Club Finance Story - On Solent from 7am this morning

[Bearsy]

Is converting loans to shares or whatever something you'd want to do if you was about to sell the company for £75m? Or is that totally unrelated?

[Gemmel]

Is converting loans to shares or whatever something you'd want to do if you was about to sell the company for £75m? Or is that totally unrelated?

 

Could be, but when you consider the Roman Abromvich did this 5 years ago at Chelsea, then probably not.

[trousers]

Is it just coincidence that the solid investment being made in staplewood is approx the same as we sold oxo for ? ...and would fall into the same financial year?

 

While i really excited about the new development im just concerned that it might affect the training schedule between now and the end of the season for our current 1st team squad... most people dont like change and any slightness of this could affect a winning mindset ....jeez am i showing how too anxiuos i am with only 7 games to go ???!!! lol

 

I think Cortese said in yesterday's interview (or was it Lallana?) that seeing the work start has given the lads a mental boost as they can see the future starting to take shape.

 

That said, psychologically, it could work either way I guess.

[Red and White Army]

Converting the loan to equity - unmitigated great news.

 

93% of turnover on wages last year - pretty terrible news.

 

At the end of the day, we have been and probably continue to be dependent on the Liebherr teat. There is no other way to describe it.

[Toadhall Saint]

So,

 

The Liebherrs, already owning the club, lent it 33m.

 

They took shares in the club as repayment for the loan.

 

In other words, they've given the money to the club, because they took shares for something they already own.

 

Thats how I see it. Anyone see it differently ?

 

'tis how I see it Alps.

[dubai_phil]

Converting the loan to equity - unmitigated great news.

 

93% of turnover on wages last year - pretty terrible news.

 

At the end of the day, we have been and probably continue to be dependent on the Liebherr teat. There is no other way to describe it.

 

No it is NOT!

 

That cost would have been covered in the loans figure.

 

14mil to buy the club 19 mil to get it into the nPc.

 

Remember that percentage was during our L1 promotion year, by swapping loans for equity any losses on the books will have been wiped away/covered or capitalised.

 

That 93% LAST season is now seeing our revenue increased by around 30% PLUS 15 million quid for AOC

 

The figure will still likely be high but it will be trending down as a percentage.

 

NC is NOT daft, he is enjoying his job. he will have made sure that everything is running smoothly and funded, otherwise the shareholders can simply fire him

[Ampersound]

...At the end of the day, we have been and probably continue to be dependent on the Liebherr teat. There is no other way to describe it.

 

I love the Liebherr bitty

[Deano6]

The club has received the cash and existing shareholders have taken the hit by being diluted and thus the sp would have dropped.

 

If the Leibherrs own the lot then it's just a paper exercise however if anyone else owns shares then they will have seen their value drop.

 

That said being as we look to be on the verge of the premiership I'd guess that the shares would be worth much more now than then so everyone would be happy.

 

 

While I hear what you're saying, I'm not sure this is completely right. Shares would only lose value if the same amount of equity was now divided into more shares. What is happening here is that £33m of debt (a liability on the balance sheet) is disappearing and being replaced with £33m of equity. It is this amount which has been converted into the new shares, presumably into a comparable number of shares to correspond with the current share value (so that Number of new shares = £33m / current share value).

 

 

So other investors are diluted in the sense of having a lesser share of the total, but the total amount has correspondingly gone up so that the share price should be (more or less) unchanged. They will, however, receive a lower percentage of any future profits, but the same is true of any losses. Plus they no longer have to service the loans.

 

 

The total equity is merely assets less liabilities. Economically nothing has changed in doing this (in that no payments have actually been received into, or paid out of the company), so there should be no change in the value of a shareholding. It just means that the family have bought into the company and are willing to follow the fortunes, rather than receive a fixed guaranteed return. It also means the club is now less leveraged which is good news.

 

 

Very simply (numbers made up):

Equity £11m; 1.1m shares = £10 per share

 

Now add in £33m of equity by writing off loans of same amount amount and issuing 3.3m shares...

 

Equity £44m; 4.4m shares = £10 per share

 

 

However were the club to make additional profits (eg Premier League cash), the original shareholders would now only receive a 1/4 of the share they would previously as they have to share it out more ways.

 

 

All of which is moot at I 'believe' they own the club 100% anyway.

[merrimd]

Does this mean that Saints now own SMS and Staplewood themselves again? It had been mentioned before that it was the Liebherr estate that owned the bricks and mortar.

[Lighthouse]

The difference between us and the Skates is that we have actually got the money to pay for our opperation, much the same as Man City CAN afford to spend vast amounts of money on bringing in players on massive contracts. 93% may be very high for wages, but most teams have to gamble a bit to go up. When the Skates got promoted in 2003 wages were 108% of turn over.

 

Having said that, the wage bill could use a trim. There are 7 or 8 players on it we just don't need, even without bringing anyone else in.

[pingwing]

Perfect announcement, by comparison (with the share thing) imagine if we had the Mike Ashley solution to the cash he's pumped into Newcastle. Turns out they owe him something like £130m because he stumped up the cash to get around all the crippling interest payments and pay him back directly a couple of million a year (with only a fairly static source of income, unless they get Europe).

 

I like this shares solution more because we (as a club) don't owe the Liebherr's any money now. We owe them a statue in gratitude or something (maybe the Markus stand) but no money from the club's earnings ever has to repay that 33m they invested, which means going into the Champ and the Prem (hopefully) we are free to operate how we ideally want to (not through difficult financial situations).

 

On the big if of the Liebherr's wanting to sell the club, they basically have stated an asking price for a well run and perfectly functioning club. I doubt they will sell for their initial investment as there is plenty more money to be made from being a decent prem side.

 

So realistically we are set, we don't need prem money to remain in business (like West Ham), we are not falling apart from bad investment (pomp) and we already have a pretty strong squad going forwards. This is the clarity we've all been waiting for to actually feel really positive for the direction of the club!

[St Marco]

Wonder if the way they "gave" money to the club in "exchange" for shares is a way around the new finance rules coming in?

[Window Cleaner]

No wonder we were good last season, League 1 players on Championship+ salaries.To think that we laugh at Pompey and West Ham.

[Window Cleaner]

Wonder if the way they "gave" money to the club in "exchange" for shares is a way around the new finance rules coming in?

 

Must be something in it for them, reducing tax or death duties or something like that.Unless of course some of them have actually sold their shares already.Guess we'll never know.

[buctootim]

By capitalising their Loans, they have made a stronger base for the Club as the Loans were probably repayable on demand. The shares have to be sold for the Leibherrs to get their money back now and thus have shown their comittment to the club. The have made a permanent investment now.

 

Dont disagree with that. You can slice it and dice it different ways though. The affairs of the club are certainly 'cleaner ' now but you could also take the devils advocate view that Saints can be marketed as a debt free premiership club, excellent academy with 100% outright ownership available.

[trousers]

No wonder we were good last season, League 1 players on Championship+ salaries.To think that we laugh at Pompey and West Ham.

 

[Lord Duckhunter]

I was listening to the press pass on talksport the other week and debt was being discussed. The general opinion was that rich foregin owners were a bad thing if they loaded debt onto the club, ala Man U, or wanted their money back in the end ala Gaydamak. They all seemed to think that putting money into the club for equity was fine and the only way to go. I'm a bit ignorant about these things, but is that what's happened here? Am I right in assuming that if things go tits up, we wont owe ML's family £33mil they will just lose that money?

[Joensuu]

Excellent news - simply the best thing we could have been told. Despite rumours to the contrary, the club is debt free, and hasn't currently got any liabilities to the Liebherr estate.

 

The 93% is a red herring. In League 1 our income can't have much exceeded 10m - so basic maths tells me that 9.5m of wages of c. £8,500 per week spread over a 20 man squad. Realistically that would give us 5 players on c. £15k; 5 players on c. £10k; and 10 players on c. £5 per week.

 

Since promotion last year I'd predict that our wages as a percentage of turnover will be currently be c. 60-70%.

[Danish Saint]

Very good news this is....

 

This means we're completely debt-free, making a healhty profit, as revenue has increased 70% (!!). I assume this increase happend after records were published, so makes it the increase in revenue from playing in the Championship. Records show, we payed 93% of turnover in wages in Leauge 1, so this percentage has already been reduced.

 

Interesting now is how much money is made available for new signings in (knock-on-wood) the Premier Leauge, but this will not be made public for obvious news.

 

Happy days at Saints!

[Verbal]

I was listening to the press pass on talksport the other week and debt was being discussed. The general opinion was that rich foregin owners were a bad thing if they loaded debt onto the club, ala Man U, or wanted their money back in the end ala Gaydamak. They all seemed to think that putting money into the club for equity was fine and the only way to go. I'm a bit ignorant about these things, but is that what's happened here? Am I right in assuming that if things go tits up, we wont owe ML's family £33mil they will just lose that money?

 

Correct. The joys of being a private company...

[Window Cleaner]

Excellent news - simply the best thing we could have been told. Despite rumours to the contrary, the club is debt free, and hasn't currently got any liabilities to the Liebherr estate.

 

The 93% is a red herring. In League 1 our income can't have much exceeded 10m - so basic maths tells me that 9.5m of wages of c. £8,500 per week spread over a 20 man squad. Realistically that would give us 5 players on c. £15k; 5 players on c. £10k; and 10 players on c. £5 per week.

 

Since promotion last year I'd predict that our wages as a percentage of turnover will be currently be c. 60-70%.

 

Turnover was 16.4 million. I just assumed wages account for 93% of that, ie 15.5 million,which kind of makes sense because they were 12+ million the season before.No doubt player wages account for about 80/85% of that.

[Joensuu]

Turnover was 16.4 million. I just assumed wages account for 93% of that, ie 15.5 million,which kind of makes sense because they were 12+ million the season before.No doubt player wages account for about 80/85% of that.

 

That makes more sense... I was starting to think that our players weren't on the sort of money I thought they were last year... Lambert or Fonte on c. £15k doesn't sound enough. Lambert/Fonte on c. £20k... makes you realise why he signed for us in the first place.

[DrunkenSaint]

Well i can see a big clear out at the end of the season weather we get promoted or not and the youngsters coming through will be given contracts but on slightly less money than the players who leave to balance it out.

[Turkish]

It's threads like this that are the reason why I love the innernezz and Internet mong boards. A story goes out and the mong board is immediately full of experts spouting their ill-informed opinions about something they know f*ck all about as gospel. I particularly like the made up figures and sums and what something might mean, could equal or will mean in 3 years time. Keep going chaps, I never knew we had some many people well equipped to run a football club.

[Brussels Saint]

The Saints finance guy is worth a listen to if you ask me. Certainly talks a good game and this news overall seems very positive.

 

http://www.bbc.co.uk/sport/0/football/17547804

 

The club feels like its in good hands and most importantly we are not in debt.

 

Reading between the lines does it seem that Pardew got about a 1.4m payoff?

[thorpie the sinner]

No it is NOT!

 

That cost would have been covered in the loans figure.

 

14mil to buy the club 19 mil to get it into the nPc.

 

Remember that percentage was during our L1 promotion year, by swapping loans for equity any losses on the books will have been wiped away/covered or capitalised.

 

That 93% LAST season is now seeing our revenue increased by around 30% PLUS 15 million quid for AOC

 

The figure will still likely be high but it will be trending down as a percentage.

 

NC is NOT daft, he is enjoying his job. he will have made sure that everything is running smoothly and funded, otherwise the shareholders can simply fire him

 

Fairest synopsis I have read so far

[Frank's cousin]

My take is somewhat simple, and FWIW may I say less hysterical than some of the reactions and no doubt especially those down the road, who will be in a frenzy LOL. Would you mind?

 

First up: Markus Liebherr saw an opportunity to turn a failing club/business with decent infrastructure around. He knew it would require a solid financial strategy, but one he was willing to back and invest in as the returns for success would be more than adequate.

Since day 1 – Firstly Markus, and then the Liebherr Estate (With Katherine Liebherr, honouring her father’s commitment and investment provision) have invested a TOTAL of 33 million up to June 2011. That INCLUDES the 14 mil purchase price (or cost of satisfying and clearing the creditors Aviva and Barclays).

 

This means that in addition to the purchase price, they have invested a net 19 mil in those 2 years, some of which will have been player purchase, wages and infrastructure improvements – approximately 7 mil in 2009-2010 season, and a further 12 mil in 2010-2011.

So a total investment of 33 mil for a business that if promoted to the PL will be worth TWICE that (approx 60-70 mil) – Looks like VERY GOOD BUSINESS to me.

 

Many have said before that this ‘debt’ is NOT debt, but would be converted to equity as it’s about investing in a business to ensure growth – common practice. The 93% wage to turnover was for the promotion season in L1 and is high, but expected. We have since had 70% turnover increase and likely a wage increase but would expect the ration for 2011-2012 to be more like 70% as a result.

 

(NB. Do not confuse 'shares' with PLC/stock exchange shares - there are likely to be 4 or 5 shares wiyth a nominal value - if the reports have any truth, NC will own one and the Leibherrs 4)

 

 

On the potential sale: Nicola Cortese is trusted friend of the Liebherrs, and sits on the MALI board which is now owned by Katherine Liebherr. He probably fully understands that they don’t really have the passion or interest in football or the club that their late father had, however, they are decent people who have honoured their father’s commitment. However, NC also commented some time ago that should they wish to liquidate their asset, he knew many folk through his financial connections that would be interested in taking over... I suspect that there is some truth in the rumour, and that the Liebherrs would be willing to sell under the right conditions to the right folk – and that NC would ensure that happens.

 

The tricky bit of the puzzle now is that we are 2 years ahead of schedule if we are promoted and such the club is no longer worth 20-30 mil, but if promoted twice that - if any sale is being discussed, its more than likely that its changed the ballpark and a compromise on price would need to be reached somewhere along the line.

 

I see no need to worry about this – I see NC here to complete the long term plan, whoever is holding the equity, given that its possible he holds 20% (if that speculation is true) he will have a very vested interest in the clubs future potential. Ideally any new owner would be aprivate invester, rather than a financila institution, and yes there might be the possibilty that any purchase is leveraged against the club, but we cant predict the future, so lets at least not get depressed by 'what ifs'?

 

By all means ask questions and rightly ask questions about our wage to turnover situation, but I suspect that by the time we are in the Prem, this will be self sustaining – the investment was to get us there. I also suspect that because we are ‘ahead of schedule’ the wage to turnover level is probably still higher than expected by the time we are promoted.

 

Think we need to chill out and enjoy the ride.

[buctootim]

The Saints finance guy is worth a listen to if you ask me. Certainly talks a good game and this news overall seems very positive.

 

http://www.bbc.co.uk/sport/0/football/17547804

 

 

Good interview. The last two line are interesting given the 'for sale?' thread. "Nothing has changed from an operational and strategic perspective with ML not being here. NC will drive the club forward and has every plan to do so"

Edited 29 March, 2012 by buctootim

[Frank's cousin]

Good interview. The last line NC is empowered to run the club and has every plan to do so into the futre (or words to that effect) is interesting given the 'for sale?' thread.

 

Thing is NC said previously that should the Liebherrs wish to divest, he knows several folk who would be interested - from that I reason that they are folk know to him and he would in effect be a partner in any consortium.

[thorpie the sinner]

My take is somewhat simple, and FWIW may I say less hysterical than some of the reactions and no doubt especially those down the road, who will be in a frenzy LOL. Would you mind?

 

First up: Markus Liebherr saw an opportunity to turn a failing club/business with decent infrastructure around. He knew it would require a solid financial strategy, but one he was willing to back and invest in as the returns for success would be more than adequate.

Since day 1 – Firstly Markus, and then the Liebherr Estate (With Katherine Liebherr, honouring her father’s commitment and investment provision) have invested a TOTAL of 33 million up to June 2011. That INCLUDES the 14 mil purchase price (or cost of satisfying and clearing the creditors Aviva and Barclays).

 

This means that in addition to the purchase price, they have invested a net 19 mil in those 2 years, some of which will have been player purchase, wages and infrastructure improvements – approximately 7 mil in 2009-2010 season, and a further 12 mil in 2010-2011.

So a total investment of 33 mil for a business that if promoted to the PL will be worth TWICE that (approx 60-70 mil) – Looks like VERY GOOD BUSINESS to me.

 

Many have said before that this ‘debt’ is NOT debt, but would be converted to equity as it’s about investing in a business to ensure growth – common practice. The 93% wage to turnover was for the promotion season in L1 and is high, but expected. We have since had 70% turnover increase and likely a wage increase but would expect the ration for 2011-2012 to be more like 70% as a result.

 

(NB. Do not confuse 'shares' with PLC/stock exchange shares - there are likely to be 4 or 5 shares wiyth a nominal value - if the reports have any truth, NC will own one and the Leibherrs 4)

 

 

On the potential sale: Nicola Cortese is trusted friend of the Liebherrs, and sits on the MALI board which is now owned by Katherine Liebherr. He probably fully understands that they don’t really have the passion or interest in football or the club that their late father had, however, they are decent people who have honoured their father’s commitment. However, NC also commented some time ago that should they wish to liquidate their asset, he knew many folk through his financial connections that would be interested in taking over... I suspect that there is some truth in the rumour, and that the Liebherrs would be willing to sell under the right conditions to the right folk – and that NC would ensure that happens.

 

The tricky bit of the puzzle now is that we are 2 years ahead of schedule if we are promoted and such the club is no longer worth 20-30 mil, but if promoted twice that - if any sale is being discussed, its more than likely that its changed the ballpark and a compromise on price would need to be reached somewhere along the line.

 

I see no need to worry about this – I see NC here to complete the long term plan, whoever is holding the equity, given that its possible he holds 20% (if that speculation is true) he will have a very vested interest in the clubs future potential. Ideally any new owner would be aprivate invester, rather than a financila institution, and yes there might be the possibilty that any purchase is leveraged against the club, but we cant predict the future, so lets at least not get depressed by 'what ifs'?

 

By all means ask questions and rightly ask questions about our wage to turnover situation, but I suspect that by the time we are in the Prem, this will be self sustaining – the investment was to get us there. I also suspect that because we are ‘ahead of schedule’ the wage to turnover level is probably still higher than expected by the time we are promoted.

 

Think we need to chill out and enjoy the ride.

 

Good read Frank

[jasoneuelllfanclub]

Yes the Liebherrs may decide to sell in the future but I have utmost confidence in Cortesi to carry on taking the club forward. I am sure he will only sanction a sale in the best interests of the club as well as ensure he and the liebherrs get a sizeable return on their investment. Les Read was talking about making it a sustainable project for the next 20-30 years, so with or without the liebherrs I truly believe the club is in good hands. should we get to them premiership we will become a very attractive purchase given our stadium is debt free, training ground will be world class, big fan base with huge catchment area and last but not least a young up and coming manager who's reputation is growing by the day. its all good on the south coast so keep calm guys and enjoy the ride:)

[trousers]

It's threads like this that are the reason why I love the innernezz and Internet mong boards. A story goes out and the mong board is immediately full of experts spouting their ill-informed opinions about something they know f*ck all about as gospel. I particularly like the made up figures and sums and what something might mean, could equal or will mean in 3 years time. Keep going chaps, I never knew we had some many people well equipped to run a football club.

 

It's the experts that come on here telling the so called experts that they're not experts that I enjoy most

[trousers]

The Saints finance guy is worth a listen to if you ask me. Certainly talks a good game and this news overall seems very positive.

 

http://www.bbc.co.uk/sport/0/football/17547804

 

 

The key thing Rogers highlights IMO is that we are ahead of where they planned for us to be at the moment. In other words, they hadn't planned for us to be in the Premier League next season (in terms of the financial planning). Yes, we knew there was a "5 year plan" but I don't think we were ever sure whether that meant we would aim to get to the Premier League in year 3, 4 or 5.

[JonnyLove]

Small point to make is that and it has been detailed was last year we were in league 1. We had less money, no sponsor, large squad (ok we do have a large squad now but anyway) and our Season ticket prices were rock bottom. Now were in the championship with higher revenues, more expensive (than last years) season tickets, carparking charges, a sponsor and more corporate finances coming in than before so I would probably say the wages have now dropped to a 70% level. (shame we have to wait until next year to find out)

[Dibden Purlieu Saint]

Perfect announcement, by comparison (with the share thing) imagine if we had the Mike Ashley solution to the cash he's pumped into Newcastle. Turns out they owe him something like £130m because he stumped up the cash to get around all the crippling interest payments and pay him back directly a couple of million a year (with only a fairly static source of income, unless they get Europe).

 

Whatever an odious twunt he is, he has really done a cracking job with that club. Very, very impressive.

[Window Cleaner]

so I would probably say the wages have now dropped to a 70% level. (shame we have to wait until next year to find out)

 

doubt that, they may have dropped but are probably still up around 80% ish at least.Few have gone out completely and a fair few have been drafted in,we know (or at least this was the press figure) that Chung is on about 15K a week so we can assume that all the structurally important players are now on at least that.Add Jos,Sharp,Fox,Cork and there's no way that our increased revenues this season will diminish the effect of the salarial mass very much.We're in a good place right now but I see promotion as

pretty necessary for us to sustain our current salary levels.

[Matty's Caddy]

I don't see what all the fuss is about.

It wouldn't matter if the wages ratio was 293%, the liebherrs are obviously happy with those figures because NC is still in the job.

We as fans have no input into it whatsoever, they can do with us as they wish

Luckily for us, it appears the Liebherrs are still on board, but even if they weren't, didn't NC say following Marcus' death that he had interested parties if that were to change

I think everybody should relax and let the banker worry about the figures.

Us fans? Sit back and enjoy the ride.

You never know, the owners might be after the real riches of the champions league........

[Ken Tone]

It's threads like this that are the reason why I love the innernezz and Internet mong boards. A story goes out and the mong board is immediately full of experts spouting their ill-informed opinions about something they know f*ck all about as gospel. I particularly like the made up figures and sums and what something might mean, could equal or will mean in 3 years time. Keep going chaps, I never knew we had some many people well equipped to run a football club.

 

I have never noticed ignorance stopping you from posting, Turkish

 

And interpreting accounts is something that many posters do know something about. This is very good news all round IMO. The debts being converted to equity is fantastic news. Add to this the Saints finance guy saying that £1.4 million of the wages last year were one-off payments, to Pardew etc, so that the underlying wages were more like 80% of turnover (still very high) and that turnover this season is already 70% up on last, and I am a very reassured Saints fan.

Edited 29 March, 2012 by Ken Tone

[Sour Mash]

I don't see what all the fuss is about.

It wouldn't matter if the wages ratio was 293%, the liebherrs are obviously happy with those figures because NC is still in the job.

We as fans have no input into it whatsoever, they can do with us as they wish

Luckily for us, it appears the Liebherrs are still on board, but even if they weren't, didn't NC say following Marcus' death that he had interested parties if that were to change

I think everybody should relax and let the banker worry about the figures.

Us fans? Sit back and enjoy the ride.

You never know, the owners might be after the real riches of the champions league........

So don't bother looking at anything financial while NC is here? Strange approach. He's doing a great job, but fans should still be aware and conscious of what is going on at their club. Also, just because NC is still here, doesn't necessarily mean the Liebherrs are happy with everything.

[Frank's cousin]

So don't bother looking at anything financial while NC is here? Strange approach. He's doing a great job, but fans should still be aware and conscious of what is going on at their club. Also, just because NC is still here, doesn't necessarily mean the Liebherrs are happy with everything.

 

Thing is, why the need to try and speculate on who is happy, unhappy? No need. Think this is a simple case of 2+2 =5. We KNOW the Leibherrs would probably sell if the price was right, nawt to do with being happy or otherwise, just different interests which is fair enough. We should still be very thankful that they have supported tehir late father's wishes and NC in delivering the plan to date - as NC has indicated, if they chose to sell, he has others waiting who would support teh fulfilment of the plan...

[derry]

I know the basic level for one of our best players and that is nowhere near the excessive amounts quoted. They have a bonus scheme for results that pays out dependent on position. Below top two it drops off considerably. Therefore the overall wage would be very good but dependent on results and top two position. We have a lot of players and support staff and I can't see us breaking the structure for overpaid mercenaries on their way down. Our turnover, provided we reach the Premier, will leap up, so provided we don't go stupid, we will be in a terrific position financially.

[oracle saint]

I love the way people challenge official statements. If they expect no return on their investment then they HAVE written it iff. If you think they have not - show me where in the Leibher accounts it is shown as an asset or debtor.

 

The loan would have been a liability and therefore reduced shareholders' funds by £33m. After the conversion to equity shareholders would be £33m better off in terms of book (or enterprise) value. In theory they are no better or worse off.

 

Anyone know if interest was being paid on the loans? If so this would disappear reducing the burden on revenue.

 

There might be a taxation angle on the conversion of loans (repaid from revenue) to equity (capital). Dividends might be paid instead of interest/loan repayments that would qualify for a different and possibly more beneficial tax treatment.

 

In any event it strikes me that it can probably be viewed as a vote of confidence by the shareholders in the Club.

[sentry]

93% is a real worry - I read once clubs should only be at about 50-60%

 

I may be wrong, but I read that 50-60% is ideal for most companys, and football clubs should aim to this, but very very few do. I think im correct in saying almost all clubs are over 80% and many are over 100%.

[Keglin]

I know it’s been linked before but worth a look to get some context on this year’s figures.

 

http://swissramble.blogspot.co.uk/2012/01/southampton-saints-alive.html?utm_source=BP_recent

 

Found this bit most interesting:

 

There has been some speculation that others might want to invest in Southampton now that their prospects have improved, but Cortese has firmly stated that “the club is not for sale.” He also maintained that Liebherr’s death would not derail their plans, “Nothing has changed. This is a long-term project. This was never a financial transaction. It was done with the strong belief that we can achieve something here which is going to be special.”

This would be reinforced if the owners were to convert their loans into equity, as Mansour has done at Manchester City, but to date they have lived up to their promises. In any case, Cortese says that there would be other options if the Liebherr family decided to exit stage left, “If there's any lack of commitment, we have a plan B. I know people with money who would have the same attitude as Markus who would join us on this. But, just to underline, the commitment of the family is 100%.”

[Chez]

I'm pretty sure there were people on here suggesting we were breaking even or there abouts. Were we ****. Our wage bill was huge (Lallana doesn't sign a 5 year deal for buttons when he had offers from the Premiership) and despite the decent crowds you can't cover top end Championship wages whilst in League 1 (you can't in the Championship).

 

Into the Championship and players like Cork and Sharpe will have expanded (£1m each a year maybe??) that wage bill considerably. Loses next year anyone? Jesus these Liebherrs have been brave. Thankfully it is paying off, but even they can't of expected us to go through the league. These kind of losses are exactly the reason why I've been asking questions. But I needn't have bothered as all my concerns have been washed away with the news of the debt being turned into equity. Brilliant news and fair play to those people on here telling me that the Liebherrs would do just that. You were spot on.

[kpturner]

Where has 33m come from then? If private investor or creditor such as bank lent it then do they now have shares in club?

Have you been in a cocoon for the last three years?

[Legod Third Coming]

I love the way people challenge official statements. If they expect no return on their investment then they HAVE written it iff. If you think they have not - show me where in the Leibher accounts it is shown as an asset or debtor.

 

Er, are shares not an asset class?? Has my pension been screwed over by my financial adviser...

[Legod Third Coming]

Whatever an odious twunt he is, he has really done a cracking job with that club. Very, very impressive.

 

And with a manager we couldn't wait to get rid off too...

[hutch]

...and why would it be in Liebherr accounts?

[Legod Third Coming]

I'm pretty sure there were people on here suggesting we were breaking even or there abouts. Were we ****. Our wage bill was huge (Lallana doesn't sign a 5 year deal for buttons when he had offers from the Premiership) and despite the decent crowds you can't cover top end Championship wages whilst in League 1 (you can't in the Championship).

 

Into the Championship and players like Cork and Sharpe will have expanded (£1m each a year maybe??) that wage bill considerably. Loses next year anyone? Jesus these Liebherrs have been brave. Thankfully it is paying off, but even they can't of expected us to go through the league. These kind of losses are exactly the reason why I've been asking questions. But I needn't have bothered as all my concerns have been washed away with the news of the debt being turned into equity. Brilliant news and fair play to those people on here telling me that the Liebherrs would do just that. You were spot on.

 

They took a £33m punt and if we go up, they could sell the club (assuming there are still Arab/Russian buyers around) and get a half decent return. We must be worth £50m+ on promotion based on being one of the few clubs with a genuine Premeirship infrastructure and debt free, with a good crowd base (about to get bigger when the only other Championship club nearby goes belly up).

 

My money is on a sale to the Chinese - the only sovereign wealth fund yet to play in the football world to kmy knowledge...