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Dusic

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TWar

TWar

Posted
Posted
2 minutes ago, Mr Brightside said:

Apologies, as expect this has already been discussed, but that article says we borrowed nearly £80M from MSD at over 9%, when other bank loans are at 1%. Now I clearly don’t understand the world of business very well, but why would we do that?

I think I read an article that said we had to pay a higher rate on the loan as we are less secure and debtors were more worried we might get relegated and therefore not be able to pay them back and needed to mitigate that risk.

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trousers

trousers

Posted
Posted (edited)
28 minutes ago, Mr Brightside said:

Apologies, as expect this has already been discussed, but that article says we borrowed nearly £80M from MSD at over 9%, when other bank loans are at 1%. Now I clearly don’t understand the world of business very well, but why would we do that?

 

25 minutes ago, TWar said:

I think I read an article that said we had to pay a higher rate on the loan as we are less secure and debtors were more worried we might get relegated and therefore not be able to pay them back and needed to mitigate that risk.

Given the £80m is secured against pretty much every SFC asset (even more so than MacQuarie had previously), surely there's little or no risk even if we do get relegated? The stadium/land itself must be worth that? (Dunno, no idea, just my usual thinking-out-loud)

 

Edited by trousers
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TWar

TWar

Posted
Posted (edited)
16 minutes ago, trousers said:

 

Given the £80m is secured against pretty much every SFC asset (even more so than MacQuarie had previously), surely there's little or no risk even if we do get relegated? The stadium/land itself must be worth that? (Dunno, no idea, just my usual thinking-out-loud)

 

I think for the stadium to be sold ect. we would have to go into full administration and would probably be a drawn out process over 5-10 years atleast judging by other clubs. They would be waiting for their money for ages, and there would be a risk they would only get part of it if we owed money to multiple parties and didn't have enough to pay everyone off. Also there would be extensive legal fees involved. When most clubs go fully under they have massive debt in all directions and all their debtors miss out to some degree usually. I think it is just risk mitigation at the end of the day.

Edited by TWar
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Suhari

Suhari

Posted
Posted (edited)
7 minutes ago, SuperSAINT said:

http://www.insideworldfootball.com/2021/02/02/dagrosa-changes-tack-saints-deal-dead-kfg-focuses-player-development/

He couldn't conclude a deal to buy us. So now he's investing in developing players in South America.

Nothing shady or concerning with this guy is there!?

Dodged. A. Bullet.

Edited by Suhari
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TWar

TWar

Posted
Posted (edited)
31 minutes ago, Matthew Le God said:

Why is that shady or concerning?

I guess the feeling is that if this guy had enough spending power to purchase and sustain a premier league side when the deal fell through he would go looking for another side of similar stature to buy. Instead investing money in south american football academies, a much less ambitious project, shows some people he is a little bit small time and didn't have what it took to take us to the next level after all and would have potentially only bought us using the same underhanded tactics currently being used on Burnley.

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Matthew Le God

Matthew Le God

Posted
Posted
8 minutes ago, TWar said:

I guess the feeling is that if this guy had enough spending power to purchase and sustain a premier league side when the deal fell through he would go looking for another side of similar stature to buy. Instead investing money in south american football academies, a much less ambitious project, shows some people he is a little bit small time and didn't have what it took to take us to the next level after all and would have potentially only bought us using the same underhanded tactics currently being used on Burnley.

I don't see how that makes it 'shady'

Nor why it rules out also buying a European team.

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Saint_lambden

Saint_lambden

Posted
Posted

Not sure if this is even the right thread and it's from TalkSh_te so to be taken with a pinch of salt, but Matterface the skate indicating that there are three potential buyers interested now that the DaGrosa exclusivity period is over. "One has been trying to get in for months but up until now was prohibited."

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Suhari

Suhari

Posted
Posted
1 minute ago, Saint_lambden said:

Not sure if this is even the right thread and it's from TalkSh_te so to be taken with a pinch of salt, but Matterface the skate indicating that there are three potential buyers interested now that the DaGrosa exclusivity period is over. "One has been trying to get in for months but up until now was prohibited."

Alex Crook likewise saying that there are a few interested parties.

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SuperSAINT

SuperSAINT

Posted
Posted
13 hours ago, Saint_lambden said:

Not sure if this is even the right thread and it's from TalkSh_te so to be taken with a pinch of salt, but Matterface the skate indicating that there are three potential buyers interest now that the DaGrosa exclusivity period is over. "One has been trying to get in for months but up until now was prohibited."

Any prospective buyer that uses Matterface & Crook as it's media mouth-piece probably shouldn't be considered as serious :) 

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Convict Colony

Convict Colony

Posted
Posted

Dont know but either way neither of them have the personal funds to improve our club, Da grosa couldnt get funding and Gao trying to claw backs some money with this sale from his other losses.

Should be a rule that you have to pay for a club with your own money and it shouldnt cost more than 20% of your net worth so they have flexibility to invest etc.

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31cc

31cc

Posted
Posted
47 minutes ago, spyinthesky said:

I have been told from a reasonable source that the DaGrosa takeover was moving forward but Gao decided up the sale price from £200m to £250m when Saints were hovering around the top of the table. Anyone heard anything similar?

From the Daily Heil in November -

SALE STALLS AS SAINTS SOAR

The proposed takeover of Southampton has been delayed by their excellent form, with owner Gao Jisheng using the success of Ralph Hasenhuttl’s side in going top of the Premier League last month to raise the asking price.

As Sportsmail revealed in September, the Chinese businessman has entered into a period of exclusive negotiations with American businessman Joseph DaGrosa, who made it clear he was not willing to increase his offer on the basis of a handful of impressive results.

 

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SuperSAINT

SuperSAINT

Posted
Posted
51 minutes ago, spyinthesky said:

I have been told from a reasonable source that the DaGrosa takeover was moving forward but Gao decided up the sale price from £200m to £250m when Saints were hovering around the top of the table. Anyone heard anything similar?

That makes it sound like DaGrosa successfully raised £200m, which is doubtful. 

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beatlesaint

beatlesaint

Posted
Posted
13 hours ago, spyinthesky said:

I have been told from a reasonable source that the DaGrosa takeover was moving forward but Gao decided up the sale price from £200m to £250m when Saints were hovering around the top of the table. Anyone heard anything similar?

I’m not sure that once you enter a period of exclusivity you can move the goalposts like that can you?

Anyway it’s irrelevant now I guess.

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Tamesaint

Tamesaint

Posted
Posted
17 hours ago, 31cc said:

From the Daily Heil in November -

SALE STALLS AS SAINTS SOAR

The proposed takeover of Southampton has been delayed by their excellent form, with owner Gao Jisheng using the success of Ralph Hasenhuttl’s side in going top of the Premier League last month to raise the asking price.

As Sportsmail revealed in September, the Chinese businessman has entered into a period of exclusive negotiations with American businessman Joseph DaGrosa, who made it clear he was not willing to increase his offer on the basis of a handful of impressive results.

 

After Tuesday night Gao has put us up for sale in Poundland.😁😁

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SuperSAINT

SuperSAINT

Posted
Posted
7 minutes ago, daldridge7 said:

https://theathletic.com/2374736/2021/02/09/southampton-takeover-dagrosa-to-look-elsewhere-in-pl-if-gao-doesnt-drop-price/

Joseph DaGrosa has told Southampton’s majority owner Gao Jisheng to lower his price for the club or the American investor will look elsewhere, with Crystal Palace, Newcastle and West Ham understood to be the most likely alternatives for his first investment in the Premier League.

Gao has never confirmed how much he paid for his 80 per cent stake in the club in 2017 — The Athletic understands it was between £180 million and £200 million — but the Chinese businessman is believed to value Southampton at £200 million, which means he wants £160 million for his shares.

DaGrosa’s Kapital Football Group paid a deposit to enter one-on-one talks with Gao’s representatives last year but its period of exclusivity has expired, with Kapital forfeiting some of that payment.

Speaking exclusively to The Athletic, DaGrosa said: “Southampton are a good club but there are many other good clubs in the league.

“COVID-19 has created a very fluid situation with regards to the financial performance of all clubs. We have to take that into consideration as we contemplate transactions — we pride ourselves on being very disciplined investors.

“Southampton’s management team has done an excellent job, during a very challenging period, in getting a successful refinancing done last summer. Having said that, particularly in this environment, sellers need to have a reasonable expectation of value and it has to be consistent with our view.

“We are open to opportunities that make financial sense. As we evaluate clubs, we are of course looking at not only the price that needs to be paid but capital that needs to be invested subsequently for the deal to make sense.”

DaGrosa’s reference to a “successful refinancing” relates to the almost £80 million loan Southampton took from MSD Capital, American computer billionaire Michael Dell’s private investment company, last summer. This loan replaced an earlier funding arrangement with Australian bank Macquarie.

The details of the new loan were revealed in the annual accounts Southampton posted last month. In the 12 months to the end of June 2020, the club lost £76 million as income fell from £150 million to £124 million, and total debt grew to £93 million.

The accounts also confirmed the MSD loan will cost the club more than £7 million a year to service as the interest rate is just over nine per cent, although Southampton do not need to start making payments until 2025. That said, Macquarie’s typical interest rate is more like seven per cent.
 

DaGrosa is understood to be relatively comfortable with Southampton’s decision to fill the shortfall, which will be even worse this season, with a loan but the Florida-based investor wants Gao’s price to reflect the club’s changed financial outlook.

The Athletic understands DaGrosa believes the pandemic has wiped at least £50 million off Southampton’s value as any new owner will be forced to deal with several more years of losses, as well as repaying debts. Beijing-based Gao, however, refuses to budge, and it is understood his representatives are now talking to other interested parties, including at least one other US-based group.

This leaves DaGrosa with a predicament as Kapital has now secured funding for its plans with two American investment firms: Ares Capital Corporation and Munro Capital Inc. It is understood they would both lend money to Kapital but also become equity partners.

The strategy is for Kapital to buy a mid-tier Premier League side and make it the anchor of a multi-club group, similar to City Football Group or Red Bull’s football empire. Kapital wants the Premier League side to be linked with three to five satellite clubs and up to nine academies in other countries.

Ares and Munro have not given DaGrosa any fixed deadlines but he knows that in the current economic climate of zero-interest rates and low growth, private equity will not wait forever. This means Kapital must consider other options.

DaGrosa looked at Newcastle in 2019 but his interest never advanced beyond the preliminary stage, although it understood that the club remains high on Kapital’s list of potential anchor clubs. Several sources have told The Athletic that Crystal Palace and West Ham also fit the profile of clubs that Kapital is targeting.

“The Premier League is the largest and safest league in Europe,” said DaGrosa. “It’s the largest because of its broadcast income and that makes it the safest, too.

“We looked into other markets but decided the EPL was the best market for us. It’s easier to be a medium-sized fish in a big pond than a big fish in a medium-sized pond.

“For example, to make one of the big Italian clubs work, you’d have to qualify for one of the European competitions every year, which is pretty hard. Of course, like everyone else, we would like to qualify for the Champions League or Europa League but we view that as icing on the cake.”

There are some in the football industry, however, who believe DaGrosa’s failure to close a deal with Southampton, or progress beyond informal talks with anyone else, is a result of question marks over his track record in football, citing a perceived failure at French side Bordeaux.

The New York native, who made his reputation in business by setting up a company that bought 248 Burger King restaurants out of bankruptcy, led the £60 million takeover of Bordeaux in December 2018 via his Miami-based sports investment firm GACP Sports.

But 12 months later, GACP sold its stake in the Ligue 1 club to investment partner Kings Street Capital after the two groups fell out over mounting losses and future strategy, with several sources suggesting to The Athletic that DaGrosa simply failed to fully understand the French market.

When asked about Bordeaux, Da Grosa would not be drawn, but it has been suggested to The Athletic that both parties offered to buy the other out, with Kings Street bidding more. It would, however, be fair to assume that neither saw COVID-19 nor the collapse of French football’s domestic broadcast deal coming.

It should also be stated that Kapital boasts much more football expertise than GACP Sports could call on, as the senior partners are DaGrosa, Francisco Lopez and Hugo Varela.

Lopez is a former chief financial officer at Barcelona and business director at City Football Group, where he was involved in the purchase of Melbourne City and New York City FC. A former player for Sporting Lisbon, Varela was a players’ agent before moving into club investment. He was closely involved in the Bordeaux deal and helped restructure Malaga and Panathinaikos.

But as well as Lopez and Varela, Kapital has nine senior advisors, including former Everton and USA star Landon Donovan and Relevent Sports Group boss Charlie Stillitano, the man behind the International Champions Cup summer tournaments.

GACP Sports also owns the Soccerex exhibition business, which gives DaGrosa and his colleagues considerable networking opportunities. For example, Southampton chief executive Martin Semmens took part in panel discussion about investing in clubs during last week’s virtual Soccerex gathering.

There is certainly no shortage of talking about investment in European football at present but the only transaction to get over the line in the Premier League recently is ALK Capital’s takeover of Burnley. That deal, however, has raised eyebrows on both sides of the Atlantic, as the American firm used a loan from MSD and the club’s own cash to fund most of the purchase, reminding many observers of the Glazer family’s controversial takeover of Manchester United.

But DaGrosa rejects any comparison between Kapital’s proposed approach and the leveraged buyout model used by new Burnley chairman Alan Pace.

“Our model is fundamentally different because we have a platform approach where we want to invest in multiple clubs,” he said. “I don’t know all the specifics on the Burnley deal but I think it was well done by Alan Pace from a financial engineering point of view.”

On why predominately American investors like him, Pace and others are so interested in European football, DaGrosa said: “From an investment point of view, football clubs have incredible staying power. If you look at most of the clubs in the English Premier League, they’ve been around 50 to 100 years.

“But not every sport is equal. In the US, Major League Baseball is in a death spiral because its audience is aging but the demographics are clearly on soccer’s side.”

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Saint Garrett

Saint Garrett

Posted
Posted

I do find it odd, that Adam Blackmore called this BS and nothing in it when it first got leaked, yet there has clearly been a period of exclusivity, so clearly not BS.

I don't like the sound of this guy, and I personally disagree with owners owning more than one club, but Gao is also dreadful, but might be better the devil you know on this one.

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Matthew Le God

Matthew Le God

Posted
Posted (edited)
50 minutes ago, Saint Garrett said:

I don't like the sound of this guy, and I personally disagree with owners owning more than one club, but Gao is also dreadful, but might be better the devil you know on this one.

Why? The plan is to have Saints as the anchor club. How would that be a negative for Saints?

Quote

 Buy a mid-tier Premier League side and make it the anchor of a multi-club group, similar to City Football Group or Red Bull’s football empire. Kapital wants the Premier League side to be linked with three to five satellite clubs and up to nine academies in other countries.

 

Edited by Matthew Le God
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edprice1984

edprice1984

Posted
Posted

Let's be honest here, the majority of club owners aren't going to be able to live up to the demands of the supporters. Gao is dreadful and I would rather he was not our owner, but equally he doesn't appear to be interfering directly in the club (I am aware that this is also a negative in some scenarios). 

Unless you get a multi-billionaire who wants to properly splash the cash or a Sovereign Fund (a la Citeh) every owner we could possibly have is just a version or a shade of grey of what we already have in place.

DeGrosa looks dodgy and I worry that Saints (although the Anchor) would also be the first to sink.

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Turkish

Turkish

Posted
Posted (edited)
18 minutes ago, edprice1984 said:

Let's be honest here, the majority of club owners aren't going to be able to live up to the demands of the supporters. Gao is dreadful and I would rather he was not our owner, but equally he doesn't appear to be interfering directly in the club (I am aware that this is also a negative in some scenarios). 

Unless you get a multi-billionaire who wants to properly splash the cash or a Sovereign Fund (a la Citeh) every owner we could possibly have is just a version or a shade of grey of what we already have in place.

DeGrosa looks dodgy and I worry that Saints (although the Anchor) would also be the first to sink.

The average modern saints fan seems to want endless signings, pay players massive wages, never sell anyone unless they decide they are useless (usually after 2 games), weekly updates from the directors of the club as to strategy, signings, ambitions and any personal issues players may be having,  cheap ticket prices, free beer, their own personal toilet, michelin star food in the kiosks and shirts designed for elite sportsman to look good on a bloke with a 35+ BMI worn over a hoodie. So yes, an impossible task.

Edited by Turkish
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UpweySaint

UpweySaint

Posted
Posted (edited)

We seem to have a really really low bar. He wouldn’t even have to spend to be considered remotely decent ... he could have loaned the club money at a small interest rate instead of saddling us with debts with staggering interest rates. He would have made money and it would have been healthier for the club. 

 

Apart from putting Semmens in charge and letting him get on with it what has he actually contributed? 
 

He has no interest in our club at all beyond trying to make a few quid but it rather looks like he might end up coming out even at best.

 

Da Grosa might not be any better but I don’t think there is anything wrong with holding Gao to a reasonable standard just because ‘it could be worse’

Edited by UpweySaint
Clarity
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