Mike Ashley (former owner) (still alive)

[Ben]

 

[Kanj]

Mike should just sell the delta between his "loan" and the equity position and then charge a nominal interest rate to the Buyer that has various step-down principle payments that eventually allows him to exit albeit with a premium. 

[mrmojorisin75]

Just now, Kanji said:

Mike should just sell the delta between his "loan" and the equity position and then charge a nominal interest rate to the Buyer that has various step-down principle payments that eventually allows him to exit albeit with a premium. 

 

well there's some words

[loki679]

lol, he said asses

[Kanj]

21 minutes ago, ManDoon said:

I understand Delta when trading options, but can you explain how it would apply to a loan? or is literally the same?

 

In this case the delta would be what, instead of the underlying asses (stock) its the equity position?

 

 

 

 

Just the variance, the difference, etc...he should literally just hold his "loan" and look at it as a debt position to a new buyer and the buyer should pay the difference between Mike's "loan" and the agreed price (ex: 300 million). That way they come in with a healthy going-in basis as equity, pay some sort of interest to Mike on a monthly or annual basis with additional larger balloon payments to buy Mike out faster, so maybe for example 20 million a year in balloon payments to lower the debt balance and increase new buyer's equity position. 

 

IMO this wouldn't be so bad for any party. Mike could earn interest and in essence make more money in the long-run than outright sale, a new buyer doesn't have to fork out 300 million up front and can try and come in and use their position to start spending money on facilities, players, and then using time to find additional partners 

[Kanj]

^^ alternatives to an outright sale and potentially opens up to a bigger buyer pool. Have always felt his exit strategy has been stupidly flawed from the get-go and has always been about finding a unicorn buyer who would pay his insane valuation on a very capital intensive business with horrendous facilities, no business or football infrastructure, and very weak playing squad(s). 

[gjohnson]

28 minutes ago, ManDoon said:

I got you, I'm with you now. So it's basically similar to an options contract, where in this case Mike collects the premium. That's a really smart idea actually.

 

And there's where it falls down with Mike being involved

[Hhtoon]

1 hour ago, Kanji said:

^^ alternatives to an outright sale and potentially opens up to a bigger buyer pool. Have always felt his exit strategy has been stupidly flawed from the get-go and has always been about finding a unicorn buyer who would pay his insane valuation on a very capital intensive business with horrendous facilities, no business or football infrastructure, and very weak playing squad(s). 

 

I wonder whether that has been mooted, as I'm sure it was reported that other parties have come forward but PIF was up all front. Didn't really get what they meant but maybe your suggestion explains it!

[Scoot]

2 hours ago, Kanji said:

Mike should just sell the delta between his "loan" and the equity position and then charge a nominal interest rate to the Buyer that has various step-down principle payments that eventually allows him to exit albeit with a premium. 

 

Was just thinking that.

[mrmojorisin75]

Look, I'm sure if he wanted to sell for anything but an immediate, healthy profit in cold hard cash he'd have done so by now.

[Kanj]

2 hours ago, ManDoon said:

I got you, I'm with you now. So it's basically similar to an options contract, where in this case Mike collects the premium. That's a really smart idea actually.

 

You often see it in commercial real estate transactions where a property owner will sell an asset that has mortgage financing (debt) that has to remain in-place as it has costly pre-payment penalties.

 

So in my example, Mike would sell NUFC for 300M as a headline price, the Buyer would step into or assume a 100M loan (whatever that balance is currently) and only need to pay 200M in cash at closing. Mike then charges a for example, 5% interest on 100M mortgage over a say 5-year term to the new owner of NUFC. He could make something close to 13M in interest over 5 years (assuming some sort of traditional amortization of loan), get that 100M paid down in 5 years and/or sooner via balloon payments or simple buy-out option. 

 

So if said new owner had 400M to spend on a club, they'd be able to put 200M equity to buy, then have 200M equity to 1) purchase players over a few windows 2) invest in stadium 3) invest in business staff 4) investment in academy, etc. -- further they'd also be able to basically pin some of the TV money to pay down the debt to MA (it likely pays for itself) and then with said new business staff, try and go get proper commercial partners to increase the revenues etc. 

 

 

 

Edited August 10, 2021 by Kanji

[Kanj]

50 minutes ago, Hhtoon said:

 

I wonder whether that has been mooted, as I'm sure it was reported that other parties have come forward but PIF was up all front. Didn't really get what they meant but maybe your suggestion explains it!

 

To me it seems like MA is fixated on the PIF bid because it allows him to exit NUFC at a healthy profit and there has to be some discussions with PIF in terms of getting MA's business interests into the middle east. 

 

Because the club has aging facilities, a poor training ground, a poor academy, and very little staffing on football and business side (not to mention major investment in players, but I don't think that's a "deduct" on value) there is probably a ceiling by which an ambitious investor wants to pay for NUFC because it's simply not worth it. They will have raised say, 300-400M as a total investment basis over 3-4 year period, and if MA only will sell for 350M, that only leaves a buyer 50M to invest which probably doesn't sound as appetizing. 

[James]

5 hours ago, Kanji said:

Mike should just sell the delta between his "loan" and the equity position and then charge a nominal interest rate to the Buyer that has various step-down principle payments that eventually allows him to exit albeit with a premium. 

Would the accumulation of stock offset the depreciation of the assets? Market trading has indicated that forecast growth would lead to macroeconomic inflation where the discount rate would effectively demonstrate the present value.

[LV]

Think he probably wants his lump of money in one go because he’s got it earmarked for buying summat else. 
 

Christ knows what like, he’s bought most of the high street as it is. 
 

 

[gjohnson]

On 10/08/2021 at 20:56, LV said:

Think he probably wants his lump of money in one go because he’s got it earmarked for buying summat else. 
 

Christ knows what like, he’s bought most of the high street as it is. 
 

 

Despite the fact that the 'high street' is pretty much dead (thanks in part to Big Mike himself) There's got to be some chain that's bordering on going bankrupt left for him to target. Poundland? H&M? I don't know physical shops anymore?!

[nbthree3]

[huss9]

no chance the arabs are going to buy us. the best thing they could do for this club is to say they no longer retain an interest.

the fat cunt then has no defence for not looking at other buyers (not that he would give a sit though).

[Hhtoon]

2 minutes ago, huss9 said:

no chance the arabs are going to buy us. the best thing they could do for this club is to say they no longer retain an interest.

the fat cunt then has no defence for not looking at other buyers (not that he would give a sit though).

 

Yeah, Ashley isn't going to look anywhere else whilst he's got that valuation promised - reckon he'll drop 50m at least with another buyer.

[Ben]

Most owners would look at Sunday and think right we need to spend a few quid on 3 or 4 players and a manager or we are going down.

 

Ashley will think, we are going down so I better make a few quid on selling some players and if he gets his anti-competion payment he's quids in.

[Dokko]

RB should buy the club for £200m and sell it to PIF if they ever get approved. If they don't then Ashley sues the PL for the £100m+ he's lost out on. 

 

This would clearly define how much he's lost by the rejection and the PL are basically signing their own damages claim allowing RB to go through. 

[Darth Crooks]

Rafa Benitez? Alreet Keyesy.

[nbthree3]

 

[nbthree3]

 

[Willow]

[Miggys First Goal]

I’d like to know what else that 18% of Man City fans want.