PODCAST: Wolves 3 Liverpool 0 - Match Reaction

2 minutes ago, aws said:

Most partial investors will want to see a business plan showing how their investment is going to increase in value. You’d expect that business plan to set out details of necessary expenditure by all the owners to achieve that. The success of the team is integral to value growth so it’s likely that any deal will include provision for strengthening the team to ensure regular CL qualification as a minimum. 

Again though, there are FFP implications. We couldn't just spend the billion quid over three or four windows could we? Or could we?

We could if we are underspending now or find a loophole, like Chelsea did with spreading fees over 8 years. instead of five.

4 minutes ago, dave u said:

 

Again though, there are FFP implications. We couldn't just spend the billion quid over three or four windows could we? Or could we?

I think we’ve got massive existing leeway under the FFP rules. I read somewhere we could spend at least £300m extra and still be fine. 

1 hour ago, dave u said:

 

This is different because the premise they are selling to everyone is "we need investment to compete in the transfer market" 

 

I'm not sure they've said that?

There may be noises in the media to that effect but similar noises were made at the time of the Redbird deal, i.e. to combat Covid losses.

1 hour ago, aws said:

Most partial investors will want to see a business plan showing how their investment is going to increase in value. You’d expect that business plan to set out details of necessary expenditure by all the owners to achieve that. The success of the team is integral to value growth so it’s likely that any deal will include provision for strengthening the team to ensure regular CL qualification as a minimum. 

There might be investors willing to take a share without additional investment in the team? Banking on future TV rights etc and the Super League getting back on the table?

Why did Redbird invest in FSG without the funds being passed on to the sports teams? Is there any reason that wouldn't happen again, even with investment directly into LFC, if they believe there's other ways to increase the value of the club?

1 hour ago, Moo said:

 

I'm not sure they've said that?

There may be noises in the media to that effect but similar noises were made at the time of the Redbird deal, i.e. to combat Covid losses.

 

 

There might be investors willing to take a share without additional investment in the team? Banking on future TV rights etc and the Super League getting back on the table?

Why did Redbird invest in FSG without the funds being passed on to the sports teams? Is there any reason that wouldn't happen again, even with investment directly into LFC, if they believe there's other ways to increase the value of the club?

Because the money from selling the sports clubs / increased valuation of the sports clubs will go to the increased value of FSG as an owner of the said clubs, and thus to Redbird?

27 minutes ago, SasaS said:

 

Because the money from selling the sports clubs / increased valuation of the sports clubs will go to the increased value of FSG as an owner of the said clubs, and thus to Redbird?

Exactly.  So the next investors to buy a share, whether in FSG or LFC, could believe the same.

25 minutes ago, Moo said:

Exactly.  So the next investors to buy a share, whether in FSG or LFC, could believe the same.

Not if they invest in the capital of LFC. If as they say in the podcast, we are valued at 4 billion of something and FSG finds a new investor that will invest a billion in exchange for 20 percent stake (LFC would then be valued at 5 billion), the money will be invested in LFC (although not necessarily (all) in the team).

In that scenario FSG may decide they would rather just sell 25 percent and take the biggest chunk of the billion (if they still own most of the club) for themselves, because, if it is not easy to sell LFC for 4 billion, it may be even more difficult finding a buyer for 5 billion (for them to make a (huge) return on their (full) investment). If they think the billion of investment is not essential to protect the value or that it cannot substantially increase it beyond 5 billion, it makes no sense for them to negotiate it.

So if FSG want to keep the money and not put it into the club they can do that, it would just reduce their share? If, of course, the buyer agrees.

A bit like when they sold a chunk of FSG to Redbird then?

I guess it depends on the deal they make.

I think if they sell some of the club, it makes no sense to put it back into the club, because that would be their investment in capital, in equity, and the buyer can make the same investment without buying the percentage of the club from FSG.

I'd say it goes something like if TLW is valued at 20k and Dave sells half of it for 10k to me, it would not benefit the site, Dave would take the money as his reward for all the effort and investment in the site over the years and now own only half of TLW. It makes no sense to put it back into the site, because he would then again own more than half, based on this investment (and have no money to blow on golf clubs and hookers). He can though, if we agree on that.

If we on the other hand  agree that I invest 20k in TLW, Dave would not get anything and own half of the new site, the site will be improved (by investing 20k in whatever the site needs investing into) and he would hope that it would generate more profit in the future or be valued at more than 40k (of which 20k is still Dave's) based on successful investment.

Dave can also decide that there is not much one can do for 20k to improve the revenues considerably, so as an owner it makes more sense to sell half of it and take the money.    

Is that offer to pay Dave £20k subject to contract? 

1 hour ago, SasaS said:

I guess it depends on the deal they make.

 

I think if they sell some of the club, it makes no sense to put it back into the club, because that would be their investment in capital, in equity, and the buyer can make the same investment without buying the percentage of the club from FSG.

 

I'd say it goes something like if TLW is valued at 20k and Dave sells half of it for 10k to me, it would not benefit the site, Dave would take the money as his reward for all the effort and investment in the site over the years and now own only half of TLW. It makes no sense to put it back into the site, because he would then again own more than half, based on this investment (and have no money to blow on golf clubs and hookers). He can though, if we agree on that.

 

 

If we on the other hand  agree that I invest 20k in TLW, Dave would not get anything and own half of the new site, the site will be improved (by investing 20k in whatever the site needs investing into) and he would hope that it would generate more profit in the future or be valued at more than 40k (of which 20k is still Dave's) based on successful investment.

 

 

Dave can also decide that there is not much one can do for 20k to improve the revenues considerably, so as an owner it makes more sense to sell half of it and take the money.    

 

 

Which about covers what I am saying;

that a partial sale can go either way depending on what FSG and the buyer agrees.

I will base my expectations of what FSG would prefer on their previous actions.  

Therefore I wouldn't expect the proceeds from any partial sale to be put back into the club.

1 hour ago, aws said:

Is that offer to pay Dave £20k subject to contract? 

I'm not saying it's £20k.

2 hours ago, SasaS said:

because he would then again own more than half, based on this investment (and have no money to blow on golf clubs and hookers).

To be clear, I don't buy golf clubs, they send them to me and I then get paid to review them.

As for the hookers....

“It’s like sticking your finger in the dyke”

20 hours ago, dave u said:

 

I understand the logic for that though. I don't like it as a fan but I understand from their perspective why they did that, and I'd rather that than them taking out big payments every year like the Glazers are doing. They wanted some return on their initial investment but don't take dividends (right?), so selling off a piece and trousering the cash allows them to do that while still retaining the bulk of the asset to sell off at some point in the future when they think its at maximum value.

 

This is different because the premise they are selling to everyone is "we need investment to compete in the transfer market" when really investment in that context is really not going to do much (anything?) to benefit the club at all. It'll most likely just go into FSG coffers to do whatever they like with it.

 

A partial sell off benefits them a lot. I don't see how there's any benefit to us though, but maybe that's because I'm missing something. Didn't Redbird invest in FSG rather than LFC? Maybe if new investment is specifically just about buying a piece of the club rather than of FSG that helps us in some way, but I'm struggling to see how.

 

They could choose to allow any sale to inflate the overall value of the club by allowing the cash to go to the club rather than them. Their proportion of the club would be smaller but it would still be worth the same amount of money as the overall value would have risen through the partial sale.
 

The club could not then use that money for transfers as it’s not permitted by FFP. However, it could use the money to repay debts to FSG for the redevelopment of the stadium and training ground, as well as a potential buy back of Melwood.

That would put cash back in FSG’s pockets and release more of our legitimately earned income for players as we would free up the money we’ve been using to pay back the debt to FSG. 

19 hours ago, aws said:

I think we’ve got massive existing leeway under the FFP rules. I read somewhere we could spend at least £300m extra and still be fine. 

Yep. That’s correct. Hence the rumours about a £250m+ rebuild in the summer are entirely feasible - and that’s without factoring in the massive benefits of the likely sale of non-amortised players like Big Nat and Kweev. Their fees can be booked in full on the balance sheet at the moment of sale offsetting even further any big spend next summer.