Potential DaGrosa Takeover

Phew!
Fat into fire comes to mind with both these

 

I'm honestly not massively disappointed about either development. Lopez would have just asset stripped the club and not convinced about DaGrosa either.

 

Yeah I'm good with that.

As long as there's someone else in the wings.

 

Yeah, DaGrosa wasn't an ideal option, and Lopez arguably less so. But month by month, the bar for being an acceptable option keeps lowering. By August, I will likely be happy to take a cannibalistic habitual jaywalker if they have the funds to keep the club solvent through 2023.

 

How much money do we get for winning the league next season?

In all seriousness, do clubs like Norwich and West Brom actually benefit (financially) by getting relegated/promoted every other season due to parachute payments etc? I'm not suggesting we go down that route before you ask but they seem quite sustainable using that model, but obviously there are no guarantees of getting out the Championship.

 

It’s pretty obvious (well to me anyway) that clubs coming down from the Premier League have a significant advantage over clubs already in the championship, as they can afford to keep most of their players (if they can) and, as they have the experience of playing at a higher level, they should (and I stress “should”) be able to compete right at the top. Seems to me that we’ll see lots of clubs yo-yoing between the two.

 

Id imagine quite a lot because they don’t spend loads of money when they do come up on new wages/players.

I think Norwich might be pretty good next season if they can keep their team together. They were naïve last time they came up but they had a very young team with lots of potential. They only lost Godfrey to Everton from that group so should’ve benefited from a season in the Championship

 

I would say they need another CF. Not convinced Pukki will score that many goals this time around. With Buendia in the side they could really score quite a lot of goals with a good striker.

 

Also rumoured they are front runners for Armstrong for £20m
And if he adapts quickly (like Ollie Watkins) they have every chance of staying up.

 

Forgot they also lost Lewis as well. Have a few mates who watch a lot of Champ football as they support Bristol City and all of them said Norwich were head and shoulders above the other teams this year.

You guys are right, they probably need another striker. I’ve heard Idah is promising but probably too young to be the main man at a PL team

 

https://play.acast.com/s/priceoffootball/parachutepaymentsinthespotlight-barcaandrealmadriddebts

Small update.
11min 5secs in. Very small comment from Kieran Maguire (expert in football accounting).Clearly didn’t want to elaborate on details.
Hint of not wanting to put a name into the public domain. Unlike DaGrosa

 

Interviewer: "Do you know of any interested parties in buying Southampton?"

Kevin Maguire: "Yes, that's all I'm prepared to say." Before going on to say: "Putting names in the public domain does no good, but I'm aware that the club has been for sale to a number of parties. Periods of exclusivity may have ended, but I'd rather not say anymore."

 

Anyone able to read this Athletic article and let us know if there’s anything of note in it?

 

Why hasn’t anybody bought Southampton yet?

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By Dan Sheldon 7h ago

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On the face of it, buying Southampton Football Club would appear to be an interesting proposition.

They have a highly-regarded academy, a 32,000-seat stadium, a manager signed to a long-term deal and a handful of good players at their disposal as they prepare for what will be their 10th Premier League season in a row.

So far, however, all that hasn’t been enough to convince a potential buyer, other than American businessman Joseph DaGrosa, that buying them would be a worthwhile investment.

Throughout the takeover process, The Athletic has strived to keep you up to date with the latest movements regarding the future of your football club. As it stands, there are still two or three interested parties, although they are yet to make the crucial step forward and show serious intent.

Why is this, though?

The Athletic spoke to several industry insiders, all with vast knowledge of the current market, about the impact COVID-19 is having on individuals who have the funds to buy such a football club and whether now is even the right time to purchase a Premier League one.

Pivotal to any sale of Southampton is Gao Jisheng, the Chinese businessman who paid between £180 million and £200 million to purchase an 80 per cent stake in the club from Katharina Liebherr in 2017.

Since that initial investment, however, Gao hasn’t put another penny in.

It must also be said that he hasn’t ever taken a penny out, either.

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Gao at St Mary’s in September 2017 (Photo: Clive Rose/Getty Images)
To get through the pandemic, Southampton’s hierarchy had to turn to MSD Capital to secure a £78.8 million loan; with the interest at 9.14 per cent, repayments will cost them £7.2 million a year.

The loan doesn’t need to be paid back until 2025, and The Athletic has learned that it includes a clause that could see the club borrow an extra £20 million if they needed to boost their working capital.

While you may think a loan of this size would put investors off, one potential buyer said that securing the extra funding was a shrewd — and necessary — move.

Southampton’s latest set of accounts don’t make for pretty reading, and you can expect the next lot to look bleak, too. The fact they went a whole calendar year without supporters at St Mary’s — bar two home games last December where a small number were allowed in — was a big factor.

But that isn’t a hidden secret, and investors will know many football clubs have been recording substantial losses since the first lockdown began in March 2020. Yet, Southampton have been on the market since 2019, so the financial impact of COVID-19 can’t be the only reason they are still searching for a buyer.

“There are two types of investors (in football). Firstly, the ones who were already interested in buying a football club pre-pandemic, as they believed in the further growth of the industry and continued to explore such opportunities,” Andrea Sartori, KPMG’s global head of sports, tells The Athletic. “A good example of this is the Friedkin Group who started negotiating the acquisition of AS Roma well before the health crisis and most likely at different conditions than the ones that were ultimately agreed.

“And then you have those opportunistic players rather (more) interested in providing debt and other financing instruments to help clubs get over liquidity issues.”

The reason Gao is crucial to the sale of Southampton is that, ultimately, he is the one who has to accept an offer for his shares. If he thinks they are worth X and someone offers only Y, it’s his right to say no.

A lot has been said about the fact Gao will want to try to save face in China and not be seen to have lost a significant portion of his sizable investment. But one source points out this isn’t the case.

“If you look at Chinese investors in football clubs over the past few years, there aren’t many people remaining,” they said. “Those people (Chinese football club owners) are the pioneers. The Chinese sports market is not mature. It’s still at the beginning period.

“China needed people like them to do this, to show people: we tried, but we also may fail. There is no saving-face point about it. It’s just a normal business decision.”

Another factor worth considering is whether the Premier League has finally peaked in terms of its domestic broadcast deals.

Investors used to see the multi-billion deals between England’s top division and broadcasters such as Sky Sports and BT Sport grow whenever the contracts ran out. But the latest agreements remain worth roughly the same for 2022-25 as the ones from 2019-2022.

Asked whether this stagnation could lead to potential buyers thinking twice about the Premier League’s strength, Sartori added: “Every sector will eventually slow down and become less attractive to investors, so it’s not only the Premier League.

“Overall, the media market of the Premier League at international level is so much stronger in comparison to any other league. In consideration of the existing gap between the Premier League and other leagues, which is partially justifiable with the product’s quality, in my opinion, it’s hard to expect a significant growth of the Premier League at international level over the next few years.”

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Jack Stephens in front of the television cameras at St Mary’s last November (Photo: Stu Forster/Getty Images)
Another industry insider, who works with interested individuals and parties on takeovers, also mentioned the Premier League’s latest broadcast deal.

“The attraction over the years has been the value and exponential growth of its media rights,” they said. “External investors outside of Europe used to look at it (Premier League clubs) and see excess capital.

“I’ve been involved in conversations between clubs and buyers over the past six to 12 months, and when they see the state of cash flow and the numbers involved in buying and running a football club, they start to think twice.”

The most recent Premier League takeover involved American businessman Alan Pace’s ALK Capital and Burnley, yet that deal last December was leveraged and meant the Turf Moor side went from having around £80 million in the bank to being in debt.

Supporters are naturally uneasy about the possibility of an owner buying their club using borrowed money. But this is what Gao did when he purchased Southampton, although he borrowed money against assets he owned in China, which meant Southampton would be protected if he went bust.

“Your Jack Walker-type owners (the local-lad steel magnate whose wealth helped make Blackburn Rovers champions in the late 1990s) are gone,” explained a source. “You have got people who have made their money through private equity or investment funds.

“All of a sudden, they are coming in with a different mindset.

“They are coming in with a three-to-five-year plan which requires an exit in the fifth year, and if you buy a club outside of the Big Six, you have to factor in relegation. That can wipe out all of their value. It changes the way they look at things.”

Asked whether a rise in leveraged takeovers is a concern, Sartori said: “The financial structure described in the acquisition of Burnley is very, very typical of private equity in any sector of the economy.

“But when such principles are applied to sporting organisations, and not necessarily just football clubs, it is seen as more of a risk. Understandably from the supporters’ perspective, it is difficult to accept the fact that there are investors buying a club with a high level of leverage.”

Many supporters realise that fresh investment into Southampton is crucial for more reasons than simply boosting the playing squad.

In Gao, who can’t speak English, they haven’t had a vocal leader at the helm of their club, with the businessman opting to remain silent in China. The communication is left to the likes of Martin Semmens, the chief executive, and Toby Steele, the club’s managing director.

But fans care about what their owners are doing — and what they plan to do with their club.

Although many supporters feel a new buyer is needed at St Mary’s sooner rather than later, the impact of COVID-19, the failed Super League coup, the stagnating domestic Premier League broadcast deals and uncertainty of how the football world will recover post-pandemic in the coming months and years could mean it may still be a while before a takeover gets done.

(Top photo: Matt Watson/Southampton FC via Getty Images)

 

Chinese ownership not the way to Gao then.

 

Anyone able to explain to a simpleton like me how Burnley's takeover meant they went from having £80m in the bank to being in debt?

 

Too lazy to check but assuming that the owners took out a loan to purchase the club, then leveraged the loan against the club?

 

Not an update, but found this interesting and wasn't sure where to put it.

 

Think that's very kind of Saints fans tbh. We will continue to exist on a knife edge under Gao. I suppose the fact that he hasn't been taking any money from the club is a big positive, as is the fact that he doesn't get involved with the football side of things. But I do feel exisiting under the constraints that we are, there is very little leeway for mistakes and we are likely to continue to operate around lower midtable and in the conversation for the relegation spots most seasons.

 

The gap between the bottom 6 and the rest is interesting!