Ska Junkie Posted March 22, 2018 Report Share Posted March 22, 2018 32 minutes ago, Monkeh said: How had the debt been paid off? , its still showing in their accounts (which are due next week) Transferred to the charge against the land (their only asset) I guess. 1 Quote Link to comment Share on other sites More sharing options...
Port Said Red Posted March 22, 2018 Report Share Posted March 22, 2018 10 minutes ago, Ska Junkie said: Transferred to the charge against the land (their only asset) I guess. Any owner could do that though, it would have surely been Highs last option if he hadn't found the Wael of Fortune. Quote Link to comment Share on other sites More sharing options...
Ska Junkie Posted March 22, 2018 Report Share Posted March 22, 2018 (edited) 1 hour ago, Port Said Red said: Any owner could do that though, it would have surely been Highs last option if he hadn't found the Wael of Fortune. You would have thought so PSR but I'm not sure Higgs wasn't already doing that hence why Wael and his mob had to pay him off and start accruing debt again against the asset , essentially paying off Higg's charge by putting their own on the same asset. I'm only guessing by the way. I'm intrigued as to where all this ££££ is coming from for their superdome / new tent etc as they no longer have the Sainsbury's money and can't borrow against their only asset as it's got a charge on it already and is subsequently mortgaged to the limit as I see it? Edited March 22, 2018 by Ska Junkie 1 Quote Link to comment Share on other sites More sharing options...
Eddie Hitler Posted March 22, 2018 Report Share Posted March 22, 2018 7 minutes ago, Ska Junkie said: You would have thought so PSR but I'm not sure Higgs wasn't already doing that hence why Wael and his mob had to pay him off and start accruing debt again against the asset , essentially paying off Higg's charge by putting their own on the same asset. I'm only guessing by the way. I'm intrigued as to where all this ££££ is coming from for their superdome / new tent etc as they no longer have the Sainsbury's money and can't borrow against their only asset as it's got a charge on it already and is subsequently mortgaged to the limit as I see it? I agree with your summary of the position Mr Junkie. It's not been explicitly stated but as I read it from what happened with the UWE deal the family, not having the enormously deep pockets of our own Lansdown family, are trying to set up a side deal for a stadium which will attract external funding. So someone without a Rovers or family connection would provide the money for the rebuild and upgrade of facilities so that it would provide a regular income rather than just gate money (conferences at sports grounds are good, there are a decent number of these and events held at Ashton Gate) and in return they would get the profit from these events for ?20, 30 years or an agreed inflating rental stream. That IMO is the reason for the repeated "these things take time" messages, they are trying to come up with a redesign and funding package that will attract an investor and then have to find the investor. They do not intend just rebuilding a few stands because they would have to fund that themselves and there would be minimal return on that funding. Ordinary debt funding packages are out because the security on the Memorial Ground has already been taken by the Al Qadis to secure their money so there is no physical security available meaning that they have to find someone prepared to lend money based upon the future additional income stream of the redeveloped ground. That is a fairly hard sell but there may be someone interested if they can package it well and seek them out. The idea of a search for an outside investor is also the only way that I can make sense of that otherwise baffling £250k a year London office for which Rovers shelling out. If the two staff are debt market specialists then that will be its purpose and they don't come cheap. 2 Quote Link to comment Share on other sites More sharing options...
Ska Junkie Posted March 22, 2018 Report Share Posted March 22, 2018 20 minutes ago, Eddie Hitler said: I agree with your summary of the position Mr Junkie. It's not been explicitly stated but as I read it from what happened with the UWE deal the family, not having the enormously deep pockets of our own Lansdown family, are trying to set up a side deal for a stadium which will attract external funding. So someone without a Rovers or family connection would provide the money for the rebuild and upgrade of facilities so that it would provide a regular income rather than just gate money (conferences at sports grounds are good, there are a decent number of these and events held at Ashton Gate) and in return they would get the profit from these events for ?20, 30 years or an agreed inflating rental stream. That IMO is the reason for the repeated "these things take time" messages, they are trying to come up with a redesign and funding package that will attract an investor and then have to find the investor. They do not intend just rebuilding a few stands because they would have to fund that themselves and there would be minimal return on that funding. Ordinary debt funding packages are out because the security on the Memorial Ground has already been taken by the Al Qadis to secure their money so there is no physical security available meaning that they have to find someone prepared to lend money based upon the future additional income stream of the redeveloped ground. That is a fairly hard sell but there may be someone interested if they can package it well and seek them out. The idea of a search for an outside investor is also the only way that I can make sense of that otherwise baffling £250k a year London office for which Rovers shelling out. If the two staff are debt market specialists then that will be its purpose and they don't come cheap. Thanks Eddie. That doesn't sound good on their part then as the benefits of any new asset would be taken up for a considerable length of time, paying off the investors used to build that asset? R*vers wouldn't see much, if any, benefit for some time. If I were gas (thankfully I'm not) that would worry me considerably as there would be minimal upturn in profit although the turnover should rise. That's not a particularly good business model I suppose plus they would also be carrying the burden of the multi £Million charge on the Mem? Oh dear, how sad, never mind! Quote Link to comment Share on other sites More sharing options...
Rudolf Hucker Posted March 22, 2018 Report Share Posted March 22, 2018 41 minutes ago, Eddie Hitler said: I agree with your summary of the position Mr Junkie. It's not been explicitly stated but as I read it from what happened with the UWE deal the family, not having the enormously deep pockets of our own Lansdown family, are trying to set up a side deal for a stadium which will attract external funding. So someone without a Rovers or family connection would provide the money for the rebuild and upgrade of facilities so that it would provide a regular income rather than just gate money (conferences at sports grounds are good, there are a decent number of these and events held at Ashton Gate) and in return they would get the profit from these events for ?20, 30 years or an agreed inflating rental stream. That IMO is the reason for the repeated "these things take time" messages, they are trying to come up with a redesign and funding package that will attract an investor and then have to find the investor. They do not intend just rebuilding a few stands because they would have to fund that themselves and there would be minimal return on that funding. Ordinary debt funding packages are out because the security on the Memorial Ground has already been taken by the Al Qadis to secure their money so there is no physical security available meaning that they have to find someone prepared to lend money based upon the future additional income stream of the redeveloped ground. That is a fairly hard sell but there may be someone interested if they can package it well and seek them out. The idea of a search for an outside investor is also the only way that I can make sense of that otherwise baffling £250k a year London office for which Rovers shelling out. If the two staff are debt market specialists then that will be its purpose and they don't come cheap. A good summary of possible goings on, Eddie. Thanks. For this to be appealing to any third party investor, use of the stadium and its infrastructure would need to be maximised. Many of our fellow supporters dislike the Bristol Sport concept and sharing AG with the egg chasers but in truth, it's a more sound business model than would have been seen had City gone forward alone. It enables the stadium to be used for sporting events every week through the season added to which it has quickly become established as a popular events and conference venue. In a city the size of Bristol, there is only room for one Bristol Sport concept - and we're a cornerstone of it and thus, able to enjoy the benefits of it. Any 'other football club' in the city will use their ground on just 23 occasions each season, plus cup ties - so just 23 occasions then. For conference facilities, they will find themselves competing with hotels, us (with the prospect of a new arena rumoured to be planned by SL) and the city council - once their new arena is built at TM. I accept that may be someday, one day or maybe never but if it is ever built, competition for conferences and events in Bristol will become extremely fierce. I just don't see how the likely profit from 23/365 (see what I did there?) events can entice a non-partisan investor to part with £30-40m. 4 Quote Link to comment Share on other sites More sharing options...
Midlands Robin Posted March 22, 2018 Report Share Posted March 22, 2018 The trouble with the external investor model is that its great in the short term because of the initial cash injection but then you are slaved to the investor for the length of the agreement. If things start heading pear shaped financially then the investors will cheerfully take them down to protect their investment. Also, before they can grow further they would need to generate profits on top of that which they need to pay the investors. That's a tall order and means if the footballing side goes tits up, say a relegation, they will be hamstrung. It would be short term gain and long term pain relying entirely on guaranteeing on and off field growth. Quote Link to comment Share on other sites More sharing options...
Bar BS3 Posted March 22, 2018 Report Share Posted March 22, 2018 (edited) I suppose it comes down to a simple question, from any potential investors point of view. If they have no connection or affinity to Bristol Rovers “Where will my investment see the best return?” Even if they specifically yearn to invest in football, are Rovers really a viable option to generate significant (if any) ROI..? On the face of it, the answer has to be “No” FACTS: They haven’t averaged over 10k for 40 years. They have no remaining assett to Secure investment against. Their current offering must be one of the least attractive in the market. They have no valid plans to bring on-field success, to enhance the club’s standing. Indeed, promotion to the Championship, and it’s related costs, would send them deeper into debt. As I see it, their only hope is to find a very wealthy football fan, looking for a “project”, who’s got money to burn on a “hobby” - maybe some Jordanian bankers or something. What could possibly go wrong with a plan like that...?! Edited March 22, 2018 by Bar BS3 3 Quote Link to comment Share on other sites More sharing options...
Eddie Hitler Posted March 22, 2018 Report Share Posted March 22, 2018 7 minutes ago, Rudolf Hucker said: A good summary of possible goings on, Eddie. Thanks. For this to be appealing to any third party investor, use of the stadium and its infrastructure would need to be maximised. Many of our fellow supporters dislike the Bristol Sport concept and sharing AG with the egg chasers but in truth, it's a more sound business model than would have been seen had City gone forward alone. It enables the stadium to be used for sporting events every week through the season added to which it has quickly become established as a popular events and conference venue. In a city the size of Bristol, there is only room for one Bristol Sport concept - and we're a cornerstone of it and thus, able to enjoy the benefits of it. Any 'other football club' in the city will use their ground on just 23 occasions each season, plus cup ties - so just 23 occasions then. For conference facilities, they will find themselves competing with hotels, us (with the prospect of a new arena rumoured to be planned by SL) and the city council - once their new arena is built at TM. I accept that may be someday, one day or maybe never but if it is ever built, competition for conferences and events in Bristol will become extremely fierce. I just don't see how the likely profit from 23/365 (see what I did there?) events can entice a non-partisan investor to part with £30-40m. Just working some numbers: £30m in a 20 year secured bond is going to earn about 3.5% so £1.05m per year. Unless the Al Qadis are going to release their security on the Memorial Ground then this would be unsecured and so would need to pay higher than this, without some kind of guarantee the interest would be up to 7% plus but offer some security (other family assets?) and maybe 4.5% would attract an investor so £1.35m a year so the new ground facilities will need to generate an additional £26k per week plus the £30m would require repayment at the end. Maybe £10m is more realistic and would allow events to be held so requiring £9k a week additional income to pay the interest and then more than that again to cover existing losses and build up enough reserves to repay at the end. It still at root doesn't work for me. That refurbishment in isolation may stand up but the ongoing losses of £2m, I know there are write-offs there so say £1m at least, means that there is no prospect of the club doing anything other than swallowing money on that scale for many years to come. This has the whiff of shit or bust about it and maybe the true purpose of that London office is finding a greater fool new owner. 5 Quote Link to comment Share on other sites More sharing options...
Midlands Robin Posted March 22, 2018 Report Share Posted March 22, 2018 So that's around 1 million a year that needs to be generated BEFORE any additional profits could be ploughed back into developing the club. Any on or off field issues soon destroys the profit margins and sinks the club. 1 Quote Link to comment Share on other sites More sharing options...
RedLionLad Posted March 22, 2018 Report Share Posted March 22, 2018 6 hours ago, Cheesleysmate said: Yeah sure. PM me your email address and I will send it through. Done Quote Link to comment Share on other sites More sharing options...
Bristol Rob Posted March 22, 2018 Report Share Posted March 22, 2018 1 hour ago, Midlands Robin said: So that's around 1 million a year that needs to be generated BEFORE any additional profits could be ploughed back into developing the club. Any on or off field issues soon destroys the profit margins and sinks the club. That's how I read it. Also, they won't have a unique market position as they will be in competition with the facilities at Ashton Gate, who will likely be several years forward with their own offering and able to call on a track record of success, in addition to the fact we don't have an external investor expecting a regular return. So we could undercut them on price. Just for a laugh. Quote Link to comment Share on other sites More sharing options...
Ska Junkie Posted March 22, 2018 Report Share Posted March 22, 2018 42 minutes ago, Bristol Rob said: That's how I read it. Also, they won't have a unique market position as they will be in competition with the facilities at Ashton Gate, who will likely be several years forward with their own offering and able to call on a track record of success, in addition to the fact we don't have an external investor expecting a regular return. So we could undercut them on price. Just for a laugh. IF we hit the Premier league, we could really hurt any potential deal for them, going by the above, as any 'floating' supporter would surely head to BS3 if that were the case? That would destroy any 'match day' hopes of covering those losses let alone make the required profit to cover investment charges. I appreciate the 'non matchday' stuff would be unaffected but all I can see is 'risk, risk, risk' on the part of any investor. Quote Link to comment Share on other sites More sharing options...
Bristol Rob Posted March 22, 2018 Report Share Posted March 22, 2018 22 minutes ago, Ska Junkie said: IF we hit the Premier league, we could really hurt any potential deal for them, going by the above, as any 'floating' supporter would surely head to BS3 if that were the case? That would destroy any 'match day' hopes of covering those losses let alone make the required profit to cover investment charges. I appreciate the 'non matchday' stuff would be unaffected but all I can see is 'risk, risk, risk' on the part of any investor. Risk, Risk, Risk.... they forgot about the (revenue) streams.... A more modern take on the classic 'ground/team rant from that glorious day when they went non league. 2 Quote Link to comment Share on other sites More sharing options...
myol'man Posted March 22, 2018 Report Share Posted March 22, 2018 Is the Bodin money all gone yet? Quote Link to comment Share on other sites More sharing options...
Unan Posted March 22, 2018 Report Share Posted March 22, 2018 1 Quote Link to comment Share on other sites More sharing options...
Unan Posted March 22, 2018 Report Share Posted March 22, 2018 5 Quote Link to comment Share on other sites More sharing options...
Bianconeri Posted March 22, 2018 Report Share Posted March 22, 2018 4 hours ago, Bristol Rob said: That's how I read it. Also, they won't have a unique market position as they will be in competition with the facilities at Ashton Gate, who will likely be several years forward with their own offering and able to call on a track record of success, in addition to the fact we don't have an external investor expecting a regular return. So we could undercut them on price. Just for a laugh. We’ve got a few related things here. On the one hand is how much the capital will cost the company. Any self-respecting CFO will know this, made of of the blended cost of equity and cost of borrowing. Let’s assume this investment would be entirely financed. Any investor will want a rate of return based on the risk free rate (what is available risk-free, usually the return on 25 yr government bonds) plus the credit risk premium that relates to the company, the investment, the industry etc. Risk free rate is going to be about 2.8%, credit risk premium is really hard - heavily indebted company not currently making a profit, industry probably past peak revenues BUT the lending would be secured on the new asset. Moot point, would the new asset plus the eventual sale of the Minimal cover the current plus new debt? Then you have the issue if having an old stadium while the new one is built - costs go up considerably in the short term, this really hurt Arsenal so heaven knows what it does to a small club. I’d say they’d be lucky to get away with an interest rate of less than 8%. That means each million costs £80k a year in interest alone, and the investment also has to be paid back at some point. Payingf for the ‘80k’s’ is not a simple income generation issue. It’s virtaully unheard of for each £1 of additional revenue to add £1 to the coffers. So what margin will these ‘new income streams’ generate? We know that Ashton Gate now generates lots of new income but it’s hard to say what profit each activity delivers, though the club will know (obviously). We’ve got first mover advantage so Sags would be trying to attract market share away from an established supplier. Maybe they undercut us in their new megabowl, except that hurts margin and they’ve got all those £80ks to pay.... i wouldn’t want to have to write this an investment proposal! 2 3 Quote Link to comment Share on other sites More sharing options...
Eddie Hitler Posted March 22, 2018 Report Share Posted March 22, 2018 Brian Seymour Smith has ceased to be a director of the gas; is that news or already well known? Quote Link to comment Share on other sites More sharing options...
Unan Posted March 22, 2018 Report Share Posted March 22, 2018 How long in league one would be satisfactory? How many seasons would you be happy with in league one? A decade? 2 more years then championship? How long do you really think with our infrastructure would be needed in league one? _________________ Ive had enough of the sh** league already. Quote Link to comment Share on other sites More sharing options...
Ska Junkie Posted March 22, 2018 Report Share Posted March 22, 2018 (edited) 37 minutes ago, Bianconeri said: We’ve got a few related things here. On the one hand is how much the capital will cost the company. Any self-respecting CFO will know this, made of of the blended cost of equity and cost of borrowing. Let’s assume this investment would be entirely financed. Any investor will want a rate of return based on the risk free rate (what is available risk-free, usually the return on 25 yr government bonds) plus the credit risk premium that relates to the company, the investment, the industry etc. Risk free rate is going to be about 2.8%, credit risk premium is really hard - heavily indebted company not currently making a profit, industry probably past peak revenues BUT the lending would be secured on the new asset. Moot point, would the new asset plus the eventual sale of the Minimal cover the current plus new debt? Then you have the issue if having an old stadium while the new one is built - costs go up considerably in the short term, this really hurt Arsenal so heaven knows what it does to a small club. I’d say they’d be lucky to get away with an interest rate of less than 8%. That means each million costs £80k a year in interest alone, and the investment also has to be paid back at some point. Payingf for the ‘80k’s’ is not a simple income generation issue. It’s virtaully unheard of for each £1 of additional revenue to add £1 to the coffers. So what margin will these ‘new income streams’ generate? We know that Ashton Gate now generates lots of new income but it’s hard to say what profit each activity delivers, though the club will know (obviously). We’ve got first mover advantage so Sags would be trying to attract market share away from an established supplier. Maybe they undercut us in their new megabowl, except that hurts margin and they’ve got all those £80ks to pay.... i wouldn’t want to have to write this an investment proposal! Blimey! A new build / redevelopment not as good as ours costing, say £40M (a reasonable figure as 2 1/2 sides of our place cost £46M?), will cost them £3,200,000 in interest alone annually, before they pay any agreed dividend? No way on this earth can they afford that and compete can they? Edited March 22, 2018 by Ska Junkie Quote Link to comment Share on other sites More sharing options...
In the Net Posted March 22, 2018 Report Share Posted March 22, 2018 34 minutes ago, Eddie Hitler said: Brian Seymour Smith has ceased to be a director of the gas; is that news or already well known? He resigned a few months ago. He was one of the fans' Directors, and I think that he felt his role was obsolete - even more so than under the previous regime. Quote Link to comment Share on other sites More sharing options...
Bianconeri Posted March 22, 2018 Report Share Posted March 22, 2018 6 minutes ago, Ska Junkie said: Blimey! A new build / redevelopment not as good as ours costing, say £40M (a reasonable figure as 2 1/2 sides of our place cost £46M?), will cost them £3,200,000 in interest alone annually, before they pay any agreed dividend? No way on this earth can they afford that and compete can they? Sad reality of external investment. Since you have to make a profit to pay a dividend then equity holders may get fed up and sell their shares if they can. Of course over the, say, 30 year life of the project finance the asset should grow in value (the land will almost certainly) and the £80k’s paid back in 2050 are worth much less in today’s terms than the ones paid back in 2020. Revenue will grow as long as crowds stay stable but costs will increase. A fascinating NPV model I think - but I ain’t going to write it. 1 Quote Link to comment Share on other sites More sharing options...
Eddie Hitler Posted March 22, 2018 Report Share Posted March 22, 2018 16 minutes ago, In the Net said: He resigned a few months ago. He was one of the fans' Directors, and I think that he felt his role was obsolete - even more so than under the previous regime. Thanks, I had missed that. Quote Link to comment Share on other sites More sharing options...
Port Said Red Posted March 22, 2018 Report Share Posted March 22, 2018 1 hour ago, Bianconeri said: We’ve got a few related things here. On the one hand is how much the capital will cost the company. Any self-respecting CFO will know this, made of of the blended cost of equity and cost of borrowing. Let’s assume this investment would be entirely financed. Any investor will want a rate of return based on the risk free rate (what is available risk-free, usually the return on 25 yr government bonds) plus the credit risk premium that relates to the company, the investment, the industry etc. Risk free rate is going to be about 2.8%, credit risk premium is really hard - heavily indebted company not currently making a profit, industry probably past peak revenues BUT the lending would be secured on the new asset. Moot point, would the new asset plus the eventual sale of the Minimal cover the current plus new debt? Then you have the issue if having an old stadium while the new one is built - costs go up considerably in the short term, this really hurt Arsenal so heaven knows what it does to a small club. I’d say they’d be lucky to get away with an interest rate of less than 8%. That means each million costs £80k a year in interest alone, and the investment also has to be paid back at some point. Payingf for the ‘80k’s’ is not a simple income generation issue. It’s virtaully unheard of for each £1 of additional revenue to add £1 to the coffers. So what margin will these ‘new income streams’ generate? We know that Ashton Gate now generates lots of new income but it’s hard to say what profit each activity delivers, though the club will know (obviously). We’ve got first mover advantage so Sags would be trying to attract market share away from an established supplier. Maybe they undercut us in their new megabowl, except that hurts margin and they’ve got all those £80ks to pay.... i wouldn’t want to have to write this an investment proposal! I may have to borrow some St Andrews Gas's IQ points so I can understand that! . 1 Quote Link to comment Share on other sites More sharing options...
GreedyHarry Posted March 22, 2018 Report Share Posted March 22, 2018 8 minutes ago, Port Said Red said: I may have to borrow some St Andrews Gas's IQ points so I can understand that! . I think you will be disappointed as he miscounted. 1 Quote Link to comment Share on other sites More sharing options...
BCFC11 Posted March 22, 2018 Report Share Posted March 22, 2018 2 hours ago, Bianconeri said: We’ve got a few related things here. On the one hand is how much the capital will cost the company. Any self-respecting CFO will know this, made of of the blended cost of equity and cost of borrowing. Let’s assume this investment would be entirely financed. Any investor will want a rate of return based on the risk free rate (what is available risk-free, usually the return on 25 yr government bonds) plus the credit risk premium that relates to the company, the investment, the industry etc. Risk free rate is going to be about 2.8%, credit risk premium is really hard - heavily indebted company not currently making a profit, industry probably past peak revenues BUT the lending would be secured on the new asset. Moot point, would the new asset plus the eventual sale of the Minimal cover the current plus new debt? Then you have the issue if having an old stadium while the new one is built - costs go up considerably in the short term, this really hurt Arsenal so heaven knows what it does to a small club. I’d say they’d be lucky to get away with an interest rate of less than 8%. That means each million costs £80k a year in interest alone, and the investment also has to be paid back at some point. Payingf for the ‘80k’s’ is not a simple income generation issue. It’s virtaully unheard of for each £1 of additional revenue to add £1 to the coffers. So what margin will these ‘new income streams’ generate? We know that Ashton Gate now generates lots of new income but it’s hard to say what profit each activity delivers, though the club will know (obviously). We’ve got first mover advantage so Sags would be trying to attract market share away from an established supplier. Maybe they undercut us in their new megabowl, except that hurts margin and they’ve got all those £80ks to pay.... i wouldn’t want to have to write this an investment proposal! So in other words, **** all chance it will ever happen. Let them rot. Quote Link to comment Share on other sites More sharing options...
Ska Junkie Posted March 22, 2018 Report Share Posted March 22, 2018 (edited) 14 minutes ago, BCFC11 said: So in other words, **** all chance it will ever happen. Let them rot. We all know how 'lovely' Wael is but even he can't sell that I should think!! £3.2M in interest alone, each and every year BEFORE any equity is paid off? OUCH!!!! Edited March 22, 2018 by Ska Junkie Quote Link to comment Share on other sites More sharing options...
Lanterne Rouge Posted March 22, 2018 Report Share Posted March 22, 2018 Most of this financial stuff is way over my head but would I be right in thinking they`re trying to finance the rebuild via some sort of PFI equivalent? Would that be a good analogy or not? Quote Link to comment Share on other sites More sharing options...
BCFC11 Posted March 22, 2018 Report Share Posted March 22, 2018 3 minutes ago, Ska Junkie said: We all know hoe 'lovely' Wael is but even he can't sell that I should think!! £3.2M in interest alone, each and every year BEFORE any equity is paid off? OUCH!!!! I think it’s all Bull as it usually is with anything coming out of Whorefield, Higgs probably told Wally when he took over that the pikeys believe anything you say to just string them along. Cant wait to see how it ends, it won’t be pretty I’m sure of it. 1 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.