The case to put to a multi-millionaire buyer...help needed

[SaintBobby]

Was wondering if I could call on the combined intellectual might of readers of this forum to help me with a few questions.

 

1. Is there any evidence - any at all - to suggest that Richard Branson has, at any stage, ever had the remotest interest in buying Southampton? Or that he is actually a supporter of Saints - or even vaguely sympathetic to us? Or even has a passing interest in football? If so, what is this evidence?

 

2. What - in less than a few hundred words - is the most compelling case for a multi-millionaire buying Southampton FC (putting aside reasons of personal vanity or a lifelong support of Saints)? Specifically: why are SFC's debts nothing like as bad as they first appear? Why are we a better prospect than other CCC/League One clubs? How much better is our "infrastructure" than other CCC/L1 clubs? How much bigger - and more expandable - is our fanbase compared to other CCC/L1 clubs?

I know all the generic arguments here - but am v weak on specifics. (e.g. how good is the training facility at Staplewood and compared to what? how high is our average attendance compared to other clubs - including weak supported clubs in the Premiership? How massive is our season ticket base compared to other clubs? etc etc etc)

 

Any/all help most appreciated - if you don't want to post here, please PM me.

[Matthew Le God]

over 200,000 on ticket database apparently

[SaintBobby]

over 200,000 on ticket database apparently

 

I can imagine there are 200,00 people on the database - this is just a subset of anyone who's been a member or season ticket-holder or purchased home-end tickets since 2001, right?

[buctootim]

Was wondering if I could call on the combined intellectual might of readers of this forum to help me with a few questions.

 

1. Is there any evidence - any at all - to suggest that Richard Branson has, at any stage, ever had the remotest interest in buying Southampton? Or that he is actually a supporter of Saints - or even vaguely sympathetic to us? Or even has a passing interest in football? If so, what is this evidence?

 

2. What - in less than a few hundred words - is the most compelling case for a multi-millionaire buying Southampton FC (putting aside reasons of personal vanity or a lifelong support of Saints)? Specifically: why are SFC's debts nothing like as bad as they first appear? Why are we a better prospect than other CCC/League One clubs? How much better is our "infrastructure" than other CCC/L1 clubs? How much bigger - and more expandable - is our fanbase compared to other CCC/L1 clubs?

I know all the generic arguments here - but am v weak on specifics. (e.g. how good is the training facility at Staplewood and compared to what? how high is our average attendance compared to other clubs - including weak supported clubs in the Premiership? How massive is our season ticket base compared to other clubs? etc etc etc)

 

Any/all help most appreciated - if you don't want to post here, please PM me.

 

Why Richard Branson? What interest has he ever shown in any football? Just because he is famous and rich doesnt make him a candidate to buy us out. I'm sure there are many people out there who might be interested at the right price, but I doubt Branson is one of them.

[trousers]

I can imagine there are 200,00 people on the database - this is just a subset of anyone who's been a member or season ticket-holder or purchased home-end tickets since 2001, right?

 

I know of one person who is 'on the database' but isn't a Saints supporter, per se.

[derry]

No, No, and No.

 

The debt is put variously at £6m with a mortgage of £24m to service.

 

The bank state is believed to be £4m overdraft limit standing at £4.4m.

 

These are not horrendous figures in themselves.

 

NU I believe settled with Ipswich for £7m to write off a £32m mortgage.

I understand something similar could be on the table for a purchaser of the club.

 

Staplewood and Jacksons Farm have no development value at present, and the facilities at Staplewood are good.

 

I suspect the whole thing could be bought for between £12 - £15m.

[Big Bad Bob]

The biggest thing is to get past this perception that SFC is C£30M in debt, which it factually is!

 

However C£24M of this is a mortgage on the stadium that can be restructured at favourable rates (or as Derry say negotiated down to a smaller amount)

 

The other C£4-6M can be paid off by the MultiMillionaire Philanthropist (MMP)!!

 

So as long as the MMP can get a big enough turnover or can earn enough cash year on year to pay off the mortgage then all they have to fork out, initially, is C£4-6M to pay off the overdraft and other debts. Then promise some cash to improving the squad etc. etc. etc.

 

Sold to the MMP at the bar

Edited 8 April, 2009 by Big Bad Bob
Edited after seeing Derry's response

[waggy]

Why Richard Branson? What interest has he ever shown in any football? Just because he is famous and rich doesnt make him a candidate to buy us out. I'm sure there are many people out there who might be interested at the right price, but I doubt Branson is one of them.

 

The Branson rumour first saw the light of day when the club was originally put up for sale years ago just before Lowe decended on us. Was never verified, I think it was just wishful thinking by an individual and from there it grew arms and legs and eventualy got its own postcode?

[SaintBobby]

The biggest thing is to get past this perception that SFC is C£30M in debt, which it factually is!

 

However C£24M of this is a mortgage on the stadium that can be restructured at favourable rates (or as Derry say negotiated down to a smaller amount)

 

The other C£4-6M can be paid off by the MultiMillionaire Philanthropist (MMP)!!

 

So as long as the MMP can get a big enough turnover or can earn enough cash year on year to pay off the mortgage then all they have to fork out, initially, is C£4-6M to pay off the overdraft and other debts. Then promise some cash to improving the squad etc. etc. etc.

 

Sold to the MMP at the bar

 

It does seem to me that a huge amount hinges on renegotiating the mortgage (it's beyond me why the former board of SLH couldn't do this).

 

Given the value of SMS to anyone other than Southampton Football Club is pretty damned minimal, it strikes me that the barganining position with Norwich Union is strong.

 

My very, very tentative calculations would be this:

 

1. Renegotiate mortgage down to £5-10m, cost of servicing this and eventually repaying it is c. £500,000 per annum

2. Pay-off the debt to Barclays at the rate of £500,000 per annum over a c.20-year period.

3. Assume average gate receipts of about £200,000 a game, about 25 times a year = £5m.

4. Assume all other income (TV revenue, shirt sales, merchandising, programme sales, sponsorship) of £1m per annum.

5. Assume profit on player sales of £1m per annum.

6. Assume SMS running costs of £2m per annum (ticket office staff, electricity, stewarding etc etc).

7. That leaves in the region of £4m to spend on player/coaches wages. This would probably mean our 4 or 5 "star" players being paid around £7,000 a week (up to £1.5m on "star" player salaries), 12 or 14 squad players on an average of £3,000 a week (c. £2m on the bulk of the first team squad) and the remaining £500,000 being split between coaching staff and academy players.

 

All of this seems achievable if the mortgage can be negotiated down - but WITHOUT paying off the remaining mortgage or clearing the debt to Barclays (whcih may have to be refinanced).

 

So, what am I missing?

[Rebel]

I don't understand why Lowe and Wilde didn't renegotiate the mortgae with Norwich Union - to reduce the payments to £500K p.a. or at least something more managable

 

after all NU had everything to lose by not coming to an agreement with us

 

similarly why didn't we sell players to raise some cash in January to stay within opur overdraft

 

or release players on frees to other clubs to reduce the wage bill

 

or like directors at other clubs why didn't they loan the club the money to fill the gap between the overdraft and running costs to the end of the season

 

don't tell me we couldn't sell Dyer, Surman, Schneiderlin, Lallana and McGoldrick in the Summer - if not Rasiak, Saga, Davies, and Skacel as well to raise some cash

[Big Bad Bob]

I don't understand why Lowe and Wilde didn't renegotiate the mortgae with Norwich Union - to reduce the payments to £500K p.a. or at least something more managable

 

after all NU had everything to lose by not coming to an agreement with us

 

Maybe the were as shocked at Barclays pulling the plug as we are!!

 

similarly why didn't we sell players to raise some cash in January to stay within opur overdraft

 

or release players on frees to other clubs to reduce the wage bill

 

To sell or loan players other clubs have to be interested in them and willing to pay a decent price for them. Also the player pretty much has to want to move too.

 

I remember rumours of some players being wanted but I have not heard of any figures.

 

No-one appeared to want Saga or Skacel so we're stuck with their wages.

 

Lallana and Surman were probably the only realistic targets and you can bet your bottom dollar that any offers for them were ****takes!!

 

or like directors at other clubs why didn't they loan the club the money to fill the gap between the overdraft and running costs to the end of the season

 

They don't have nor can raise any readies ??

 

don't tell me we couldn't sell Dyer, Surman, Schneiderlin, Lallana and McGoldrick in the Summer - if not Rasiak, Saga, Davies, and Skacel as well to raise some cash

 

Then we wouldn't have a team at all and relegation would be a certainty.

[SaintBobby]

Maybe the were as shocked at Barclays pulling the plug as we are!!

 

 

 

To sell or loan players other clubs have to be interested in them and willing to pay a decent price for them. Also the player pretty much has to want to move too.

 

I remember rumours of some players being wanted but I have not heard of any figures.

 

No-one appeared to want Saga or Skacel so we're stuck with their wages.

 

Lallana and Surman were probably the only realistic targets and you can bet your bottom dollar that any offers for them were ****takes!!

 

 

 

They don't have nor can raise any readies ??

 

 

 

Then we wouldn't have a team at all and relegation would be a certainty.

 

I think we turned down £500,000 for Dyer didn't we?

[Patrick Bateman]

Was wondering if I could call on the combined intellectual might of readers of this forum to help me with a few questions.

 

1. Is there any evidence - any at all - to suggest that Richard Branson has, at any stage, ever had the remotest interest in buying Southampton? Or that he is actually a supporter of Saints - or even vaguely sympathetic to us? Or even has a passing interest in football? If so, what is this evidence?

 

 

No, no, no, no and none. Won't be changing either.

[Big Bad Bob]

I think we turned down £500,000 for Dyer didn't we?

 

But hasn't he been on loan at Swansea since before Christmas? Unless of course it was Swansea that offered the £.5M

[SaintBobby]

But hasn't he been on loan at Swansea since before Christmas? Unless of course it was Swansea that offered the £.5M

 

It was Swansea - in the Jan tarnsfer window.

[benjii]

One point that is important to note is that Aviva actually seem to have been supportive and have little interest in accelerating the Loan Notes.

 

I see no reason why, if a potential investor can show sufficient proof of funds, they would not allow the Loan Note to exist on its current terms.

 

It is designed to be a long-term debt. It only requires something like £2m per year in repayments. The notion that a new investor MUST stump up £20m or some other lesser but large capital sum to Aviva is probably not true.

 

Similarly, the overdraft with Barclays is unsecured I believe? Again, any new investor will be in a pretty strong position with respect to cuting a deal with them.

[dubai_phil]

It does seem to me that a huge amount hinges on renegotiating the mortgage (it's beyond me why the former board of SLH couldn't do this).

 

Given the value of SMS to anyone other than Southampton Football Club is pretty damned minimal, it strikes me that the barganining position with Norwich Union is strong.

 

My very, very tentative calculations would be this:

 

1. Renegotiate mortgage down to £5-10m, cost of servicing this and eventually repaying it is c. £500,000 per annum

2. Pay-off the debt to Barclays at the rate of £500,000 per annum over a c.20-year period.

3. Assume average gate receipts of about £200,000 a game, about 25 times a year = £5m.

4. Assume all other income (TV revenue, shirt sales, merchandising, programme sales, sponsorship) of £1m per annum.

5. Assume profit on player sales of £1m per annum.

6. Assume SMS running costs of £2m per annum (ticket office staff, electricity, stewarding etc etc).

7. That leaves in the region of £4m to spend on player/coaches wages. This would probably mean our 4 or 5 "star" players being paid around £7,000 a week (up to £1.5m on "star" player salaries), 12 or 14 squad players on an average of £3,000 a week (c. £2m on the bulk of the first team squad) and the remaining £500,000 being split between coaching staff and academy players.

 

All of this seems achievable if the mortgage can be negotiated down - but WITHOUT paying off the remaining mortgage or clearing the debt to Barclays (whcih may have to be refinanced).

 

So, what am I missing?

 

A billionaire

 

HTH

 

 

Mind you if you have a pet one on a string he better REALLY hurry up

[SaintBobby]

A billionaire

 

HTH

 

 

Mind you if you have a pet one on a string he better REALLY hurry up

 

But my point was, on my numbers, you wouldn't need a billionaire. Would be nice to have one, but if my numbers are even half-right, Southampton FC can wash its own face.

[david in sweden]

I think we turned down £500,000 for Dyer didn't we?

 

.......and had agreed a fee for Skacel, but he couldn't agree personal terms.

[Window Cleaner]

But hasn't he been on loan at Swansea since before Christmas? Unless of course it was Swansea that offered the £.5M

 

They talked about breaking their club record transfer of 500K for Dyer, however Martinez said they were in no rush. I doubt that 500K was ever really offered, just talked about.The club said we'd had only ridiculously low offers in January.

[trousers]

.......and had agreed a fee for Skacel, but he couldn't agree personal terms.

 

Respect

[Saint Fen]

No, No, and No.

 

The debt is put variously at £6m with a mortgage of £24m to service.

 

The bank state is believed to be £4m overdraft limit standing at £4.4m.

 

These are not horrendous figures in themselves.

 

NU I believe settled with Ipswich for £7m to write off a £32m mortgage.

I understand something similar could be on the table for a purchaser of the club.

 

Staplewood and Jacksons Farm have no development value at present, and the facilities at Staplewood are good.

 

I suspect the whole thing could be bought for between £12 - £15m.

 

I reckon that estimate is about right, at worst they would need £10 Million to cover the debt and for cash flow over the next season, The Mortgage doesn't have to be settled and they can just take that over.