Plan in 2018 vs Reality in 2022

I'm not claiming any deep knowledge of running a business or accounting but having read how PMG operated in Nice, I've been thinking about what they planned to achieve at Barnsley and how that's unfolded so far. Sorry if this is repeating stuff but I'm new on here.

In Nice, they found an underperforming club but with major infrastructure already funded & being built (improvements which Conway took credit for on the basis that they completed while PMG were owners). They took a 20m loan out at 9% interest to repay them their initial investment; this loan was repaid by multiple player sales and meant that when they sold the club PMG walked away with 100% profit having already had the 'club' repay their initial investment.

Buoyed by this, they looked to England to repeat the formula, approached several clubs but found in Barnsley, a club debt-free, with cash in the bank, a focus on young players and an owner sadly needing to sell. As they said at their 1st press conference, 'it sounded too good to be true'.
Their plan was to repeat their personal success at Nice: to exploit the lower European leagues for cheap players and coaches, able to pay lower wages to them than established players as you are giving them their 'break' in England with a promise to not stand in their way when bigger clubs come calling.

I think their aim with clubs in their portfolio is to use club turnover / transfer profit to 'clear' their initial investment and fund the running of the club, and then once their purchase cost has been recovered, sell the club and the sale price is their profit.

However, I think there are several factors that have stopped this succeeding at Barnsley so far (ignoring bad decisions, bad luck etc):

BREXIT: the change in Visa's has effectively closed the markets they were hoping to exploit. This means the overseas players who can still get a visa are out of our reach financially so we are left with those who can get a visa but not wanted by other clubs (Oulare, Iseka etc) or by buying domestically.

COVID: For 4 transfer windows, this effectively stopped big money sales in the transfer market at the level we would look to sell to. This has made it easier to retain our players but has made it more difficult to trade players which is crucial to PMG's plan.

CHAMPIONSHIP FINANCES: In 2018 I don't think they were aware of the insanity of finances in the Championship. I read the average weekly wage in 2019/20 was L1 is £2500, in the Championship it was £16,000.
Is it less risk in L1 to buy a player for £500k, pay £3k wages and hope to sell for £3m than to buy in Championship for £2m, pay £10pw and hope to sell for £8m?
For a club struggling in the Championship, it is hard to invest and improve the club in a without 'up front investment' and is certainly no guarantee. Rightly or wrongly, the model PMG pursue isn't one that can thrive in the Championship (barring a Ismael one-off!)

These factors have made their plan much more difficult / impossible to succeed and I wonder if, coupled with the ground ownership issues, they would see their model is much easier to execute in countries still in the EU and less financially crazy than English football?

I don't for a minute think they would walk away without making a profit (their whole purpose) but do think that these circumstances may make them more open to selling up.

 

Have you got a link to that financial stuff from Nice because the stuff I read confirmed they took out a short term loan to cover wages initially but no where near £20m , this at the time was described as not unusual . They ran into trouble when they qualified for the Champions League for the first time in their history and the ex owner / President felt he’d been short changed and started a campaign against them . Fortunately or unfortunately depending how you view it a certain hypocritical Brexiteer , Jim Ratcliffe of Ineos fame , had relocated to Monaco and decided he wanted to engratiate himself with the local glitterati and agreed to buy Nice putting the ex President back in charge , it’s not gone that well for them as far as I can see . Chien did alright out of it though

 

I agree with the OP. They had a plan that has been possibly derailed. Not sure we'd have been any better off it hadn't. They would have been, but probably not us or the club I'm afraid

 

Fair enough I must admit I didn’t check before I wrote it , Those young players Chiens mob bought must be paying off !!!

 

From what I read, they slumped down the league after the sale (big players had been sold prior to the club sale and not equally replaced) but under the new ownership, they've picked up and are 2nd.

 

Chien appointed Vierra they came 7th when Ratcliffe sacked him , finished 11th and 9th since then , currently on their 3 manager since the take over and he is obviously doing well

 

The loan was euros, not £. And they took their purchase costs out. There were plenty of articles and fan pieces about it at the time, hence why we know the terms of the loan arrangement with a cypriot financier and that falling below a certain league position meant immediate repayment. Sadly our search algorithms don't seem to prioritise french articles and if you use "loan" in any search query, it seems to prioritise transfer dealings.

The best bet may be searching this site and trying to find the multitude of posts, links and translated articles which gave us the first glimmer of accurate insight into our owners.