Could Tony Bloom sell the club

[Ernest]

The only clubs worth buying are ones already in the Prem, too much of a lottery buying a team in the Championship and thinking they could go up, took Leicester ages and god knows how much cash before they finally went up and how can you do that now with FFP ? I wouldn't say we were worthless but until we get to the Prem I can't see any serious buyers coming in, Aston Villa can't get a buyer and they are an established Prem side with a world wide name so why would any mega bucks person want to buy us ?

 

[El Presidente]

How do you come to this valuation? The whole club ie players and infrastructure must be worth more than 12m as a going concern to someone surely?

Player and infrastructure are worth quite a bit, but after you have paid off the outstanding loans my calcs give a figure of £12 million. Equity = Assets less liabilities!

 

[GoldWithFalmer]

I always had faith that this club would come good the mid 1990's,the old man always was of the opinion that nobody is interested as they have not come forward,i replied when the time is right they will.

As such i would not rule out an attempt by some mega billionaires to wish to make our club their play thing,at some stage,now that all the off the field aspects are falling into place.

We then would have a moral dilemma to deal with..

 

[Creaky]

Player and infrastructure are worth quite a bit, but after you have paid off the outstanding loans my calcs give a figure of £12 million. Equity = Assets less liabilities!

However you insinuated that TB would just get £12M for his £200M investment - on the above basis he would also get back his outstanding loans.

 

[Herr Tubthumper]

Player and infrastructure are worth quite a bit, but after you have paid off the outstanding loans my calcs give a figure of £12 million. Equity = Assets less liabilities!

Is it as simple as equity-assets? There must be a premium. If Bloom decided he wanted out tomorrow I feel he will get more than 12m for the club. The hotel potential must add some serious value to the club as well.

 

[GoldWithFalmer]

The only clubs worth buying are ones already in the Prem, too much of a lottery buying a team in the Championship and thinking they could go up, took Leicester ages and god knows how much cash before they finally went up and how can you do that now with FFP ? I wouldn't say we were worthless but until we get to the Prem I can't see any serious buyers coming in, Aston Villa can't get a buyer and they are an established Prem side with a world wide name so why would any mega bucks person want to buy us ?

The next big thing?

Besides did anybody expect Tony to bail us out,strange things can happen and although it may seem i have straw in my hands i think,your right,when in the Premier and for that reason i would not rule it out..

 

[El Presidente]

There must be a premium though. If Bloom decided he wanted out tomorrow I feel he will get more than 12m for the club. The hotel potential must add some serious value to the club at least.

Only get a premium if the business makes profits, presently it doesn't.

 

[Blue3]

No in Tony I trust

 

[GoldWithFalmer]

Only get a premium if the business makes profits, presently it doesn't.

Do all these calculations that you do and know about,accountancy and so forth,do you factor in the fact that it's a football club and that most of that sensible stuff tends to go out of the window.

 

[El Presidente]

Is it as simple as equity-assets? There must be a premium. If Bloom decided he wanted out tomorrow I feel he will get more than 12m for the club. The hotel potential must add some serious value to the club as well.

The shares are worth £12m. TB would also get some money back on his loans, but no one apart from a complete lunatic would give him full repayment.

 

[El Presidente]

Do all these calculations that you do and know about,accountancy and so forth,do you factor in the fact that it's a football club and that most of that sensible stuff tends to go out of the window.

Yup, which is why I based the valuation on a fully reviewed research exercise, which has used existing prices paid for clubs to generate a formula to work out prices.

 

[El Presidente]

Bill Archer accepted 50pence in the pound for his loans when he sold out.

 

[GoldWithFalmer]

Yup, which is why I based the valuation on a fully reviewed research exercise, which has used existing prices paid for clubs to generate a formula to work out prices.

So really,we either need to wait or perhaps find that lunatic some how....

 

[Creaky]

The shares are worth £12m. TB would also get some money back on his loans, but no one apart from a complete lunatic would give him full repayment.

I'm struggling now - you say you took into account the loans the club have as a liability when calculating the share value but then discount the value of those loans should a sale take place - shouldn't the share valuation in that case be based on the 'reduced' liability represented by those loans?

 

[El Presidente]

So really,we either need to wait or perhaps find that lunatic some how....

I'm amazed that ANY Albion fan would want to get rid of Tony Bloom. Shows how short memories and unrealistic expectations can overwhelm common sense.

 

[El Presidente]

I'm struggling now - you say you took into account the loans the club have as a liability when calculating the share value but then discount the value of those loans should a sale take place - shouldn't the share valuation in that case be based on the 'reduced' liability represented by those loans?

The original question was asking whether TB would sell the club. There is no way he would get his £200 million back. On a cash basis they are worth nothing, if he was lucky he might get 20 pence in the pound back on the loans, plus £12 million for the shares. If so he would lose £148 million.

The stadium may have cost £100 million, but it's not worth that, as it only generates cash 25 days a year, for 80 minutes a day.

 

[Creaky]

The original question was asking whether TB would sell the club. There is no way he would get his £200 million back. On a cash basis they are worth nothing, if he was lucky he might get 20 pence in the pound back on the loans, plus £12 million for the shares. If so he would lose £148 million.

The stadium may have cost £100 million, but it's not worth that, as it only generates cash 25 days a year, for 80 minutes a day.

But if the true liability represented by the loans is only 20% of the actual amount wouldn't that increase your share valuation?

 

[El Presidente]

But if the true liability represented by the loans is only 20% of the actual amount wouldn't that increase your share valuation?

I think the club value should be based on the following formula

Club value = (Revenue + Net Assets) x (Net Profit + Revenue)/Revenue x (Stadium Capacity %)/(Wages/Revenue)

 

[El Presidente]

They talk about that in business school: The Greater Fool Theory.

Yup, but if Randy Lerner's Villa experience is anything to do by, the greater fool bubble has burst.

 

[Guy Fawkes]

Yes but are you saying that companies are never bought when they are in debt? .... Of course not...I know the debt is Tony's personally but I'm sure that can be changed.

I just don't understand football finance in general. Couldn't someone just do what the glazers did at Man U. Highly leveraged takeover then dump the debt back on the club?

When someone buys a club, they also buy the debt, if the club is around £200m in debt (including what is owed to TB but could be converted to shares if the club is unable to repay this in about 20 years time) and TB wants to actually profit from this, the buyer will have to stump up over £200m (or taking over and becoming the debtor) before even considering investing in the playing side which will take how much more to guarentee promotion exactly?

I'd doubt very much that there is anyone out there who would be willing to buy us for that much money and anyway, i doubt TB would want to sell anyway. If he was in it for financial gain then he would never have got involved with the club in the first place.

If a new owner did come in and it turned into another Pompey ownership type situation, who would step in afterwards and buy the club with even greater debts to take over? - If that were to happen, then that would be the end of the club and i can't see TB putting all that money in if there is a risk it was all in vain.

He has stated publicly that he wanted to secure the long term future of the club so that future generations can continue to watch the Albion, and the way he is trying to run it (eventually self financing and within FFP) it seems like a long term view is his aim rather than a short term turnaround to a new buyer. If he was to lose around £8m each season for the next 3 seasons, why wouldn't he have gambled that £24m extra the first season on a shot at the top flight to make the club more attractive to a potential buyer rather than make it more expensive for a new buyer to take over (clubs debt increases but we are still in the Championship) - there was no guarentee that would have worked anyway (look at the number of clubs that have tried this approach at various levels of the football pyramid and failed.)