ExiledAjax

Would have thought that if Bentley goes we stick with O'Leary and Bajic as 1 and 2, with Wiles-Richards the number 3.

BBC reporting it as paid.

Who would have thought we'd get that in a thread about Neil ******* Warnock ?

Tell you what though Fevs, and anyone else reading this: the prospective buyout and demonstration threads have been excellent today. Lots of adult discussion, excellent questions from genuinely interested people, and decent answers. I've found today quite an uplifting one on here!

And so you see how everything that happens on the pitch is dependent upon what happens off it. Bad management of the books means no money in the transfer market means we sell our best players and buy worse and so have a weaker squad and so lose games. Get it right off the pitch and you drastically increase your chances of getting it right on the pitch.

average xG deficit/surplus in bold above. If you're going to use shots to show that we are shit then really you need to use xG IMO. In the same time frame you've omitted to mention Watford where we had 9 shots and 2 on target to their 2 shots with none on target. xG of +0.9 in that one. Also Sheff Utd where we dominated shots by 16 - 4 and shots on target were equal at 3 apiece. xG was +0.83 there. It is still not pretty, but we have dominated some games. Watford, Stoke and Sheff Utd really could have returned us 9 points rather than the 1 they actually did.

In PE you'd very rarely see a fully leveraged buyout. Any bank providing a loan would absolutely expect the PE house to put in its own money yes. Would it be a gamble with a swift promotion built in? Probably. What is "swift". The number one way that any buyer would increase the value of the club is by getting into the Premier League. So yes promotion would absolutely be part of the equation. You are right to be wary by the way. I am just trying to explain the way this business works. If you're still wary after that then fair enough and in part I agree with you.

Why would a new owner buy a club using a structure that instantly wrecks it? By all means tell me I am a fool, but I'd trust any buyers, in particular professional US-based PE people, to structure the deal in a way that wouldn't see the club immediately wrecked due to overbearing interest payments.

Were they bought by a PE house or by some very rich blokes. There is a subtle difference in that PE houses will have their investors on them, and be accountable to them to deliver returns. Very rich blokes are accountable only to themselves. Purchase loaded onto the club in terms of it being the club that repays the interest yes. Whether or not that wrecks a Championship club depends on how much that loan is and whether the owner(s) are prepared to pump money into the club in order to service it. I don't think it is inevitable that such a structure wrecks a club.

Leveraged buy-outs get a bad rep in football, but they're pretty common elsewhere. I just bought a house before Christmas. I borrowed from a bank to do so and gave them a mortgage over the property in order to secure that lending. If I fail to pay the mortgage then the bank take ownership of the house. That's a kind of leveraged buyout. In football the buyer borrows from the bank, and in order to secure the money the bank takes a mortgage over either the shares that are being bought or possibly over an asset - ie the stadium. In general PE terms it would most likely be over the shares. The bank lends at an interest rate - normally 5-10% as I understand it in football - and the PE house bets that when it sells it sells for more like 400-500%, and so comfortably makes a profit despite paying the bank the interest. If the PE house fails to pay the loan back then the bank takes control of the mortgaged shares, and so takes the company. All well and good, and it works in many many industries. But, in football, if the bank takes the shares then it becomes owner of the club. The club is, so far as the bank is concerned, a ******* car crash of a company that is hemorrhaging money on a galactic scale. They'd put it into administration immediately and try and recover whatever they could. If there's an institution more ruthless than a PE house it's a bank. So the leveraged buyout is fine until it goes tits up. I don't really have an issue with us being bought by a PE house using a leveraged structure. It has potential drawbacks, and it feels very "cold", but it should bring a high degree of professionalism to the club, it should deliver excellent governance, and it should bring a very focussed and driven and motivated management team in at board level. We may lose a little bit of "soul", but in the modern world that's where the game is. Now if we could get just one small golden share in place as well with some protections over dealings with assets then I think you could end up with a decent compromise structure where the PE house gets its returns, fans get some comfort that the club isn't going change too much, and we get a future that involves a better standard of football.

Must...not...mention...the...Regul...ah shit.

I've wondered whether he might go for a sale with what's known as an "earn-out" provision. This is a way of structuring the payment he receives as two lumps. One is paid upfront, and the other is "earned" based on the future performance of the business. It's normally used where an owner-manger wants to realise some of the wealth tied up in his company, but also bets that the company will grow, and he wants a slice of that as well. The snag is that the second future performance based payment is risky. In our case if we never got promoted then SL wouldn't get it, and so he'd end up having sold us for not very much. It also still generally requires you to relinquish full control of the business to the new owner, and as we're discussing, this seems to be something SL is against. Contractually tricky, but legally possible. Agree it would be expensive to properly structure the deal. Lawyers would be the only happy people. It should be possible though, although as I say, 99% of potential buyers would much prefer just taking the whole lot.

I mean in recent years he's basically put £13m - £15m in every year. He's also bankrolled a £45m redevelopment of a stadium, plus the HPC...so I don't think £50m would see much return. However if the stadium, sporting quarter and HPC are included I think a proper valuation is nearer £100m than £50m. To an investor what's the potential uplift? Well West Ham took investment recently that valued them at about £500m and as said, Bournemouth were at £120m in the autumn of last year. So if you're investing in City at a valuation of, well let's say £80m, then to get your 4-5x return you need to sell with us at something like £320 - £400m valuation. That probably means securing at least sporadic European football, plus a well-established presence in the Premier League, and the high profile (and highly paid) player contracts that come with that. You're probably targeting that happening by 2030. Is this likely? No. Is it cheap? No. Is it easy? No. PS> I'm deliberately not mentioning the likes of Liverpool, Man Utd and Chelsea as if we ever reach their levels of valuation (£4bn approx) then this whole conversation has moved to an entirely different room.

Exactly. In particular, if we are looking at US-based PE houses as the most likely investors. A PE house is ruthless. They will have a 5-10 year exit plan and will target a certain multiple of their investment upon sale/exit. Likely a 4-5x profit is expected. In another industry they would aim to achieve that by taking either a controlling stake of the shares - basically 75% in order to allow them to pass both ordinary and special resolutions unopposed - or they might take a minority stake in terms of the quantity of shares, but would have clauses that ensure they have a majority of directors, or they have all the voting shares, and Steve takes shares that only have an economic interest. Ultimately though the PE house would expect to take control of the business so that they can guide it and they can achieve that 4-5x on exit. If Steve digs his heels in and says "no I want day-to-day control" then that will be a dealbreaker for most PE houses. I have never been able to nail down whether the training centre is under one of the Bristol City Holdings companies. The answer will be on the Land Registry records, and I don't have access to that as it stands. But in the event of a sale yes you would expect the HPC to be part of the deal. A precise valuation is a finger in the air job really. Looking at recent similar clubs though you've got Derby who were a Championship club in name only and were in distress but effectively went for about £17m (@Mr Popodopolous is that correct?). Millwall are currently touting a £80m valuation I hear. Sheff Utd are valued at £80-90m by Kieran Maguire (https://www.examinerlive.co.uk/sport/football/news/sheffield-united-takeover-abdullah-offer-25805657). Realistically it's anything between £50m and £100m I would say. Bournemouth were valued at £120m last month - higher division, but much worse facilities.

And I would add that it is a completely fair and reasonable misconception for a fan to hold. The way it is presented and marketed by the Club(s) and SL I am unsurprised that most fans who are not experts in corporate structures, companies house, and shareholdings think and believe that Bristol Sport owns everything. You do need to look beneath the surface to discover the truth, and that is another fault to be laid at SL's feet.

No they would not. Read my chart above to see that the football club is, in terms of ownership, entirely separate from the rugby, basketball, and Bristol Sport companies. Even the women's team could be split off and retained by SL if that was wanted. Both either could, or could not, be included in any sale. The legal structure means both are optional.

I heard two legs are bad and four legs are good.

Don't. There'd be too many "doing a Derby" and blaming the EFL for simply enforcing it's own rules.

I agree. If I'm an investor or buyer I want the stadium and everything. I don't want to buy a football club and then rent from the old owner. I'd be happy to be a landlord to the old owner's rugby club, but I want control of the main bricks and mortar asset.

Unbelievable.

Well the interview is well worth listening to anyway, and it was new to me.

Yep, although Marshall is the Secretary rather than a Director. But yeh, Maggie and Steve are the only persons with significant control, and the company is 100% owned through Pula.

Football Ramble interview with Neil Warnock has just come out. We get a mention or two and he really confirms that he both loves and hates us. First of all he mentions the time that he told our fans that when he dies he wants us to chant that "Warnock is a w****r" at his funeral. Apparently "Bristol City, yeh they got to me". Presumably all to do with the Palace ghost goal, Cardiff etc etc. All well documented. But then a little later on (about 30 minutes in) he's asked if there are any teams he wishes he could have managed - he says yes, Portsmouth, Ipswich, and Bristol City. Reckons we always get behind the team and says he'd have loved to manage us.

Surely all squid are damp?

I understand that the Sporting Quarter is being done under the company "Esteban Investments Ltd" rather than any Club company. That is the company listed as the one putting in the planning permission application. Esteban Investments Ltd is on my chart (furthest to the right), as another sister company of Bristol City Holdings Ltd and Bristol Sport Ltd. However it is not in any way owned by either of those. So any sale or investment of/in the football club or stadium doesn't directly involve that company or the development that it is doing. The stadium and sporting quarter are, I bleieve, on different titles at the land registry. Therefore, so long as SL was comfortable that he would have the correct access easements and contractual relationships with Bristol Sport or Bristol City football Club then as I understand things it doesn't affect it at all really. Alternatively yes they could include Esteban Investments or the Sporting Quarter as part of the sale - and yes that would increase the valuation again. It all depends on how much SL and any new owner/investor wants to control the entire site/package, or whether they are happy buying just the football club part and having an ongoing contractual relationship with the bits that SL retains.