Great questions, Kate.KateR wrote: ↑Tue Oct 06, 2020 9:41 pmif you do a SWOT analysis on purely business terms there are not clear outcomes that would point you to the buy option, if you were in lower leagues and could get BFC for considerably lower costs then the outcome may well pivot to being something that could point to a buy option.
Simple points I am sure everyone knows that you can answer for yourselves can help you put some of it into perspective:
If you are a big fan, that can override sensible business decisions, that you would never normally do if you were not a fan.
Do you believe BFC can be increased in playing terms and break in to the top six, if yes, look at how you attract the players and how much you think that might cost, 10 million, will a hundred million in player purchases do it?
Do you believe that BFC and TM can be expanded, can it attract and sustain 30K, 40K, 50K, if so, how much would that cost you? Will the extra ST and ticket sales, plus merchandise and food/beverage sales be able to pay back the costs of increasing the seating capacity, if so over how long, 2 years, 5 years, 10+ years.
Put your billionaire hat on, you want a football club, do you want to invest in a consortium or do you want the world to know it's yours, you want to meet your friends and peers on the 100ft long yacht, do you want to light that big cigar, lean back smiling, knowing they are all jealous/envious that you own Burnley Football Club.
If you're a mere millionaire, what and why do you want to be involved in a football club for, the US model has been mentioned numerous times, risks in the UK in this model are a factor higher, if you are doing it for capital gains, which is typical, do you really believe you can can grow BFC to such a point someone else will come along, whether individual or consortium and say wow, yes I will give you X times what you paid for BFC in 2020.
MG has a business, like 90% of businesses it is down, everyone seems to think C-19 is reducing prices, is MG willing to let BFC go on the cheap at the same time his main business is suffering? Will MG as a fan sell out and not care about the intent of the new owners?
We can all look at the above, which is just a snapshot of questions around this, a fraction of the things going through many different minds, my experience is that if 10 of us look at this we will end up with a collection of different answers/thoughts and no two will be exactly the same.
As always, many, many more questions than answers, the only thing I know for sure is what I think about it all.
I think there's one that we can add.
If you are an investment banker and you are looking for something that will make you money, perhaps a SPAC is the strategy to acquire Burnley FC. Funding is provided by "ordinary investors." These won't be the ones that will entertain on their yachts. The investors won't be telling their friends and acquaintances "I own Burnley FC." They will buy a few shares in ALK's SPAC and invest to participate in the prospective capital gain that may come to the owner of a Premier League football club - promoted to them in the way that investment bankers have learnt to promote opportunities for retail investors. The investment opportunity will be aided by (a) low interest rates; (b) capital gains in many other sports franchises; (c) linking of the sponsors' past experience in sport franchises, (d) community/northern powerhouse/manchester (it won't matter that Burnley is not either of the Manchester clubs, just in the same "neighbourhood" for US investor purposes- and (e) all the risk disclosures re the differences between Premier League and US sports franchises, including relegation, absence of draft etc. How many prospective investors read and understand the risk disclosures? how many think "it will be different this time?"
Time will tell if ALK Capital progresses.