Jon Lansdown on buyouts, budgets and why Liam Manning can raise the bar at Bristol City

[Davefevs]

5 minutes ago, Ashtongreight said:

It wouldn’t increase the capacity much would it, a couple of thousand at most I would have thought ? 

Yep…and imagine how easy BCC would make it to develop the rest of the ground…not!

[W-S-M Seagull]

48 minutes ago, Ashtongreight said:

It wouldn’t increase the capacity much would it, a couple of thousand at most I would have thought ? 

I believe it can wrap all the way round to the Lansdown which would add a few more but tbh it would just look quite shite having half of a redeveloped stadium. 

[exAtyeoMax]

2 hours ago, Harry said:

As far as I know from the rumour mill - when he first put the club up for sale a couple of years ago there were a number of interested parties. Not one off big benefactors, but more the business-investment style groups. 
I’m certain 777 was one of them. 
There were others that were batted away immediately. 
So, with 777, it could be that Steve made a good call and pulled out, but I think the truth would more likely be that they weren’t anywhere close on price. 
I think 2 years ago they probably looked like a decent investor. 
I believe that with all talks, they’ve quickly stumbled when it comes to a few things :

1) Structure. We are the most complex of structures, more so than any other championship club that’s been available in the last few years. 
2) Ground. Steve ballsed up with the Ashton Vale situation and the Ashton Gate rebuild is not something some of the potential investors saw as a great facility. In terms of size rather than anything else. It’s a very good championship facility but if new owners have ambitions for Prem football, there are no grounds for expansion and many thought it’s too small to sustain a Prem club. 
3) The cost base at the club is ridiculous. (Mainly loaded with mates of Jon). There are reams and reams of positions that just aren’t required or provide very little value for money. When someone arrives and challenges this (Phil Alexander) they are quickly removed for asking too many questions and telling too many home truths. 
4) The people. I know that a party who were previously interested a couple of years ago were very satisfied with the Gould/Nige/Tins set up and felt they could really work with that. 
We are now miles away from that and I can’t see how any investors would currently be happy with how we’re set up. 
5) The price. Steve wants his money back. Basically. He might settle for being about £50million down as an absolute maximum but he basically wants his money back. 
That doesn’t make us a very attractive proposition when other championship clubs can be purchased for a lot less and without the complexity of the Bristol Sport model. 
 

So, short answer is, how far has anyone got, a lot closer a couple of years ago than they are now. 

Seems strange for SL and co to get rid then?!

[Harry]

2 hours ago, Harry said:

 and I know questions were asked as to why the redevelopment had no future growth plans, especially as there have since been plans for other things in the area behind the Lansdown (ie the sporting quarter). That could easily have enabled a larger capacity. 
 

 

2 hours ago, W-S-M Seagull said:

Not just that but even the redevelopment. 

I know I'm talking with hindsight now but as Lansdown now owns the land next to the stadium then it could have been possible to move the stadium over to create the space for expansion and still build the sporting quarter. 

Yep. As I said earlier. I understand some potential investors queried exactly that. Why now have the extra land when you could have used that for the stadium, flipped it 90 degrees and been able to build much bigger. Ashton Vale at 40k was ideal. The AG redevelopment is underwhelming to potential new ownership. 
As said earlier, it’s a mighty fine stadium for championship football. But the serious owners want to play seriously in the next league up, especially for the serious cash it’ll cost to buy it from Steve. So these finer points make us a more difficult sale. 
It’s why someone like Preston, with only a slightly lower capacity but plenty of room for improvement is probably more attractive to some suitors, as they could likely buy it for half the price of City. 

[Davefevs]

24 minutes ago, Harry said:

It’s why someone like Preston, with only a slightly lower capacity but plenty of room for improvement is probably more attractive to some suitors, as they could likely buy it for half the price of City. 

Probably a quarter in reality!  £50m vs £200m.  And they have land too!

[Harry]

11 minutes ago, Davefevs said:

Probably a quarter in reality!  £50m vs £200m.  And they have land too!

Yep. Probs more accurate. And the land being a big deal swinger. 

[Steve Watts]

43 minutes ago, Harry said:

 

Why now have the extra land when you could have used that for the stadium, flipped it 90 degrees and been able to build much bigger. . 

On this point, is this not just a case of bad timing? When the plans were submitted for the South Stand weren't some of the landowners in the middle of the site refusing to sell, or is that my memory playing tricks on me? 

Further to that, how feasible would it have been? The rotation of the pitch would put the new stand behind the goal much closer to Winterstoke road I'd have thought. There isn't the room to move back past the Dolman. It may fit, I don't know. Just a thought.

[The Constant Rabbit]

4 hours ago, Davefevs said:

Yep…and imagine how easy BCC would make it to develop the rest of the ground…not!

Money talks Dave.

 

If enough money was tabled to be invested then you swing the new jobs angle, a 'contribution' to the railway station across the road - things open up.

 

Trouble for Lansdown is that things closed up for the best potential buyers when tanks rolled across the Ukrainian border and Chinese planes broke the Taiwanese airspace.  Excluding Eastern Europe and Chinese 'investment' knocked off a lot of interested parties.

 

Not at the price Lansdown wants, but interest nonetheless.

 

If he wants to sell he will have to drop 40% IMHO

 

He won't currently.

[Rob k]

6 hours ago, Harry said:

 

Yep. As I said earlier. I understand some potential investors queried exactly that. Why now have the extra land when you could have used that for the stadium, flipped it 90 degrees and been able to build much bigger. Ashton Vale at 40k was ideal. The AG redevelopment is underwhelming to potential new ownership. 
As said earlier, it’s a mighty fine stadium for championship football. But the serious owners want to play seriously in the next league up, especially for the serious cash it’ll cost to buy it from Steve. So these finer points make us a more difficult sale. 
It’s why someone like Preston, with only a slightly lower capacity but plenty of room for improvement is probably more attractive to some suitors, as they could likely buy it for half the price of City. 

The thing with Preston is that (imo) they would have far less chance of filling a 40k stadium, Bristol has a huge catchment area and would attract people from Cornwall to Tewkesbury should we ever be a premier league side. At some point, we are going to need to buy those houses behind the Atyeo and build at that end. 

[Son of Fred]

12 hours ago, Kid in the Riot said:

If you really were to get inside Jon's head then I guarantee that at the moment it's a very happy place. 

Uh oh

[Olé]

10 hours ago, ExiledAjax said:

I would absolutely expect us to be bought by a fund/consortium/group btw. I don't think sole owners are really playing at our level right now. Below in L1 and L2 yes, and higher up (if you can call an Emirate a "sole" purchaser), but not really at Champ level.

Having worked at a fund albeit not in sport, one thing I’d deeply love to hear is what the board summary (or even just private soundbite) is about Bristol City. Because trust me these guys, especially the Americans, approach to buying businesses is not unlike a football club buying players. There will be a team of @Davefevs who will run the numbers on every viable club in Europe, they will have done due diligence whether or not they have made an approach. They’ll have critically appraised everything about the club (probably more so than our incumbents ever have) and all without having a single dollar invested. And trust me there will be an overall soundbite about us, everyone will have one.

So back to that board meeting, a combination of backers such as the representatives of large family offices (families with lots of generational wealth) and partners at the very top of large US venture capital firms. There will be a slide titled “Clubs with Prumeer League Potenial” and a list of prospects with some summary analysis. And one of the board who is time poor and literally only thinks about football 5 minutes before the board meeting but has done the obvious stuff like look at size of city, catchment area, position in the Championship, will lean in and go “Hey Dwight, this is Bob. Where are we at with Bristol City what’s the story there the fundamentals look rully good.” And then Dwight says…

[Insert here soundbite/running joke that every single investment fund has formed about us over the last few years]

• “Hey Bob great question, as you know we really liked that one but the structure is complex you have to buy an amateur basketball team and a weird social media marketing company which are all priced into the deal”
• “Hi Bob, glad you could join how was Cancun? So Bristol we have ran a bunch of scenarios with the modelling guys and we can’t get near a scenario where the number the owner wants makes sense. It’s a dead end”
• ”Bob, glad you could join, Danny and I flew out from Boston to meet these guys, we had met with their chairman and well Bob, he drew some weird soccer kit, and tried to have us invest in a video production company”

Edited May 21 by Olé

[ExiledAjax]

10 minutes ago, Olé said:

Having worked at a fund albeit not in sport, one thing I’d deeply love to hear is what the board summary (or even just private soundbite) is about Bristol City. Because trust me these guys, especially the Americans, approach to buying businesses is not unlike a football club buying players. There will be a team of @Davefevs who will run the numbers on every viable club in Europe, they will have done due diligence whether or not they have made an approach. They’ll have critically appraised everything about the club (probably more so than our incumbents ever have) and all without having a single dollar invested. And trust me there will be an overall soundbite about us, everyone will have one.

So back to that board meeting, a combination of backers such as the representatives of large family offices (families with lots of generational wealth) and partners at the very top of large US venture capital firms. There will be a slide titled “Clubs with Prumeer League Potenial” and a list of prospects with some summary analysis. And one the board who is time poor and literally only thinks about football 5 minutes before the board meeting but has done the obvious stuff like look at size of city, catchment area, position in the Championship, will lean in and go “Hey Dwight, this is Bob. Where are we at with Bristol City what’s the story there the fundamentals look rully good.” And then Dwight says…

[Insert here soundbite/running joke that every single investment fund has formed about us over the last few years]

• “Hey Bob great question, as you know we really liked that one but the structure is complex you have to buy an amateur basketball team and a weird social media marketing company which are all priced into the deal”
• “Hi Bob, glad you could join how was Cancun? So Bristol we have ran a bunch of scenarios with the modelling guys and we can’t get near a scenario where the number the owner wants makes sense. It’s a dead end”
• ”Bob, glad you could join, Danny and I flew out from Boston to meet these guys, we had met with their chairman and well Bob, he drew some weird soccer kit, and tried to have us invest in a video production company”

Yep. I work with funds, family offices, super HNWs. I'm also currently advising a couple of people looking to buy EFL clubs.

What you describe in delightfully humorous detail is what I negligently summarised as "just chats" in my first post. I agree that's what will be happening in the investment committees and meetings. If nothing is getting beyond that then fair enough. I wondered earlier in the season whether Lansdown's presence at some of our games was about getting us ready for sale or meeting prospective buyers (although much will be done by Teams nowadays).

My point to @Harry was borne from the fact that the guys I'm advising right now don't seem that agitated about stadium size or expansion potential. They're doing much higher level DD on fundamental stuff.

But I will admit that the clubs in question are not quite our exact peers. They are not quite going to be on your slide titled “Clubs with Prumeer League Potenial” (they might be on the following slide though). 

The concern around the stadium surprised me, but on explanation I can understand how, when you're being asked to buy Bristol Sport for £200m, it is a concern that's big enough to torpedo your interest.

[exAtyeoMax]

I did a quick Google earth a couple of weeks ago to see if there was another site where you could build a stadium, I couldn’t see on at first glance.

 

[ExiledAjax]

1 minute ago, exAtyeoMax said:

I did a quick Google earth a couple of weeks ago to see if there was another site where you could build a stadium, I couldn’t see on at first glance.

Fruit market?

[Barrs Court Red]

So my cynical assumption, FA Youth Cup winners would have been a handy gold star in the selling points column.  

[Barrs Court Red]

3 minutes ago, ExiledAjax said:

Fruit market?

The Galaries site. Too late, too expensive and possibly too small, but what a location that would have been! 
 

Fruit Market aside, not sure there’s much option. Potential to do something with the Harbour Gateway plans, or whatever that’s called. 

[Kid in the Riot]

29 minutes ago, ExiledAjax said:

The concern around the stadium surprised me, but on explanation I can understand how, when you're being asked to buy Bristol Sport for £200m, it is a concern that's big enough to torpedo your interest.

Yes, I think the stadium size thing is only an issue because of the overall price being quoted. 

It is not a stumbling block in itself to new investment or playing in the Premier League. 

[exAtyeoMax]

54 minutes ago, ExiledAjax said:

Fruit market?

I did think that . Or the arena site near BTM. I don’t know what sort of sized area you need. The Emirates is squeezed into quite a tight area and is a nice stadium. With Bristol’s poor public transport system you don’t want to be too far out of town

[W-S-M Seagull]

2 hours ago, ExiledAjax said:

The concern around the stadium surprised me, but on explanation I can understand how, when you're being asked to buy Bristol Sport for £200m, it is a concern that's big enough to torpedo your interest.

It's not something I had considered would be a problem but now thinking about it someone would need to buy the stadium which comes with debt and then also invest in upgrading it if that's at all possible. 

[Davefevs]

2 hours ago, Son of Fred said:

Uh oh

Just come out of the board committee meeting???

[Davefevs]

1 hour ago, Kid in the Riot said:

Yes, I think the stadium size thing is only an issue because of the overall price being quoted. 

It is not a stumbling block in itself to new investment or playing in the Premier League. 

Yep.  If it £100m that’s a different story.

[Harry]

3 hours ago, Son of Fred said:

Uh oh

I think this is definitely the view. 
But the soundtrack would likely be the floaty chorus of PM Dawn - Set adrift on memory bliss. 
 

[ExiledAjax]

1 hour ago, W-S-M Seagull said:

It's not something I had considered would be a problem but now thinking about it someone would need to buy the stadium which comes with debt and then also invest in upgrading it if that's at all possible. 

The debt basically affects the price. Any buyer will either a) want it settled before they buy, or b) want a discount equal to the debt. 

It's a solvable problem... so long as the seller is willing to do either of those two things. And that's probably our sticking point.

So it all comes back to the fact that £200m is way too high given there are some expensive issues such as the debt.

[bcdc]

10 hours ago, Davefevs said:

Probably a quarter in reality!  £50m vs £200m.  And they have land too!

Preston may have lots of land, but I can’t see Preston as the site of a stadium much bigger than Deepdale.
 

Their geographical position makes increasing on their core area of support a difficult job. Within 20 miles radius there’s Blackpool, Blackburn, Wigan, Bolton, even Fleetwood, as alternative poles of EFL allegiance; to the north there’s hardly any population to attract (have a look at the area covered by the Trough of Bowland and the Pennines), and to the south of the 20 mile radius you’ve got the equivalent of astronomical black holes  in Manchester and Liverpool to contend with.  So in crowd terms, a stadium with 40,000 capacity for Preston looks as viable as 20,000 for the Gas. 

Increasing the stadium footprint could also mean space for non-matchday revenue, of course, and, to an outsider, this also looks a tough call for Preston.  North Lancs is a classically struggling economic sub-region, with high derivation rates and so on.

You’ld get a club with a fine tradition if you bought Preston, but I find it hard to see it developing as an engine for income generation.

 

[W-S-M Seagull]

21 minutes ago, ExiledAjax said:

The debt basically affects the price. Any buyer will either a) want it settled before they buy, or b) want a discount equal to the debt. 

It's a solvable problem... so long as the seller is willing to do either of those two things. And that's probably our sticking point.

So it all comes back to the fact that £200m is way too high given there are some expensive issues such as the debt.

How does the football club having a lease to play at Ashton Gate for 100 odd years impact things? 

Could a new owner just say "OK I won't buy the stadium as the football club has a lease to play there anyways" ? But then I guess it depends on what the terms of the lease are and I guess Steve could change those terms at any point whilst he still owns the lot. 

[Olé]

4 hours ago, ExiledAjax said:

what I negligently summarised as "just chats" in my first post. I agree that's what will be happening in the investment committees and meetings. If nothing is getting beyond that then fair enough

Being more serious for a second, in my experience this step (chats to potential targets to qualify them) comes with a fair amount of effort before profiling into an investment board. A discussion about potential acquisitions (Championship clubs in this case) with an investment board would have had a lot of analyst leg work even in the first instance to understand the route to acquiring any of the mentioned businesses.

Which is why in my head at least the only possible blocker in our case after several years is price. Teams in these firms are literally incentivised to make deals possible because funds not invested are burning a hole due to the expected rate of return. Therefore those finding targets and those doing DD, are all paid commission to make deals achievable - find a price and process at which any prospect is worth buying.

This means even if City - for example - is complicated by the wider sporting group, the stadium, or other factors, there will have quickly been a working hypothesis for how to navigate around that if the price is right. No one in these firms will have gone "sounds complicated, we just won't bother looking". They will have figured out the investment case, because (as in my last message) Bob is going to ask the question.

In defence of Steve Lansdown on the other side of this, if there is any owner who you'll struggle to agree a price with, it is someone in investments who can value assets. The skill of funds is to find under valued assets with growth potential. The scenarios they run look at the mid/long term increased value they think is achievable (investment, cost cutting etc). The problem is, SL is smart enough to price this all in.   

 

Edited May 21 by Olé

[Harry]

29 minutes ago, bcdc said:

Preston may have lots of land, but I can’t see Preston as the site of a stadium much bigger than Deepdale.
 

Their geographical position makes increasing on their core area of support a difficult job. Within 20 miles radius there’s Blackpool, Blackburn, Wigan, Bolton, even Fleetwood, as alternative poles of EFL allegiance; to the north there’s hardly any population to attract (have a look at the area covered by the Trough of Bowland and the Pennines), and to the south of the 20 mile radius you’ve got the equivalent of astronomical black holes  in Manchester and Liverpool to contend with.  So in crowd terms, a stadium with 40,000 capacity for Preston looks as viable as 20,000 for the Gas. 

Increasing the stadium footprint could also mean space for non-matchday revenue, of course, and, to an outsider, this also looks a tough call for Preston.  North Lancs is a classically struggling economic sub-region, with high derivation rates and so on.

You’ld get a club with a fine tradition if you bought Preston, but I find it hard to see it developing as an engine for income generation.

 

Agreed. 
Bristol City is quite clearly a better overall prospect than Preston. If only because Preston is, well, in Preston. 
But the main stumbling block would be the price. 
2 teams who’ve both finished 10th and 11th for the last 9 years, with similar sized stadia and no top flight football for over 40 years. 
One is valued at £150 million more than the other. 
That makes no sense to potential investors. 

[ExiledAjax]

31 minutes ago, W-S-M Seagull said:

How does the football club having a lease to play at Ashton Gate for 100 odd years impact things? 

Could a new owner just say "OK I won't buy the stadium as the football club has a lease to play there anyways" ? But then I guess it depends on what the terms of the lease are and I guess Steve could change those terms at any point whilst he still owns the lot. 

Pedantic legal point: it's a licence not a lease. The FC operating company does not have exclusive possession or control over the stadium. It's a licence. Broadly though both a lease and a licence do the same thing - they give us (and the Bears and the Women) permission to host and play matches at Ashton Gate.

Secondly.

Yes a buyer could theoretically buy the company that runs the football club/team but not the company that runs AG. If they did then they'd find themselves taking that licence on and would retain a relationship with Lansdown (assuming he didn't sell AG to someone else).

Yes as it stands it's effectively a licence between Steve and Steve, and either of those Steve's could try and change the terms. 

I do always say that I really, really, really think it's unlikely that any buyer will take the operating company and not the stadium.

13 minutes ago, Olé said:

Teams in these firms are literally incentivised to make deals possible because funds not invested are burning a hole due to the expected rate of return.

They will literally have an obligation to their partners to invest the funds that they draw down. It will be in the IM and the subscription agreement. They have to spend the funds.

And yes they will prepare lots of slideshows, spreadsheets, and memos looking at whatever is out there publicly. I wonder though I'd we have a standing dataroom with more confidential information in it that we grant access to for more detailed analysis to happen.

In my experience football clubs often don't have that level of sophistication and do things on a more ad hoc basis.

Edited May 21 by ExiledAjax

[Topper 123]

Is there no chance SL and co revisiting the site they own at long Ashton producing new plans that might appease the neighbours and building a new stadia there -can new plans be resubmitted?

[Davefevs]

1 hour ago, Topper 123 said:

Is there no chance SL and co revisiting the site they own at long Ashton producing new plans that might appease the neighbours and building a new stadia there -can new plans be resubmitted?

I think the houses at Longmoor fund the Sporting Quarter.