Only going one way with these people in charge

So, hypothetically, what kind of funds would a prospective buyer need to take it off their hands? Would there be debts to be cleared etc?

I know that it would ultimately come down to Neerav, JAQ etc to agree to leave for whatever fee, but in your opinion what would it take?

EDIT - Thanks for the info in your previous reply, forgot my manners there

 

It sounds like you are weighing up your options to make a bid mate haha

 

My understanding is that the money was put in as equity, not debt. So any potential purchaser would "just" need to pay the asking price for purchase of the business, plus have the capital to be able to fund ongoing losses.

 

The ‘cost’ of buying the club can be split in to two parts, the transaction to acquire the shares and then proving to the football league that the buyer has sufficient funds to run the club.

The cost of acquiring the shares would depend on the shareholders, predominantly, Neerav agreeing to a sale. Most companies are valued on a multiple of profit, you’ll often hear the term EBITDA which is an adjusted measure of profit. BFC consistently make a loss so based on trading the value is zero. Typically the value would then derive from assets minus liabilities. The club has minimal fixed assets as the ground is owned by the council. The intangible assets are the players. However; many of the players have zero sell on value and have three and four year contracts that can’t simply just be cancelled. You could argue that the players are a liability.

There is then the issue of cash on balance sheet, although this, at the last accounts, was more than offset by a £3m soft debt to Oakwell Holdings and the remaining COVID loan debt. Overall I’d struggle, if I was advising a purchaser, I’d struggle to suggest paying more than a nominal £1 plus any net cash on balance sheet.

So theoretically buying the club is not the issue. Quite sad that the club is worthless.

The issue would be proving to the EFL that you had the funds to support the club. From historical losses I would suggest they would want to see a minimum of £10m, possibly more, proved funding in place to authorise the transaction. That may be the stumbling block for most potential acquirers.

 

Thanks again for this.

So would it fair to conclude that the tenure of the current owners, whilst taking into account the necessary gratitude for their continued financial support, could be construed as an abject failure owing to the drop in league, our squad and the fact they paid 20 million for a Club that is worth essentially nothing now?

 

In absolute terms it’s has been a disaster of an investment. However, you only have to look across other football clubs to realise the whole sector is a basket case.

 

Would it be fair to say the seeds were sown by Conway/Lee and that we've not managed to recover from it?

 

And if they aren't replaced with owners who have deeper pockets it will be administration and possibly worse.

 

Deeper pockets or more capable of operating without incurring huge monthly operating losses, yes.

 

Many don't realise this,it's not as simple as many seem to think.

 

Because the club is run like British Leyland.. Over staffed through out plus with a pointless money pit of an academy

 

You do realise that ‘not making money’ & ‘losing money’ aren’t necessarily the same thing?

Can you give some examples where the owners ‘plead poverty’?

I’m not having a go at you btw, but I think expecting our club to be more frivolous, because others are, and saying ‘it’s just modern football’ sounds incredibly entitled and dismissive of the fact that their money is worth the same as yours or mine.

We might think, ‘well they’re pumping money in anyway, why not pump a bit more in and buy some success’, but there is no guarantee of anything. So many people are doing it, it’s old hat. Probably get you going forwards for a bit, but is it sustainable?

 

Very much so. They took on a club that had a healthy balance sheet at the time and didn't provide a penny of funding after the acquisition, unlike the equity funding being provided by the current shareholders.

In fact, they took £750k out of the operating funds of the club to cover a payment instalment due to the Cryne family as part of the purchase, prior to the two parties ending up in a legal dispute.

 

Proper chuckle.

Seriously, thanks for the overview

 

It’s hard to see all this ending well unless we somehow miraculously got back to the prem.

 

A few things I'd do almost immediately as the new owner:
1) Look to offload non-playing players for a transfer fee and/or early release through cancellation of contracts at a less than 100% rate, slimming down the squad, providing more opportunities for the club's youth players, and reducing the ongoing cost of player wages
2) Ask the academy to recommend those ready to play League One football and to focus on producing first team assets; ring-fencing any monies from sales (starting with any residuals from John Stones and Mason Holgate years ago), and indicate the academy needs to wash its own face and would be closed when the transfer fees received run out
3) Look at the total incomes from catering and events - explore a model of welcoming any local business to offer food on match days for a nominal pitch fee rather than continuing with the current approach to delivery
4) Build stronger links with the town and community - reaching out to grassroots teams for volunteer youth coaches, and to recommend their best prospects to come play with the academy teams; offering free tickets through local primary and secondary schools that the ground is full each week rather than with a sizeable number of seats empty

 

Leverage …. The new garlic bread!

Its sad that we are a club that neutral ‘investors’ may have seen a few years ago as having great potential that the owners haven't realised that potential. Meaning continuous improvement in the development of the club, game day and all round experience, on the field performance and fan engagement. I dont think anyone can justifiably argue we have progressed overall. As pointed out we cant even succeed with the acquire young hungry players and convert to sustainable revenue model now.

The biggest disappointment for me is that we had an opportunity to strengthen our football experience on the board with the. CEO and DOF. Nothing personal but we didn’t fill these positions with that experience that i thought we could have. I expected soneone who has been around the block, across the english leagues, managed teams maybe played back in the day. Someone who had influence and connections and had respect in the professional footballing community for footballing things. We missed the opportunity.

So while i thank the board for keeping us afloat and propping us up, i also believe the only way to progress is to restart under new ownership. Im not so sure its as hard as people make out to sell a club. The hard bit is what profile suits the current owner’s interests and what do they want in return.

 

I think this is the situation...

The owners are pumping money into the club and are clearly doing their best to make us succeed.

But, they are terrible at this and due to their own incompetence are losing that money hand over fist.

 

Be interesting to see what happens with the COVID debt as I see the Govt took shares in Bolton (think it was them)for theirs.

 

I've said it for a while now, we are an over complex , over expensive set up for a 3rd tier club, who naively believe operating to a continental style model with a singular set playing ethos throughout the club will give us an advantage, the market has changed the EPPP looks after bigger CAT A academies which swamp the talent pools of young players, which is the end of the market we are ideally looking for the bargains to develop for profit.
When you look at our recruitment over the past 3 seasons its been poor on the whole, only Max Watters has been signed after a loan deal, we're just borrowing players as short term stop gaps, apart from Phillips and probably connell there's little to no resale value been developed, its pretty depressing viewing.