New Investment Options

[Yoshi-1991]

2 minutes ago, weeyin said:

What's the opportunity?

If it does exist, then we should be charging extra for that opportunity cost, not handing over control for a discount.

 

Well thats a question for Barmack, however I get the impression I get is he is holding certain cards against his chest, at least publicly, which is fair enough.

 

As far as I understand, that is the point, the club will be the one to benifit from it.

[dennyc]

2 minutes ago, weeyin said:

That's where it gets a bit complicated, or at least nuanced.

The Club Board definitely run the club, but as the Society is the majority shareholder, they run it at the behest of the Society. If we don't like what they are doing, there will be mechanisms, I'm sure, to replace them all.

Just appears to me that McMahon (and by association Dickie) are working very hard to sell the belief that it is up to the Society to secure external finance, when in fact that should be their responsibility as Club Board members. 
As for the WS as owners effecting change to the Club Board, I’m not sure there was a will to do that given the make up of the Society Board over the years. Plus you have to come up with competent alternatives. And your air fare to and fro would be prohibitive. 😀

Recent changes to the Society Board have ruffled a few feathers though…….allegedly. In some ways it is a shame this proposal has come in so soon after the Society Board changes as I was looking forward to seeing how things progressed under their leadership. 

[steelboy]

Anyone who believes that there is an untapped revenue stream out there which only Erik Barmack knows about and it's is going to give only us a significant long term boost is a complete mug. 

We are growing our turnover year on year and the focus should always be on improving our core football business. That's where improvements need to be made, talking about AI and celebrities is smoke and mirrors to draw in easily impressed morons.

The deal only offers short term protection so in 2030 we would be in a position where all the assets can be sold by Barmack and the Society will have given up it's entire bank balance and won't be able to offer any protection to the club. It would be utter madness to go down this path. 

We only need to look at the ways that Mike Ashley crippled Rangers by using his control over the club to sign them up to deals that were suicidal for them but very lucrative for companies controlled by him. This deal means could Barmack could put in a small amount of money and on day one sign us to expensive and long term Artificial Intelligence and marketing contracts. There are lots of ways to take money out a football club. 

 

[ropy]

If the buy back option after two years is likely to empty the WS coffers what would the situation be at the end of the ‘protected’ 6 years.  The club could be sold to anyone or asset stripped.  What happens after the 6 years if the model has been successful?  Would this mean that revenue streams have increased and no further investment is required?

What is their exit strategy?

[ClaretAndBamber]

Where am I going wrong here?

If, and it's a big if, the club is worth £4m today, and the WS owns 71%, their shareholding is worth £2.84m

Over the next 6 years the WS has to "invest" £1.35m and in 6 years time will have a 46% shareholding. So, Current Shareholding + £1.35m = 46% in 6 years time. 46% of £4m is £1.84m.

The Barmacks will put in £1.95m and have 49%.

This means that the Current Shareholding is actually worth £1.84m-£1.35m = £0.49m

If the Current Shareholding is worth £0.49m, and that's 71% of the total shares, then this values the club at £690k.

The question here is, is the club worth £4m today or £4m after equity injections of £1.95m + £1.35m?

I have to be missing something.

[bobbybingo]

12 minutes ago, ropy said:

If the buy back option after two years is likely to empty the WS coffers what would the situation be at the end of the ‘protected’ 6 years.  The club could be sold to anyone or asset stripped.  What happens after the 6 years if the model has been successful?  Would this mean that revenue streams have increased and no further investment is required?

What is their exit strategy?

Exactly, that's the biggest question for me. Is it possible to have an exit strategy from a football club that doesn't leave either party taking a huge hit - other than flogging the club to someone else.

The Well Society haven't a hope of buying back at the end of year 6 and the details of the end of year 2 option make it clear these investors do not intend to lose their money. 

[steelboy]

https://x.com/GavinMcCafferty/status/1800426228651844045?t=80n4AfcJpDyFrmSl3TFQVA&s=19

Some good points from Gavin McCafferty. The possibility of a divided fanbase is the biggest danger to the long term prospects of the club. 

[StAndrew7]

36 minutes ago, ropy said:

If the buy back option after two years is likely to empty the WS coffers what would the situation be at the end of the ‘protected’ 6 years.  The club could be sold to anyone or asset stripped.  What happens after the 6 years if the model has been successful?  Would this mean that revenue streams have increased and no further investment is required?

What is their exit strategy?

Based on the (limited) information on the club website, the Barmacks' letter says that they'd be looking to attract additional investment in the future and if they did, they'd then sell part of their shareholding to those parties; I imagine at a decent profit, if the plan has been a success. That would then, I guess (although I'm clutching a bit here without quite understanding it all) mean their shareholding is diluted, to the point where the WS/private fan shareholders hold a larger majority over the others.

I don't know what that would do to the Chairmanship (I imagine it'd mean EB would have to relinquish his status, but perhaps not?)

From what I can see, there's also nothing to stop him buying additional privately owned shares to increase his holding after the 6-years are up; that's what worries me (aside from this being an absolutely shite deal). If it's in the spirit of a German 51/49 model which he's said over on P&B (although some people have shown a lack of understanding of what that means; the 51 doesn't have to be a single entity), that should be prevented from happening in whatever articles are drawn up, if the WS ends up voting in favour.

I just so happen to be off on holiday for the rest of this week after today, so I'm going to spend some time trying to come up with a fairly substantial list of questions to send to the e-mail address the club has provided. If anyone who's not in the WS or a shareholder wants to ask anything, ping me a DM and I'll try to include it.

[steelboy]

What's worth remembering about the 49% figure is that some of the clubs shares are effectively 'lost' so it's not possible for the entire 51% of non Barmack shareholders to come together to vote against him. 

[StAndrew7]

Just now, steelboy said:

What's worth remembering about the 49% figure is that some of the clubs shares are effectively 'lost' so it's not possible for the entire 51% of non Barmack shareholders to come together to vote against him. 

By the dilution, you mean?

Also, another random thought; I'm not sure how this works for private shareholders, just yet. It appears that I would have to invest the equivalent value of 8% at £330k for me to retain my level of holding, is that correct? 

[steelboy]

Just now, StAndrew7 said:

By the dilution, you mean?

Also, another random thought; I'm not sure how this works for private shareholders, just yet. It appears that I would have to invest the equivalent value of 8% at £330k for me to retain my level of holding, is that correct? 

No I mean that a lot of the private shares were issued decades ago and between people dying, moving away or other reasons not every share is actively owned by someone the club can contact.

 

[StAndrew7]

Just now, steelboy said:

No I mean that a lot of the private shares were issued decades ago and between people dying, moving away or other reasons not every share is actively owned by someone the club can contact.

 

Ahh, got you. And of course there's nothing you can do about them, I assume?

[santheman]

I'd be more than interested in how he and his financial people came up with the 4m valuation of the clubs assets.

If the ground (and presumably all its infrastructure fixtures and fittings machinery etc etc are not included in that figure) what makes up the 4m.

Players? They can be classed both as assets or liabilities depending how you look at it.

Cash in bank?

Outstanding debtors?

Then you have to offset any liabilities against that which are?

Us mere fans will probably never know.

 

[wellgirl]

Just now, santheman said:

I'd be more than interested in how he and his financial people came up with the 4m valuation of the clubs assets.

If the ground (and presumably all its infrastructure fixtures and fittings machinery etc etc are not included in that figure) what makes up the 4m.

Players? They can be classed both as assets or liabilities depending how you look at it.

Cash in bank?

Outstanding debtors?

Then you have to offset any liabilities against that which are?

Us mere fans will probably never know.

 

Apparently it was the club that set that value. 

[StAndrew7]

12 minutes ago, santheman said:

I'd be more than interested in how he and his financial people came up with the 4m valuation of the clubs assets.

If the ground (and presumably all its infrastructure fixtures and fittings machinery etc etc are not included in that figure) what makes up the 4m.

Players? They can be classed both as assets or liabilities depending how you look at it.

Cash in bank?

Outstanding debtors?

Then you have to offset any liabilities against that which are?

Us mere fans will probably never know.

 

I'll be asking for the details of that, but I think it may well be as simple as McMahon/The Exec Board saying "Aye, £330k over 6 years for 49% means the club is worth this by extrapolation" less the liabilities they've attributed to the club. My main thrust of questioning for that will be why the entire value of the COVID loan has been applied to a 6-year period of investment when the payment terms are interest free over 20 years (or more, I can't remember the exact terms).

[santheman]

6 minutes ago, StAndrew7 said:

I'll be asking for the details of that, but I think it may well be as simple as McMahon/The Exec Board saying "Aye, £330k over 6 years for 49% means the club is worth this by extrapolation" less the liabilities they've attributed to the club. My main thrust of questioning for that will be why the entire value of the COVID loan has been applied to a 6-year period of investment when the payment terms are interest free over 20 years (or more, I can't remember the exact terms).

It might be as simple as that but I'm sure EB's financial people won't just have accepted the figure without at least doing due diligence as to its accuracy.

Presumably because he wants it paid off as quickly as possible so that it doesn't show up as an outstanding liability should he decide to jump ship in 6 years time

[Villageman]

8 hours ago, Yoshi-1991 said:

Well thats a question for Barmack, however I get the impression I get is he is holding certain cards against his chest, at least publicly, which is fair enough.

 

As far as I understand, that is the point, the club will be the one to benifit from it.

Cannot agree with your understanding. He is committing to just less than£2m over 6 years. That is it financially. He also said he and his Organisation will make MFC a more widely known entity which should mean benefits. Nowhere does it say those benefits will end up in MFC pockets. My suspicious mind says they will not.

[StAndrew7]

10 minutes ago, santheman said:

It might be as simple as that but I'm sure EB's financial people won't just have accepted the figure without at least doing due diligence as to its accuracy.

Presumably because he wants it paid off as quickly as possible so that it doesn't show up as an outstanding liability should he decide to jump ship in 6 years time

On your first point, I would imagine some due diligence has been done, yes, but if the exec board low-balled it initially (which is probably the case tbh, I've heard that during the initial negotiations the terms were worse than this, so they probably negotiated to this and thought "fuck it"), he'd rightly just jump at those terms.

I think this is the crux of things; we can't presume anything about what's being proposed, because there's absolutely nothing to demonstrate what the plan is moving forward other than some text on the club website and his posts on P&B. There's absolutely no substance to this.

[Toxteth O'Grady]

Maureen Downie resigns from the Well Society board:

https://www.motherwellfc.co.uk/2024/06/11/maureen-downie-resigns/

[steelman1991]

Just now, Toxteth O'Grady said:

Maureen Downie resigns from the Well Society board:

https://www.motherwellfc.co.uk/2024/06/11/maureen-downie-resigns/

I reckon we now know who the "3" were that voted for the investment plan.

[El Grew]

I’m not for one minute going to suggest that the club go back down a road that once led to administration but it 
raises a few questions:

(1) Was The Well Society consulted and did it agree with the decision to seek the external finance?

(2) Why solicit external finance if now when it’s been offered, there is a reluctance to accept it?

(3) Does the finance offer have too many strings attached and why?

(4) Who has the final say - the Club Board or the Well Society?

[steelboy]

It will be interesting to see if Dickie and Downie are willing to come out and explain why they think Barmack's offer is beneficial for Society members.

 

[StAndrew7]

5 minutes ago, El Grew said:

I’m not for one minute going to suggest that the club go back down a road that once led to administration but it 
raises a few questions:

(1) Was The Well Society consulted and did it agree with the decision to seek the external finance?

(2) Why solicit external finance if now when it’s been offered, there is a reluctance to accept it?

(3) Does the finance offer have too many strings attached and why?

(4) Who has the final say - the Club Board or the Well Society?

1) As far as I'm aware, no. It's been discussed at the last 3 or 4 AGMs but I'm not sure how much the WS were consulted on it. I would imagine that Dickie and Feeley were aware, being on the board with McMahon who led the charge.

2) I assume this stems from point 1 and the Society's overall involvement in things; I don't think the WS is against external investment but I think the WS board (6 of them, anyway) are right to protect its status as the majority shareholder in the club.

3) Can't really comment on that, hopefully will get some information on the fine print from my questions e-mail later in the week.

4) The Well Society as the majority shareholder has the final say (it says that on the Club statement, at least); if the WS comes back and rejects the bid, that's the end of it. Although I think someone posted (I forget who, sorry) asking the question as to what majority is required for it to go through; it could be as high as 75%?

  

4 minutes ago, steelboy said:

It will be interesting to see if Dickie and Downie are willing to come out and explain why they think Barmack's offer is beneficial for Society members.

 

I await this with baited breath...

[steelboy]

To me saying the Society should give up fan ownership and hand over all financial assets to the club is effectively the same as killing off the Society. I knew that's what McMahon and Dickie were aiming for so no surprises there. 

Feely and Downie going along with it after being involved for so long is a very strange one. Changing from volunteering your time towards making fan ownership work to trying to end fan ownership is a complete reversal which needs some explaining.

Edited June 11 by steelboy

[weeyin]

1 hour ago, steelboy said:

Feely and Downie going along with it after being involved for so long is a very strange one. Changing from volunteering your time towards making fan ownership work to trying to end fan ownership is a complete reversal which needs some explaining.

The resignations smack a bit of "I'll promise to represent the fans views... unless what they want is different from what I want personally, then I'm offski"