[Archived] Rovers Might Have Been Sold?

[Iceman]

good post Paul.

[philipl]

Daily Telegraph link on Liverpool sale woes. Or Gillett and Hicks woes.

Explains there is a £20m penalty for not selling the club. I guess if you add that to the fees for converting the £110m loan to the PIK interest, you could get to £2.5m a week for 26 weeks but it still seems enormous.

The good news for LFC is the penalty is on Gillett and Hicks personally. Any potential buyer looking at a Premier League club is going to see how the banks are hitting directly at the owners who thought they had protected themselves from such losses by dumping on the club. Quote- "Hicks and Gillett are also thought to be personally liable for millions of pounds in punitive interest charges since RBS agreed to a new refinancing deal in April. The bank will take the fees out of the proceeds of a sale of the club, though should Liverpool fetch less than the £282.4 million sum of its total debt, RBS will pursue the Americans for the extra funds."

At last somebody is saying the following:

"Liverpool's is not a long-term business model," said Philip Long of PKF accountants, who conduct an annual survey into football finance. "There simply is not a happy ending to leveraged buy-outs. The burden of the interest outweighs any profits the club make, and that becomes unmanageable.

"The two Americans hanging on and seeing their debt refinanced by RBS, continuing to pay interest, is a far worse scenario than the bank taking over the running of the club. The debt burden will just increase to a point where the interest is not being serviced any more. The ultimate end game, if Hicks and Gillett cling on, is that Liverpool goes bust."

And I still can see no way that Man U can repay £700m+ of debt- they had to sell Ronaldo to finance interest remember.

Quite how this colours the thinking of Rovers' two Indians is a very open question but the unfolding failure of the debt financed regime at Liverpool following failures at Leeds, West Ham and Pompey must be changing the way buyers and financiers are looking at the PL. The fact the PL generates strong cashflows has blinded people to the underlying near impossibility of making actual returns.

We just have to hope that one of the bidders has a very strong reason for putting £100m+ in spread over at least five years with no expectation of seeing their money coming back. If the ultimate end game is Liverpool going bust, Rovers will go bust after 5 minutes if this putative sales goes wrong.

[PAFELL]

Daily Telegraph link on Liverpool sale woes. Or Gillett and Hicks woes.

Explains there is a £20m penalty for not selling the club. I guess if you add that to the fees for converting the £110m loan to the PIK interest, you could get to £2.5m a week for 26 weeks but it still seems enormous.

The good news for LFC is the penalty is on Gillett and Hicks personally. Any potential buyer looking at a Premier League club is going to see how the banks are hitting directly at the owners who thought they had protected themselves from such losses by dumping on the club. Quote- "Hicks and Gillett are also thought to be personally liable for millions of pounds in punitive interest charges since RBS agreed to a new refinancing deal in April. The bank will take the fees out of the proceeds of a sale of the club, though should Liverpool fetch less than the £282.4 million sum of its total debt, RBS will pursue the Americans for the extra funds."

At last somebody is saying the following:

"Liverpool's is not a long-term business model," said Philip Long of PKF accountants, who conduct an annual survey into football finance. "There simply is not a happy ending to leveraged buy-outs. The burden of the interest outweighs any profits the club make, and that becomes unmanageable.

"The two Americans hanging on and seeing their debt refinanced by RBS, continuing to pay interest, is a far worse scenario than the bank taking over the running of the club. The debt burden will just increase to a point where the interest is not being serviced any more. The ultimate end game, if Hicks and Gillett cling on, is that Liverpool goes bust."

And I still can see no way that Man U can repay £700m+ of debt- they had to sell Ronaldo to finance interest remember.

Quite how this colours the thinking of Rovers' two Indians is a very open question but the unfolding failure of the debt financed regime at Liverpool following failures at Leeds, West Ham and Pompey must be changing the way buyers and financiers are looking at the PL. The fact the PL generates strong cashflows has blinded people to the underlying near impossibility of making actual returns.

We just have to hope that one of the bidders has a very strong reason for putting £100m+ in spread over at least five years with no expectation of seeing their money coming back. If the ultimate end game is Liverpool going bust, Rovers will go bust after 5 minutes if this putative sales goes wrong.

Ironically if Man U, Liverpool did go bust, I cannot see the supporters wanting to then go and support Man city and Everton. But a football supporter is like a junky in some respects, once a football supporter always a football supporter. If Rovers went bust can any of us then supporting the dingles? (perish the thought)

so where would the supporters on Man U and Liverpool go (especially those who live in Blackburn)? I suggest they would come to Rovers.

An ideal situation for Rovers would be for liverpool and man u to go bust.

[philipl]

The words are "ultimate end game" re Liverpool going bust.

ie it is not going to happen tomorrow and given the way the banks have locked Hicks and Gillett into personal liability for any losses made on any sale, Liverpool are not going bust end of.

Man U might have difficulty rolling over their £500m of bonds in six and a half years' time especially if the PIK loans of £215m are not repaid pronto.

[PAFELL]

The words are "ultimate end game" re Liverpool going bust.

ie it is not going to happen tomorrow and given the way the banks have locked Hicks and Gillett into personal liability for any losses made on any sale, Liverpool are not going bust end of.

Man U might have difficulty rolling over their £500m of bonds in six and a half years' time especially if the PIK loans of £215m are not repaid pronto.

Just a thought, if Rovers increased the price of season tickets to that of other clubs, what would that generate in income. Would be interesting to see who would advocate such a move by Rovers - so as to icrease the transfer budget.

[imy9]

Just a thought, if Rovers increased the price of season tickets to that of other clubs, what would that generate in income. Would be interesting to see who would advocate such a move by Rovers - so as to icrease the transfer budget.

What budget?

[Hughesy]

If Rovers increased prices to say £500....we would lose about half of our season ticket holders....so its a pointless topic as the increase will just cover the loss of fans.

[47er]

Just a thought, if Rovers increased the price of season tickets to that of other clubs, what would that generate in income. Would be interesting to see who would advocate such a move by Rovers - so as to icrease the transfer budget.

I'm afraid that move would generate nothing at all. The extra revenue would be off-set by those who didn't renew.Sad but realistic.

Even if 20000 season ticket-holders all paid another 200 quid each that would enable us to buy 1 decent player I suppose. But given that Fletcher went to Wolves for 7M and Kenwynne Jones went to Stoke for 8M, even that is doubtful.

[only2garners]

The reduction in prices turned out to be more or less self financing - the total gate income afterwards was about the same as before. This season it's likely to be a bit down assuming ticket sales end up a bit down, but overall gate receipts for Rovers are peanuts compared to TV income.

[thenodrog]

Liverpool will sell a player for £25 million [Mascherano] and replace him with another similar type for £4.5 million [Poulsen]...the profit pays some bills.

That is one big difference at Rovers this summer. You have had nobody to sell to cover for the fact that you do not have benefactors who put their hands in their pockets.

We might have but there are so few able to buy big at the moment. Also I suspect player's agents now prefer to advise their charges to run their contracts down and not go anywhere without an exit fee. The entire transfer market is drying up in favour of FOC moves.

[thenodrog]

It is strange that Liverpool are mega millions in debt, yet are trying to buy players. rovers a mere 20 mill in debt and cannot buy players. How does that work?

Ever asked yourself just how a club with their earning potential actually got to be mega millions in debt?

One day the chickens will come home to roost with these debt laden clubs. All their eggs are in the media basket.

[den]

Those continuing to support the Trust and being critical of potential buy-outs are asked to come up with an alternative. I ask "why?"

Because the trust are selling us Paul. As much as people want us to remain with them, they don't want to remain with us. They didn't become trustees because they wanted to run a football club, they became trustees to run all of Jack Walkers businesses. They can't go any further with the club, so they will concentrate on JW's other businesses.

No point wishing them to stay at Ewood, because they don't want to and they wont. That's the reality until, or unless something changes. The club has to move on.

By the way Paul, which stand are you in this season?

[thenodrog]

Because you said that the trust will not see us relegated. We were relegated under Jack Walker, so why wont we get relegated under the trust? that's what I'm saying.

It's not as safe a haven as some people say.

But if we are relegated with a small debt we'd survive. If we were relegated with a massive debt then it't be the end for BRFC.

Rovers v Olympic would be a keenly anticipated contest once again.... but in the Blackburn Combination down at Plessy fields by one man and his dog!

[den]

But if we are relegated with a small debt we'd survive. If we were relegated with a massive debt then it't be the end for BRFC.

I know that Theno. I was replying to the poster who said the trust could guarantee that we wouldn't go down. I also agree that with the wrong buyers we could pretty quickly go bust. However we don't have any say in the matter.

[thenodrog]

..... Why do you wish to throw this all away in the pursuit of money? It is money - and let's not use all this "investment" clap trap, it's complete nonsense

Amen to that Paul

If we all want Rovers to progress and recognise the club needs "investment" my first suggestion is every fan starts to pay a proper price to watch PL football. Our household used to have to budget for the cost of STs and all the associated paraphenalia, these days it's not even thought about. The product has been utterly devalued, partly due to ST pricing. If you want better players, start sending the club the difference between waht you pay and the real cost of an ST.

And amen to that too. The past generation has created a raft of breast fed supporters who are only able to suck on someone elses tit all their bloody life. In fact some now seem to see it as their right.

[philipl]

Because the trust are selling us Paul. As much as people want us to remain with them, they don't want to remain with us. They didn't become trustees because they wanted to run a football club, they became trustees to run all of Jack Walkers businesses. They can't go any further with the club, so they will concentrate on JW's other businesses.

No point wishing them to stay at Ewood, because they don't want to and they wont. That's the reality until, or unless something changes. The club has to move on.

By the way Paul, which stand are you in this season?

We don't know what the Tustees "want". All we have to go by is their statement when they instructed Rothschilds to find a buyer three or is it four years ago- that in the light of the new Sky deals, the money that had been provided for Rovers no longer makes any great difference and that the Sky deals should now enable the club to stand on its own feet without support.

I stand to be corrected but can anyone provide a more recent statement by the Trust?

They have changed their mind in one respect though- they have loaned another £5m interest free since then which suggests they are more engaged with the club than less.

However, this Trustees "want" is an issue.

Trustees are not appointed to want. They are appointed to do what the Settlement tells them to do and to manage the Trust's assets to the benefit of all beneficiaries. They earn their fees interpreting the Settlement document, their skills in custodianship and their ability to manage conflicts which might develop.

So the "Trustee wants to sell us" should be read as "Jack told them to sell us". Do you believe that?

Where the problem undoubtedly lies is that because Jack had thought the numbers now involved in a PL club these days would be many more years further in the future, they can no longer intervene in the ways Jack used to and had envisaged the Trust continuing to do so. Of course it is possible that there could be a new owner who could fulfil Jack's wishes better than they can. Jack's wishes I understand were to do with a successful Blackburn Rovers and entertaining the people of Blackburn so it is hard to think of any potential buyer not agreeing to that.

The big issue now is the threat to the well-being of all the Trust were Rovers to get into a bail-out situation under their ownership so I can understand getting new ownership being a higher agenda item for the Trust. But it remains the case that the Trustees are bound by the Settlement and a number of potential buyers have come and gone, all of which in retrospect could be seen as certain calamitous disasters had they bought the club- the Thai consortium being but the latest.

There could be no plainer evidence in terms of the new interest free loans, the involvement of David Brown when the club's Premier League status was under threat and the club not being sold to Dan Williams, Chris Ronnie and the Thais that Rovers are in very good hands with the Trust and, as they evaluate the Indian bids, even more so today.

It is also worth remembering that the Trust very publicly committed to sell Flybe because there was a major imbalance in the Trust's portfolio- Flybe had become too big and therefore represented a concentration of risk that the Trustees wished to diversify. However, they backed Flybe's takeover of BA Connect and Flybe became even bigger! I have no doubt that if the current takeover bids fail, the Trust would be similarly pragmatic in their approach to de-risking Rovers. And retaining a squad which came 10th last season 20 points ahead of 18th place with a group of exciting youngsters emerging is not in my opinion an existential risk to the Rovers so not in need of immediate de-rsking.

[den]

And amen to that too. The past generation has created a raft of breast fed supporters who are only able to suck on someone elses tit all their bloody life. In fact some now seem to see it as their right.

Totally missing the debate Gord. You have been asked what the way forward is, assuming the trustees want to sell [which they do], but also recognising that you don't want anyone to buy. This is your response? Suggests that you are responding with insults when you're at a loss.

[tonygreenbank]

According to the Times this morning Ali Syed has stepped up his efforts to buy Rovers by enlisting the help of Jean-Claude Darmon who is a leading football marketing pioneer.Darmon will advise Syed`s team which hopes to conclude a deal with the Trustees by the end of the month and clear the club`s £20 million debt.

Darmon would then step in and develop the required marketing strategy.Apparently he has done this with 18 0f France`s top clubs.

Syed`s potential investment is the £300m mentioned on here.The negative is that the takeover would not be completed before the end of the transfer window.

Syed`s main interest it is said is in expanding the academy to develop English talent.

He also wants to retain the current management team which may not please some on here!

I know most of this as been mentioned previously but the Frenchman`s name is an interesting development.

[den]

Philip, I don't understand how there can be any misunderstanding of what the trustees want. They appointed Rothschild's and are negotiating to sell.

[ABBEY]

If Rovers increased prices to say £500....we would lose about half of our season ticket holders....so its a pointless topic as the increase will just cover the loss of fans.

probably the best post youve done!

[thenodrog]

Totally missing the debate Gord. You have been asked what the way forward is, assuming the trustees want to sell [which they do], but also recognising that you don't want anyone to buy. This is your response? Suggests that you are responding with insults when you're at a loss.

I'm just not a cry baby expecting someone else to pay my way through life all the time Den. It's probably foolish but I've too much pride for that. I've always said that football clubs should stand on their own feet and if they can't then it's toughshit and they can go to the wall. To avoid that scenario they should amalgamate with others in order to increase revenue and reduce costs. Not really rocket science that is it?

The stupid money that we see paid to players is not their fault it's ours!

[philipl]

Philip, I don't understand how there can be any misunderstanding of what the trustees want. They appointed Rothschild's and are negotiating to sell.

Jack appointed Rothschilds in 1985.

The brief when Rothschilds were asked to find a buyer three or four years ago was to find someone who could do better for the club than the Trust could.

[rovers1995]

PaulPlunkett on Twitter has said big takeover news coming up. Bet its just what was in the papers today ^^^^^^^^^^^^^^^^^

[Balwer]

According to the Times this morning Ali Syed has stepped up his efforts to buy Rovers by enlisting the help of Jean-Claude Darmon who is a leading football marketing pioneer.Darmon will advise Syed`s team which hopes to conclude a deal with the Trustees by the end of the month and clear the club`s £20 million debt.

Darmon would then step in and develop the required marketing strategy.Apparently he has done this with 18 0f France`s top clubs.

Syed`s potential investment is the £300m mentioned on here.The negative is that the takeover would not be completed before the end of the transfer window.

Syed`s main interest it is said is in expanding the academy to develop English talent.

He also wants to retain the current management team which may not please some on here!

I know most of this as been mentioned previously but the Frenchman`s name is an interesting development.

Ties in with Paul Plunkett's comments on Twitter about big takeover news coming up.

[thenodrog]

If Rovers increased prices to say £500....we would lose about half of our season ticket holders....so its a pointless topic as the increase will just cover the loss of fans.

I'd agree but I doubt it would be that big a loss if they'd never reduced them in the first place.