[Archived] Rovers Sold ??

[Jonnolad]

Given that the trust was worth circa £650m when it was established, it is probably worth well over £1bn now that JEA has been sold, so who ever comes in will have to have more cash than that and be in a position to lend it on more favourable rates than the trust.

I may be asking an obvious question here, but where are these figures from - the £650m one in particular?

[Cheshireblue]

£650m was the value of Jacks Estate following the sale of Walker Steel and the investment in JEA. These numbers were from the published "Rich list" and from other news sources. Knowing how astute a businessman he was (and indeed knowing some of his professional advisers) I cannot believe that the value of his estate went down before he put it into trust. The family were provided for seperately with very reasonable grants (both Jack and his brother were very considerate to their families) and so with the passage of time, the growth of the investment portfolio generally over 10 years and in particular the sale of JEA to BMi, I would suggest that £1bn is a conservative estimate for the total value of the trust.

[rovers_rob]

Given that the trust was worth circa £650m when it was established, it is probably worth well over £1bn now that JEA has been sold, so who ever comes in will have to have more cash than that and be in a position to lend it on more favourable rates than the trust.

So you are saying that whoever comes in to buy BRFC will have to be worth over 1 billion and prepared to lend the money at more favourable rates ?

If what you are saying is true then Rovers will never be sold, this thread is pointless and why waste money on Rothchilds talking to potential investors when they will never meet the above criteria.

[Jonnolad]

£650m was the value of Jacks Estate following the sale of Walker Steel and the investment in JEA. These numbers were from the published "Rich list" and from other news sources. Knowing how astute a businessman he was (and indeed knowing some of his professional advisers) I cannot believe that the value of his estate went down before he put it into trust. The family were provided for seperately with very reasonable grants (both Jack and his brother were very considerate to their families) and so with the passage of time, the growth of the investment portfolio generally over 10 years and in particular the sale of JEA to BMi, I would suggest that £1bn is a conservative estimate for the total value of the trust.

Whilst I wouldn't necessarily disagree with the value of Jack's estate (although the "rich lists" are notoriously subject to huge estimations), I'm wondering where you get the information that all of the estate passed to the trust on his death?

[FourLaneBlue]

£650m was the value of Jacks Estate following the sale of Walker Steel and the investment in JEA. These numbers were from the published "Rich list" and from other news sources.

I've not seen news sources suggesting Jack's estate was 650million but that it was rather the worth of what The Walker Family was worth and it was placed in that region. They tended to put the wealth of Fred and Jack together I recall.

The Sunday Times Rich List has The Walker Family being at 700million. If this includes Fred Walker's share (and presumably it does as he is nowhere else on the list and previous editions have had "Fred Walker and Family) then a substantial amount of that might not have been in the trust.

As an example...the 2002 rich list entry is here. Which suggets a worth of 800million for Fred Walker and Family whereas last year it was back down to 700million and just under 'The Walker Family'. Rich List 2006

Another thing we don't know if what happens with profits. Do they go to fund other causes? Are they just ploughed back into the Trust? What does the family take out...it has been mentioned that they were taken care off but won't they also reap some rewards from this Trust?

Regardless of such quibbles it does appear that only a serious bidder will be able to get to the stage of checking the books and so on. Borrowing money from left, right and centre while desperately trying to cobble together investors then holding them together for long enough to get in a bid does not seem likely to impress the Trust.

The Trust might well want to sell but unless they find a suitable buyer then they will have to keep on going as they are.

[stuwilky]

The family were provided for seperately with very reasonable grants (both Jack and his brother were very considerate to their families) and so with the passage of time, the growth of the investment portfolio generally over 10 years and in particular the sale of JEA to BMi, I would suggest that £1bn is a conservative estimate for the total value of the trust.

Chesh, I was under the impression that all fell through, and the trust still owned Rosedale Aviation, which in turns own around two thirds of the newly expanded Flybe (after acquiring Connect in February/March this year).

Not that I am by any means sure of this!

[philipl]

If you understand anything about trust law (no doubt Rovermatt will provide a crash course) you will know that the trustees are bound by the terms of the trust deed. They have some discretion, but they have to follow the wishes of the person that set the trust up (ie Uncle Jack).

In our case, the Trustees can only sell the club if it is in the best interests of the Club. They are not out to generate a profit, they do not have shareholdes to satisfy, they simply have to do what is best for the club under the trust rules.

In reality this means they can only sell it to a buyer who is financially more stable and prepared to make funds available on more favourable terms than the trust does.

Given that the trust was worth circa £650m when it was established, it is probably worth well over £1bn now that JEA has been sold, so who ever comes in will have to have more cash than that and be in a position to lend it on more favourable rates than the trust.

That, in a nutshell, is why any story about Dan Williams or any other tin pot millionaire claiming to be interested in buying the club but having to borrow money to do so, is just pie in the sky.

The tabloids/John Williams state that the shareholders (the trust) are willing sellers. Of course they are, they always have been if it is in the best interests of the club. Rothschilds advised Uncle Jack and the trust from the date it was established, so they have not been "brought in", they have always been there. They are there to advise on any offer, but they always have been in their capacity as advisers to the trustees.

It's a total non-story, and that is why I have consistently poured scorn on Nicko's rumours about a take over.

I think you are correct Stuwilky re Flybe and as for the Sunday Times Rich list- the words very inexact come to mind.

This should not detract anything from Chesh's post above which is the best yet on this long and winding thread.

[Eddie]

That, in a nutshell, is why any story about Dan Williams or any other tin pot millionaire claiming to be interested in buying the club but having to borrow money to do so, is just pie in the sky.

I believe the story was that he was setting up a consortium, not borrowing the money. If a new investor is willing to put £25 million or so a year into it then that would be great, I don't think that is an unrealistic idea and I think there would be plenty of people out there who won't be looking to make a profit either.

What I don't get about this topic is why so many people talk as if they know something. As far as I can tell there are a good number of people with a basic idea of Walker's fortunes and the possible clauses in the trust, but no one has any information with regards to true nature of the trust or who is or isn't interested. On that basis no one can make a solid statement, either way that is.

[rovers_rob]

What I don't get about this topic is why so many people talk as if they know something. As far as I can tell there are a good number of people with a basic idea of Walker's fortunes and the possible clauses in the trust, but no one has any information with regards to true nature of the trust or who is or isn't interested. On that basis no one can make a solid statement, either way that is.

I think the above is one of the best posts on this long and winding thread.

I also think that the fact that John Williams is making statements regarding possible takeovers means that it will happen sooner rather than later.

I hope that Philipl and Cheshireblue are correct in what they say because that will mean that when someone takes over the club they will be billionaires who are prepared to invest in the club without expecting anything in return.

[Exiled in Toronto]

In reality this means they can only sell it to a buyer who is financially more stable and prepared to make funds available on more favourable terms than the trust does.

Given that the trust was worth circa £650m when it was established, it is probably worth well over £1bn now that JEA has been sold, so who ever comes in will have to have more cash than that and be in a position to lend it on more favourable rates than the trust.

I'm afraid I don't follow your logic there. Why does a buyer have to have a greater net worth than the trust? All that matters is that they are financially stable enough to be able to move Rovers forward.

Rovers turns over c 35 mill/year with breakeven cashflow and a shortfall on the P&L of around 3-5 million/year. Income from TV rights is about to go up dramatically and with the liklihood of more to follow. Rovers doesn't need an owner with a net worth of a billion to be financially stable for the forseeable future. The Trust doesn't devote its total assets to propping up Rovers. We're small change to them.

Unless of course you are privy to the terms of the top secret trust and know otherwise??

[Exiled in Toronto]

How to make a profit from the club while also funding our continued presence in the top league is the problem though. Who can manage that balancing act? Or are we expecting the new owners not to make profits?

The report also says an "estimated" one billion people watched Man Utd V Arsenal. They don't say who estimated that however, why they came up with that figure or if it has any real basis in truth. Sounds like a big number plucked out of thin air.

I think recent history shows that serious money can be made from owning a football club, but that usually doesn't come from annual dividends, apart from Man Yoo. The Edwards clan, John Hall and Fat Freddy, that previous bloke at West Ham, Ken Bates at Chelsea etc etc all made vast fortunes by being able to sell at much higher prices than they paid, nicely topped up by paying themselves a hefty salary. I think the principle attraction in buying Rovers would that someone thinks the value of Premier League clubs will continue to rise as it becomes more and more a global attraction.

The money from overseas has enormous potential still in it. If those billion viewers paid 10c each to see the Man Yoo/Arse game, that one match would have realised $100 million. We are no longer little old Blackburn being watch by 7,000 supporters, but are 1/20th of a league that attracts hundreds of millions of viewers. Even in little old Canada, last season I paid $3/month for Foxsportsworld as my primary EPL provider, whereas this season I am paying $15/month for Setanta, a five-fold increase, and I would gladly pay more if I had to.

I also don't understand the asset-stripping argument as I'm not sure we are an asset-strippers dream. Who would buy Ewood? It's a white elephant if there isn't a Premier League club playing there, and the site is worth squat. Maybe Brockhall is worth a few bob, but hardly worth the effort involved. Even selling all the players would probably not cover the asking price.

And lastly, we may get bought as a rich man's plaything. Nothing wrong with that. They would no more asset strip the club than they would rip out the gold bathtaps of their yacht or cut up their Picasso and sell off the pieces for a tenner each.

So maybe I'm missing something, but I can see several reasons why someone would buy us.

[FourLaneBlue]

I think recent history shows that serious money can be made from owning a football club, but that usually doesn't come from annual dividends, apart from Man Yoo. The Edwards clan, John Hall and Fat Freddy, that previous bloke at West Ham, Ken Bates at Chelsea etc etc all made vast fortunes by being able to sell at much higher prices than they paid, nicely topped up by paying themselves a hefty salary. I think the principle attraction in buying Rovers would that someone thinks the value of Premier League clubs will continue to rise as it becomes more and more a global attraction.

That is a true enough point but if the cost of football clubs rise it is usually related to them being in the Premier League and doing well. To do that we need a buyer who can also contribute to the team. It seems that a suitable bidder hasn't appeared yet as the Trust certainly seem willing sellers.

The money from overseas has enormous potential still in it. If those billion viewers paid 10c each to see the Man Yoo/Arse game, that one match would have realised $100 million. We are no longer little old Blackburn being watch by 7,000 supporters, but are 1/20th of a league that attracts hundreds of millions of viewers. Even in little old Canada, last season I paid $3/month for Foxsportsworld as my primary EPL provider, whereas this season I am paying $15/month for Setanta, a five-fold increase, and I would gladly pay more if I had to.

There is certain a lot of potential from overseas viewers...even if the figure of a supposed billion people watching the Arsenal Man U game is a load of rubbish. Despite that...it would still have been shown to a lot of viewers it is true.

It does also show we are riding on the coat tails of the big clubs however. How many times more people watched that than would watch us play...I don't know...Villa? Wigan?

Rovers could be looked upon as an attractive, secure option for someone to enter the market. That is fine but hopefully the Trust will be certain of making sure that the deal is a good one for the club and not just for these new bidding investors.

We should be in no rush to sell however. We are good hands after all so only a really worthy bidder should be entertained. Going with the likes of the Dan Williams bid smacks somewhat of an unnecessary risk rather than a calculated one.

[Cheshireblue]

I'm afraid I don't follow your logic there. Why does a buyer have to have a greater net worth than the trust? All that matters is that they are financially stable enough to be able to move Rovers forward.

Rovers turns over c 35 mill/year with breakeven cashflow and a shortfall on the P&L of around 3-5 million/year. Income from TV rights is about to go up dramatically and with the liklihood of more to follow. Rovers doesn't need an owner with a net worth of a billion to be financially stable for the forseeable future. The Trust doesn't devote its total assets to propping up Rovers. We're small change to them.

Unless of course you are privy to the terms of the top secret trust and know otherwise??

If you need to borrow money to buy the club, then you are not as financially stable as the trust. You will not be able to lend money on the same terms as the trust as you will have to pay a commercial rate of interest on those borrowings as banks are not in the habit of lending money for free. The trust however has plenty of assets and can lend on whatever terms it sees fit.

It therefore follows that if a solvent buyer (ie one who is debt free) wants to buy the club, he will need to be able to match the terms, or rather better them, than the trust can offer. At the moment, the trust could theoretically lend hundreds of millions of pounds to the Club, should it need a new stadium, training ground, a new team, etc. Any purchaser would need to be able to do the same otherwise you could argue that the sale is not in the best interests of the club.

The trust was set up to manage the JEA business and the Club. JEA has been sold, so that just leaves the Club. The Trust therefore has nothing else to worry about.

[Cheshireblue]

Philipl - You are right, it is Flybe not BMi that has JEA in its stable. I got my two-bob airlines confused. Apologies.

[Eddie]

It therefore follows that if a solvent buyer (ie one who is debt free) wants to buy the club, he will need to be able to match the terms, or rather better them, than the trust can offer. At the oment, the trust could theoretically lend hundreds of millions of pounds to the Club, should it need a new stadium, training ground, a new team, etc. Any purchaser would need to be able to do the same otherwise you could argue that they sale is not in the best interests of the club.

Once again we're getting into territory where no one really knows the details, but I disagree with that line of thinking. Any potential owner doesn't need to have the possibility of lending us hundreds of millions, the situations in which we will need that amount of money are unlikely to come up in the near future. What any new owner would be need to be able to do is to be able to contribute more than the trust does on an annual basis. I don't know what the exact figure is but I'd imagine they are giving us somewhere in the region of 5-10 million a year? Maybe a bit more. So if someone can come in and say that they can give us 15-20 million a season then that is fine, even if his actual net worth is well short of what the trust has. Again though, we don't know what the stipulations of the trust are, so there's no way to know how it would need to work. The only thing we can go by is what came out from the Dan Williams story and the fact that it seemed as if he would need to be able to put 25 million into the team.

[Jimbo]

I think in the current financial climate all this is pie in the sky thinking anyway - I think that debt leveraged buy-outs are no longer viable in the short to medium term as the "credit crunch" starts to take hold - I'd love to be a fly on the wall in the Glazer boardroom at the moment - That only really leaves dodgy eastern europeans and corrupt asian polticos that need to launder some of their ill gotten billions - Eddie you may not give a toss how these people came into their money but some of us do, it's a shame the the FA seeem to have the same morals as you though.

[Eddie]

I never said that I don't care how they came into their money, but I don't really think it is for me to comment on how owners of other clubs came into their money, particularly when for most of them it is very unclear. I wouldn't want someone investing potentially dirty money into the club.

The credit crunch isn't going to have any impact on people of that sort of financial clout who are borrowing large amounts of money.

[Sandiway Blue]

In all honesty i am firmly of the view that the club won`t be sold within the next couple of years,unless we happen to be the luckiest club in the world and find another Jack Walker type figure.

Looking at bare facts why would anybody buy Rovers? we don`t draw big enough gates to generate revenue, and yes we might sneak into the champions league this year,however we would need to spend most of the money generated on improving the team to maintain our place in the champions league year after year.

Also a large chunk of the champions league money would have to be pumped back into the everyday running of the club (better players = better wages etc).

Although our position on the pitch is at the moment is very healthy,within the next couple of years Hughesy will want to take his ambitions to the next level.

And personally i don`t think it will be with us,so i think we should all enjoy the ride while we can and see where it takes us.

[Cheshireblue]

So in theory we should be spending more than Man United? OK, so they have a much higher turnover than any club in the world, but the fact that they have borrowed money to loan the club doesn't mean they're financially unstable, but perhaps that they are good businessmen and they can pump money into the club while paying back the loans they bought the club with via the share of their profits.

No, in theory the trust have the finances available should the club wish to spend more than Manchester United, and the club can put forward a credible case to the trust that those funds ought to be made available in the best interests of the club. There is a world of difference. Simply asking the trust for £50m to buy, say, Ronaldinho, is a none starter. It would require a business plan and a financial model to be submitted to show that the club would be better off for having invested £50m in a single player and having paid him £200k a week for 4 years. A very high hurdle to get over when the only thing you have won in the 11 years is the worthington cup, and you have been relegated. The club needs to build slowly, spend a number of seasons in Europe, and doing well rather than getting knocked out by Greek pub teams, before the trust can even consider making huge money available to buy big name players. In effect, the trust will require the club to be generating more income before they will make funds available.

Eddie - Just for once, try accepting that you don't know enough to have a credible opinion. You are 12 years old where as I buy, sell and float companies for a living and have done so for over 10 years. Who do you think has the better idea of how trust funds operate, the fiduciary duties of trustees and how investment cases are generated? Even if they have taught you the theory at school, you have never applied it and have no experience. Pontificate all you like, but be safe in the knowledge that you really have no idea how it works.

[Eddie]

Eddie - Just for once, try accepting that you don't know enough to have a credible opinion. You are 12 years old where as I buy, sell and float companies for a living and have done so for over 10 years. Who do you think has the better idea of how trust funds operate, the fiduciary duties of trustees and how investment cases are generated? Even if they have taught you the theory at school, you have never applied it and have no experience. Pontificate all you like, but be safe in the knowledge that you really have no idea how it works.

I wasn't picking a fight with you, I was merely expressing an opinion. I just feel that no one knows the true nature of the trust, which means no one can say for sure what the situation is. If you do know the exact details of the trust then just say so and I will happily accept that you know what is going on. I would also be impressed if next when you happen to disagree with me, that at least once, you manage to come up with a response that doesn't involve making fun of my age or bringing up some lack of experience. If you'd like, as I'm such a little boy, I'll ask my father what his opinion is and, seeing as he has far more than 10 years of experience, you'll just have to accept whatever he says as fact. That's how it works right?

[AlanK]

At the end of the day folks all of the money in the world ain`t worth jack.

How much have Liverpool, Spurs, Boro, Villa, Newcastle spent? Hoe many league titles have they won recently?

Who is to say if we had all that money it would noy be squandered again. Davies? Grabbi? Ferguson? The list goes on.

Its not how much you have got its who is in charge.

Give me Hughes and Williams anyday.

They make the clubs listed above look like a laughing stock.

[LeftWinger]

At the end of the day folks all of the money in the world ain`t worth jack.

How much have Liverpool, Spurs, Boro, Villa, Newcastle spent? Hoe many league titles have they won recently?

Who is to say if we had all that money it would noy be squandered again. Davies? Grabbi? Ferguson? The list goes on.

Its not how much you have got its who is in charge.

Give me Hughes and Williams anyday.

They make the clubs listed above look like a laughing stock.

Fantastic post! Agree with every word!

[Eddie]

At the end of the day folks all of the money in the world ain`t worth jack.

How much have Liverpool, Spurs, Boro, Villa, Newcastle spent? Hoe many league titles have they won recently?

Who is to say if we had all that money it would noy be squandered again. Davies? Grabbi? Ferguson? The list goes on.

Its not how much you have got its who is in charge.

Give me Hughes and Williams anyday.

They make the clubs listed above look like a laughing stock.

You are right, but the thing is bringing in a new owner and more money doesn't mean losing Williams and Hughes. It isn't as if we have to choose one or the other. Based on what Hughes has said over the past year or so, if we want to keep him for any serious length of time thenI think investment from somewhere is necessary. Can anyone seriously say that if we gave Hughes £20 million in January instead of £5 million that we would be worse off at the end of it? We don't have to force him to spend it, but if he thought fit he could. I have no doubt that had more money been available in the summer that the centre of midfield would have been addressed. I do think we probably had some more money, but not enough to get the players who were going. I love it when we sign players like Samba and they turn out to be fantastic deals, but realistically that won't happen everytime. Sooner or later we'll have a season where the cheap signings don't work out, that could prove costly. Sometimes you need money, particularly as clubs like Villa, Portsmouth and Spurs, as well as a few others, are finding more and more money to spend themselves. Other teams will work it out, other teams are building good sides (look at Everton and Portsmouth, who will both have more money to spend than us in January). Other teams have very good managers and if we don't find a way to compete financially we won't be able to compete on the pitch eventually.

In a perfect world we would have the Trust in charge for the rest of time and each summer we'd sign 6 players for 500,000 who would turn out to be world beaters. Sadly that just isn't going to happen. We have a good side now, but we are an injury or sale or two a way from having to make some very serious replacements, that will require money. Things are going very well at the moment, but that doesn't mean that things can't be improved or that our long-term future is secure. It is because things are going so well that I think now is the best time to act. It is a moment where we can serious assess things and aren't forced to act, it's a time when we will be most attractive to prospective buyers and it is a time when good financial investment could make a huge difference to the club.

[Uddersfelt Blue]

I wasn't picking a fight with you, I was merely expressing an opinion. I just feel that no one knows the true nature of the trust, which means no one can say for sure what the situation is. If you do know the exact details of the trust then just say so and I will happily accept that you know what is going on. I would also be impressed if next when you happen to disagree with me, that at least once, you manage to come up with a response that doesn't involve making fun of my age or bringing up some lack of experience. If you'd like, as I'm such a little boy, I'll ask my father what his opinion is and, seeing as he has far more than 10 years of experience, you'll just have to accept whatever he says as fact. That's how it works right?

Are you really only 12 Eddie?

[Eddie]

Are you really only 12 Eddie?

I'm 20.