Raising Funds

[Londonlisa2001]

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

What the club is worth now or in the future is entirely subjective to be honest.

It’s based on assets (realisable assets that is) together with profits / future profits, cash etc etc.

The point I was making is that when money is raised via an equity injection, the value of the post money business is pre money value plus money in. Any prospectus will outline what the money will be spent on and they’ll have to largely stick to that.

Ultimately we are going to be ‘worth’ more by increasing our asset base by buying players that have a projected future profit to the club, either by gaining promotion or by having a future resale in excess of their book value. And increasing our income.

Buying the stadium will be neither here nor there, buying Fairwood would be helpful. Having said that, land purchases where you can’t really do much with them will not have the same value as buying land that could be developed into an alternative use. The value of owning Fairwood would be if we could exploit any other uses (rental income for example), or just if it solidifies our position re stability of usage (it couldn’t be sold out from underneath us for example).

 

[Londonlisa2001]

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.

In this case though it makes no difference.

It’s not like in 30 years’ time the council can say ‘we’ll turn the ground into something else’.

 

[Londonlisa2001]

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.

We can expand it anyway. Indeed, we have done in the past. Albeit by small amounts.

 

[Martyn - Derwydd]

What the club is worth now or in the future is entirely subjective to be honest.

It’s based on assets (realisable assets that is) together with profits / future profits, cash etc etc.

The point I was making is that when money is raised via an equity injection, the value of the post money business is pre money value plus money in. Any prospectus will outline what the money will be spent on and they’ll have to largely stick to that.

Ultimately we are going to be ‘worth’ more by increasing our asset base by buying players that have a projected future profit to the club, either by gaining promotion or by having a future resale in excess of their book value. And increasing our income.

Buying the stadium will be neither here nor there, buying Fairwood would be helpful. Having said that, land purchases where you can’t really do much with them will not have the same value as buying land that could be developed into an alternative use. The value of owning Fairwood would be if we could exploit any other uses (rental income for example), or just if it solidifies our position re stability of usage (it couldn’t be sold out from underneath us for example).

Ok so I think its as I thought. That 50m cash injection if spent is ideally spent on realizable assets. Players worth more if sold, real estate etc etc.
And, if that 50m was spent purely on something like wages we'd be back where we started pre 50m injection

 

[Londonlisa2001]

Ok so I think its as I thought. That 50m cash injection if spent is ideally spent on realizable assets. Players worth more if sold, real estate etc etc.
And, if that 50m was spent purely on something like wages we'd be back where we started pre 50m injection

If you mean covering operating expenses that we are already committed to, any additional £50m injection wouldn’t be used for that as it wouldn’t be an attractive proposition for new investors.

If you mean an equity injection could mean paying wages for better additional players in the future than we could otherwise afford, it could be value enhancing as I said previously.

If we bring in £50m and it sits in the bank, the club is worth £50m more than if it wasn’t sitting in the bank.

It’s exactly the same as if you had a box you were selling and put a £20 note into the box. The box would the then be worth whatever someone was previously going to pay for it plus £20.