Fans Buyout Feasibility

[Hitcat]

Can't wait for the fans to take charge and install big Mick on a lifetime contract....

[Hookowl]

2 minutes ago, LondonOwl313 said:

We were but I doubt we are right now given how cheap this squad is comparatively. And come the end of this season when the last of the big earners leave or sign reduced terms it will come down again 

 

You forgot to add "come the end of the season when we have earned no revenue".

[room0035]

On 05/01/2021 at 14:51, Mcguigan said:

 

They actually make significant operating losses every year recovered by player sales and, last year by sale of land.

 

They have made close to £100m in player sales in the last 6 years, that figures up to the July 19 accounts does not included the Watkins sale and probably the sale for the lad who went to West Ham on loan then a transfer at the end of this season. 

 

It allows them to remain financially viable and the fans do no get ripped off with ticket prices and merchandise (Chairman report in last figures), they have 6,000 season tickets and average attendances of 11,000 yet out perform us on everything.

 

Brentford might not be a model you like, but equally it is a model that works, they are on a strong financial footing and year on year improvement has led them to the brink of promotion without breaking EFL rules. But if they don't do it this year, they have not risked everything they will challenge again next year.

 

They accepted a footballing brain offer for Watkins of in excess of £25m, then reinvested in the team and brought in Toney for £5m who is probably worth double that know. DC in running a football club both off and on the pitch could learn an awful lot from the guys and ladies at Brentford.

[Guest Mcguigan]

1 hour ago, room0035 said:

They have made close to £100m in player sales in the last 6 years, that figures up to the July 19 accounts does not included the Watkins sale and probably the sale for the lad who went to West Ham on loan then a transfer at the end of this season. 

 

It allows them to remain financially viable and the fans do no get ripped off with ticket prices and merchandise (Chairman report in last figures), they have 6,000 season tickets and average attendances of 11,000 yet out perform us on everything.

 

Brentford might not be a model you like, but equally it is a model that works, they are on a strong financial footing and year on year improvement has led them to the brink of promotion without breaking EFL rules. But if they don't do it this year, they have not risked everything they will challenge again next year.

 

They accepted a footballing brain offer for Watkins of in excess of £25m, then reinvested in the team and brought in Toney for £5m who is probably worth double that know. DC in running a football club both off and on the pitch could learn an awful lot from the guys and ladies at Brentford.

Easy tiger, I’ve not said the Brentford model was one I didn’t like, I was only replying to a post that made it look like Brentford were a multi million pound profit making machine.

 

When in fact, from the last 7 years of accounts I’ve viewed, they posted a profit just once in season 18/19.

 

I'm fully aware about the Watkins sale but as the 19/20 accounts aren’t available yet, I can’t comment on them.

[room0035]

2 hours ago, Mcguigan said:

Easy tiger, I’ve not said the Brentford model was one I didn’t like, I was only replying to a post that made it look like Brentford were a multi million pound profit making machine.

 

When in fact, from the last 7 years of accounts I’ve viewed, they posted a profit just once in season 18/19.

 

I'm fully aware about the Watkins sale but as the 19/20 accounts aren’t available yet, I can’t comment on them.

They may not make profits but they have a sustainable model that works.

 

We on the other hand the accounts from 2018/19 must be bad because there could be the stadium sale in there so why the delay.

[Guest Mcguigan]

8 minutes ago, room0035 said:

They may not make profits but they have a sustainable model that works.

 

We on the other hand the accounts from 2018/19 must be bad because there could be the stadium sale in there so why the delay.

If they're not making profit regularly, how can their model be sustainable? 

 

6 from the last 7 set accounts have shown million pound losses.

 

Not sustainable at all if your player sales dry up. 

[1867etc]

Assume for a minute a rich investor. Wants to buy the ground, would the sum count against ffp given the sale helped with ffp.

[Guest Hornsby]

12 hours ago, Mcguigan said:

Easy tiger, I’ve not said the Brentford model was one I didn’t like, I was only replying to a post that made it look like Brentford were a multi million pound profit making machine.

 

When in fact, from the last 7 years of accounts I’ve viewed, they posted a profit just once in season 18/19.

 

I'm fully aware about the Watkins sale but as the 19/20 accounts aren’t available yet, I can’t comment on them.

While spending £71 million on a new stadium.

 

Others in Championship also make profits.

 

But we are nearer to Portsmouth model where their fans took control of club and saved it from extinction.

 

Loads of clubs now offering fans and others shares in order to fund operations, like Lincoln yesterday.

[briggowl]

On 31/12/2020 at 16:46, 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?

 

Chesterfield have done it, on a much smaller scale, granted but they've done it using the supporters trust with a loan from Chesterfield BC of 2.5m and the same from DerbyshireCC. Of course this is secured against the ground and 5 in their business plan is to pay this off, while the board are committed to living within their financial means. 

 

For Wednesday I imagine we'd have to borrow as well as issue shares, not an easy task at all, and rather than talk of the prem, I think we'd be looking at a long term sustainable business plan that would give us an opportunity at the premier league in 7-10 years. The sticking point would be finding a board of directors who could actually run a football club. This for me is where SWFC have failed for most of their history and could/should have been a top elite English club but never have sustained this for more than a few seasons.

[Guest Mcguigan]

1 hour ago, Hornsby said:

While spending £71 million on a new stadium.

 

Others in Championship also make profits.

 

But we are nearer to Portsmouth model where their fans took control of club and saved it from extinction.

 

Loads of clubs now offering fans and others shares in order to fund operations, like Lincoln yesterday.

The stadium outlay has nothing with to do with their footballing operations. Totally separate, unless the players themselves were being paid to build it through lockdown.

[Guest Hornsby]

51 minutes ago, Mcguigan said:

The stadium outlay has nothing with to do with their footballing operations. Totally separate, unless the players themselves were being paid to build it through lockdown.

True, but in same company accounts.

 

Bazza doesn't sell our shirts but still in clubs accounts.

[83owl]

17 hours ago, LondonOwl313 said:

We were but I doubt we are right now given how cheap this squad is comparatively. And come the end of this season when the last of the big earners leave or sign reduced terms it will come down again 

Just because its comparatively cheap doesnt mean its cheap. The wage bill is still higher than Brentfords and we have no saleable assets whatsoever.

[Guest Mcguigan]

45 minutes ago, Hornsby said:

True, but in same company accounts.

 

Bazza doesn't sell our shirts but still in clubs accounts.

Seriously, I have no idea what you're about.

 

The cost of building the new stadium isn't mentioned in their accounts,  only the profit they get selling their current ground.

 

The executive summary in their accounts states that the only way the club can remain financially sustainable and keep ticket prices affordable is by selling their best players if there is interest in them.

[soldierboyblue]

2 hours ago, Mcguigan said:

Seriously, I have no idea what you're about.

 

The cost of building the new stadium isn't mentioned in their accounts,  only the profit they get selling their current ground.

 

The executive summary in their accounts states that the only way the club can remain financially sustainable and keep ticket prices affordable is by selling their best players if there is interest in them.

I've given up with him pal it's pointless trying to have a reasoned debate

[Guest LondonOwl313]

4 hours ago, 83owl said:

Just because its comparatively cheap doesnt mean its cheap. The wage bill is still higher than Brentfords and we have no saleable assets whatsoever.

Have a hard time believing the 20/21 season squad is on more than Brentford’s squad. I’m assuming you’re looking at last set of accounts which is two seasons ago when we had way more high earners. There’s only Westwood, Lees, Reach, Bannan and Rhodes left on big money and they’re all out of contract this summer. So the 2021/22 wage bill will be back to a low level.. bottom half 

[83owl]

10 minutes ago, LondonOwl313 said:

Have a hard time believing the 20/21 season squad is on more than Brentford’s squad. I’m assuming you’re looking at last set of accounts which is two seasons ago when we had way more high earners. There’s only Westwood, Lees, Reach, Bannan and Rhodes left on big money and they’re all out of contract this summer. So the 2021/22 wage bill will be back to a low level.. bottom half 

Our current wage bill is higher than Brentfords 

[Guest LondonOwl313]

5 hours ago, briggowl said:

 

Chesterfield have done it, on a much smaller scale, granted but they've done it using the supporters trust with a loan from Chesterfield BC of 2.5m and the same from DerbyshireCC. Of course this is secured against the ground and 5 in their business plan is to pay this off, while the board are committed to living within their financial means. 

 

For Wednesday I imagine we'd have to borrow as well as issue shares, not an easy task at all, and rather than talk of the prem, I think we'd be looking at a long term sustainable business plan that would give us an opportunity at the premier league in 7-10 years. The sticking point would be finding a board of directors who could actually run a football club. This for me is where SWFC have failed for most of their history and could/should have been a top elite English club but never have sustained this for more than a few seasons.

When I wrote the OP I knew it wasn’t particularly realistic, it was more to see what people’s thoughts were. There’s been some good posts amongst the sarcastic ones.

 

Its a big ask to raise that sort of money. And it’s a loss making venture without promotion so that needed to be a goal. It’s clear from the replies that we’d struggle to get people to stump up £250 in the knowledge that half of it would go down the drain.. and all of the people who are loyally saying they’d put in 10k or more are assuming they could hold in perpetuity and they wouldn’t lose half their money. That’s not realistic because we’d run out of cash after 3 years and have no way of raising more. If the initial investment phase is a hard sell a rights issue would be even harder.

 

I’m not sure the Brentford model is sustainable either. For a start, imagine if every club copied them.. we can’t all cash in players to the PL clubs every year. Plus it would push up the cost of the talent pool. They’ve also been very lucky with signings.. they will hit a run of less successful ones sooner or later which will burn through resources and they’re back at square 1.

 

Bottom line is championship football in general is unsustainable because of the gap in finances with the league above. While that’s on offer there’s always going to be some owners who want to go for it. And that trickles down. To be sustainable our wage bill would probably need to be about £12m a year, or half of revenue. That’s about £500k a player, or £10k a week. Tough to achieve when all of our best players have been on £20-35k over the last few years 

[Guest LondonOwl313]

2 minutes ago, 83owl said:

Our current wage bill is higher than Brentfords 

What is the current wage bill of Sheffield Wednesday and Brentford then? The total number I mean, given you know for sure it’s higher.

 

For those of us who are speculating from the outside looking in it doesn’t look that way. We have 5 players who will be on more than 15k.. the rest of the squad is likely on significantly less than that 

[Guest Mcguigan]

8 minutes ago, LondonOwl313 said:

What is the current wage bill of Sheffield Wednesday and Brentford then? The total number I mean, given you know for sure it’s higher.

 

For those of us who are speculating from the outside looking in it doesn’t look that way. We have 5 players who will be on more than 15k.. the rest of the squad is likely on significantly less than that 

Brentford’s 18/19 wage bill was £18.9m, the 3rd lowest in the league for that accounting period. I don’t think that will have changed much.

 

Ours will need to have dramatically reduced from the £42m on the last of accounts, to be less than Brentford’s.

[Guest LondonOwl313]

1 minute ago, Mcguigan said:

Brentford’s 18/19 wage bill was £18.9m, the 3rd lowest in the league for that accounting period. I don’t think that will have changed much.

 

Ours will need to have dramatically reduced from the £42m on the last of accounts, to be less than Brentford’s.

A lot has changed since then though as that’s two seasons ago, which was my point. In that time Brentford have become one of the best sides in the league and reached the play off final. You’d imagine a lot of their players will have been given new contracts on significantly more money on the back of it as there was PL interest in a lot of their players, not just Watkins and Benrahma. Much like what happened to us in 2016.

 

So I think that Brentford wage bill is likely to be quite a bit higher than the 2018/19 figure. In the same timeframe we’ve lost Hooper, Boyd, Matias, Pudil, Abdi, Jones, Hector, Aarons, Lazaar, Onomah, Fletcher, Forestieri, Hutchinson, Fox, Lee, Nuhui. Off the top of my head, probably a few more too. And the players we’ve brought in will be on max £15k a week and likely a lot less. I’d think our wage bill will have dropped loads from £42m