstly, we'd have to make him an offer for the club. Being realistic, its worth about what he paid for it (i.e. £35m). And we'd also need him to give us the stadium back included within that. Getting him to agree to selling for that and writing off his losses is probably the biggest sticking point in the whole plan.

 

But say if he did agree to that, how much more would we need. Obviously we'd need more than that because the club loses money so with no wealthy benefactor we'd need capital to absorb the losses. Unfortunately thats just the business model outside the premier league with the pot of gold on promotion the incentive for anyone to invest.

 

So lets assume that we'd need to fund the maximum allowable loss under FFP of £13m a season, and do this for 3 years to 1. give us the opportunity to build towards promotion and 2. because FFP is a rolling 3 year thing anyway.

 

So already we're talking a total of £35m + £13m x 3 = £74m to do this (lets call it £75m to make the maths easier).

 

The easiest way would be to divide that in to equal shares, but being realistic if you start asking most fans for £1,000 or even £500 they're probably going to say no because personal finances at the moment just dictate that its too much money. So lets say 1 share would be £250, which I think you could convince some casuals to part with as an investment.

 

So £75m divided by £250 is 300,000 shares. The plan would be that we either achieve promotion and sell the club for a profit in excess of the £75m at the end of the 3 years, money which would be returned to the investors... or we fail to go up and we sell the club on to someone else to have a go for £35m, and investors lose about half of their investment in the process (£125 loss). Either way, the long term strategy wouldn't be to be fan owned because the ongoing losses make it unfeasible.

 

Obviously the prospect of finding 300,000 individuals to do this is a non starter. But would it be possible to get 50,000 or even 100,000 individuals to do it, with wealthier fans buying more than one share to get us to the required 300,000. I think thats much more realistic. For a start I think most season ticket holders could be convinced... and then many more people would if theres a carrot available of a bigger pay off if promotion is achieved with their personal losses capped at £125.

 

I don't think this is as far fetched as you think, would just take some organising and probably some wealthy fans committing 5 and 6 figure sums to get the numbers up. Thoughts?

[Guest Grandad]

Im sorry - I know you went to a great deal of effort to post that but I didnt read it.

 

The answer to the opening question is - its not feasible at all.

[Errol Flashman]

 

Do I get a seat with me name on a plaque? 

[bladeshater]

2 minutes ago, LondonOwl313 said:

After hearing Mr Chansiri say that the fans should buy him out if they're not happy with how he's running the club, I was trying to come up with some numbers to see whether this is even a possibility.

 

Firstly, we'd have to make him an offer for the club. Being realistic, its worth about what he paid for it (i.e. £35m). And we'd also need him to give us the stadium back included within that. Getting him to agree to selling for that and writing off his losses is probably the biggest sticking point in the whole plan.

 

But say if he did agree to that, how much more would we need. Obviously we'd need more than that because the club loses money so with no wealthy benefactor we'd need capital to absorb the losses. Unfortunately thats just the business model outside the premier league with the pot of gold on promotion the incentive for anyone to invest.

 

So lets assume that we'd need to fund the maximum allowable loss under FFP of £13m a season, and do this for 3 years to 1. give us the opportunity to build towards promotion and 2. because FFP is a rolling 3 year thing anyway.

 

So already we're talking a total of £35m + £13m x 3 = £74m to do this (lets call it £75m to make the maths easier).

 

The easiest way would be to divide that in to equal shares, but being realistic if you start asking most fans for £1,000 or even £500 they're probably going to say no because personal finances at the moment just dictate that its too much money. So lets say 1 share would be £250, which I think you could convince some casuals to part with as an investment.

 

So £75m divided by £250 is 300,000 shares. The plan would be that we either achieve promotion and sell the club for a profit in excess of the £75m at the end of the 3 years, money which would be returned to the investors... or we fail to go up and we sell the club on to someone else to have a go for £35m, and investors lose about half of their investment in the process (£125 loss). Either way, the long term strategy wouldn't be to be fan owned because the ongoing losses make it unfeasible.

 

Obviously the prospect of finding 300,000 individuals to do this is a non starter. But would it be possible to get 50,000 or even 100,000 individuals to do it, with wealthier fans buying more than one share to get us to the required 300,000. I think thats much more realistic. For a start I think most season ticket holders could be convinced... and then many more people would if theres a carrot available of a bigger pay off if promotion is achieved with their personal losses capped at £125.

 

I don't think this is as far fetched as you think, would just take some organising and probably some wealthy fans committing 5 and 6 figure sums to get the numbers up. Thoughts?

You would need at 100 million after buying the club

[Quadzilla]

There is not a chance this could happen 

[Mystic Neg]

It's all well and good buying him out but where is the money to run the club going to come from?

 

[Manwë]

Thoughts.

 

Anything is possible if you put your mind to it.  We are 25000 committed fans with probably more than 100000 less committed fans.

 

I've said before that I could put in £10k to purchase shares, but I'm not going to do it to later hand over the club to the next smooth talking suit that comes along, so that'd be a precondition for me personally.

 

Anyway, £75m is entirely Doable when you have tens of thousands of people joining together.

[Minton]

5 minutes ago, LondonOwl313 said:

After hearing Mr Chansiri say that the fans should buy him out if they're not happy with how he's running the club, I was trying to come up with some numbers to see whether this is even a possibility.

 

Firstly, we'd have to make him an offer for the club. Being realistic, its worth about what he paid for it (i.e. £35m). And we'd also need him to give us the stadium back included within that. Getting him to agree to selling for that and writing off his losses is probably the biggest sticking point in the whole plan.

 

But say if he did agree to that, how much more would we need. Obviously we'd need more than that because the club loses money so with no wealthy benefactor we'd need capital to absorb the losses. Unfortunately thats just the business model outside the premier league with the pot of gold on promotion the incentive for anyone to invest.

 

So lets assume that we'd need to fund the maximum allowable loss under FFP of £13m a season, and do this for 3 years to 1. give us the opportunity to build towards promotion and 2. because FFP is a rolling 3 year thing anyway.

 

So already we're talking a total of £35m + £13m x 3 = £74m to do this (lets call it £75m to make the maths easier).

 

The easiest way would be to divide that in to equal shares, but being realistic if you start asking most fans for £1,000 or even £500 they're probably going to say no because personal finances at the moment just dictate that its too much money. So lets say 1 share would be £250, which I think you could convince some casuals to part with as an investment.

 

So £75m divided by £250 is 300,000 shares. The plan would be that we either achieve promotion and sell the club for a profit in excess of the £75m at the end of the 3 years, money which would be returned to the investors... or we fail to go up and we sell the club on to someone else to have a go for £35m, and investors lose about half of their investment in the process (£125 loss). Either way, the long term strategy wouldn't be to be fan owned because the ongoing losses make it unfeasible.

 

Obviously the prospect of finding 300,000 individuals to do this is a non starter. But would it be possible to get 50,000 or even 100,000 individuals to do it, with wealthier fans buying more than one share to get us to the required 300,000. I think thats much more realistic. For a start I think most season ticket holders could be convinced... and then many more people would if theres a carrot available of a bigger pay off if promotion is achieved with their personal losses capped at £125.

 

I don't think this is as far fetched as you think, would just take some organising and probably some wealthy fans committing 5 and 6 figure sums to get the numbers up. Thoughts?

 

Even if that was feasible (I don't believe it is) how do you finance the club going forward? Who provides the funds to finance things? How do you keep the club liquid? 

[@owlstalk]

 

 

You’d have more takers if it was Club 1867

 

That’s how bad it is as an idea

[Guest LondonOwl313]

3 minutes ago, Grandad said:

Im sorry - I know you went to a great deal of effort to post that but I didnt read it.

 

The answer to the opening question is - its not feasible at all.

I know its a long shot.. was trying to see what numbers would make it work, and its still difficult even being optimistic about take up

 

3 minutes ago, bladeshater said:

You would need at 100 million after buying the club

Was working on the assumption we'd just lose the maximum allowed under FFP and cut the wasteful spending we've had under DC. With all the big earners out of contract this summer it would be a good time for someone to restructure the finances

[Owl999]

Just now, Mystic Neg said:

It's all well and good buying him out but where is the money to run the club going to come from?

 

Precisely, the club repeatedly runs at a loss do we just ask share holders to chip in when we want to make a signing or spend money on the stadium ?

[FreshOwl]

5 minutes ago, Grandad said:

Im sorry - I know you went to a great deal of effort to post that but I didnt read it.

 

The answer to the opening question is - its not feasible at all.

So you should probably stop moaning on here all day if you can’t even be bothered to read the one thing which benefits the point of view you’re coming from 

 

unbelievable 

[S72 Owl]

You'd struggle to get even 1,000 never mind the 300,000 fans you’d probably need. 
 

Then I don’t think you’ve calculated how much money you’d need to build the promotion squad your talking about.

 

Nice idea though. 

[Guest LondonOwl313]

2 minutes ago, Mystic Neg said:

It's all well and good buying him out but where is the money to run the club going to come from?

 

 

2 minutes ago, Minton said:

 

Even if that was feasible (I don't believe it is) how do you finance the club going forward? Who provides the funds to finance things? How do you keep the club liquid? 

 

The numbers I set out allow for a loss of £39m over 3 years over and above regular revenue. We'd have to sell after 3 years either way as then we'd run out of cash

[Prince]

Fans can't fund the losses or the day to day running costs for a club our size. that's why owners are usually multi-Millionaire types.

 

Works for Non league and the like but not any higher. 

[ChinaOwl]

You've more chance of crossing the Sahara Desert in a rubber dinghy.

 

[daveyboy66]

Burnley have just been bought for £200M...yes that's Burnley. No chance for us unless we make it to the Prem. That's why I want DC to succeed because if he succeeds then WE succeed. Then we might get finance from a new owner who wants to take us higher. 

[@owlstalk]

3 minutes ago, FreshOwl said:

So you should probably stop moaning on here all day if you can’t even be bothered to read the one thing which benefits the point of view you’re coming from  

Aye sooooooo many benefits to taking on a million pound a month loss losing business

[Animis]

1 minute ago, Prince said:

Fans can't fund the losses or the day to day running costs for a club our size. that's why owners are usually multi-Millionaire types.

 

Works for Non league and the like but not any higher. 

 

Absolutely - I'm not aware of a fan-ownership model in the top two divisions

[@owlstalk]

Just now, daveyboy66 said:

Burnley have just been bought for £200M...yes that's Burnley. No chance for us unless we make it to the Prem. That's why I want DC to succeed because if he succeeds then WE succeed. Then we might get finance from a new owner who wants to take us higher. 

 

 

Big time

We all want Chansiri to succeed

But he's blaming everything  and everyone  else, won't change his advisors and won't change his strategy or philosophy