The trouble with Norwich...

[eatonparkboy]

This blog, written by Duncan Edwards, neatly dovetails into this thread.

https://duncanedwards8.wordpress.com/2015/11/01/are-the-ghosts-of-2013-still-haunting-us-ncfc/

I think it is well considered but slightly naive. I don't believe ANY club wants to spend big money on players. It doesn't really make sense and is a terrific gamble. For RVW read Falcao. Just because some clubs can apparently afford to lose money doesn't make it any more palatable for them.

Of course we would love to unearth another Holt. But remember we bought him when in League 1 which was his apparent ability level. As it turned out, he was much better than that. Luck? Or a brilliant bit of work by Bryan Gunn. And whatever we paid for him, it was still a lot of money for a club that was very, very close to deep financial problems. Only the net worth of the club's assets preventing serious worries.

We are now in the Prem and cannot really afford to look at too many players from lower divisions. Many from higher have not worked out for us and it is a real conundrum for the club. Was Adams buying for the Championship season and hoping he bought time to bring through some apparently gifted youngsters? Or did he see his signings as Prem material? 

If it is true that we offered big money for defenders and were turned down by the players then there is nothing can be done. Being held to ransom is not what we are known for and hopefully never will be. If it was personal terms that stopped them, obviously we will never be privvy to those details but it would be interesting and equally important, in the circumstances, to know a bit more about these kind of negotiations. Do we want gold diggers or the kind of person like Hucks who may well have got a better deal somewhere else but chose us for far different but better reasons.

The more and more I reflect on this and read other peoples very valid reasons, I become even more glad that I am just a supporter who can fire bullets at will rather than the board who can only duck when I shoot. The rules of the game do't allow them to fire back.

 

[It's Character Forming]

While I agree with a lot of what you say EPB, the discussions I saw were that we went in for van Dijk but lost out to Soton (fair enough for obvious reasons) but also put in a last minute bid for a CB from abroad who rejected a move to City.  My problem is that we shouldn't have just been going for 2 targets in the CB position, I thought it was the most important area where we needed to upgrade and we should've had a longer list, and should have put in bids a few days earlier.

Similarly for Gayle there was the comment from them (I think) that our bid was just received too late for them to take it seriously, and for Walters it seems we were close to what Stoke would've accepted but just weren't willing to stretch a bit more.

All in all, it seems to me we played it too conservatively this transfer window and should have pushed it a little bit more in these areas.

I know it's always easy for us as fans to say we should spend more money and the board have to make it all add up.  But we've just got promoted and our net spending has been not much more than we spent the summer before after relegation, and that to me has always seemed strange and worrying.

 

[eatonparkboy]

While I agree with a lot of what you say EPB, the discussions I saw were that we went in for van Dijk but lost out to Soton (fair enough for obvious reasons) but also put in a last minute bid for a CB from abroad who rejected a move to City.  My problem is that we shouldn't have just been going for 2 targets in the CB position, I thought it was the most important area where we needed to upgrade and we should've had a longer list, and should have put in bids a few days earlier.

Similarly for Gayle there was the comment from them (I think) that our bid was just received too late for them to take it seriously, and for Walters it seems we were close to what Stoke would've accepted but just weren't willing to stretch a bit more.

All in all, it seems to me we played it too conservatively this transfer window and should have pushed it a little bit more in these areas.

I know it's always easy for us as fans to say we should spend more money and the board have to make it all add up.  But we've just got promoted and our net spending has been not much more than we spent the summer before after relegation, and that to me has always seemed strange and worrying.

Yes, the Gayle and Walters (were they both coming?) affairs were farcical. Left right to the very last minute. This isn't Ebay, it will be rare to be gazumped for players we are looking at in this country. You can do the business well before deadline day. I know it depends on the selling club's shopping list but normally there is a chain and it would be a catalyst to get things done and dusted and the new player out on the training ground with his new team mates.

Van Dijk chose wisely on reflection. That is just the way the pecking order is at the moment and there is no disgrace in that.

I have no idea who the foreign based player was. And it is annoying sometimes that transfer approaches and deals are done "in camera". It might relieve a lot of supporters frustrations if things were a wee bit more transparent.

 

[morty]

As a thinly veiled excuse to resurrect this thread, I see a Chicago investment firm has just bought a 25% stake in Bournemouth, putting two people on the board.

The same investment firm failed in a bid to take over Reading in 2014.

Not so sure this is what I would want for Norwich City.

 

[SussexYellow]

As a thinly veiled excuse to resurrect this thread, I see a Chicago investment firm has just bought a 25% stake in Bournemouth, putting two people on the board.

The same investment firm failed in a bid to take over Reading in 2014.

Not so sure this is what I would want for Norwich City.

I would agree.

When I made my post suggesting we needed more investment to keep up with the "haves" this was not what I had in mind.

I think we need investment from a source that is committed to the long term future and development of the club and if they already have an emotional attachment to the club then that would be hitting the bullseye.

 

[Canaryboy]

I would agree.

When I made my post suggesting we needed more investment to keep up with the "haves" this was not what I had in mind.

I think we need investment from a source that is committed to the long term future and development of the club and if they already have an emotional attachment to the club then that would be hitting the bullseye.

People also forget that "investment" = a loan. 

When people call for investment I wonder what makes them think that this is the best or cheapest form of borrowing. 

It is said that Ipswich are paying Marcus Evans something like 6% interest on the money they owe him. That's currently a very high interest rate. 

We could get much cheaper finance from a bank considering we have the collateral of a freehold stadium and freehold training complex (Ipswich don't). 

Often it seems that when people call for new investment they envisage some rich person coming along and becoming a philanthropist thinking that it would be good to give away a huge chunk of their money to something that some community somewhere cherishes.. very rarely the case. It doesn't work like that. 

If we can find a super rich Norwich born Norwich fan with no Children to leave their money to then great, but its very rare that a club can find a Jack Walker. 

So what they are actually calling for is for the club to borrow money, and that doesn't have to involve loans from directors or new equity, it can be a bank loan. We seem to be obsessed with finding somebody richer than Delia to loan us money, makes little sense to me. Clubs like Ipswich and Leeds need to find these people to lend them money because they have no assets so can't borrow from banks, whilst we've got assets and collateral, so could probably borrow at favorable terms. 

We will also at some stage be looking to finance a ground expansion. I can't see any reason why we need to try and find a single high net worth individual of potentially questionable character or motives to "invest" (loan) us £30m to do that, and hand them a big slice of the club in the process, when we should be able to afford to put 25% down and borrow the other 75% as a mortgage from a reputable regulated organisation over x number of years. 

Clubs like West Brom, Stoke, Swansea and us are seen as well run because we're debt free and live within our means. You don't see them begging the have-yachts to use them as their play thing for a while like Leeds or QPR, and I'd much rather we retained our dignity and focused more on the ability and diligence of our experienced executives like McNally and Bowkett and just borrowed from a financial institution when the need arises.  

 

[Canaryboy]

Also, you use the example of Bournemouth taking US investment. 

Its not just foreign investors with questionable motives. 

Rangers took a loan from Mike Ashley. 

Now Sports Direct get 95% of their the revenue from their merchandise sales. You buy a Rangers shirt from the Rangers club shop and Rangers are just getting a 5% royalty on the sale. 

Football is an increasingly murky world and Norwich fans don't appreciate how lucky we are to have straight and narrow owners with the clubs best interests at heart.

My preference would be for Michael Foulger and other local business people to buy out Delia and MWJ when they become too old to sit on the board, possibly even Bowkett taking a sake. This has always been the Norwich way and it has served us well in the grand scheme of things, we're a smallish city with a Premier League side. 

If our city had a god given right to have a club of our size and our status then so would Oxford, Lincoln, Exeter, and numerous other cathedral cities. 

Continuation candidates. I would take a board made up of respectable local business people over eccentric loose cannons like Tony Fernandes or people who spot a business opportunity to exploit like Mike Ashley. 

 

[eatonparkboy]

I am from an industrial background not financial and to be honest do not really understand what it means when Bournemouth sell a 25% stake.

Surely somebody owned that 25% so isn't the money going to them just the same as if they sold stocks and shares? If the previous owners of that 25% don't put it back into yhe club, then Bournemouth won't be any better off.

I understand somebody buying up shares in the club so that they get a seat on the board and influence the way the club is run. And I understand that some new owners become sole owners and do put extra money into the club. Delia has said she doesn't want the money back she has loaned the club.

And if a new wealthy owner buys shares then I guess some clubs on the open market would have an increase in their share value thus, on paper, increasing their wealth. But in reality, isn't the wealth of the club only what it can be sold for? The land that Carrow Road sits on would be valueless if they discovered an ancient Roman burial site underneath it and then the club would have to move and borrow to build a new ground.

I understand that Evans bought the Ipswich debt for less than 50p in the pound but could in fact charge Ipswich pound for pound. That is not football but good business I suppose. But returning to my original statement, the 25% sold to the yanks may not be worth as much if they are relegated, and they might be unless some or all of that money is spent players.

And what is the role of the Russian at Bournemouth if the Chairman has said that this transaction is to secure the future?

 

[Personal Trainer]

My preference would be for Michael Foulger and other local business people to buy out Delia and MWJ when they become too old to sit on the board, possibly even Bowkett taking a sake. This has always been the Norwich way and it has served us well in the grand scheme of things, we're a smallish city with a Premier League side. 

I do wonder if Steve Morgan, currently trying to sell Wolves, might show an interest as he is unlikely to ever own his first love Liverpool!

Alan Bowkett worked as Director at REDROW PLC from 05 July 2007 to 30 June 2009 which Morgan owns and I have heard that the Morgans were friends/ aquaintances of Delia and MWJ.

Morgan also likes refurbishing football grounds.

 

[morty]

I do wonder if Steve Morgan, currently trying to sell Wolves, might show an interest as he is unlikely to ever own his first love Liverpool!

Alan Bowkett worked as Director at REDROW PLC from 05 July 2007 to 30 June 2009 which Morgan owns and I have heard that the Morgans were friends/ aquaintances of Delia and MWJ.

Morgan also likes refurbishing football grounds.

Interesting....

I should imagine there is some kind of "succession" plan, in at least the planning stage.

 

[Canaryboy]

I am from an industrial background not financial and to be honest do not really understand what it means when Bournemouth sell a 25% stake.

Surely somebody owned that 25% so isn't the money going to them just the same as if they sold stocks and shares? If the previous owners of that 25% don't put it back into yhe club, then Bournemouth won't be any better off.

There are two ways that it can be done. One is to issue new shares, in which case the investor is purchasing shares from the club and the stakes (in terms of percentage) of all other shareholders is reduced.  

The other is for a current shareholder to sell them. 

But either way, the £25m doesn't have to mean that the investor has purchased £25m worth of shares. It is more likely that they have spent a much smaller amount on a shareholding, with the rest of the money made up of loans.

Also, buying shares doesn't guarantee you a place on the board. The only way you can guarantee yourself a place on the board is to purchase a majority stake. Otherwise you'd need a majority of shareholders to agree to you having a seat on the board. You could have 49% and not get a seat on the board if the person who owns a controlling 51% stake doesn't like you.

So an example would be....

There are 1 million shares in Tinpot FC, all owned by other people.

Tinpot FC agree to issue an additional 100,000 new shares and sell them at £100 each to the investor (£10m). This would give them a share of 9.09%. Meanwhile, the percentage controlled by all other shareholders falls, as they previously owned x amount of 1m shares, but now own x amount of 1.1m shares.

As part of the agreement they could agree to inject a further £15m in cash in the form of a loan, and the other Tinpot FC directors agree that they have seats on the board.

This would be an investment of £25m... £10m in equity and £15m in loans. And it isn't necessary for other shareholders to sell their shares (only agree to have their stake reduced). 

So if Bournemouth previously had 750,000 shares in issue for example, and somebody has purchased a 25% stake, then they could simply issue 250,000 additional shares in the business. The owners of the other 750,000 shares wouldn't have to sell any shares, but they would subsequently own a smaller proportion of the company. 

 

[eatonparkboy]

There are two ways that it can be done. One is to issue new shares, in which case the investor is purchasing shares from the club and the stakes (in terms of percentage) of all other shareholders is reduced.  

The other is for a current shareholder to sell them. 

But either way, the £25m doesn't have to mean that the investor has purchased £25m worth of shares. It is more likely that they have spent a much smaller amount on a shareholding, with the rest of the money made up of loans.

Also, buying shares doesn't guarantee you a place on the board. The only way you can guarantee yourself a place on the board is to purchase a majority stake. Otherwise you'd need a majority of shareholders to agree to you having a seat on the board. You could have 49% and not get a seat on the board if the person who owns a controlling 51% stake doesn't like you.

So an example would be....

There are 1 million shares in Tinpot FC, all owned by other people.

Tinpot FC agree to issue an additional 100,000 new shares and sell them at £100 each to the investor (£10m). This would give them a share of 9.09%. Meanwhile, the percentage controlled by all other shareholders falls, as they previously owned x amount of 1m shares, but now own x amount of 1.1m shares.

As part of the agreement they could agree to inject a further £15m in cash in the form of a loan, and the other Tinpot FC directors agree that they have seats on the board.

This would be an investment of £25m... £10m in equity and £15m in loans. And it isn't necessary for other shareholders to sell their shares (only agree to have their stake reduced). 

So if Bournemouth previously had 750,000 shares in issue for example, and somebody has purchased a 25% stake, then they could simply issue 250,000 additional shares in the business. The owners of the other 750,000 shares wouldn't have to sell any shares, but they would subsequently own a smaller proportion of the company. 

Thanks for the explanation. So if you are a Reading fan, might you be worried that Lady Sasima has bought your nearly 50% of your club. She doesn't look your average football fan but the stadium sits right in the middle of redevelopment area of Reading