Taylor Swift Posted November 12, 2009 Share Posted November 12, 2009 One little thing that confuses me, which I don't think has been answered, is the limit on investors. Say for example (just making numbers up here!) 50,000 fans/businesses invest enough to buy the club, once the club is bought can anybody then come along and say 'here's £1500 I want in'? Could the amount of investors theoretically reach 100,000+? Because there must be a point when the numbers becoming unworkable? On the other hand it would be a shame if people who can't afford to invest now wouldn't be allowed to stick their cash in at a later date. Why would the numbers be unworkable? There are of course different models of funds and their returns but because most people investing in the club will do so because of their care/love rather than financial interest, I think it'd be reasonable to operate on an equity fund model (with the equity being the club) where you guarantee an interest rate for 2-5 years then after that, it's wholely up to the judgment of the board when to give out 'dividends'. So for the first 2-5 years, no matter how good/bad the club's finances are, investors would get 2% of their investment back per year, then after that their return will be dependent on the club's finances. Of course, if you operate using this model, the number of shares has to be restricted to a certain amount and people can 'trade' their 'shares' based on the returns. Then, if you have a significant number of people on your waiting list, you issue more shares after x amount of years guaranteeing y% returns for z years, thus increasing the club's capital without guaranteeing that much returns to your investors, meaning the club isn't leveraged to fuck. If you raise more capital, you'll only have to guarantee the return to the people you're getting money from, not all of your investors because the initial guarantee is over. This way, you don't risk a lot but you can still raise money when (if) it's needed. But that's why I asked about how much NUST are looking for from investors and who they are targetting because there needs to be a specific plan in place regarding the finances if you're going to attract public institutions/funds like pension funds etc. Personally, I think 2% won't be enough. Think about guaranteeing 5% for 3 years and you'll get money from other people and you only have to guarantee the return for 3 years. This form of fundraising would get your pension funds interested, and hopefully that combined with the money raised from fans will be enough. Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted November 12, 2009 Share Posted November 12, 2009 Can the club realistically guarantee any kind of return over such a short time though, when it is currently in debt and presumably making a loss every year? Link to post Share on other sites More sharing options...
cp40 Posted November 12, 2009 Share Posted November 12, 2009 who wants a return?. put it in an ISA if that matters. Link to post Share on other sites More sharing options...
Taylor Swift Posted November 12, 2009 Share Posted November 12, 2009 It'll have to if it wants to have any hope of raising enough money. Guarantee 5%, hope to raise £120m, spend £80m on the club, £25m on players to get promoted then spend that £40m extra cash from the Premiership on players/wages and you'll still have £15m left from the initial capital raised. Say you spend £5m on the interest payments, you're still fine because now two years have passed meaning you only have to guarantee the money for a year and since you're in the Premiership, you can refinance some loans etc. and reinvest in the first-team again. There is risk involved but no one's gotten anywhere in life without taking a few risks. Even the best run club in the world (Arsenal) have risked a lot to get to where they are now. Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted November 12, 2009 Share Posted November 12, 2009 who wants a return?. put it in an ISA if that matters. I know what you mean, but if you're not expecting a return then it isn't an investment... it's a charity donation. And I don't think that's what NUST are asking for, is it? Link to post Share on other sites More sharing options...
peasepud Posted November 12, 2009 Share Posted November 12, 2009 Can the club realistically guarantee any kind of return over such a short time though, when it is currently in debt and presumably making a loss every year? When you think that the interest on the £40m overdraft was running at around £4m per year then yes, £200m raised would mean the club would be bought + investment in the team and running costs yet still paying out the same amount as we were for the overdraft alone. Link to post Share on other sites More sharing options...
peasepud Posted November 12, 2009 Share Posted November 12, 2009 who wants a return?. put it in an ISA if that matters. I know what you mean, but if you're not expecting a return then it isn't an investment... it's a charity donation. And I don't think that's what NUST are asking for, is it? its a combination of both tbh, we're not expecting people to just hand over their money and say "there you go, have it" (of course if you want to then great ) but rather, "heres an investment opportunity, invest in the club you love and gain a little bit of interest while you're on". The big difference of course is you can get your original money back from an investment not from a donation. I suppose the way to look at it is, if you have a spare £1500 sitting that you know you're not going to miss then stick it in here instead of the bank, in ten years time you're not going to be rich off either option, using just the basic maths and not all that compound interest malarky.... Good savings account is what 5-6%? so in ten years you'd have got interest of £900. With this (if it stayed at 2%) then you'd get 200. What it would mean however is that you've technically paid £70 per year to have a say in the club and be part of something of this magnitude. Thats working on the logic you'd have left the cash sitting there. Others are looking at bunging it on a 0% credit card therefore they would be being paid £20 per year to have their say! how good is that? the club paying you for your views! (Im not advocating that people go into debt for this btw) Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted November 12, 2009 Share Posted November 12, 2009 who wants a return?. put it in an ISA if that matters. I know what you mean, but if you're not expecting a return then it isn't an investment... it's a charity donation. And I don't think that's what NUST are asking for, is it? its a combination of both tbh, we're not expecting people to just hand over their money and say "there you go, have it" (of course if you want to then great ) but rather, "heres an investment opportunity, invest in the club you love and gain a little bit of interest while you're on". The big difference of course is you can get your original money back from an investment not from a donation. I see what you're saying, I know there will be a big emotional and/or charitable aspect to most of the investment. What I meant was more that it was a bit flippant to suggest that nobody will need or expect anything back at any time. Link to post Share on other sites More sharing options...
peasepud Posted November 12, 2009 Share Posted November 12, 2009 who wants a return?. put it in an ISA if that matters. I know what you mean, but if you're not expecting a return then it isn't an investment... it's a charity donation. And I don't think that's what NUST are asking for, is it? its a combination of both tbh, we're not expecting people to just hand over their money and say "there you go, have it" (of course if you want to then great ) but rather, "heres an investment opportunity, invest in the club you love and gain a little bit of interest while you're on". The big difference of course is you can get your original money back from an investment not from a donation. I see what you're saying, I know there will be a big emotional and/or charitable aspect to most of the investment. What I meant was more that it was a bit flippant to suggest that nobody will need or expect anything back at any time. I agree, for me its an emotional thing, I wouldnt hand over £1500 as a donation but when I know its an investment and I'll get it back then Im happy to do it, even if its not increased by much, the fact it has increased at all would just be a little (tiny) bonus. Link to post Share on other sites More sharing options...
Guest Roger Kint Posted November 12, 2009 Share Posted November 12, 2009 Can the club realistically guarantee any kind of return over such a short time though, when it is currently in debt and presumably making a loss every year? When you think that the interest on the £40m overdraft was running at around £4m per year then yes, £200m raised would mean the club would be bought + investment in the team and running costs yet still paying out the same amount as we were for the overdraft alone. If Ashley wants £100m plus £130m repaid for his loans you then have £20m or so for the overdraft and the NUST will have to be looking a fair bit higher than £300m in truth. Obviously this depends on what Ashley wants and most importantly if he wants to sell it to the very people who hate him. Link to post Share on other sites More sharing options...
peasepud Posted November 12, 2009 Share Posted November 12, 2009 Can the club realistically guarantee any kind of return over such a short time though, when it is currently in debt and presumably making a loss every year? When you think that the interest on the £40m overdraft was running at around £4m per year then yes, £200m raised would mean the club would be bought + investment in the team and running costs yet still paying out the same amount as we were for the overdraft alone. If Ashley wants £100m plus £130m repaid for his loans you then have £20m or so for the overdraft and the NUST will have to be looking a fair bit higher than £300m in truth. Obviously this depends on what Ashley wants and most importantly if he wants to sell it to the very people who hate him. He doesnt though, I always thought that was the case but the deal he was looking at before he took it off was £80m lock stock n barrel, no debts. Whether thats changed because of his last £20m investment who knows. As for selling to us, the fact they were on the phone an hour after we launched looking to talk to us answers that I think. Link to post Share on other sites More sharing options...
Guest Roger Kint Posted November 12, 2009 Share Posted November 12, 2009 Well its something that has never been clarified unless he has informed the NUST privately, certainly its provided plenty of debate here over the past 12 months. Obviously i dont know as much as you but surely he would have specifically said he was writing it off at the time? Link to post Share on other sites More sharing options...
Guest icemanblue Posted November 12, 2009 Share Posted November 12, 2009 Do I get a free season ticket for stumping up the 1.5k? Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted November 12, 2009 Share Posted November 12, 2009 Sorry if this has been answered, but does anyone have any idea how the club's existing debt and overdraft would be handled in a takeover? (I have read the whole thread now, promise) Does the club only owe money to Ashley, or what about the overdraft? Surely £80-100m is a bargain if the club will come with no debts, but could this ever happen? Bit of a ramble there, sorry. Link to post Share on other sites More sharing options...
Guest Roger Kint Posted November 12, 2009 Share Posted November 12, 2009 Sorry if this has been answered, but does anyone have any idea how the club's existing debt and overdraft would be handled in a takeover? (I have read the whole thread now, promise) Does the club only owe money to Ashley, or what about the overdraft? Surely £80-100m is a bargain if the club will come with no debts, but could this ever happen? Bit of a ramble there, sorry. If you had read a few posts up you would have seen the same queries Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted November 12, 2009 Share Posted November 12, 2009 Sorry if this has been answered, but does anyone have any idea how the club's existing debt and overdraft would be handled in a takeover? (I have read the whole thread now, promise) Does the club only owe money to Ashley, or what about the overdraft? Surely £80-100m is a bargain if the club will come with no debts, but could this ever happen? Bit of a ramble there, sorry. If you had read a few posts up you would have seen the same queries What is this, a fucking comprehension test? I didn't see any semblance of an answer, but maybe nobody knows. That's fine too. Link to post Share on other sites More sharing options...
gray Posted November 12, 2009 Share Posted November 12, 2009 Ashley and Llambias may already be rattled, according to the Chronicle llambias was trying to set up a meeting with NUST an hour after they launched the campaign. NUST have apparently turned down the request as they aren't in a position to discuss it with the club. I agree that NUST shouldn't be talking until they are in a position to act. on the other hand wheres the harm in a preliminary hearing, the main obstacle i view for the nust is I can't see Ashley wanting to sell to them, they're negotiating position is weak to begin with and possibly offending the current regime by not meeting them isn't a good way to start. No offending has taken place, we've politely declined his offer under the logic of we dont want to waste their time if we cant raise the funds. I think the fact Llambias called an hour after we launched tells you that hes happy to sell. Doesn't sound very polite on the twitter NUST turns down meeting offer with #NUFC MD Llambias. We will talk on our terms' date=' when we're ready.[/quote'] Link to post Share on other sites More sharing options...
peasepud Posted November 12, 2009 Share Posted November 12, 2009 Sorry if this has been answered, but does anyone have any idea how the club's existing debt and overdraft would be handled in a takeover? (I have read the whole thread now, promise) Does the club only owe money to Ashley, or what about the overdraft? Surely £80-100m is a bargain if the club will come with no debts, but could this ever happen? Bit of a ramble there, sorry. If you had read a few posts up you would have seen the same queries What is this, a f***ing comprehension test? I didn't see any semblance of an answer, but maybe nobody knows. That's fine too. I gave our understanding 3 posts up from your query Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted November 12, 2009 Share Posted November 12, 2009 Cheers, but I'm still not sure I get it fully. If Ashley was to sell the club 'lock, stock and barrel, no debts' for say £80m... what would happen to the debts? Ashley would take a hit on the ones owed to him I presume, and write them off. But the club would still have a sizeable overdraft, right? Or does this not exist anymore? I'm not really expecting an answer to this fro you personally peaspud, I haven't got a clue myself. Link to post Share on other sites More sharing options...
peasepud Posted November 12, 2009 Share Posted November 12, 2009 Cheers, but I'm still not sure I get it fully. If Ashley was to sell the club 'lock, stock and barrel, no debts' for say £80m... what would happen to the debts? Ashley would take a hit on the ones owed to him I presume, and write them off. But the club would still have a sizeable overdraft, right? Or does this not exist anymore? I'm not really expecting an answer to this fro you personally peaspud, I haven't got a clue myself. The overdraft is an unknown however its less than £40m now as per Barclays rules. We;d only really find out the true stuff when we do due diligence, if the clubs in a shit state and we couldnt afford to run it then we wouldnt buy otherwise we'd be putting the club in deeper crap than it is now. Link to post Share on other sites More sharing options...
Cronky Posted November 12, 2009 Share Posted November 12, 2009 who wants a return?. put it in an ISA if that matters. I know what you mean, but if you're not expecting a return then it isn't an investment... it's a charity donation. And I don't think that's what NUST are asking for, is it? its a combination of both tbh, we're not expecting people to just hand over their money and say "there you go, have it" (of course if you want to then great ) but rather, "heres an investment opportunity, invest in the club you love and gain a little bit of interest while you're on". The big difference of course is you can get your original money back from an investment not from a donation. I see what you're saying, I know there will be a big emotional and/or charitable aspect to most of the investment. What I meant was more that it was a bit flippant to suggest that nobody will need or expect anything back at any time. I agree, for me its an emotional thing, I wouldnt hand over £1500 as a donation but when I know its an investment and I'll get it back then Im happy to do it, even if its not increased by much, the fact it has increased at all would just be a little (tiny) bonus. It's not been clear what structure NUST are aiming for, and this post makes me even more confused. If you're guaranteed to get your original money back (with or without interest), then it's effectively a loan. In which case, who actually owns the club and is responsible for the finances? If on the other hand, you become part of the ownership of the club through your £1500, then it's a share. You have to sell a share, and it may decline in value. If there's a third way, or if I've got the above wrong, please you or someone else say. Link to post Share on other sites More sharing options...
ikri Posted November 12, 2009 Share Posted November 12, 2009 Bit of a hypothetical question. What would NUST's reaction be if a company like Greggs said that they'd be willing to invest £20m to help purchase the club as long as they were given stadium naming rights for 5 years? Would NUST be willing to accept renaming St James Park to The Greggs Steak Bake Stadium if it meant gaining control of the club? Link to post Share on other sites More sharing options...
colinmk Posted November 12, 2009 Share Posted November 12, 2009 Cheers, but I'm still not sure I get it fully. If Ashley was to sell the club 'lock, stock and barrel, no debts' for say £80m... what would happen to the debts? Ashley would take a hit on the ones owed to him I presume, and write them off. But the club would still have a sizeable overdraft, right? Or does this not exist anymore? I'm not really expecting an answer to this fro you personally peaspud, I haven't got a clue myself. The overdraft is an unknown however its less than £40m now as per Barclays rules. We;d only really find out the true stuff when we do due diligence, if the clubs in a shit state and we couldnt afford to run it then we wouldnt buy otherwise we'd be putting the club in deeper crap than it is now. This is what kind of fucks everything for everyone at the moment. We only find out how much the club costs after due dilligence... Link to post Share on other sites More sharing options...
binnsy Posted November 12, 2009 Share Posted November 12, 2009 Cheers, but I'm still not sure I get it fully. If Ashley was to sell the club 'lock, stock and barrel, no debts' for say £80m... what would happen to the debts? Ashley would take a hit on the ones owed to him I presume, and write them off. But the club would still have a sizeable overdraft, right? Or does this not exist anymore? I'm not really expecting an answer to this fro you personally peaspud, I haven't got a clue myself. The overdraft is an unknown however its less than £40m now as per Barclays rules. We;d only really find out the true stuff when we do due diligence, if the clubs in a s*** state and we couldnt afford to run it then we wouldnt buy otherwise we'd be putting the club in deeper crap than it is now. This is what kind of f***s everything for everyone at the moment. We only find out how much the club costs after due dilligence... Yes but then again, all that the NUST have done so far is asked for people to REGISTER there interest in the idea, the next step will be to pay a 10% refundable (minus 5%) deposit, followed by due dillegence if it gets that far, then pay up the rest of the money and hopefully the end result is we get rid of Ashley. At the minute people are getting too far ahead of themselves. Link to post Share on other sites More sharing options...
peasepud Posted November 13, 2009 Share Posted November 13, 2009 Cheers, but I'm still not sure I get it fully. If Ashley was to sell the club 'lock, stock and barrel, no debts' for say £80m... what would happen to the debts? Ashley would take a hit on the ones owed to him I presume, and write them off. But the club would still have a sizeable overdraft, right? Or does this not exist anymore? I'm not really expecting an answer to this fro you personally peaspud, I haven't got a clue myself. The overdraft is an unknown however its less than £40m now as per Barclays rules. We;d only really find out the true stuff when we do due diligence, if the clubs in a s*** state and we couldnt afford to run it then we wouldnt buy otherwise we'd be putting the club in deeper crap than it is now. This is what kind of f***s everything for everyone at the moment. We only find out how much the club costs after due dilligence... Yes but then again, all that the NUST have done so far is asked for people to REGISTER there interest in the idea, the next step will be to pay a 10% refundable (minus 5%) deposit, followed by due dillegence if it gets that far, then pay up the rest of the money and hopefully the end result is we get rid of Ashley. At the minute people are getting too far ahead of themselves. Exactly, and if it then turns out that we werent buying the club the deposits are returned (minus the 5% hamdling fee) so as I said before if you were looking to invest £1500, you'd pay a deposit of £150 to the Escrow account and if it all went pear shaped, you'd get £142.50 back. Link to post Share on other sites More sharing options...
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