It’s really straightforward.
They bought a club that on the face of it was maintaining its position in the premier league with no owner investment (some short term cash bridging loans but no actual investment was made at any point). The club was financially self sufficient.
The plan was to remain in situ in the belief that:
1. Broadcasting rights would continue to rise exponentially thus increasing their initial valuation similarly exponentially with zero outlay required;
2. There were commercial opportunities available that hadn’t been exploited including stadium naming, sponsorships, commercial partnerships etc etc if they brought in someone with the requisite experience;
3. There were significant opportunities available in generating US interest in the club (the Jack to a King nonsense, the love of the underdog story - see Wrexham) and they tried to advance this by the appointment of Bob Bradley.
Several things went wrong.
Firstly, the club was not actually financially self sufficient - it was chasing its tail by the time they got involved - ludicrous contracts to players like Ayew and Gomis which completely changed the financial structure, bad recruitment decisions with players like Clucas - awful decisions on management (Monk replacing Laudrup) etc etc etc.
The club was a lot closer to relegation than perhaps they ever realised. No5 certain that at the time they genuinely believed that a club like us are permanently so close to going down.
Commercially I’m not sure they realised quite how much the stadium ownership structure hampered the club’s ability to exploit things such as naming rights, likewise I don’t think they realised quite how beneficial the stadium ownership structure was in derisking future downsides. Equally, I suspect they didn’t really work out that there is very little interest commercially in clubs which are outside the ‘big club’ set up, outside major population centres, not historically glamorous and who had thrown away the reflected commercial attractiveness of someone like Laudrup. Also the people appointed to cover commercial opportunities were weak.
The cocked up the whole ‘US’ interest bit by appointing a manager who was so woefully out of his depth that it was farcical. And forgot that US interest almost always means the club has to be in the premier league (unless owned by a huge film star) as it simply won’t get the tv coverage needed to sustain the interest outside that.
Plus the chairman they thought had a magic touch made increasingly bad decisions. And an ownership that fancied itself as commercially competent but which was exposed for lack of football nous time and time again, resulting in damaging outcomes.
When relegated, they were left with stupid contracts, a dramatic fall in broadcast revenue with no commercial revenue to make any difference and so were facing huge losses immediately.
They realised that they needed to get back up, but initially at least completely underestimated how difficult that is. And when faced with managers that would have stood a chance, instead blamed them for not walking back up with almost no effort and time and time again failed to back them as they lost confidence and assumed that it must the managers’ faults that didn’t result in promotion.
They are now in a position that they will have written off the vast majority of their initial investment, they have reduced their holdings (by bringing others into the LLC and putting some money from the LkC into the club reducing the average cost of their holding and reducing minority ownership), they have looked unsuccessfully to sell the club for quite some time, but are stuck between a rock and a hard place. They know the only possibilities are the club going back up and them making a lot of money, or the club eventually falling away, probably into administration and start again. I suspect they’re torn. They are just about doing enough to delay the second possibility without really having the desire to invest enough for the first. This will continue for as long as they think ‘just a couple more wins and we could have fluked a play off place which is then a toss up for going back up).
Despite comments by others there has been no opportunity for them to recoup their investment otherwise they would have done it. While the Trust legal case was ongoing that prevented it and since the ridiculous settlement the club has been an absolute basket case so only a few have been willing to make an investment, and even then, it’s been a few quid (in their terms) thrown in in much the way that a normal person would put a hundred quid on red at a casino. It’s not been a big enough investment to move the dial.
The only chance we have is that we hit really lucky with a new manager who manages to find a way of getting success out of an increasingly thread bare cupboard (and they will in that situation chuck some cash at some loans or players that they think could turn a profit). Or that someone somewhere who is rich as all hell wants to buy a club to take up and for what ever reason fancies us.
