Bluedell 5,356 Posted December 10, 2012 Share Posted December 10, 2012 Another problem is that the cash is going to go into the holding company and will presumably be lent to the club at a commercial rate of interest, and the only place that interest is going is into the pockets of the investors. I wonder if these loans will be secured on the assets of the club? 0 Quote Link to post Share on other sites More sharing options...
der Berliner 3,290 Posted December 10, 2012 Share Posted December 10, 2012 Just a gut feeling, but have we become too pessimistic here? We all know how capitalism works and hardly any football club works on a profitable basis. While it is sure concerning what might happen, are we too cautious here - despite the Whyte affair. As far as I see it, a number of investors will/may look for a dividend, while some others have other thoughts on their minds. Given that any share issue or the shares handed out thus far are split amongst quite a few holder, the club as such is on a better footing than it was (ever) before? Are we now questioning those capitalists who rescued our club with a touch of profit in mind (and fair enough) for being capitalists and not "fans"? (BTW, don't get me wrong ... I would also hope that the least money going out of the club the better.) 0 Quote Link to post Share on other sites More sharing options...
the gunslinger 3,366 Posted December 10, 2012 Share Posted December 10, 2012 All profits should be invested in the club. It now seems as if a bigger priority may be to create profit to pay dividends. It's concerning. We could have the scenario whereby we are looking at breaking even for the year but we then sell a player for £5m who has been with us for 5 years on 30th June and buy another for £5m on a 5 year contract on the same day, instantly creating a £4m+ profit. The club's cash may not have changed but a profit has been generated due to accounting treatment, allowing the club to pay dividends using the following season's season ticket money. aye or just sell him and use that cash. 0 Quote Link to post Share on other sites More sharing options...
calscot 0 Posted December 10, 2012 Share Posted December 10, 2012 The whole thing sounds like a money making scam where the rich pull the wool over the eyes of the relatively poor and then empty their pockets. Can you imagine doing it the "right" way and going to Dragons Den for the money? Pitch: We're looking for £1m for a 10% stake a football club which is in financial trouble but will be debt free due to the parent company being liquidated and then plan to take that club back to the summit of Scottish football and a force in Europe. Duncan: What's your profit forecast for the next five years? Pitch: Year one, break even. Year two, break even. Year three, break even. Year four, break even. Year five, break even. Duncan: So how come there's no profit? Pitch: Each year we put any surplus back into the club. Duncan: So when do you pay a dividend? Pitch: Never. Duncan: So how do I get my money back? Pitch: We'll sell shares to the fans, invest in infrastructure and the staff and so the company will increase in value. In five years time you can sell your shares for a possible profit. Duncan: But you're saying you're going to water down my shareholding and spend all the money raised on patching up the stadium and salaries for over-paid players? Pitch: Yes. Duncan: Sorry, that sounds ridiculous and ludicrous, football clubs lose money all the time, and either my shares will be worth a fraction of the value in a few years or you'll be coming back to me to pump money in. I'm out! Or the "wrong" way... Green: I'm looking for one million pounds investment for a 10% stake in resurrecting a huge club and making a lot of money taking them back up the leagues. Peter: How do you plan to make the money? Green: Your money is needed to purchase the assets from an administrator, we'll then appeal to the fans to get behind the club and buy season tickets while dramatically reducing the wage bill. This will give us plenty of working capital and so we'll treat your investment as a loan and pay three quarters of it back in six months without diluting your holding. We'll then have an IPO where the fans will raise £20m due to loyalty and sentimentality but we'll only give them a fraction of the shareholding by valuing our shares at £25m. Peter: So after getting most of my money back I'll have 8% of £45m company with no debt? Green: Yes and of a company with assets of over £100m and a large chunk of the yearly profits made by only having a 33% wage to income ratio, will go towards a handsome dividend. Peter: I'd like to make you an offer for the full amount but for 20%. Charles: Sorry, I can't allow anyone to have more than 10% ownership as a lot of this depends on keeping the trust of the fans. Peter: Ok, sounds interesting but for my input I'll need a seat on the board with a £350k wage with the same in bonus and more in share options. Charles: You've got a deal! 0 Quote Link to post Share on other sites More sharing options...
Darthter 542 Posted December 10, 2012 Share Posted December 10, 2012 As I have said before.... If we want to bring in high levels of QUALITY investment, we need to make it attractive to those investors. They don't care about Rangers Football club - they are only interested in what return they will receive. NO RETURN, NO INVESTMENT!!! If the club is successful, the investors will be rewarded. This in turn will encourage further investment, and hopefully very active market trading. 0 Quote Link to post Share on other sites More sharing options...
Frankie 8,186 Posted December 10, 2012 Share Posted December 10, 2012 Can someone please write an article on this for the site? 0 Quote Link to post Share on other sites More sharing options...
the gunslinger 3,366 Posted December 10, 2012 Share Posted December 10, 2012 what bluedell says about loaning the money to the club needs clarifying. 0 Quote Link to post Share on other sites More sharing options...
simplythebest 0 Posted December 10, 2012 Share Posted December 10, 2012 The IPO said there are no loans from investors. 0 Quote Link to post Share on other sites More sharing options...
simplythebest 0 Posted December 10, 2012 Share Posted December 10, 2012 All profits should be invested in the club. It now seems as if a bigger priority may be to create profit to pay dividends. It's concerning. We could have the scenario whereby we are looking at breaking even for the year but we then sell a player for £5m who has been with us for 5 years on 30th June and buy another for £5m on a 5 year contract on the same day, instantly creating a £4m+ profit. The club's cash may not have changed but a profit has been generated due to accounting treatment, allowing the club to pay dividends using the following season's season ticket money. Or maybe dividends will be a reward to come after a profit is made with the club progressing? Does it have to be a bad thing? 0 Quote Link to post Share on other sites More sharing options...
the gunslinger 3,366 Posted December 10, 2012 Share Posted December 10, 2012 (edited) yes it is always a bad thing. anything which leeches money out is bad for the club. it doesnt have to be terminal or even dangerous but its not good no matter how you try to justify it. if we make a 100 million profit and pay a 2 million dividend thats 98 million to spend which is great and 2 million gone which is bad no matter what. Edited December 10, 2012 by the gunslinger 0 Quote Link to post Share on other sites More sharing options...
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