Fans Buyout Feasibility

[adelphi1867]

12 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?

There is more chance of me becoming the next Pope than a fan buy out, with out some Owls fan who has millions to waste.

[gurujuan]

It would be cheaper to get the chairman’s ear by forming a powerful supporters group, that was prepared to work with him That will be difficult, and more so now we cannot attend games

[Guest Grandad]

5 minutes ago, @owlstalk said:

 

 

You’d have more takers if it was Club 1867

 

That’s how bad it is as an idea

 

Can we stop remindng people that only an idiot would buy into Club 1867

[Minton]

3 minutes ago, LondonOwl313 said:

 

 

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

 

So £39m of debt, with no realistic way of servicing the debt. What bank would Green light that? The only real out would be administration and someone paying a fraction of the debt and owning the club wholesale with the aim of either selling it on for eventual profit or asset stripping. What planet are you on?!

Edited December 31, 2020 by Minton

[myHero]

Better for fans to setup AFC Wednesday than to bail out the mess that is SWFC.

 

Have last year's SWFC accounts been submitted to companies House yet?!?

[@owlstalk]

Just now, Grandad said:

 

Can we stop remindng people that only an idiot would buy into Club 1867

 

Can't you get a refu......

oh. 

Never mind

[mogbad]

DC struggles to work within FFP even when charging the highest season ticket & matchday ticket prices. Presumably as the prices are a major gripe within the fanbase you would want to reduce these to a more acceptable level. How would that shortfall in income be bridged to keep us under FFP limits.

[Mystic Neg]

I once dreamt I'd won the Euromillions and succesfully bought the club, it quickly turned into a nightmare and I walked away with a sore bottom.

[bladeshater]

2 minutes ago, @owlstalk said:

 

 

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

 

 

So how do we change things

[myHero]

1 minute ago, gurujuan said:

It would be cheaper to get the chairman’s ear by forming a powerful supporters group, that was prepared to work with him That will be difficult, and more so now we cannot attend games

He's got advisors he listens to first. I don't see any evidence he values the opinion of fans.

[vulva]

Not a prayer. 

[mogbad]

1 minute ago, Mystic Neg said:

I once dreamt I'd won the Euromillions and succesfully bought the club, it quickly turned into a nightmare and I walked away with a sore bottom.

Why, who was in bed with you.

 

[vulva]

The clubs pricing policy has managed to alienate both the pay on the day fan, and the wealthy corporate money. Usually it’s one or the other.
 

We’ve managed to crack both at the same time which is some achievement. 

[Guest LondonOwl313]

1 minute ago, Minton said:

 

So £39m of debt, with no realistic way of servicing the debt. What bank would Green light that? The only real out would be administration and someone paying a fraction of the debt and owning the club wholesale with the aim of either selling it on for eventual profit or asset stripping. What planet are you on?!

I'm not saying this is an idea that can work, posted it as a debating point really. The £39m isn't debt. I'm saying we would raise £75m, pay Chansiri £35m and have £40m of cash with the club which would fund the losses. We'd also comply with FFP so those losses would be £13m a year, and we would therefore have enough liquid assets to last 3 years.

 

If we win promotion everyone gets their money back plus a premium, if we don't we sell to someone else for £35m and everyone takes a 50% hit on their £250 investment.

 

I don't think its the financial aspect that doesn't work, its the getting 300,000 people together thats the non starter part of it

[CircleSeven]

8 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?

I’ve war gamed it myself many times for fun. 
 

It isn’t as far fetched as many think regarding the purchase but it’s the running the club at break even (never mind profit) even that’s the nightmare. 
 

You also can’t show anyone a return on investment because it depends on factors you can’t realistically model never mind control.

 

The only way I could make it work on paper (well the computer) was by running SWFC as a part of a giant property portfolio with enough community activities to qualify as a charity. 
 

Even then you just end up thinking it’s easier to just run the business without the football bit!

 

All in all it would be fantastic if it could be done for the community as much as anything but there’s a reason no one else of any note does it like that. It’s because in the modern era it doesn’t really work!

 

 

[Mystic Neg]

Just now, mogbad said:

Why, who was in bed with you.

 

 

I said walked away, not woke up! Goodness me.

 

The only thing I woke up with was a sore head

[myHero]

11 minutes ago, Manwë said:

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.

If he really wanted to sell the club to fans he'd have setup a share scheme, not come up with these club 1867 and ten year season ticket Ponzi schemes.

[Guest LondonOwl313]

7 minutes ago, mogbad said:

DC struggles to work within FFP even when charging the highest season ticket & matchday ticket prices. Presumably as the prices are a major gripe within the fanbase you would want to reduce these to a more acceptable level. How would that shortfall in income be bridged to keep us under FFP limits.

We'd have to cut the playing budget from what it was at the peak of his spending. I know that makes promotion even more unlikely though

[Ray Von shabba]

Pass

[CircleSeven]

8 minutes ago, Ozymandias Owl said:

Better for fans to setup AFC Wednesday than to bail out the mess that is SWFC.

 

Have last year's SWFC accounts been submitted to companies House yet?!?

Setting up a new club with all of the required infrastructure is as hard if not harder than buying a club. 
The terrifying thing is we are discussing fan buyouts and setting up another club because the current situation is so bloody awful!

What a shambles!