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

[farawaysaint]

A secure income stream is a legitimate form of security in this context. Sky tv payments, for example. Or parachute payments. I have no idea if that is the case here, but it is not impossible.

 

In fact Leeds secured their loan that made them go pop on future revenues. More recently I think Cortese did the same against the immediate payment of the PL funds to us if I recall correctly.

[benjii]

As I tried to say we don't know so why worry until it impacts. If it's as bad as some worry VVD 60m Cedric 20m Bertrand 15m sales will happen and pay half that off coupled with wages.

It's a waiting game so no point in fretting yet.

 

Sent from my SM-G930F using Tapatalk

 

Not fretting, merely pointing out that there are some questions and the situation is now far more complicated than it was before.

 

And you sound a bit like a Skate. Frankly, I have an emotional attachment to the football club and I would like to know who its owners are and what their motivations are.

 

Despite the cast of owners we have had over the years - some good, some bad - those questions have normally had pretty transparent and straightforward answers.

[shurlock]

Highlighted the only meaningful word in your stream of complete drivel.

 

Unless you're a chartered accountant with inside knowledge of the deal plus an intimate knowledge of our new owner's finances and intents I'd humbly suggest that speculate is a euphemism for talking out of your big, fat @rse and that you in fact know nothing, just like the rest of us.

 

How about we give him (and indeed Kat) the benefit of the (very considerable) doubt and consider the possibility that they may have the best interest of the club at heart given as, unlike most of the financial experts on here, they have put their money where their mouth is.

 

 

Touch a raw nerve pal?

[Charlie Wayman]

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.

 

I doubt your analogy stand up to scrutiny. Leibherr used their own lawyers for due diligence and the PL have made an independent assessment.

[benjii]

I'd be very surprised if Mr Gao has taken out a personal loan to fund the purchase of a business asset. No sane businessman would do that. It would make him personally liable if the loan is defaulted on, meaning he could lose his house (or one of his houses more likely!).

 

He's probably set-up some sort of limited liability shell company to borrow this money (so if there's a default, he could liquidate that company and lose nothing personally).

 

My hunch is that this debt will be transferred to the club eventually.

 

Rupert Lowe tried, and failed, to liquidate a shell company (Southampton Leisure Holdings), but keep the football company as a going concern. He didn't get away with that trick and I doubt Gao could either.

 

As I said on the other thread, debt isn't necessarily a bad thing so long as it's affordable, sustainable and allows the club to gain more in increased revenue than it has to spend on the debt repayments.

 

Overall, I think it's too early to tell if this is a good or bad takeover. We'll have to judge the Gao family on their actions over the next couple of years.

 

That's not what Lowe did at all. The PLC wasn't a shell company, it was the holding company (and he didn't try to liquidate it, he put it into administration). The fixed term debt in the group at the time was split amongst various subsidiaries, which was entirely normal given it was incurred for what was essentially the project-financing of a stadium. It wasn't some clever trick and only really became a subject of conversation in relation to trying to escape a footballing points deduction on a technicality.

 

Gao may very well have established a company for the purpose of making the borrowing but it won't be a "shell" company. Why would a commercial lender lend to a company with no assets? If it did, it would expect to charge a very uncompetitive rate of interest.

 

I agree with you that the debt may well end up on the club's books eventually though - that would not be a surprise.

Edited 18 August, 2017 by benjii

[monosaint]

I think it's already been said. The club did not incur the debt but the major Chinese shareholder did.

[Give it to Ron]

Not fretting, merely pointing out that there are some questions and the situation is now far more complicated than it was before.

 

And you sound a bit like a Skate. Frankly, I have an emotional attachment to the football club and I would like to know who its owners are and what their motivations are.

 

Despite the cast of owners we have had over the years - some good, some bad - those questions have normally had pretty transparent and straightforward answers.

Sound like a skate you cheeky cnt . So what you going to do then march with torches and pitch forks?

So Kat who has been our safe custodian for years and allegedly turned down other offers chose to proceed and kept 20% to ensure it's all fine yet

Yes I would rather have stayed with the Liebherrs We didn't have that option but I am not going to spit my dummy out and pretend I am not a Skate because I didn't question it. I couldn't give a rat's arse what they do.

I think she deserves a bit of respect for her choice shame some won't give it a chance

 

Sent from my SM-G930F using Tapatalk

Edited 18 August, 2017 by Give it to Ron

[aintforever]

I think we are all prepared to give them a chance but are right to be sceptical given what happened to that shower of ****e down the road and numerous other clubs.

 

I'd like to think that Kat has carefully chosen who she thinks is the best custodian of the club going forward but we all live in the real world and it's naive to think she has done anything else but cash in her chips. It's pointless worrying about it though because there is absolutely nothing we can do about it. For all we know these new owners might have some obscenely rich sugar daddy lined up somewhere in China.

[verlaine1979]

Where does it say that any loans used in the purchase are secured against the club?

 

What the loan is secured against is irrelevant unless Gao defaults on the capital and interest payments (at least insofar as we need to be concerned about existential threats to the club's continued existence). What matters is the source of the money that will be used to service the debt on an ongoing basis. As Shurlock says below, with a relatively small asset base outside of China to secure against, and significant restrictions on where he could turn for cash, the cost of borrowing is likely to be high (for comparison, the Glazers used loans with interest rates of between c.8-16% during their acquisition and refinancing of Man Utd). If, as was the case with Man U, Saints end up providing the cash to service these loans on a ten year capital repayment, we could be talking about anything between £30-50m a year being taken out of the club to pay for the privilege of having a new owner. Of course, that could turn out to not be the case, and Gao could have every intention of funding the repayments out of his personal wealth, but if that's the case, they should probably come out and say something since it's such an obvious concern with a commercially-sourced debt-funded takeover such as this.

[Cartman]

What the loan is secured against is irrelevant unless Gao defaults on the capital and interest payments (at least insofar as we need to be concerned about existential threats to the club's continued existence). What matters is the source of the money that will be used to service the debt on an ongoing basis. As Shurlock says below, with a relatively small asset base outside of China to secure against, and significant restrictions on where he could turn for cash, the cost of borrowing is likely to be high (for comparison, the Glazers used loans with interest rates of between c.8-16% during their acquisition and refinancing of Man Utd). If, as was the case with Man U, Saints end up providing the cash to service these loans on a ten year capital repayment, we could be talking about anything between £30-50m a year being taken out of the club to pay for the privilege of having a new owner. Of course, that could turn out to not be the case, and Gao could have every intention of funding the repayments out of his personal wealth, but if that's the case, they should probably come out and say something since it's such an obvious concern with a commercially-sourced debt-funded takeover such as this.

 

Considering that he made his own $1.4B fortune, I have a hard time believing he would be that bad a businessman. SFC, like football clubs in general, is asset rich but cash poor, making us particularly bad targets for a leveraged takeover. The way to make money from us is to do what Kat did, increase the value of the business' assets and sell, we don't generate the sort of profits that a leveraged takeover raquires to be successful, and never will.

Also, considering that the loan has been secured entirely against other assets outside of the chinese mainland, they are not likely to be small, especially as other people from Macau have been brought in, presumably for that very purpose.

[Nordic Saint]

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.

 

I assume all of the money he borrowed has gone into Kat's bank account. I guess most of the Club's income from PL prize money and player sales has ended up there too to cover any loans which had to be cleared before the deal could get through, leaving both Mr Gao and the Club a bit short of spare cash.

[ALWAYS_SFC]

I assume all of the money he borrowed has gone into Kat's bank account. I guess most of the Club's income from PL prize money and player sales has ended up there too to cover any loans which had to be cleared before the deal could get through, leaving both Mr Gao and the Club a bit short of spare cash.

 

Yeah, cos we never paid anyone either ......

[Chez]

It doesn't in fact says opposite in Bloomberg post but that doesn't stop the old soothsayers on here we are doomed beware the Ides off March. Don't panic Capt Mainwaring

 

Sent from my SM-G930F using Tapatalk

 

the long and short of it is the loan taken out to buy the club will be paid back from income/profits from the club, not income/profits from the Gao's other businesses. The loan is therefore intrinsically linked with the club. I suspect it wont be too long before the club itself becomes the asset at which the loan (perhaps renegotiated) is secured against. Its the same method as the Glaziers, whereupon they use the club to buy the club for them, with no cost or risk to themselves, but leaving them with one hell of a fully paid for asset at the end. Nothing illegal, it just means the club has less money to work with every year.

 

I don't see any positives at all here. More money leaves the clubs coffers and goes straight into bankers pockets. The club is financially worse off, not better after this buyout. Kat, who I have never had any issues with has sold the club to the highest bidder.

[Chez]

Considering that he made his own $1.4B fortune, I have a hard time believing he would be that bad a businessman. SFC, like football clubs in general, is asset rich but cash poor, making us particularly bad targets for a leveraged takeover. The way to make money from us is to do what Kat did, increase the value of the business' assets and sell, we don't generate the sort of profits that a leveraged takeover raquires to be successful, and never will.

Also, considering that the loan has been secured entirely against other assets outside of the chinese mainland, they are not likely to be small, especially as other people from Macau have been brought in, presumably for that very purpose.

 

No one knows how much he really has. That figure is an estimate, but note that it relates to $1.4B of assets, but how much debt do those assets have attached to them? Maybe none, but seeing how he has bought our club, an asset he owns worth £210m of, but there is now £210m of debt connected to that asset, has his `fortune now risen to $1.61b? I am getting out of my depth here, as I don't know big business/finance, but the arguments for why this is a great move for the club feel wafer thin to me.

[aintforever]

I'm pretty sure you couldn't secure a £210m debt on Saints anyway, if we get relegated we will be worth a fraction of that.

[pangy]

I have only flicked through all of this as I am not a expert on business matters but can someone sum this up for me ? am I right in assuming we are just going to be buying players in the same price bracket and it will be buy to sell like we have always been ? we won't be smashing £200m release clauses then ?

[Suhari]

I have only flicked through all of this as I am not a expert on business matters but can someone sum this up for me ? am I right in assuming we are just going to be buying players in the same price bracket and it will be buy to sell like we have always been ? we won't be smashing £200m release clauses then ?

 

I think it all means business as usual as far as our operating model is concerned.

 

So no smashing the glass ceilings of dugouts like the Toffees are.

[Cartman]

No one knows how much he really has. That figure is an estimate, but note that it relates to $1.4B of assets, but how much debt do those assets have attached to them? Maybe none, but seeing how he has bought our club, an asset he owns worth £210m of, but there is now £210m of debt connected to that asset, has his `fortune now risen to $1.61b? I am getting out of my depth here, as I don't know big business/finance, but the arguments for why this is a great move for the club feel wafer thin to me.

 

There is no £210m of debt connected to SFC Danny Trejo (love the avatar, tried to grow the same moustache with the long hair, looked terrible on me), it was a personal loan secured against other assets, not a Glazer style leveraged takeover. As far as we know, with Kat's loans paid up and the loan not having been taken either by SFC or using SFC as collateral, we are debt free and not on the hook for any of it. And his net worth is still the same, $1.4B, so that value is assets - debts, he gained a £210m asset and devalued it by the same amount elsewhere. If he was previously debt free (unlikely) then with a net worth of $1.4B he will have had $1.4B worth of assets, now he has $1.61B of assets and $210m of debt, it's still a net worth of $1.4B.

[Chez]

There is no £210m of debt connected to SFC Danny Trejo (love the avatar, tried to grow the same moustache with the long hair, looked terrible on me), it was a personal loan secured against other assets, not a Glazer style leveraged takeover. As far as we know, with Kat's loans paid up and the loan not having been taken either by SFC or using SFC as collateral, we are debt free and not on the hook for any of it. And his net worth is still the same, $1.4B, so that value is assets - debts, he gained a £210m asset and devalued it by the same amount elsewhere. If he was previously debt free (unlikely) then with a net worth of $1.4B he will have had $1.4B worth of assets, now he has $1.61B of assets and $210m of debt, it's still a net worth of $1.4B.

 

SFC is debt free at the moment. What I am suggesting is that once the dust settles I would be surprised if the security for the loan doesn't change to SFC rather than other Gao assets. I might be wrong, but that's what I'd do if I was him.

[shurlock]

Considering that he made his own $1.4B fortune, I have a hard time believing he would be that bad a businessman. SFC, like football clubs in general, is asset rich but cash poor, making us particularly bad targets for a leveraged takeover. The way to make money from us is to do what Kat did, increase the value of the business' assets and sell, we don't generate the sort of profits that a leveraged takeover raquires to be successful, and never will.

Also, considering that the loan has been secured entirely against other assets outside of the chinese mainland, they are not likely to be small, especially as other people from Macau have been brought in, presumably for that very purpose.

 

Who knows what this fella is worth. Chinese data is a hall of mirrors. Like you I saw the Daily Echo story, though he doesn’t appear in the latest Forbes List Of China's 400 Richest People (with a reported £1.5bn, he should do).

 

Either way, I’m sceptical of estimates calculated on the basis of shareholdings and other forms of public information as Forbes and others do. Many rich Chinese, especially proprty tycoons are like bank executives who held shares in banks in the run up to the 2008 financial crisis. Shares have soared, propelling them up the ranks of rich list, even as their companies have accumulated more and more debt. That’s particularly true in China where stock markets are still young, less liquid and have casino characteristics. Its not unknown for billions in paper wealth to be made and wiped out in days.

 

Gao has most of their fortune in real estate – adding to the volatility and uncertainty of his wealth. If you think prices are stretched here, go to China, though in a country where the state is ultimately both the main creditor and debtor and debt can keep getting consolidated, rolled over and shoved under the CCP's bigger budget, I’m sure the music will keep playing for a while. Still the music won't play forever - as one leading Chinese official puts it the economy has been ‘kidnapped’ by the property bubble. On one level buying an overseas football club represents a useful form of diversification, if you can get your money out of the country.

 

Am sure Gao is very smart but he’s followed a similar route of many rich Chinese who are ex-army. They have taken advantage of political contacts to secure monopolies and other market privileges. Perhaps he’s good at navigating a highly opaque and corrupt system; but that doesn’t make him an entrepreneur or businessman in the way either you or I would understand the term.

Edited 18 August, 2017 by shurlock

[Chez]

Who knows what this fella is worth. Chinese data is a hall of mirrors. Like you I saw the Daily Echo story, though he doesn’t appear in the latest Forbes List Of China's 400 Richest People (with a reported £1.5bn, he should do).

 

Either way, I’m sceptical of estimates calculated on the basis of shareholdings and other forms of public information as Forbes and others do. Many rich Chinese, especially proprty tycoons are like bank executives who held shares in banks in the run up to the 2008 financial crisis. Shares have soared, propelling them up the ranks of rich list, even as their companies have accumulated more and more debt. That’s particularly true in China where stock markets are still young, less liquid and have casino characteristics. Its not unknown for billions in paper wealth to be made and wiped out in days.

 

Gao has most of their fortune in real estate – adding to the volatility and uncertainty of his wealth. If you think prices are stretched here, go to China, though in a country where the state is ultimately both the main creditor and debtor and debt can keep getting consolidated, rolled over and shoved under the CCP's bigger budget, I’m sure the music will keep playing for a while. Still the music won't play forever - as one leading Chinese official puts it the economy has been ‘kidnapped’ by the property bubble. On one level buying an overseas football club represents a useful form of diversification, if you can get your money out of the country.

 

Am sure Gao is very shrewd but he’s followed a similar route of many rich Chinese who are ex-army. They have taken advantage of political contacts to secure monopolies and other market privileges. Perhaps he’s good at navigating a highly opaque and corrupt system; but that doesn’t make him an entrepreneur or businessman in the way either you or I would understand the term.

 

your posts are very interesting and you seem very knowledgeable on this subject. Feel free to ignore, but would you mind telling me your background?

[verlaine1979]

There is no £210m of debt connected to SFC Danny Trejo (love the avatar, tried to grow the same moustache with the long hair, looked terrible on me), it was a personal loan secured against other assets, not a Glazer style leveraged takeover. As far as we know, with Kat's loans paid up and the loan not having been taken either by SFC or using SFC as collateral, we are debt free and not on the hook for any of it. And his net worth is still the same, $1.4B, so that value is assets - debts, he gained a £210m asset and devalued it by the same amount elsewhere. If he was previously debt free (unlikely) then with a net worth of $1.4B he will have had $1.4B worth of assets, now he has $1.61B of assets and $210m of debt, it's still a net worth of $1.4B.

 

You're taking a hell of a lot for granted. For a start, the $1.4bn figure for Gao's net worth is coincidentally the same as the market capitalization of Lander on the Shenzhen exchange. Bearing in mind how lazily/inaccurately Markus Liebherr's fortune was calculated and subsequently reported, I wouldn't say its outside the bounds of possibility that people have just looked up how much Lander is worth and applied the entire figure to Gao (I'm making the assumption here that as a publicly traded company, he isn't the sole shareholder of Lander).

 

And, as has already been explained, it's immaterial whether the loan is secured against SFC or not - all that matters is whether SFC cash flows will be used to service the interest and capital repayments (as was the case with the Glazers take over of Man U, though in that case the club was also used as partial security against the initial loans). If the new owners have no intention of using money generated by the club to pay off the debt, it's a simple enough announcement to make, and the fact that they haven't said anything of the sort (and that certain aspects of the takeover quoted initially have already proven fragile, such as the existence of a consortium behind the Gao family) leaves ample room for doubt.

[Chez]

After the Glazier buyout, using loans, did the Premier League not adjust their FPP rules? Probably not something they could ever police or perhaps want to, but thought I'd ask.

[itchen]

Well we've seen how bad the Glazier leveraged buy out was for Man Utd. They've barely been able to raise the price of a Paul Pogba and had to look down the back of the sofa to pay Zlatan.

[saint1977]

You're taking a hell of a lot for granted. For a start, the $1.4bn figure for Gao's net worth is coincidentally the same as the market capitalization of Lander on the Shenzhen exchange. Bearing in mind how lazily/inaccurately Markus Liebherr's fortune was calculated and subsequently reported, I wouldn't say its outside the bounds of possibility that people have just looked up how much Lander is worth and applied the entire figure to Gao (I'm making the assumption here that as a publicly traded company, he isn't the sole shareholder of Lander).

 

And, as has already been explained, it's immaterial whether the loan is secured against SFC or not - all that matters is whether SFC cash flows will be used to service the interest and capital repayments (as was the case with the Glazers take over of Man U, though in that case the club was also used as partial security against the initial loans). If the new owners have no intention of using money generated by the club to pay off the debt, it's a simple enough announcement to make, and the fact that they haven't said anything of the sort (and that certain aspects of the takeover quoted initially have already proven fragile, such as the existence of a consortium behind the Gao family) leaves ample room for doubt.

 

No idea on the first bit, but the second paragraph sums up what I'm thinking - there's been no clarification that SFC income won't be used to service these repayments (and we have no idea what basis these are on either) plus appear to be gaps in the official statements.

 

Wary - that's what I am, until we know far more. Until we know far more, and the longer we don't, the more sceptical many fans will be.

[Saint Benali]

He shouldn't need to put his own money into the club. We should have a **** load of it from the domestic and foreign tv deals. If we are having to sell people simply to stay a float as some on here imply then maybe the club was not being run very well at all before. I am happy to give the new owner a chance before I pass judgement on them. But as I said before without better attacking players we are really going to struggle this season. 4 goals in our last 9 games isn't down to being 'unlucky' its down to having seriously average attacking players.

[adrian lord]

SFC is a business, like it or not. As such all owners will want to see a return on their investment - as indeed Kat has done. That means growing the business by more success on the pitch --> better transfer trading surplus/more prize money/more merchandise sold/more tickets sold; while keeping costs (salaries) contained. Therefore if they are any good at business they won't let the football suffer and we should be ok.

[aintforever]

SFC is a business, like it or not. As such all owners will want to see a return on their investment - as indeed Kat has done. That means growing the business by more success on the pitch --> better transfer trading surplus/more prize money/more merchandise sold/more tickets sold; while keeping costs (salaries) contained. Therefore if they are any good at business they won't let the football suffer and we should be ok.

 

Agree, but I can't see where there is much to be made. Whilst we have made good money on player trading it is a bit of a lottery. Merchandise - not much scope there, tickets - pretty near the ceiling there. Footballing wise - not much further we can go without massive investment.

 

My Only guess is that if Lander are in the stadium building business they see potential in addding value that way?

[Jonnyboy]

*If* things carry on the same that will be excellent. Here's to decades of top 10 finishes!

[Nordic Saint]

*If* things carry on the same that will be excellent. Here's to decades of top 10 finishes!

 

Here's to winning a trophy for a change!

 

I hope the Gaos can help us achieve that and wish them well.

[Jonnyboy]

Here's to winning a trophy for a change!

 

I hope the Gaos can help us achieve that and wish them well.

 

That would be great so long we don't do a Pompey.

[IN MY DAY]

130 posts on a speculative newspaper article.

 

Papers must be right, always are.

[broken spoke]

too soon to tell... the fella has just spent around 200 million, and the club can look after themself so we aren't going to see anything before summer 2018, for any ambition....

[Morse]

One thing I know about owners of Footballl Clubs is they very very rarely put the best interests of the club above their own. The very small handful that do were fans of the club long before they were owners, think Jack Walker at Blackburn.

I would wager Kat has retained a 20% stake in the club because the Chinese fella wouldn't or couldn't stump up more dosh. I would also wager that spending the sort of money needed to improve our chances of European Cup completion wouldn't return enough extra to significantly cover the risk, better for him as an investor to put in minimum to keep us on the Premiership gravy train and pocket the profits.

[Secret Site Agent]

Can I just ask one question about this.

 

Why is it only in the Times and no where else? Surly this is a good story for all of the tabloids to spin around the need to sell VVD to Liverpool, but no one else seems to have oicked it up.

 

Why?

 

And, as I said in my rant, do some of you take this as gospel? I find a LOT of assumes, and interpretation, and Gao MUST be doing this because, and yet no real evidence beyond a single story int he times which no one else, including the echo, has yet ran wiht or added to. Not even to regurgitate the chunalism.

[Secret Site Agent]

130 posts on a speculative newspaper article.

 

Papers must be right, always are.

 

Your my mate, couldn't agree more.

[Secret Site Agent]

Also, when did Lander invest in us? I thought it was Gao?

 

Or are we still making things up to fit our argument.

[hutch]

Exactly.

 

Somebody earlier gave us the benefit of a lengthy post about the pitfalls of a transaction of this nature. We know absolutely sod all about the nature of this transaction, other than the name of the person (or maybe he's the front man of a consortium?) that has bought 80% of the shares of the company that owns the football club.

[AK]

Can I just ask one question about this.

 

Why is it only in the Times and no where else? Surly this is a good story for all of the tabloids to spin around the need to sell VVD to Liverpool, but no one else seems to have oicked it up.

 

Why?

 

And, as I said in my rant, do some of you take this as gospel? I find a LOT of assumes, and interpretation, and Gao MUST be doing this because, and yet no real evidence beyond a single story int he times which no one else, including the echo, has yet ran wiht or added to. Not even to regurgitate the chunalism.

 

 

 

I don't know why reasoned debate is so frowned upon here, I feel I'm wasting my time replying.

Some people might like more info on how the takeover helps Saints because , Gao has borrowed the money to buy the shares ( from a Chinese government backed bank in HK).That debt will require interest and capital repayments.Who is going to make those payments? Gao presumably, is he going to take the money out of Saints to make these payments or will he make them from other funds? That's a reasonable question for supporters to discuss,on a message board. As obviously it could have a financial impact on the club.

Second point would be ,were the shares now owned by Gao offered as security for the deal? That could also effect us in the future if he defaulted on the loan. Hopefully over the next few weeks the new owners will issue a bit of info on how they see the future unfolding.

[Secret Site Agent]

I don't know why reasoned debate is so frowned upon here, I feel I'm wasting my time replying.

Some people might like more info on how the takeover helps Saints because , Gao has borrowed the money to buy the shares ( from a Chinese government backed bank in HK).That debt will require interest and capital repayments.Who is going to make those payments? Gao presumably, is he going to take the money out of Saints to make these payments or will he make them from other funds? That's a reasonable question for supporters to discuss,on a message board. As obviously it could have a financial impact on the club.

Second point would be ,were the shares now owned by Gao offered as security for the deal? That could also effect us in the future if he defaulted on the loan. Hopefully over the next few weeks the new owners will issue a bit of info on how they see the future unfolding.

 

No i don't think you are wasting your time replying and I have no problem with debate. However, I do have a problem with us basing our opinions on one piece in a newspaper, and I have asked a different question. You state that Goa has borrowed the money from the Chinese government backed bank, fair enough, but is this your opinion, do you base that on fact, and if so, is it because it's what the Times is saying? Simple question I think. Finances aren't my bag,per se, but information is, especially how communication can be used to achieve any result, if taken at face value. Also the ability to interpret it in a way that benefits our argument. i.e. Goa has said that MP wont ever get any transfer cash ever, or Goa has said that MOPO wont get any cash in this transfer window, butr will get oodles of it in the next, or, simply, No cash this month, no more to say. Same statement, three interpretations, all valid dependant on what argument I wish to put up. Also logic, if I lend someone some money to buy a car, I don't expect him to rip out the stereo and seats and sell them on e-bay to start giving me back my cash. This is me applying my logic to question the veracity of the statement 'Goas backers want returns straight away.' The final thing is that I have deliberately not gone back to the article but relied on my memory. This means that I have based my argument on my interpretation of the article, and not dissected facts.

 

So, in a nutshell, i'm glad you responded, i found your response interesting, but you didn't answer my question.

[Diabolus Ex Machina]

So if I’m getting this right peoples major concern is that money will be taken from the club to finance repayments rather than being re-invested into the club? With the numbers mentioned so far do we even currently make enough annual profit to cover these suggested repayments? If not then surely they have only put themselves in a position to lose money which wouldn’t make sense? Likewise they certainly couldn’t risk us dropping out of the Prem by selling off all of our best players as that would also lead to a big shortfall in income.

 

Perhaps they are counting on the continued growth of the Premier League and the T.V deals to increase the price of the club without them actually having to do anything – that gives them a profit when they do sell but doesn’t help with repayments in the interim.

 

Point of fact is that if they are wanting to pay back a loan via the club then the club needs to be making money – and consistently as well – which means it is in their best interest to keep the club running well – bring players through the academy, keep the emphasis on good scouting to bring in new players rather than paying over the odds, trying to increase commercial revenue – basically running the club in the same way the Liebherrs did to make it a successful business venture.

 

It may mean selling some of our best players but that’s nothing new either and is usually done on the basis that we are getting a good return for them. So yes we may not be getting lots of money for new players or pushing for top 6 as was initially suggested but we’re not suddenly going to be stripped of all assets and left to rot either, that is unless you seriously believe they would try and sell £210m+ worth of players and then try selling the club off I suppose. Can’t see it myself.

 

I think it just irks people that the owners want some sort of return on their investment – the amount of snide comments about Kat for being able to make money off the club shows that (despite getting us back to the Prem, into Europe and consistently in Top 8 – and yes I’m also aware a lot of other people helped us get to that position but as owner it was her money on the line) and I think it’s the same with the new owners. Not sure what people expect really, for the owners to run the club at a personal loss? Why bother investing in a club at all then?

[AK]

No i don't think you are wasting your time replying and I have no problem with debate. However, I do have a problem with us basing our opinions on one piece in a newspaper, and I have asked a different question. You state that Goa has borrowed the money from the Chinese government backed bank, fair enough, but is this your opinion, do you base that on fact, and if so, is it because it's what the Times is saying? Simple question I think. Finances aren't my bag,per se, but information is, especially how communication can be used to achieve any result, if taken at face value. Also the ability to interpret it in a way that benefits our argument. i.e. Goa has said that MP wont ever get any transfer cash ever, or Goa has said that MOPO wont get any cash in this transfer window, butr will get oodles of it in the next, or, simply, No cash this month, no more to say. Same statement, three interpretations, all valid dependant on what argument I wish to put up. Also logic, if I lend someone some money to buy a car, I don't expect him to rip out the stereo and seats and sell them on e-bay to start giving me back my cash. This is me applying my logic to question the veracity of the statement 'Goas backers want returns straight away.' The final thing is that I have deliberately not gone back to the article but relied on my memory. This means that I have based my argument on my interpretation of the article, and not dissected facts.

 

So, in a nutshell, i'm glad you responded, i found your response interesting, but you didn't answer my question.

 

Ok I don't know why it's in The Times and not the tabloids but I'm basing my opinion on the Bloomberg article, which is normally reliable for financial info. I'm not complaining about no further money for the window. I was happy the way we were. I'm just keen to know how this will effect the club.if everything stays as it has been I'll be happy top half,decent football,odd excursion to Europe.

It's not about when the backers will want a return but , how will it be funded, would we have to sell a player every year to make the repayments? I've no idea but I think it's fair to say there will need to be repayments. If he'd bought the club with his own cash we'd effectively be in the same position as we were with Kat so that would be fine, but we effectively ( not literally) have a 200m debt which we didn't have last week.

 

You are of course correct my concerns are based upon a piece of journalism , so potentially groundless. But I'd still like to know more ,but I appreciate it's their business not mine so there isn't any obligation for them to tell.Although I would have thought they might have issued a more substantive statement ( not about the nitty gritty of the finance) about their vision for The Club on completion.

 

Time will tell, like all the rumours whether on managers,players or owners we get to find out in the end I suppose!

 

 

https://www.bloomberg.com/news/articles/2017-08-17/new-southampton-owner-is-said-to-get-loan-from-china-backed-bank

[Toadhall Saint]

Ok I don't know why it's in The Times and not the tabloids but I'm basing my opinion on the Bloomberg article, which is normally reliable for financial info. I'm not complaining about no further money for the window. I was happy the way we were. I'm just keen to know how this will effect the club.if everything stays as it has been I'll be happy top half,decent football,odd excursion to Europe.

It's not about when the backers will want a return but , how will it be funded, would we have to sell a player every year to make the repayments? I've no idea but I think it's fair to say there will need to be repayments. If he'd bought the club with his own cash we'd effectively be in the same position as we were with Kat so that would be fine, but we effectively ( not literally) have a 200m debt which we didn't have last week.

 

You are of course correct my concerns are based upon a piece of journalism , so potentially groundless. But I'd still like to know more ,but I appreciate it's their business not mine so there isn't any obligation for them to tell.Although I would have thought they might have issued a more substantive statement ( not about the nitty gritty of the finance) about their vision for The Club on completion.

 

Time will tell, like all the rumours whether on managers,players or owners we get to find out in the end I suppose!

 

 

https://www.bloomberg.com/news/articles/2017-08-17/new-southampton-owner-is-said-to-get-loan-from-china-backed-bank

 

That article is a bit all over the place tbh. Consortium one minute - personal the next. No direct quotes confirming one way or the other? So to me it looks like speculation which may or may not be true. Only way we will find out is when either a statement is made or SFC's accounts show money going to pay loans. I thought RK did a good interview all about the take over. He seemed very positive about Gao and basically said he'd seen the numbers/plans and was excited (or words to that effect). Me I'm keeping my powder dry on this until there is proof that SFC are paying the loan.

[Secret Site Agent]

Ok I don't know why it's in The Times and not the tabloids but I'm basing my opinion on the Bloomberg article, which is normally reliable for financial info. I'm not complaining about no further money for the window. I was happy the way we were. I'm just keen to know how this will effect the club.if everything stays as it has been I'll be happy top half,decent football,odd excursion to Europe.

It's not about when the backers will want a return but , how will it be funded, would we have to sell a player every year to make the repayments? I've no idea but I think it's fair to say there will need to be repayments. If he'd bought the club with his own cash we'd effectively be in the same position as we were with Kat so that would be fine, but we effectively ( not literally) have a 200m debt which we didn't have last week.

 

You are of course correct my concerns are based upon a piece of journalism , so potentially groundless. But I'd still like to know more ,but I appreciate it's their business not mine so there isn't any obligation for them to tell.Although I would have thought they might have issued a more substantive statement ( not about the nitty gritty of the finance) about their vision for The Club on completion.

 

Time will tell, like all the rumours whether on managers,players or owners we get to find out in the end I suppose!

 

 

https://www.bloomberg.com/news/articles/2017-08-17/new-southampton-owner-is-said-to-get-loan-from-china-backed-bank

 

I think we understand each other. I too am a little concerned on what our business plan is, and I don't think it is as bad as predicted. I think it'll certainly be a change in the way we are manged but wonder if the best course is to invest to improve our standing and increase our rewards.

As you say, time will tell.

[Saint86]

the long and short of it is the loan taken out to buy the club will be paid back from income/profits from the club, not income/profits from the Gao's other businesses. The loan is therefore intrinsically linked with the club. I suspect it wont be too long before the club itself becomes the asset at which the loan (perhaps renegotiated) is secured against. Its the same method as the Glaziers, whereupon they use the club to buy the club for them, with no cost or risk to themselves, but leaving them with one hell of a fully paid for asset at the end. Nothing illegal, it just means the club has less money to work with every year.

 

I don't see any positives at all here. More money leaves the clubs coffers and goes straight into bankers pockets. The club is financially worse off, not better after this buyout. Kat, who I have never had any issues with has sold the club to the highest bidder.

 

That is my take as well. And people are queuing up to thank her for it. Joke TBH.

[shurlock]

Can I just ask one question about this.

 

Why is it only in the Times and no where else? Surly this is a good story for all of the tabloids to spin around the need to sell VVD to Liverpool, but no one else seems to have oicked it up.

 

Why?

 

And, as I said in my rant, do some of you take this as gospel? I find a LOT of assumes, and interpretation, and Gao MUST be doing this because, and yet no real evidence beyond a single story int he times which no one else, including the echo, has yet ran wiht or added to. Not even to regurgitate the chunalism.

 

Don't get your knickers in a twist pal. I have no reason to distrust the Times article - it has a good reputation for business journalism. So what if nobody is picking up the story - the complex financial arrangements of a provincial PL football club are flotsam and jetsam in the ocean of news and of scant interest to the average punter.

 

Let's be clear: people have some concerns about a fella that as admitted multiple bribery offences and the fact that ownership rules were subsequently changed because the league had no grounds to block him. That may just be a cost of doing business in China; but it shouldn't be swept under the carpet. Likewise some of us have good contextual knowledge of China -unlike it seems some of those of who are blandly parroting the club line such as growth opportunities in China. I can tell you, even now, that the deal will virtually zero impact on our standing in China.

 

For what it's worth, outside observers (see Mark Dreyer etc) with no emotional connection to the club also believe the deal raises various red flags. Of course, it's too early to say whether the deal will be good or bad for the club. As a result, very few here have made bold, categorical statements or slammed the deal. And of course nobody wants it to turn out badly or is ungrateful for Liebherr's past services. Still there's no harm in asking questions or maintaining some healthy scepticism.

Edited 19 August, 2017 by shurlock

[AK]

That article is a bit all over the place tbh. Consortium one minute - personal the next. No direct quotes confirming one way or the other? So to me it looks like speculation which may or may not be true. Only way we will find out is when either a statement is made or SFC's accounts show money going to pay loans. I thought RK did a good interview all about the take over. He seemed very positive about Gao and basically said he'd seen the numbers/plans and was excited (or words to that effect). Me I'm keeping my powder dry on this until there is proof that SFC are paying the loan.

 

That's fair enough if you don't believe the article.Personally I'm inclined to think it has a chance of being broadly correct. Interesting that it actually names the bank, not surprising it doesn't name a confidential source. Can't think why Bloomberg would bother to fabricate such an article either.

 

I would expect RK to be positive about Gao as he's his boss now.

 

Fair enough you don't want to raise any questions until you see the accounts . I think Saints year end is June but I could be wrong and can't be arsed to check. That means the first full year trading under the new ownership will be June 18 to June 19 which means we won't see those accounts until April 2020.

 

I think it's ok to be a little cautious but I can also appreciate that not every one thinks the same and it's more than reasonable to think we now could be in a better position than we ever have been.

 

As we all keep saying time will tell.

[Toadhall Saint]

That's fair enough if you don't believe the article.Personally I'm inclined to think it has a chance of being broadly correct. Interesting that it actually names the bank, not surprising it doesn't name a confidential source. Can't think why Bloomberg would bother to fabricate such an article either.

 

I would expect RK to be positive about Gao as he's his boss now.

 

Fair enough you don't want to raise any questions until you see the accounts . I think Saints year end is June but I could be wrong and can't be arsed to check. That means the first full year trading under the new ownership will be June 18 to June 19 which means we won't see those accounts until April 2020.

 

I think it's ok to be a little cautious but I can also appreciate that not every one thinks the same and it's more than reasonable to think we now could be in a better position than we ever have been.

 

As we all keep saying time will tell.

 

I'm wary but at the mo not overly concerned. Like most I'll be waiting on any further news but until then I'm off to the pub followed by the match. COYRAWM

[AK]

I'm wary but at the mo not overly concerned. Like most I'll be waiting on any further news but until then I'm off to the pub followed by the match. COYRAWM

Must be old or dense what does AWM stand for?looking forward to the match was on holiday last week.

 

Ps put my tickets on ticket exchange last week , my friends said they were used ,anyone know how Saints sort out the refund ?

[Toadhall Saint]

And white machine!