Southampton owner tells Mauricio Pellegrino he has no extra funds (The Times)

[GGalpin]

http://https://www.thetimes.co.uk/article/southampton-owner-tells-mauricio-pellegrino-he-has-no-extra-funds-6xz3ff8v6

 

Late story but one of interest, I would think. Story by Matt Hughes, their deputy football correspondent.

[yellow&blue]

The link isn’t working for me....

[MOSaint]

Long story short

 

purchase was financed by Hong Kong bank and investors from Macau. They want a return on that investment. So the club will run exactly as it was pre-takeover Colette with a need to sell in order to fund transfers.

[MOSaint]

Complete with a need to sell before buying, even.

 

Seems like the club neither gained or lost from this takeover, but Kat made a tidy profit

[shurlock]

Complete with a need to sell before buying, even.

 

Seems like the club neither gained or lost from this takeover, but Kat made a tidy profit

 

Disagree. We now have the complexity and incestuousness of a Chinese consortium. Further we will need to service debt on a hefty loan from a commercial lender (the choice of lenders being limited to offshore lenders in order to circumvent domestic restrictions). That's in contrast to the status quo ante where we borrowed a smaller amount of money from the owner, ostensibly on more generous terms. And the commercial loans we did obtain under KL, from what I recall, were secured against her personal estate. Agree, though, that Kat is smiling.

Edited 18 August, 2017 by shurlock

[Greenridge]

The grass isn't always greener.

[Golden Balls]

This doesn't help my feeling that this takeover is bad news

[SuperSAINT]

This doesn't help my feeling that this takeover is bad news

 

Indeed. Feels like Mr Gao might still be looking for his proverbial pot to wee in.

[Miltonaggro]

Disagree. We now have the complexity and incestuousness of a Chinese consortium. Further we will need to service debt on a hefty loan from a commercial lender (the choice of lenders being limited to offshore lenders in order to circumvent domestic restrictions). That's in contrast to the status quo ante where we borrowed a smaller amount of money from the owner, ostensibly on more generous terms. And the commercial loans we did obtain under KL, from what I recall, were secured against her personal estate. Agree, though, that Kat is smiling.

 

In a nutshell!

[BARCELONASAINT]

Jesus people relax. Do you honestly think Kat has just sold our club down the river and burdened it with a new owner that now has a huge debt to service.

 

Have people learnt nothing over the last year??? We knew very little about this takeover and when it did finally happen it certainly was not in the form that any of us was expecting.

Kat has retained 20% in the club because she wants to remain part of what her father started and part of what she took us to.....if it was about her just wanting out and as much money as she could possibly make she would already be sailing off into the sunset.

 

However don't let any of that stop you all jumping on the bandwagon and automatically condemning our new owner because of a NEWSPAPER story!

[Mowgli]

I would have been more worried if they had told MoPe that there was lots of money available for him to spend.

[Heisenberg]

So Kat is not the nice, sweet, SFC lovin princess everyone insisted she was?

 

Could be an interesting few weeks. Could Les resign?

 

If reports are true, why would she keep 20%? Perhaps his lenders couldn't stretch to the full £250m?

[Ivan Katalinic's 'tache]

Mauricio Pellegrino, the manager, is aware of the situation, however, and has been told not to expect any additional transfer funds this month.

 

This paragraph within the report would seem fair to me. It's near the end if the window, plans have been set & we seem likely to bring in a player or two before it shuts, anyway.

 

The question would come and be a relevant concern, if this didn't seem to make us more financially secure, or even powerful, in future seasons.

[trousers]

I would have been more worried if they had told MoPe that there was lots of money available for him to spend.

I'm inclined to agree.

 

Shouldn't these two paragraphs from The Times report makes us feel more rather than less comfortable?

 

"Gao’s backers are demanding a return on their investment and will not grant him a transfer budget so the club will continue to operate as it has done throughout the Liebherr family’s ownership

 

Liebherr has retained a 20 per cent stake in the club that she may sell to Gao at a later date, but in the meantime her statement on Monday that it is “business as usual” for Southampton is an accurate reflection of the club’s position"

 

In other words, we're going to continue to be self sustainable rather than go down the unsustainable route than the likes of Pompey went down in recent history.

 

Or am I being too pragmatic/optimistic (just for a change)?

[rooney]

Disagree. We now have the complexity and incestuousness of a Chinese consortium. Further we will need to service debt on a hefty loan from a commercial lender (the choice of lenders being limited to offshore lenders in order to circumvent domestic restrictions). That's in contrast to the status quo ante where we borrowed a smaller amount of money from the owner, ostensibly on more generous terms. And the commercial loans we did obtain under KL, from what I recall, were secured against her personal estate. Agree, though, that Kat is smiling.

 

Very true but we have far more income coming from Sky now than when Kat first lent the club funds.

[farawaysaint]

I'm inclined to agree.

 

Shouldn't these two paragraphs from The Times report makes us feel more rather than less comfortable?

 

"Gao’s backers are demanding a return on their investment and will not grant him a transfer budget so the club will continue to operate as it has done throughout the Liebherr family’s ownership

 

Liebherr has retained a 20 per cent stake in the club that she may sell to Gao at a later date, but in the meantime her statement on Monday that it is “business as usual” for Southampton is an accurate reflection of the club’s position"

 

In other words, we're going to continue to be self sustainable rather than go down the unsustainable route than the likes of Pompey went down in recent history.

 

Or am I being too pragmatic/optimistic (just for a change)?

 

 

 

Not really no as we now have four times the debt to service and presumably more than four times the interest. Being sustainable has been made that much harder.

Edited 18 August, 2017 by farawaysaint

[CB Fry]

I would have been more worried if they had told MoPe that there was lots of money available for him to spend.

The Saints boss promised a spending BONANZA following takeover by MONEYBAGS Chinese owner. Fans can anticipate a SPENDING SPREE on a host of BIG NAME STARS as the new regime promises to SPLASH THE CASH in pursuit of GLORY for the south coast club.

 

Thank fu ck we're not getting that sh ite.

 

I have plenty of foreboding about our new ownership, but as long as the net-spend grizzlers and the "where's the ambition" dinlows are upset, then at least that's something.

[hypochondriac]

Maybe we should have held off before rushing to thank Kat...

[trousers]

Not really no as we now have four times the debt to service and presumably more than four times the interest. Beingtrump sustainable has been made that much harder.

Could it be argued that this will incentivise the club to unearth even more Manes and Virgils in order to retain the same level of self-sufficiency? Which can only be a good thing? (Yes, I know I'm in danger of entering Devil's advocate territory here but 'debt' isn't necessarily a bad thing per se, as long as it's managed prudently. But I do accept that one possible outcome to Gao's "investment" is that it could all go tits up and we end up back in League 1, so I'm not completely blinkered We can then start moaning about the League's inadequate 'fit and proper owner' tests, much like our friends down the M27 ) Edited 18 August, 2017 by trousers

[wild-saint]

The Saints boss promised a spending BONANZA following takeover by MONEYBAGS Chinese owner. Fans can anticipate a SPENDING SPREE on a host of BIG NAME STARS as the new regime promises to SPLASH THE CASH in pursuit of GLORY for the south coast club.

 

Thank fu ck we're not getting that sh ite.

 

I have plenty of foreboding about our new ownership, but as long as the net-spend grizzlers and the "where's the ambition" dinlows are upset, then at least that's something.

 

This may be a little simplistic but my view is that if I were to buy the club why would even consider using personal wealth to fund the purchase.

 

Assuming the debt to buy the club is at 210million at circa 4% Interest then the payment would be £8m per annum. Now the 210 mil cash / capital that he doesn't need to tie up in the purchase can be invested with a likely return of more than 4%. Assuming he believes he has has the business know how &contacts to access to chinese markets to develop the business its then its easy to see a profit growth to cover the debt in a fairly relatively short amount of time.

 

Hence why owners would typically finance the purchase of clubs rather than commit personal wealth.

 

So if we assume he pumps in £8mill per year to cover the cost of the debt then the only question we really need to ask is does he have the business acumen to develop p&l of Southampton over a period of time.

 

Looking at the evidence he has built his own wealth whereas Kat inherited it so I would say we are in a better place now she has sold if as she says he holds the same values.

[trousers]

Maybe we should have held off before rushing to thank Kat...

Possibly. Or possibly not. Difficult to judge at this early stage. Although I'm sure that won't stop people jumping to conclusions...

[Wade Garrett]

If all this supposition was true, surely they wouldn't be able to get VVD out of the door quick enough.

[tajjuk]

Certainly a worry, but 'business as usual' has been used a lot so I'm presuming that when it says 'additional transfer budget' it means additional to what we have already allocated, so it doesn't mean we have no money to spend it just means we aren't going to dump another £40-50 million.

 

So looks like we are close to getting Hoedt, and possibly one other, so we are still closing in on a £40 million spend this summer with £15 million (?) recouped. If manage to get Vietto as well and have to pay for him, then likely someone (say Long) will go out. So depending how much we spend there, we are still looking at our first net spend for years.

 

Unless of course we sell VVD.

 

Does ask the question though, why if Kat was looking for someone to help take use to the next level has she sold to someone who has no money.

[trousers]

Certainly a worry, but 'business as usual' has been used a lot so I'm presuming that when it says 'additional transfer budget' it means additional to what we have already allocated, so it doesn't mean we have no money to spend it just means we aren't going to dump another £40-50 million.

 

So looks like we are close to getting Hoedt, and possibly one other, so we are still closing in on a £40 million spend this summer with £15 million (?) recouped. If manage to get Vietto as well and have to pay for him, then likely someone (say Long) will go out. So depending how much we spend there, we are still looking at our first net spend for years.

 

Unless of course we sell VVD.

 

Does ask the question though, why if Kat was looking for someone to help take use to the next level has she sold to someone who has no money.

What makes you think Gao 'hasn't got any money'?

[Batman]

Does ask the question though, why if Kat was looking for someone to help take use to the next level has she sold to someone who has no money.

 

because it could have just been spin and she has a tidy £150m in the bank whilst holding on to 20% of a premier league club, which I am sure will bring in a few quid a year

[sotonist]

KL says we can't cement a position in to 10 without funds injected.

 

MP told by new owners that there are no new funds this window.

 

New owners needed to resort to loans/investment partnership to afford 80% of the club.

 

It's very plausible that this means we will see no new funds for he foreseeable future, but that's not a certainty.

 

Givent hat Lander was said to be moving it's business entirely into sport and this is likely Gao's biggest and most lucrative sport investment, what hope is there of Gao ever being rich enough to own the club outright?

[ALWAYS_SFC]

Possibly. Or possibly not. Difficult to judge at this early stage. Although I'm sure that won't stop people jumping to conclusions...

 

If all this supposition was true, surely they wouldn't be able to get VVD out of the door quick enough.

 

Both of these

[doddisalegend]

To take us to the next level we would need a Roman Abramovich or a Sheikh Mansour someone who is basically prepared to pump money into a football club without looking for much in return bar the Kudos of owning a PL club. I don't think our new owner is one of those

so the best case scenario for us is that we carry on as we are and the new owner is pretty hands off. Anyone who was hoping for us to be moving into challenging the top six using Chinese billions is going to be dissapointed .

[pluto]

Cortese and his mate Bick trying to rubbish the situation.

[hypochondriac]

To take us to the next level we would need a Roman Abramovich or a Sheikh Mansour someone who is basically prepared to pump money into a football club without looking for much in return bar the Kudos of owning a PL club. I don't think our new owner is one of those

so the best case scenario for us is that we carry on as we are and the new owner is pretty hands off. Anyone who was hoping for us to be moving into challenging the top six using Chinese billions is going to be dissapointed .

Then why bother to buy us?

[hutch]

Among other things, a massive boost to his sports-related brands in China. That's where he will make the money out of this deal. He hasn't done for our benefit.

 

But in order to keep milking that benefit he needs to keep us going along nicely as we are. Euro appearances will be a significant add-on to the brand value.

[Sidney Fudpucker the 3rd]

This doesn't help my feeling that this takeover is bad news

 

Yep. It's also a sad reflection on the modern game. :-(

[Give it to Ron]

So VVD pays back a third of the loan....we will only have to wait 2 weeks to see if this article is rubbish or not.

Self sustaining is fine by me done us well so far and the next crop of youngsters will be through soon.

 

Sent from my SM-G930F using Tapatalk

[Fitzhugh Fella]

If I was selling my house and I got a good offer I am not too sure I would be over diligent in examining where my buyer's funds came from. Can't blame Ms Liebherr I would do the same if the money was right. However selling the deal to the fans the way RK did a few days ago was a tad duplicitous. Personally I would have preferred to stay where we were but that was no longer an option it seems.

[trousers]

Then why bother to buy us?

To also buy up the land around the stadium and make a fortune out of developing the area? Maybe? Edited 18 August, 2017 by trousers

[AK]

While it is obvious correct not to rush to judgement it is also naive to think that because we've been told it's good news it is.

 

The Gao family have not communicated directly with us so the only information we have that seems reliable is in the article in The Times and the article from Bloomberg.

 

From those articles we now know that money has been raised from a Chinese National Bank based in Hong Long and private overseas investors-that money won't come cheap and will need to be repaid.

 

We know from The Times,rather unsurprisingly, the backers are demanding a return on their investment-last week we didn't have to make these extra payments so I can't see how we are anything else but worse off. The club is effectively,not literally, saddled with £200m worth of debt, this has to be repaid and will cost around £30m a year to repay in capital and interest I

would have thought .

 

If the club has just borrowed the money from the bank it would have the benefit of spending the funds on players,staff,equipment,infrastructure etc but it hasn't so it will responsible for generating the income for the repayments but without having the benefit of the actual loan.

 

I fail to see how this is good for us fans.

 

Also I can't quite get my head around the obvious contradiction that this is all for the good of the club to help us go to the next level whilst at the same time being told everything remains the same.

 

I think this change in ownership should be welcomed but with caution until we know more. It could be the best thing that has ever happened to us but on the information currently available,I can't work out how.

[trousers]

But in order to keep milking that benefit he needs to keep us going along nicely as we are.

 

This

[hypochondriac]

This

That's true but the you would have said similar about someone like the venkys which didn't work out so good.

[AK]

To also buy up the land around the stadium and make a fortune out of developing the area? Maybe.

 

The club doesn't own any land apart from the stadium, how would paying 220m for saints help ?

[trousers]

That's true but the you would have said similar about someone like the venkys which didn't work out so good.

Fair point. I'm open to the notion that this could all go tits up. I'm also open to the possibility that it might turn out OK. I'm not making a judgement either way...yet...

[once_bitterne]

So Kat is not the nice, sweet, SFC lovin princess everyone insisted she was?

 

Could be an interesting few weeks. Could Les resign?

 

If reports are true, why would she keep 20%? Perhaps his lenders couldn't stretch to the full £250m?

 

Keeping the 20% is just Fat Kat inserting her own sell on fee. If the new owners can keep the club in the PL for 5 or so years that 20% could be worth as much then as the 80% is now.

[Secret Site Agent]

Yes, It's true.

 

Mr Gao has told Maricio that there are no extra funds available this month.

 

Thats right, we are really in the deep do do now there are no extra funds available for the next week and a half

 

I am ****in disguseted. How can we compete if the new owners REFUSE to give any extra funds to Mauricio to spend in the next 13 days.

 

I am so annoyed that i'm going to make **** up,take rumour and innuendo as FACT, I'm going to MIND READ, and i'm even going to make up a club insider, who is close to the first team and management and pretend that he is telling me things, that I will make up.

 

Whilst I'm on that, I have a mate who is close to the first team and management that tells me that Gao is going to sell VVD to Liverpool for forty million, of which 35 million is going straight to his own account. And it must be true, because it would NEVER be a plant to force us to sell VVD, as we know, other football clubs and agents don't go about that sort of business. And anyway, a team like Liverpool would talk to the SUN if they were going to leak a Story, definitely the Sun as it's their paper of choice up there.....the Sun Newspaper.

 

Oh, for ****s sake. You don't believe the papers when they say VVD is going to Liverpool, You don't believe the papers when they say his asking price is £50 or £60 million, but you believe what you want to believe from ONE NEWS PAPER. The last sentence: Mauricio Pellegrino, the manager, is aware of the situation, however, and has been told not to expect any additional transfer funds this month. suggest to me he has to still deal with the cash he had before the takeover, as it's too early to shake things up, (You don't change horses mid stream), that's all.

[Bwanamakubwa]

Among other things, a massive boost to his sports-related brands in China. That's where he will make the money out of this deal. He hasn't done for our benefit.

 

But in order to keep milking that benefit he needs to keep us going along nicely as we are. Euro appearances will be a significant add-on to the brand value.

 

 

This is how I see it. Plus with the possibility of on demand game by game streaming to China, and other strategic plays.

 

Finally, don't worry about the spending someone else's money, it's fairly standard, even the richest will spread risk when investing.

[trousers]

The club doesn't own any land apart from the stadium, how would paying 220m for saints help ?

 

I was hypothesising that Goa might have some kind of masterplan that involves buying more land around the stadium (in due course) and turning the whole area into some kind of super-dooper leisure & living quarter. He is a real estate developer by trade, after all. There again, he could simply be a con merchant whose intention is to buy the club, milk a few years of Premier League riches, and then bugger off leaving the club in dire straits. Who knows?

[Unbelievable Jeff]

They say no 'Extra' funds.

 

I presume we have the funds to bring in both Hoedt and the attacking player we want, just that after that there isn't any more - but then I doubt there is any need for any more.

 

Don't forget the new big Prem deal is paid pro-rata, so at this point in the season I assume we may have a slight cash flow problem.

[Sour Mash]

To take us to the next level we would need a Roman Abramovich or a Sheikh Mansour someone who is basically prepared to pump money into a football club without looking for much in return bar the Kudos of owning a PL club. I don't think our new owner is one of those

so the best case scenario for us is that we carry on as we are and the new owner is pretty hands off. Anyone who was hoping for us to be moving into challenging the top six using Chinese billions is going to be dissapointed .

I'm not bothered about having billions pumped in for a shot at top 6, but equally I don't want monies that could/should be used to strengthen the team be used to pay off the new chap's debt.

[angelman]

Out of interest, and because of the pay wall, how do the Times know that there are no extra funds? The language "Mauricio Pellegrino, the manager, is aware of the situation, however, and has been told not to expect any additional transfer funds this month" means that the info came from on high. Not the sort of thing Les would say. Did Ralph say it? I suspect the Gao's didn't - they haven't said anything and it would be a strange first statement.

 

So who told the Times that there were no more funds? And does that mean we aren't signing Hoedt?

[Sour Mash]

Among other things, a massive boost to his sports-related brands in China. That's where he will make the money out of this deal. He hasn't done for our benefit.

 

But in order to keep milking that benefit he needs to keep us going along nicely as we are. Euro appearances will be a significant add-on to the brand value.

I don't know that much about the Chinese football market, but does anyone over there really care about occasional appearances in the early rounds of the Europa League?

[Batman]

Out of interest, and because of the pay wall, how do the Times know that there are no extra funds? The language "Mauricio Pellegrino, the manager, is aware of the situation, however, and has been told not to expect any additional transfer funds this month" means that the info came from on high. Not the sort of thing Les would say. Did Ralph say it? I suspect the Gao's didn't - they haven't said anything and it would be a strange first statement.

 

So who told the Times that there were no more funds? And does that mean we aren't signing Hoedt?

John Aldridge

[Wurzel]

This may be a little simplistic but my view is that if I were to buy the club why would even consider using personal wealth to fund the purchase.

 

Assuming the debt to buy the club is at 210million at circa 4% Interest then the payment would be £8m per annum. Now the 210 mil cash / capital that he doesn't need to tie up in the purchase can be invested with a likely return of more than 4%. Assuming he believes he has has the business know how &contacts to access to chinese markets to develop the business its then its easy to see a profit growth to cover the debt in a fairly relatively short amount of time.

 

Hence why owners would typically finance the purchase of clubs rather than commit personal wealth.

 

So if we assume he pumps in £8mill per year to cover the cost of the debt then the only question we really need to ask is does he have the business acumen to develop p&l of Southampton over a period of time.

 

Looking at the evidence he has built his own wealth whereas Kat inherited it so I would say we are in a better place now she has sold if as she says he holds the same values.

 

^This^

 

We're not talking pay day loans here. In business the best way of obtaining a loan from a bank - certainly the best way of getting favourable terms - is to show them you don't actually need to borrow it.

 

Can't win on here, if he'd purchased us with his own cash half the posters would be worried if he was leaving himself short and might need to sell up quick if he needed it back in a hurry.