Raising Funds

[Gors Buster]

It’s fine margins in the Championship.
It would seem that we’ve got a recruitment model and set up that everyone is happy with.
If we’re able to offer that little extra to get players like Matt O’Reilly over the line, it’s a win all around.
He who dares, Rodney.

 

[Martyn - Derwydd]

Kieran Maguire reckons a Championship club is worth 3 times its revenue to a buyer.

So if as a previous post says we had 32m revenue in 2024 then that would put a prospective selling price of the club at 96m. Lets say 100m

So for that 50m incoming to raise our value to 150m
then either
it has to be invested in something like buying the stadium
or
we are just about to have some serious sponsorship deals signed soon
that would boost our revenue up from 32m

Or both.

Significant sponsorship deals, which was alluded to at the fan meeting not too long ago, might also explain how our summer signings will not get us into trouble with ffp rules

 

[BanosSwan]

If 50m investment comes in it doesnt mean the value of the club shoots up 50m. At least I dont think it does.

However, if they buy the stadium something like that would increase the value of the club as the club will then come with real estate to any future buyer

That's the whole point of investments, could go up or (if they really balls it up), down.

 

[Londonlisa2001]

If 50m investment comes in it doesnt mean the value of the club shoots up 50m. At least I dont think it does.

However, if they buy the stadium something like that would increase the value of the club as the club will then come with real estate to any future buyer

Yes it does.

The snippet seems to suggest a valuation if £110m pre money and £160m post money.

So the £50m raised would be for a bit over 31% of the club.

I hope the club don’t buy the stadium btw. Would rather it be in the hands of the council. We have the lease anyway as we bought out Stadco. So can maximise its value to us. And future value is somewhat throttled by covenants in place (thankfully).

Buying Fairwood would make sense. Obviously upgrading Academy.

 

[Londonlisa2001]

Probably buy fairwood and upgrade the academy.

Agree.

 

[Londonlisa2001]

Buying the stadium is essential. A long term investment, but definitely worth it. No immediate returns though

Wouldn’t make sense for the club. We already have the lease.

 

[Londonlisa2001]

Kieran Maguire reckons a Championship club is worth 3 times its revenue to a buyer.

So if as a previous post says we had 32m revenue in 2024 then that would put a prospective selling price of the club at 96m. Lets say 100m

So for that 50m incoming to raise our value to 150m
then either
it has to be invested in something like buying the stadium
or
we are just about to have some serious sponsorship deals signed soon
that would boost our revenue up from 32m

Or both.

Significant sponsorship deals, which was alluded to at the fan meeting not too long ago, might also explain how our summer signings will not get us into trouble with ffp rules

If the club is worth £110m and £50m cash is received, it’s worth £160m.

That £110m isn’t far off 3x revenue.

In practice the clubs’ valuations in the championship vary hugely rather than as a multiple of revenue. I don’t think any of them make profits before player trading btw.

I think sponsorship deals will have an impact on future FFP status rather than this year.

I did a post a few days ago about why I think we will be ok for FFP this year.

 

[swansnews]

£50m Growth Plan? Bloomberg AI Mentions Swansea City in Investment Roundup

Bloomberg’s AI-powered news segment Takeaways dropped a curious line this week: “Swansea City seeks £50m to aid football club’s growth.” No press relea

jackarmy.net

 

[Martyn - Derwydd]

If the club is worth £110m and £50m cash is received, it’s worth £160m.

That £110m isn’t far off 3x revenue.

In practice the clubs’ valuations in the championship vary hugely rather than as a multiple of revenue. I don’t think any of them make profits before player trading btw.

I think sponsorship deals will have an impact on future FFP status rather than this year.

I did a post a few days ago about why I think we will be ok for FFP this year.

Lisa,

OK. As I said wasnt sure if the 50m would increase the value of the club from 110m to 160m.

So current state of club 110m and then 50m cash in the bank = 160m.

However if the 50m cash is spent on things which do not add/have value ie all spent on player wages until its all gone then the club is back at 110m valuation again. Is it not?

The point I was trying to make is for it to sustain a 160m valuation then that new cash has to be turned into assets. Eg Stadium or Fairwood purchase (real estate), Players that are worth a lot more if sold etc

Or is my thinking way off Lisa?


FFP

I dont think the investment does anything to help FFP as its not considered revenue which is the main starting point in FFP calculations

Gorringe said at the Carmarthen forum that Modric's presence had opened the door to more high value sponsorship deals.

Think he said something along the lines of, we are now talking to sponsors that wouldnt give us the time of day before Modric Snoop.

So while the 50m does not do anything re FFP, increased sponsorship deals would

 

[theallseeingdai]

Wouldn’t make sense for the club. We already have the lease.

owning a lease is generally not as good as owning the property (freehold) because a lease is a diminishing asset with restrictions and responsibilities that freehold ownership doesn't have. Freehold grants complete ownership of the property and land, offering long-term control, flexibility, and no lease-end value concerns, whereas a leasehold means you're only owning the right to use the property for a fixed period, with the value tied to the remaining years of the lease.

 

[ThurrockJack]

owning a lease is generally not as good as owning the property (freehold) because a lease is a diminishing asset with restrictions and responsibilities that freehold ownership doesn't have. Freehold grants complete ownership of the property and land, offering long-term control, flexibility, and no lease-end value concerns, whereas a leasehold means you're only owning the right to use the property for a fixed period, with the value tied to the remaining years of the lease.

A stadium lease is nothing like a normal property lease. The club has about a 30 year lease left at around £300,000 a year rent. Unless the club is able to get the stadium relatively cheaply it would not make financial sense to buy. There will be no worries about the lease running out, there will essentially be no competiton for the stadium, so renewing is basically garuanteed. The only other reason to buy it would be to expand it, but we haven't been able to fill it consistently for years and are highly unlikely to for the forseeable future.

 

[Colin-swansea]

Yes it does.

The snippet seems to suggest a valuation if £110m pre money and £160m post money.

So the £50m raised would be for a bit over 31% of the club.

I hope the club don’t buy the stadium btw. Would rather it be in the hands of the council. We have the lease anyway as we bought out Stadco. So can maximise its value to us. And future value is somewhat throttled by covenants in place (thankfully).

Buying Fairwood would make sense. Obviously upgrading Academy.

Buying Fairwood falls into line with what was mentioned some weeks back about the 18's and 21's moving from Landore and being integrated with the first team training at Landore, while the younger age group teams remain at Landore.
Having said that, Fairwood as a playing complex has been in existence since the mid-70's and I just wonder whether a covenant is on the property preventing a sale.
Incidentally, the Swansea University football team has changed their name to Pure Swansea.

 

[Captain_Sham]

owning a lease is generally not as good as owning the property (freehold) because a lease is a diminishing asset with restrictions and responsibilities that freehold ownership doesn't have. Freehold grants complete ownership of the property and land, offering long-term control, flexibility, and no lease-end value concerns, whereas a leasehold means you're only owning the right to use the property for a fixed period, with the value tied to the remaining years of the lease.

If there is a long lease on ths property, then it is as good as owning the property. Ive seen leases that are for 1000yrs in my job. Freehold is worth nothing in that situation.

 

[leighton]

Kieran Maguire reckons a Championship club is worth 3 times its revenue to a buyer.

So if as a previous post says we had 32m revenue in 2024 then that would put a prospective selling price of the club at 96m. Lets say 100m

The only valuation theory that holds up for football clubs is the Greater Fool theory.

More seriously - a revenue multiple in itself is meaningless. Anyone can sell stuff at a loss. The key to value is to sell stuff at a profit (generate cash). Unfortunately …

 

[monmouth]

If there is a long lease on ths property, then it is as good as owning the property. Ive seen leases that are for 1000yrs in my job. Freehold is worth nothing in that situation.

It’s also worth nothing (extra) when you can’t change its use and you already have the rights to use it for every purpose that it can be used for. Buying it would be stupid imo. I think we should have continued to rent it on peppercorn rent from the council personally, that was a sweet deal. I’d love to see the business plan projections that were used when the Yanks took it on…the same time they thought a shop by the market was a great wheeze.