Foreign Investment

Burnleyareback2 · Post by **Burnleyareback2** » Sun Aug 26, 2018 11:19 pm

winsomeyen wrote:Do you mean a return of 12% like our current directors charged the club for their loans prior to our premier league status.

12% is a pretty good deal

Lancasterclaret · Post by **Lancasterclaret** » Sun Aug 26, 2018 11:21 pm

We had the arguments about that then.

Nobody managed to tell us the bank that would have lent us the money they did at less than 12%.

Burnleyareback2 · Post by **Burnleyareback2** » Sun Aug 26, 2018 11:21 pm

MRG wrote:Haha you choose any team outside of the top 6 and explain to me where their return is coming from

Wasn’t my point at all. But why would someone spunk away £200m on a team they don’t support.

At some stage they want a return and that’s not going to come from champions league or 50k fans a week.

MRG · Post by **MRG** » Sun Aug 26, 2018 11:24 pm

Burnleyareback2 wrote:Wasn’t my point at all. But why would someone spunk away £200m on a team they don’t support.

At some stage they want a return and that’s not going to come from champions league or 50k fans a week.

So what is your point? Tell me why Burnley are less of an investment opportunity than any of the many other clubs in the top 2 divisions who have investors? Why does it work for most clubs but it won’t for us?

Burnley Ace · Post by **Burnley Ace** » Sun Aug 26, 2018 11:45 pm

Cleveleys_claret wrote:
Schurrle no transfer fee. Lets say 120k wages over 2 years is roughly 12million

I know which i would rather have

You have forgotten to add in Schurrle’s signing on fee rumoured to be £6m - £3m for each of the two seasons he’s on loan, so that would be approx £18m spent on a 2 year loanee.

mybloodisclaret · Post by **mybloodisclaret** » Mon Aug 27, 2018 12:04 am

Everyone needs to calm down a little. We are different from what we were last year, I think SD is trying to evolve us. Trying to play in completely different types of competitions with limited numbers is not easy.

When I opened this thread I was hoping to some extent it was going to read Shiekh Mansoor's (sp) 3rd cousin removed was interested in pumping billions into Burnley for no potential reward. Oh well

Burnleyareback2 · Post by **Burnleyareback2** » Mon Aug 27, 2018 12:14 am

MRG wrote:So what is your point? Tell me why Burnley are less of an investment opportunity than any of the many other clubs in the top 2 divisions who have investors? Why does it work for most clubs but it won’t for us?

How does anyone make a return on their investment? Where is the return?

I will take the model we have for, if it means we struggle this year and even go down we have a structure to survive or take us back up. The days of selling a player to survive are still a long way off.

MRG · Post by **MRG** » Mon Aug 27, 2018 12:20 am

Burnleyareback2 wrote:How does anyone make a return on their investment? Where is the return?

I will take the model we have for, if it means we struggle this year and even go down we have a structure to survive or take us back up. The days of selling a player to survive are still a long way off.

So you simply don’t have an answer! You can’t actually give a single reason why Burnley would find it any harder to provide an investor with whatever it is that they want in return for their investment than any other club that are currently running more successfully than we are.

Burnley Ace · Post by **Burnley Ace** » Mon Aug 27, 2018 10:06 am

MRG wrote:So you simply don’t have an answer! You can’t actually give a single reason why Burnley would find it any harder to provide an investor with whatever it is that they want in return for their investment than any other club that are currently running more successfully than we are.

You have answered your own question - there aren’t any clubs like ours that are being run more successfully than ours. The reasons (if you really need them listed) that Burnley cannot provide a better investment opportunity than many other clubs is size, potential growth, location, revenue and opportunity. Perhaps you could do your own SWOT analysis.

Lancasterclaret · Post by **Lancasterclaret** » Mon Aug 27, 2018 10:07 am

I'm guessing that for a fan who bases his support on whether the board are prepared to stump up more cash to see if he turns up or not isn't going to be swayed by stuff like that to be perfectly honest.

Cleveleys_claret · Post by **Cleveleys_claret** » Mon Aug 27, 2018 10:11 am

Burnley Ace wrote:You have answered your own question - there aren’t any clubs like ours that are being run more successfully than ours. The reasons (if you really need them listed) that Burnley cannot provide a better investment opportunity than many other clubs is size, potential growth, location, revenue and opportunity. Perhaps you could do your own SWOT analysis.

So tell me how are Bournemouth an attractive investment opportunity?

Lancasterclaret · Post by **Lancasterclaret** » Mon Aug 27, 2018 10:13 am

They are bankrolled by Russian money aren't they?

MRG · Post by **MRG** » Mon Aug 27, 2018 10:21 am

Burnley Ace wrote:You have answered your own question - there aren’t any clubs like ours that are being run more successfully than ours. The reasons (if you really need them listed) that Burnley cannot provide a better investment opportunity than many other clubs is size, potential growth, location, revenue and opportunity. Perhaps you could do your own SWOT analysis.

I know the answer... there is no more risk for us receiving foreign investment than any of the many other clubs in the top 2 divisions

MRG · Post by **MRG** » Mon Aug 27, 2018 10:23 am

Lancasterclaret wrote:I'm guessing that for a fan who bases his support on whether the board are prepared to stump up more cash to see if he turns up or not isn't going to be swayed by stuff like that to be perfectly honest.

Absolutely, I am committed to the club and I am willing to invest a percentage of my salary towards that as I believe that we are all in this together.

If that turns out to not be the case with our owners who are fans more interested in taking money out, I will find it very difficult to continue to put money in to go towards them taking out at the detriment of our club

Burnley Ace · Post by **Burnley Ace** » Mon Aug 27, 2018 10:30 am

MRG wrote:I know the answer... there is no more risk for us receiving foreign investment than any of the many other clubs in the top 2 divisions

You haven’t done a SWOT analysis!!

MRG · Post by **MRG** » Mon Aug 27, 2018 10:32 am

Burnley Ace wrote:A foreign investor would expect a return on the money invested. Where would that dividend come from? We don’t have the gate receipts, corporate sponsors or potential for income growth - all we have is the TV income.

You’ve still not told us which clubs are getting the returns on their money

Burnleyareback2 · Post by **Burnleyareback2** » Mon Aug 27, 2018 10:35 am

MRG wrote:So you simply don’t have an answer! You can’t actually give a single reason why Burnley would find it any harder to provide an investor with whatever it is that they want in return for their investment than any other club that are currently running more successfully than we are.

I didn’t see the question.
Getting investment would be easy but you are not reading the posts. Any investor unless they are a billionaire Burnley fan will want to make a return.
How do you make a return from a club that doesn’t have a huge fan base and won’t win titles?
If you put £200m in you will want £250m back as an example.

randomclaret2 · Post by **randomclaret2** » Mon Aug 27, 2018 10:36 am

What is the bloke at Bournemouth getting back ?

Burnley Ace · Post by **Burnley Ace** » Mon Aug 27, 2018 10:36 am

Why don’t you just look at the accounts of every Premiership club and work it out for yourself. I can’t be bothered to spoon feed you. Once you have all the info you put it into your SWOT analysis and come back to us and explain why, for example, Brighton, Newcastle or Wolves are a better investment than Burnley.

MRG · Post by **MRG** » Mon Aug 27, 2018 10:36 am

Burnleyareback2 wrote:I didn’t see the question.
Getting investment would be easy but you are not reading the posts. Any investor unless they are a billionaire Burnley fan will want to make a return.
How do you make a return from a club that doesn’t have a huge fan base and won’t win titles?
If you put £200m in you will want £250m back as an example.

So which club that is currently ‘getting investment’ is providing a return to their investor?

Burnley Ace · Post by **Burnley Ace** » Mon Aug 27, 2018 10:37 am

randomclaret2 wrote:What is the bloke at Bournemouth getting back ?

Clean money?

Jakubclaret · Post by **Jakubclaret** » Mon Aug 27, 2018 10:44 am

Burnley Ace wrote:Clean money?

I’ve often thought that, it’s the only thing that makes any sense.

Lancasterclaret · Post by **Lancasterclaret** » Mon Aug 27, 2018 10:48 am

If that turns out to not be the case with our owners who are fans more interested in taking money out, I will find it very difficult to continue to put money in to go towards them taking out at the detriment of our club

Evidence to back that up?

Regarding the investment at Bournemouth, "clean money" is of course the answer.

MRG · Post by **MRG** » Mon Aug 27, 2018 10:50 am

Lancasterclaret wrote:Evidence to back that up

Like I said, if it turns out to be the case

Lancasterclaret · Post by **Lancasterclaret** » Mon Aug 27, 2018 10:56 am

Peak 2018

Blackrod · Post by **Blackrod** » Mon Aug 27, 2018 11:49 am

The current board and particularly Garlick and John B will have made handsome returns on their investment. Their shareholdings are worth substantially more now but then they took the risk. They don't have the wealth to take us further as they are businessmen ( as well as fans) but not benefactors. At the price they would sell im not sure where the return would be for an 'investor' seeking a return other than product and brand promotion. We may struggle to find a genuine fan that wants to be a benefactor with the required amount of wealth. An overseas 'investor' is the most likely route but what would that entail ? Big decisions for the board to make.

Danieljwaterhouse · Post by **Danieljwaterhouse** » Mon Aug 27, 2018 4:33 pm

Lancasterclaret wrote:Can people please remember that every Premier League club can spend a trillion million billion pounds on players, and THREE will still go down.

You can't expect us to compete with teams that are quite happy to spend the levels of transfers (and crucially wages) that some clubs are willing to do.

If you follow that SwissRamble bloke on twitter, he did a fascinating insight into the finances of Swansea over the premier league period. They did really well, but were at their absolute limit financially, and they knew they had reached the limit of their revenue streams.

Essentially there is a limit to just how far our wage bill can go, and I'd be interested to see just how close to that limit we are at the moment.

It is an incredibly simple problem for me:

Option a: continue with our current model and trust that Dyche will keep the club in the premiership without significant investment, whilst accepting at some point that we will get relegated. We will Then be replaced by a Leeds/Villa/Sunderland who have the commercial potential to sustain Premiership football.

Option b: sell the club to a investor this maximising the potential profit for the directors.

If I was Garlick I would be looking to sell for 350-450 million and take my gains to the bank.

Lancasterclaret · Post by **Lancasterclaret** » Mon Aug 27, 2018 4:37 pm

Garlick is a fan

I'm not shocked he's not sold up, because the list of clubs the size of ours doing well under foreign ownership isn't very long.

Danieljwaterhouse · Post by **Danieljwaterhouse** » Mon Aug 27, 2018 4:38 pm

Burnley Ace wrote:Why don’t you just look at the accounts of every Premiership club and work it out for yourself. I can’t be bothered to spoon feed you. Once you have all the info you put it into your SWOT analysis and come back to us and explain why, for example, Brighton, Newcastle or Wolves are a better investment than Burnley.

You don’t need a swot (I’m not convinced this is a genuine way to assure your bank manager to part with the finances) to know that Wolves and Newcastle commercially are light years ahead of us as an attractive purchase to increase and maximise returns.

If nothing more their stadiums and fanbase but your argument in the bin.

In regards to Brighton etc,overseas and interval investment is hot spotted to within reach of London with very few exceptions. This making Brighton and the London clubs a better investment. You only have to look at the last 25 years government spending to see the trends.

Danieljwaterhouse · Post by **Danieljwaterhouse** » Mon Aug 27, 2018 4:40 pm

Lancasterclaret wrote:Garlick is a fan

I'm not shocked he's not sold up, because the list of clubs the size of ours doing well under foreign ownership isn't very long.

Garlick is a business man, money doesn’t have loyalties. MG and JB have been brilliant custodians of our club and it was initially motivated by the club and looking after it but if you’re looking at a 1000% return on any investment you’re going to be saying YES.

I’d imagine that once we survive this year and they new money comes in we will be sold.

Lancasterclaret · Post by **Lancasterclaret** » Mon Aug 27, 2018 4:58 pm

Uh huh

its always possible, but the long term future of the club is something that they take very seriously.

I'm not sure they (like me) regard foreign investment in a club like ours would be motivated by what Burnley and Burnley fans want.

Danieljwaterhouse · Post by **Danieljwaterhouse** » Mon Aug 27, 2018 5:10 pm

And there is a crux on the matter, what does the average Burnley Fan want?

Bigger, improved club = more fan outlay

Smaller, sustained club = realistic views

Dark Cloud · Post by **Dark Cloud** » Mon Aug 27, 2018 5:18 pm

I don't necessarily think someone like Sheikh Mansoor is looking at it in terms of simply £s laid out for potential returns if he sells up. When you see Etihad plastered absolutely everywhere from the ground to the shirts to the training facilities etc and the very word Etihad has now become so synonymous with City, I suspect he considers it money well spent. (As well as a little light diversion from his everyday drudgery!)

MRG · Post by **MRG** » Mon Aug 27, 2018 5:48 pm

Burnley Ace wrote:Why don’t you just look at the accounts of every Premiership club and work it out for yourself. I can’t be bothered to spoon feed you. Once you have all the info you put it into your SWOT analysis and come back to us and explain why, for example, Brighton, Newcastle or Wolves are a better investment than Burnley.

So you can’t find any club regardless of size that is currently offering a return on investment can you?

Erasmus · Post by **Erasmus** » Mon Aug 27, 2018 5:56 pm

I think about this quite often when taking my daily stroll. The point is that there are different types of backing that comes from wealthy groups or individuals:

1. Some, foreign or British, have so much money they can buy a club almost as a toy to play with or to gain kudos and publicity from. I would put Chelsea, Manchester City, Fulham and Bournemouth in that category. And lower down the leagues we have a number of other examples like Fleetwood, Forest Green or Fylde. Problem can be that these owners do put their own money in, but are incompetent at running a club and hence it mostly goes to waste. I would put Blackburn and QPR in that category. But for some it undoubtedly brings success.

2. Then there are the investors who see owning a Premier League club as an opportunity to make money. Certainly Manchester United have done this and I think Liverpool may to as well, but it's hard to see it happening to many other clubs. Sisu tried to do it with Coventry and wrecked the club. So 'investment' is probably not the word we should use here. Principally it is donors, who want a team to have fun with.

3. Then there are wealthy supporters who have a lot of money to spend and choose to do so on the club they support. Huddersfield and Middlesbrough are examples. You could also argue that position we are in now is to a significant degree due to the money put in by Barry Kilby and Brendan Flood, though on a much smaller scale.

Speaking personally, I would absolutely welcome category 3 funding, but not so much the 'investors' who want to make money from it. I don't think this will happen anyway because I don't see anyone making money from funding Burnley.

The question then is would you welcome an outside donor? Would you like it if the persons who bought Manchester City, Hull, Fulham, Bournemouth, Derby, Leicester, Wolves etc had come to Burnley instead and enabled us to be secure in the Premier League?

It's certainly very tempting but overall I wouldn't want it. I like Burnley as we are, a small club relying on our own resources and cocking a snook at the big spenders. I know that will probably mean relegation sooner rather than later, but, as Jesus said, "For what shall it profit a club, if it shall gain the whole world but lose its own soul." I can quite understand why supporters will disagree with this, and I know I am quite an old man and perhaps somewhat behind the times, but that is what I feel. I want to like Burnley as well as supporting Burnley.

Paul Waine · Post by **Paul Waine** » Mon Aug 27, 2018 11:19 pm

There was a report in, from memory, The Times, early in the year about Burnley possibly looking at new investor(s). It was posted on here at the time.

I'm not the best at searching and finding stuff on this board. (Sometimes it's because the thread has been deleted). Can anyone find it?

Paul Waine · Post by **Paul Waine** » Mon Aug 27, 2018 11:23 pm

Having done a little lateral thinking, I've found the item that was in The Times, 3 March 2018.

Obviously, nothing has come of this, so far..... or, maybe it's now "dead"...… or, maybe it was "fake news."

Football Notebook: Investors set to bid £180m for Burnley
Matt Hughes, Football Notebook
Burnley are the subject of a £180 million takeover attempt from rival American and Middle Eastern investors. The Times has learnt that the club have signed a non-disclosure agreement with a US media company and prepared a prospectus for several other groups, including one from the Middle East.
Saturday March 3 2018 | The Times

Paul Waine · Post by **Paul Waine** » Mon Aug 27, 2018 11:25 pm

And, another thought, can anyone explain why Chelsea are worth £2 billion, but Burnley are only worth £180 million?

It can't all be the difference between finishing 5th and finishing 7th, surely?

UTC

mdd2 · Post by **mdd2** » Tue Aug 28, 2018 8:21 am

Because a club is worth what someone is prepared to pay for it but not necessarily what the owner(s) want for it

aggi · Post by **aggi** » Tue Aug 28, 2018 10:46 am

Royboyclaret wrote:That's not easy to answer and why I asked the question on the ''buy Chelsea for £2billion'' thread as to the potential valuation of BFC currently. We probably need to link that thread as it provoked some sensible responses to a tricky problem.

My post from the last time this was discussed, I think this was before the 2017 accounts had been filed so may need reworking to reflect the actuals

It's been a fair time since I did a football club valuation but the old fag packet calculation was that clubs tended to be valued at about 1.5 to 2 times their annual turnover. That roughly ties in with the £180m but is a very simplistic model.

There was a more complex model which was:
Club Valuation = (Revenue + Net Assets) x (Net Profit + Revenue)/Revenue x (Stadium Capacity %) ÷ (Wage Ratio %)

(Stadium capacity is how much of the stadium is used on average)

A very rough calculation (estimating the latest accounts) would give a value of ~ £400m which I think most would agree would be too high. The issue being is that formula is used for valuing established clubs. For a club like Burnley you'd have to discount it to represent the chances of us being relegated and a significant drop in turnover.

For comparison, the same formula applied to 2016 (i.e. Championship level) would come out at around £45m so you'd be looking somewhere in between there most likely.

Royboyclaret · Post by **Royboyclaret** » Tue Aug 28, 2018 10:57 am

Cheers for that aggi.

We're looking at Income of £140m to y/e Jun'18, so the 1.5 calculation values us currently at just over £200m.

However, as you say, in the event of relegation that figure will drop significantly based on normal matchday receipts plus parachute payments.

Lancasterclaret · Post by **Lancasterclaret** » Tue Aug 28, 2018 11:18 am

I still don't see the attraction for a foreign investor to be honest.

We don't have a massive fan base, a massive ground, a massive global reach etc etc etc

On the plus side, we don't have a stadium built on prime land for development either!

Royboyclaret · Post by **Royboyclaret** » Tue Aug 28, 2018 12:50 pm

Lancasterclaret wrote:I still don't see the attraction for a foreign investor to be honest.

We don't have a massive fan base, a massive ground, a massive global reach etc etc etc

On the plus side, we don't have a stadium built on prime land for development either!

Try to keep an open mind Lancaster. It's merely a debate, no more than that, but nonetheless a debate that's worth having.

I too would share your concerns and lots of conditions would need to be met before we even proceed from base camp. However, there are advantages too. Additional finance and funding can help in so many ways, one of which is appropriate right now. Take a look at post#34 on the 'Hysteria' thread by tybfc. He tells of meeting two of our directors at the airport on the return from Athens and both of them want us to LOSE on Thursday to concentrate on the 'money aspect' of staying in the PL.

What's that all about?.....and little wonder it provoked an irritated response from Claretforever who is concerned about the disconnect between the Board and the fans. The point being that if additional funding was available right now then priority would NOT be required to simply preserving our Premier League status.

The suspicion is that the Board saw our qualifying for Europe as nothing more than an inconvenience at best.

Lancasterclaret · Post by **Lancasterclaret** » Tue Aug 28, 2018 1:04 pm

I wouldn't trust any fan who told me on a public forum what conversation he'd had with two directors to be honest Royboy

I feel like I need to clarify a bit. I'm not against the possibility of foreign investment but I don't see what the investor is going to get out of it.

Royboyclaret · Post by **Royboyclaret** » Tue Aug 28, 2018 1:18 pm

I hear what you're saying, but reading his post I see no reason to disbelieve him.

Spijed · Post by **Spijed** » Tue Aug 28, 2018 1:24 pm

Royboyclaret wrote:The suspicion is that the Board saw our qualifying for Europe as nothing more than an inconvenience at best.

If that's the case they certainly can't call themselves proper supporters if they only want to compete in the PL and nothing more!

Dark Cloud · Post by **Dark Cloud** » Tue Aug 28, 2018 1:27 pm

All PL clubs will get in excess of £100 million just from being there this year.They got it last year and the year before too. Some have spent a fair proportion of that, some have have spent all of it and some have spent well above it. BUT (as has been stated above) ultimately 3 clubs will always go down. If one of those clubs has spent all or far worse MORE money than they've received, then they have to be in trouble and need to address it sharpish (and we've seen that happen at various clubs). If you've spent a fair amount, but not all of it then you're in a much better position to ride out the fall. We have consistently made sure we're in that category because I think the directors feel the fall will inevitably come at some point and I for one don't have any problem with that as the alternative is gambling with the club's future. Of course outside investment in the form of a sugar daddy who is willing to spend without bothering about getting a return on his money means a club can effectively override falling into any of those 3 categories and somebody will always pick up the tab. (Unless he gets fed up.....!

)

quoonbeatz · Post by **quoonbeatz** » Tue Aug 28, 2018 1:34 pm

tybfc said the same before the istanbul game, although it was only one director.

i'd be very sceptical that our directors would be telling random fans that they wanted out of europe, even if it was their opinion. you'd hope they'd have the sense to appear positive about it. kilby certainly looked like he was enjoying his bus tour of athens.

no reason to believe or disbelieve ty really.

Spijed · Post by **Spijed** » Tue Aug 28, 2018 1:38 pm

quoonbeatz wrote:tybfc said the same before the istanbul game, although it was only one director.

i'd be very sceptical that our directors would be telling random fans that they wanted out of europe, even if it was their opinion. you'd hope they'd have the sense to appear positive about it. kilby certainly looked like he was enjoying his bus tour of athens.

no reason to believe or disbelieve ty really.

Even if they keep it private, but it's what they believe there is the danger that it leaks down to the manager & ultimately the players meaning there could be a lack of incentive on the playing side, which isn't good at all.

quoonbeatz · Post by **quoonbeatz** » Tue Aug 28, 2018 1:40 pm

Spijed wrote:Even if they keep it private, but it's what they believe there is the danger that it leaks down to the manager & ultimately the players meaning there could be a lack of incentive on the playing side, which isn't good at all.

can't force them to think a particular way though spijed.