New Investment Options

[StAndrew7]

2 hours ago, Well Well said:

So you don't actually know

This is a quote from me and others, based on my report back on what was said the AGM. Jim McMahon said that any new investments will be made by the issuing of new shares not the purchase of existing ones.

Now, that may well change based on the discussions but that's as good a source as we have right now.

@steelboy is correct in what he's saying.

[StAndrew7]

2 hours ago, wellgirl said:

No. He doesn't. He's just repeating stuff from "sources". 

 

Nope, direct from the AGM in this instance.

[wellgirl]

1 hour ago, StAndrew7 said:

Nope, direct from the AGM in this instance.

He was talking about the Americans in his post as in I presume the proposed investor. Surely that won't have been discussed at the AGM

[StAndrew7]

3 minutes ago, wellgirl said:

He was talking about the Americans in his post as in I presume the proposed investor. Surely that won't have been discussed at the AGM

It's a natural progression to point to them, given that they're the ones who we're negotiating exclusively with right now.

It was stated by the Chairman at the AGM that any of the potential investors discussed (including the "Americans" in this instance) would be making their investment in new shares i.e. diluting the value of existing shareholders' shares in the club to whatever level is agreed.

As far as I'm aware it's the cleanest way for any investment to take place, as it removes the need for buying/selling of existing shares.

[wellgirl]

11 minutes ago, StAndrew7 said:

It's a natural progression to point to them, given that they're the ones who we're negotiating exclusively with right now.

It was stated by the Chairman at the AGM that any of the potential investors discussed (including the "Americans" in this instance) would be making their investment in new shares i.e. diluting the value of existing shareholders' shares in the club to whatever level is agreed.

As far as I'm aware it's the cleanest way for any investment to take place, as it removes the need for buying/selling of existing shares.

I wasn't at the AGM.. So excuse me if all of the AGM talk means very little to me. And I'm not thick.. But all of this is way over my head.. Probably because I'm just a fan who turns up on match day and donates to the well society 

Maybe someone could explain it in simple terms 

[Stuwell2]

Simplest way I can see it - if I’m correct - is at the moment the society owns 71% of the current shares (for easy calculations let’s call it 100 shares total and the society owns 71 of those with private shareholders owning the other 29) so if they issued another 39 shares making the total shares 139 then the society’s 71 shares would then be approximately 51% of the club shares instead of 71% at the moment and the existing private shareholders shareholding’s would drop to 21%.
The new investor would then be given the new 39 shares in return for their investment giving them approximately 28% ownership of the club.

Edit: I hope my sums are correct but since I left school 43 years ago (and it’s a Friday night) please forgive me if there not and don’t be too harsh on my.    

[David]

On 4/18/2024 at 2:42 PM, FirParkCornerExile said:

Exactly its a precarious operating model. We need more regular definite funds not funds that are rely on the exception rather than the rule. The WS need to tell us how they will achieve that.

It's not precarious if the club is run correctly. 

We budget for finishing 10th and a few cup games, and anything else above & beyond that goes into the "rainy day" fund. Be it player sales, extended cup runs, top six finishes, whatever.

For example, we're sitting 8th at the moment, and let's say that finishing in 8th means getting £1.375 million instead of the £1.250 million the team finishing 10th gets.

That's an extra hundred grand or so that we didn't account for, so it's a little bonus. 

[wellgirl]

4 minutes ago, David said:

It's not precarious if the club is run correctly. 

We budget for finishing 10th and a few cup games, and anything else above & beyond that goes into the "rainy day" fund. Be it player sales, extended cup runs, top six finishes, whatever.

For example, we're sitting 8th at the moment, and let's say that finishing in 8th means getting £1.375 million instead of the £1.250 million the team finishing 10th gets.

That's an extra hundred grand or so that we didn't account for, so it's a little bonus. 

I don't think the club is run badly but as I've said before. I'd like to see us be in the situation where we didn't need to sell our best players to survive and thats why I'm open to outside investment 

[wellgirl]

1 hour ago, Stuwell2 said:

Simplest way I can see it - if I’m correct - is at the moment the society owns 71% of the current shares (for easy calculations let’s call it 100 shares total and the society owns 71 of those with private shareholders owning the other 29) so if they issued another 39 shares making the total shares 139 then the society’s 71 shares would then be approximately 51% of the club shares instead of 71% at the moment and the existing private shareholders shareholding’s would drop to 21%.
The new investor would then be given the new 39 shares in return for their investment giving them approximately 28% ownership of the club.

Edit: I hope my sums are correct but since I left school 43 years ago (and it’s a Friday night) please forgive me if there not and don’t be too harsh on my.    

Thank you. You'd never think I did accounts to degree level... My head is just full of criminology just now.. Thanks again 

[David]

13 minutes ago, wellgirl said:

I don't think the club is run badly but as I've said before. I'd like to see us be in the situation where we didn't need to sell our best players to survive and thats why I'm open to outside investment 

We don't need to sell our best player to survive. Not if we're budgeting accordingly, and we're budgeting for that 10th place finish at worst. 

Selling our best players should result in some financial leeway and a cushion of sorts, the way the Turnbull money did. 

[Jay]

The player sales model debate is an interesting one. For me, it's not a precarious model by any means. And I'd suggest that it demonstrably works.

We're in a situation where the club doesn't urgently need outside investment - it would just be preferable. Our model ensures that it's unlikely that the hypothetical gap outlined in the Well Society's consultation earlier in the year, and the hypothetical gap that is the very reason for courting external investment in the first place, will, based on the experience of fan-ownership to date, materialise. It never has under fan-ownership and, even if it did, the Well Society has enough funding to cover that gap as a one-off. The issue would be if something that has yet to happen didn't just happen one year, but two in quick succession.

Of course, nothing is impossible in football. Over the same time period that fan-owned Motherwell has remained in the division, reached cup finals, and made Europe, clubs with bigger resources such as Hearts, Hibernian and Dundee United have all been relegated. So it's a duty of the club to at least recognise that hypothetical gap and see if there's a more productive way to eradicate it, other than relying on the Well Society to plug it if it happens once, and then to probably slash our playing budget if it happens again in quick succession (before the Society has built up the safety net again).

But in terms of our model, David Turnbull always gets picked out as a seeming "anomaly" but in reality, he's the result of an effective player sales model. Since fan-ownership came into being, we have - purely off the top of my head, so there'll probably be others I miss - sold, for cash, guys like Louis Moult, Cedric Kipre, Kevin van Keen, Sondre Solholm Johansen, James Scott & Ben Heneghan.

We could have, had we tied them down on contracts, added Chris Cadden, Allan Campbell, Jake Hastie, Dean Cornelius & Max Johnston to that list. However, the compensation for each still numbers in the hundreds of thousands meaning that, collectively, that's still well over £1m.

We will probably sell Theo Bair on for a relatively decent fee in the summer, January, or next summer, while at the same time, Lennon Miller will almost certainly go for a price that you could perhaps list alongside the Turnbull fee.

In terms of any investment meaning a change from that model and the ability to keep our best players, I would argue that is incredibly unlikely, if not impossible. The player sales model is only partly because of a financial need, it's also largely because of the club's stature in world football. As has been mentioned elsewhere, it was confirmed at the AGM by the club that no investment offer is transformational, meaning that there would be no change to the model. In fact, you could argue that, if any investor was keen on getting a return on their investment, the player sales model could become even more important in that situation.

The only way in which our model ceases to be our model that I can see is if we ended up with an incredibly unlikely Colin & Christine Weir scenario where a diehard Motherwell fan wins the Euromillions and wants to just chuck cash at the club. But even in that situation, where you don't necessarily need to sell players, players would still be sold - because the best guys will always want to move on to play at perceived bigger clubs or in better leagues, regardless of how much cash you're able to throw at them.

The player sales model at Fir Park has been in place, and worked successfully, before fan-ownership, has worked under fan-ownership, and will continue to work regardless of whether the club is owned by the fans, an external investor, or a hybrid of the two. Personally, I think it's both a successful model that we should be positive about, because we're good at it, and a model that will be integral to the club whether we like it or not anyway.

[stv]

26 minutes ago, Jay said:

The player sales model debate is an interesting one. For me, it's not a precarious model by any means. And I'd suggest that it demonstrably works.

We're in a situation where the club doesn't need outside investment - it would just be preferable. Our model ensures that it's very unlikely that the hypothetical gap outlined in the Well Society's consultation earlier in the year, and the hypothetical gap that is the very reason for courting external investment in the first place, is, based on the experience of fan-ownership to date, unlikely to actually materialise. It never has under fan-ownership and, even if it did, the Well Society has enough funding to cover that gap as a one-off. The issue would be if something that has yet to happen didn't just happen one year, but two in quick succession.

Of course, nothing is impossible in football. Over the same time period that fan-owned Motherwell has remained in the division, reached cup finals, and made Europe, clubs with bigger resources such as Hearts, Hibernian and Dundee United have all been relegated. So it's a duty of the club to at least recognise that hypothetical gap and see if there's a more productive way to eradicate it, other than relying on the Well Society to plug it if it happens once, and then to probably slash our playing budget if it happens again in quick succession (before the Society has built up the safety net again).

But in terms of our model, David Turnbull always gets picked out as a seeming "anomaly" but in reality, he's the result of an effective player sales model. Since fan-ownership came into being, we have - purely off the top of my head, so there'll probably be others I miss - sold, for cash, guys like Louis Moult, Cedric Kipre, Kevin van Keen, Sondre Solholm Johansen, James Scott & Ben Heneghan.

We could have, had we tied them down on contracts, added Chris Cadden, Allan Campbell, Jake Hastie, Dean Cornelius & Max Johnston to that list. However, the compensation for each still numbers in the hundreds of thousands meaning that, collectively, that's still well over £1m.

We will probably sell Theo Bair on for a relatively decent fee in the summer, January, or next summer, while at the same time, Lennon Miller will almost certainly go for a price that you could perhaps list alongside the Turnbull fee.

In terms of any investment meaning a change from that model and the ability to keep our best players, I would argue that is incredibly unlikely, if not impossible. The player sales model is only partly because of a financial need, it's also largely because of the club's stature in world football. As has been mentioned elsewhere, it was confirmed at the AGM by the club that no investment offer is transformational, meaning that there would be no change to the model. In fact, you could argue that, if any investor was keen on getting a return on their investment, the player sales model could become even more important in that situation.

The only way in which our model ceases to be our model that I can see is if we ended up with an incredibly unlikely Colin & Christine Weir scenario where a diehard Motherwell fan wins the Euromillions and wants to just chuck cash at the club. But even in that situation, where you don't necessarily need to sell players, players would still be sold - because the best guys will always want to move on to play at perceived bigger clubs or in better leagues, regardless of how much cash you're able to throw at them.

The player sales model at Fir Park has been in place, and worked successfully, before fan-ownership, has worked under fan-ownership, and will continue to work regardless of whether the club is owned by the fans, an external investor, or a hybrid of the two. Personally, I think it's both a successful model that we should be positive about, because we're good at it, and a model that will be integral to the club whether we like it or not anyway.

Great post. I would think that we have brought in more money from selling and moving on players over the last few years than most other clubs outside the old firm. 

[FirParkCornerExile]

8 hours ago, David said:

It's not precarious if the club is run correctly. 

We budget for finishing 10th and a few cup games, and anything else above & beyond that goes into the "rainy day" fund. Be it player sales, extended cup runs, top six finishes, whatever.

For example, we're sitting 8th at the moment, and let's say that finishing in 8th means getting £1.375 million instead of the £1.250 million the team finishing 10th gets.

That's an extra hundred grand or so that we didn't account for, so it's a little bonus. 

that ignores the fact , irrespective of league position nearly every year where we've not had a good cup run , semis at least, or transfer fees, the club incurs losses. Finishing in the top 4 also costs money because there are far more win bonuses to be paid. If new money is not forth coming or we don't get decent transfer fees each year the cost / budget to finish tenth a few cup games gets more expensive each year because operating costs and salary expectations increase each year. That budget for tenth and a few cup games also excludes the cost of punting a manager if we hit dire straights. I've said before the fan model is perfectly workable but without new money the level at which the club operates year on year gets harder to sustain when variable income streams do not materialise. Its basic economics. If revenue streams don't increase and costs do something has to give. Sure its not a worry as long as we get cup run money and transfer fees none of which are any way guaranteed. People can disagree but to me we do operate a bit on a a wing and a hope in terms of expected income.

[Kmcalpin]

38 minutes ago, FirParkCornerExile said:

that ignores the fact , irrespective of league position nearly every year where we've not had a good cup run , semis at least, or transfer fees, the club incurs losses. Finishing in the top 4 also costs money because there are far more win bonuses to be paid. If new money is not forth coming or we don't get decent transfer fees each year the cost / budget to finish tenth a few cup games gets more expensive each year because operating costs and salary expectations increase each year. That budget for tenth and a few cup games also excludes the cost of punting a manager if we hit dire straights. I've said before the fan model is perfectly workable but without new money the level at which the club operates year on year gets harder to sustain when variable income streams do not materialise. Its basic economics. If revenue streams don't increase and costs do something has to give. Sure its not a worry as long as we get cup run money and transfer fees none of which are any way guaranteed. People can disagree but to me we do operate a bit on a a wing and a hope in terms of expected income.

Agree 100%. Football in Scotland is constantly changing and moving forward and not always for the best. Clubs at our mid table level like Killie, Dundee and St Mirren are "finding money" from somewhere, albeit that might not be from sustainable sources. Its becoming harder to compete with them. So, in order to stand still, we have to increase our income.  Transfer income is not gauranteed and can be unpredictable.  Young players are now moving on earlier for meagre compensation as the big boys of world football get greedier, and the authorities simply stand aside meekly.

Fans too are changing and are becoming far harder to please and demanding. Many younger and middle aged spectators have been weaned on a diet of English Premier League football and that is now the standard, to which they are accustomed. 

As a club we have to update, modernise and increase our income streams sonehow as you rightly point out. Nothing is permanent but change. 

[joewarkfanclub]

There is a huge difference between increasing revenue streams and taking on outside investment.

The club will have to increase its revenue streams regardless of whether it stays under fan ownership or sells its majority shareholding to a private investor.

If we sell, the initial money will be welcome, but it doesnt seem like its going to be transformational, and its benefit could be short lived.

We still need to live within our means, otherwise we end up owing money to the investor like Dundee, Dundee United or any of the other clubs going down this route.

Thats fine as long as the investor is happy with that situation. The minute they are not you are back in a "John Boyle" situation or worse.

I look at the potential investment more like a Dragons Den situation, where the worth to the club could be through the particular skillset and expertise that Bamack could bring, rather than how deep his pockets are, which really is irelevant.

Its worth noting also, that we have just appointed a new CEO. Id be interested to hear what his ideas are about increasing revenue streams alongside the Society.

It could be that a mixed model with Society/Club/Barmack working together is the way forward.

[Well Well]

Can we rely on the sell a player model forever without investment?. Personally I don't think so. If anything we have been extremely lucky to have a few players coming through the academy that we can sell off, unfortunately we are seeing recently a few signing for bigger clubs before we can cash in on them.

I don't think the Well society can sustain the club at its current level and probably not if we were in a league lower with the lack of premier league gates and revenue.

I honestly don't know what the answer is however I don't think we can continue the way we are we can't go into every season with our fingers x that we don't get relegated and a player plays well enough to sell on. 

Finances are yo-yoing no matter how you try to spin them.

[joewarkfanclub]

3 hours ago, Jay said:

The player sales model debate is an interesting one. For me, it's not a precarious model by any means. And I'd suggest that it demonstrably works.

We're in a situation where the club doesn't urgently need outside investment - it would just be preferable. Our model ensures that it's unlikely that the hypothetical gap outlined in the Well Society's consultation earlier in the year, and the hypothetical gap that is the very reason for courting external investment in the first place, will, based on the experience of fan-ownership to date, materialise. It never has under fan-ownership and, even if it did, the Well Society has enough funding to cover that gap as a one-off. The issue would be if something that has yet to happen didn't just happen one year, but two in quick succession.

Of course, nothing is impossible in football. Over the same time period that fan-owned Motherwell has remained in the division, reached cup finals, and made Europe, clubs with bigger resources such as Hearts, Hibernian and Dundee United have all been relegated. So it's a duty of the club to at least recognise that hypothetical gap and see if there's a more productive way to eradicate it, other than relying on the Well Society to plug it if it happens once, and then to probably slash our playing budget if it happens again in quick succession (before the Society has built up the safety net again).

But in terms of our model, David Turnbull always gets picked out as a seeming "anomaly" but in reality, he's the result of an effective player sales model. Since fan-ownership came into being, we have - purely off the top of my head, so there'll probably be others I miss - sold, for cash, guys like Louis Moult, Cedric Kipre, Kevin van Keen, Sondre Solholm Johansen, James Scott & Ben Heneghan.

We could have, had we tied them down on contracts, added Chris Cadden, Allan Campbell, Jake Hastie, Dean Cornelius & Max Johnston to that list. However, the compensation for each still numbers in the hundreds of thousands meaning that, collectively, that's still well over £1m.

We will probably sell Theo Bair on for a relatively decent fee in the summer, January, or next summer, while at the same time, Lennon Miller will almost certainly go for a price that you could perhaps list alongside the Turnbull fee.

In terms of any investment meaning a change from that model and the ability to keep our best players, I would argue that is incredibly unlikely, if not impossible. The player sales model is only partly because of a financial need, it's also largely because of the club's stature in world football. As has been mentioned elsewhere, it was confirmed at the AGM by the club that no investment offer is transformational, meaning that there would be no change to the model. In fact, you could argue that, if any investor was keen on getting a return on their investment, the player sales model could become even more important in that situation.

The only way in which our model ceases to be our model that I can see is if we ended up with an incredibly unlikely Colin & Christine Weir scenario where a diehard Motherwell fan wins the Euromillions and wants to just chuck cash at the club. But even in that situation, where you don't necessarily need to sell players, players would still be sold - because the best guys will always want to move on to play at perceived bigger clubs or in better leagues, regardless of how much cash you're able to throw at them.

The player sales model at Fir Park has been in place, and worked successfully, before fan-ownership, has worked under fan-ownership, and will continue to work regardless of whether the club is owned by the fans, an external investor, or a hybrid of the two. Personally, I think it's both a successful model that we should be positive about, because we're good at it, and a model that will be integral to the club whether we like it or not anyway.

Thanks for this Jay.

Important we get some general information and opinion from members of the Society Board.

[dennyc]

10 hours ago, David said:

It's not precarious if the club is run correctly. 

 

For me this is the vital ingredient.

I think everybody acknowledges that just like everybody else we are a selling Club. And there is nothing wrong with that.

But unless the club is at the same time generating profits and/or has a constant stream of quality youth coming through, then the product on the pitch inevitably decreases. A trend we have seen for a good few seasons as income has been utilised for a wide range of infrastructure improvements rather than maintaining player quality. Not having a dig at the Directors here as most Clubs are experiencing similar decline. To a degree that has hidden our own issues.

What the Board statement actually said before all this debate started was that to CONTINUE TO OPERATE AT THE CURRENT LEVEL some form of outside investment is required. If we are prepared to risk a drop in the level we play at, then we can continue as is.

So why can't we strive to have a balance that incorporates outside investment on acceptable terms plus income from player sales plus a growing Well Society? Especially if that additional investment is used in part to fund a stronger and more productive youth programme. Then any on field performance above the level budgeted for results in growth and does not mean we just stand still at best.

Also the big issue with bringing in value through player sales is that players will often deliberately let contracts run out. And there is nothing the Club can do about it. Take Lennon Miller. Thankfully he has extended and we all expect him to go for Turnbull like monies. But what if next January Motherwell are offered half of what they think he is worth. Do they turn the offer down or reluctantly accept it because we need the money? If they opt not do sell, could that upset the player in which case he might decide to run down his contract in the hope of a big sign on fee from a top club in due course? That situation is happening throughout the football world. My point is that overly relying on player sales is risky. And if those potential sales are the only realistic way of generating income then that risk is greatly increased.

And sorry, but saying we have broken even over the past seven, ten or twenty years is meaningless. Turnbull and two cup finals in a season are history. What matters is how finances are working out in the present.

[steelboy]

40 minutes ago, dennyc said:

 

And sorry, but saying we have broken even over the past seven, ten or twenty years is meaningless. Turnbull and two cup finals in a season are history. What matters is how finances are working out in the present.

The club's finances in the present are a result of the previous income. We obviously wouldn't have spent a fortune on the pitch and East Stand if the money wasn't there from player sales. 

It's not history if you actually have the money. We should be looking at £3-4m from Bair and Miller so it's not like we don't have assets at the moment. It's obviously a balancing act from the club but that's the nature of professional sport at every level. We are in a strong position at the moment but people talk about it like a wean that thinks there's a bogeyman under the bed. 

 

[Spiderpig]

1 hour ago, steelboy said:

The club's finances in the present are a result of the previous income. We obviously wouldn't have spent a fortune on the pitch and East Stand if the money wasn't there from player sales. 

It's not history if you actually have the money. We should be looking at £3-4m from Bair and Miller so it's not like we don't have assets at the moment. It's obviously a balancing act from the club but that's the nature of professional sport at every level. We are in a strong position at the moment but people talk about it like a wean that thinks there's a bogeyman under the bed. 

 

If we are that well off, why are we actively seeking additional investment then?

[steelboy]

15 minutes ago, Spiderpig said:

If we are that well off, why are we actively seeking additional investment then?

Because McMahon and Weir don't like the look of the new Society board.

[bobbybingo]

33 minutes ago, steelboy said:

Because McMahon and Weir don't like the look of the new Society board.

What do McMahon and Weir not like about them?

[dennyc]

2 hours ago, steelboy said:

The club's finances in the present are a result of the previous income. We obviously wouldn't have spent a fortune on the pitch and East Stand if the money wasn't there from player sales. 

 

 

By the same token we would be in a better position if we had not incurred losses of over £3m in the past two accounting years. Those losses are clearly not of concern to some. How long can we sustain losses of that nature? And, Yes, we would still have had to spend a fortune on the East Stand and Pitch even if that previous income had not been available. Possibly funded by the Well Society leaving us even more exposed. Those upgrades were almost mandatory for Safety Certificate reasons and to avoid further SPFL sanctions because of the pitch. And Fir Park will continue to eat up funds as repairs are ongoing.

And, if investment  had been secured earlier, we could perhaps have also had funds to improve the playing squad rather than bringing in the low cost players you have openly stated are not good enough.

There is scope for outside Investment, the Society and player sales. In fact proper application of any Investment could actually result in more profitable youth development, increased player sales and improved performance on the pitch.

[FirParkCornerExile]

5 hours ago, joewarkfanclub said:

There is a huge difference between increasing revenue streams and taking on outside investment.

The club will have to increase its revenue streams regardless of whether it stays under fan ownership or sells its majority shareholding to a private investor.

If we sell, the initial money will be welcome, but it doesnt seem like its going to be transformational, and its benefit could be short lived.

We still need to live within our means, otherwise we end up owing money to the investor like Dundee, Dundee United or any of the other clubs going down this route.

Thats fine as long as the investor is happy with that situation. The minute they are not you are back in a "John Boyle" situation or worse.

I look at the potential investment more like a Dragons Den situation, where the worth to the club could be through the particular skillset and expertise that Bamack could bring, rather than how deep his pockets are, which really is irelevant.

Its worth noting also, that we have just appointed a new CEO. Id be interested to hear what his ideas are about increasing revenue streams alongside the Society.

It could be that a mixed model with Society/Club/Barmack working together is the way forward.

you are quite correct their is a big difference but as much as potential investors need to prove their case , so do the Well Society , they too need to tell the fans how they will grow sustainable Revenue streams and have coherent business plans to back it up. They do that and  no bugger will look twice at outside investors. 

[Stuwell2]

1 hour ago, steelboy said:

Because McMahon and Weir don't like the look of the new Society board.

Now there’s two of the bogeymen under steelboys bed, which with the amount of bogeymen he sees must either be a very big bed or very crowded under there.