Takeover

[Pragmatist]

No I didn’t I have barely mentioned the loans. I said that selling our better players solves nothing and simply meant we prolonged administration if we were not sold to a new owner. The idea under the current owners that we can become self sufficient and do anything but cling to Championship survival is naive to say the least.

All clubs in the Championship will become self-sufficient.  Our crowds and our academy provide us with every opportunity to be one of the stronger ones compared to other clubs

How many clubs are currently self sufficient in the Championship and breaking even? What timescale are clubs expected to make the transition to self sufficient? That is going to be a massive upheaval currently.

As for ourselves becoming self sufficient under the current owners… I shudder to think where that would leave us as a club, certainly not in a strong position.

The answer to the first question is None, including those with parachute payments. The maximum permitted loss is £39m over 3 years, and unless owners pump in equity (maximum £24m over 3 years), the maximum loss is just £15m over 3 years.  Most  are losing £20-£25m a year.  A transition will take a couple of years but just as we are now, clubs are being very careful with these limits and hardly any transfer fees have been paid by Championship clubs since COVID.  In that sense the transition has already started, and clubs know that points deductions will happen if they don’t transition, as some found out last year. 

The objective is to make all clubs self-sufficient, regardless of who the owners are.  Many current owners wouldn’t have bought if they weren’t able to throw their tens of millions at gambling to go up, putting the clubs’ future existences at risk. The Championship is a basket case of ownership.  Nearly every Championship is in reality up for sale. Big changes are coming.

Prag I’ve enjoyed the conversation, I will say that I believe a Prem 2 and or a legal challenge to the wage cap will happen before more than a handful (3-6 clubs) become self sufficient. Clubs with owners prepared to spend are already looking to find ways around the rules as I said look at Blues ‘sponsorship’ announcements. It really won’t be the level playing Or even less sloped field fans are hoping for imo.

Likewise - a good conversation.  

I do see a Prem 2 happening, but I doubt there will be a legal challenge because it’s to stop multiple clubs going bust. Has to happen. Biggest issue is how to deal with parachute payments. 

Sponsorship deals and stadium naming rights etc will all be under the microscope to ensure that they are on arms length market rate terms.  Those clubs who can increase their revenue will obviously have an advantage but we should do ok on that front.  If clubs are allowed to spend 70% of their revenue on wages then obviously boosting the revenue is important.

---

Making the Championship self-sufficient will take a decade or more. Hardly worth talking about in the context of our immediate future.

It will take less than 5 years.  Why?  Because if it doesn’t then half the Championship clubs will otherwise no longer exist.

[Mullers]

Matt Slater of The Athletic now weirdly saying that although Patel is the frontrunner, that Farnell & Hearn are flying to China on Tuesday to try and close a deal.

Quotes below:

“The situation at West Bromwich Albion is even more confusing.

As first reported by The Athletic last month, there is a three-way race to buy the Championship club from Guochuan Lai, the Chinese businessman who paid £175million for a majority stake for them in 2016, when they were a Premier League side. The contenders are: a group put together by the English sports lawyer Chris Farnell, Armenian entrepreneur Roman Gevorkyan’s Noah Football Group and a bid led by Florida-based businessman Shilen Patel.

The latter is very much the choice of the club’s senior staff and also of West Brom’s main creditor, MSD Partners, the investment firm linked to American IT billionaire Michael Dell. And it would be fair to say Patel is now the frontrunner. However, Farnell’s group still believes it has the inside track with Lai, the man who is actually selling the shares, and Farnell and potential partner Alex Hearn are going to China this week to try to close their staged takeover of the club.

Lai borrowed £2million from Hearn in 2021. The loan was secured on 2.35 per cent of West Brom’s shares, with a deadline for repayment of last Thursday. That deadline, unsurprisingly, came and went without repayment and the accrued interest has raised Lai’s debt to Hearn to more than £4million.

Hearn has recently sold his main business, a domestic heating firm called Warmfront, so he does not need his money back urgently. In fact, he has recently signalled to the club that he would be happy to wait for a change of control at The Hawthorns before repayment.

But, equally, he is willing to see if Farnell can get his deal over the line and perhaps convert that loan into a minority stake. Gevorkyan, in the meantime, has been encouraged to remain in the race, as all outcomes are still possible.”


Another attempt by Farnell to get his name in the media following Patel getting ahead in the race?

Reminds me of the scene in Tetris where a broke Robert Maxwell and his son fly to Moscow to speak to Gorbachev in a desperate attempt to secure the rights to the game. Funnily enough, they try to stop an American bidder from coming out on top.

The fact that very specific details are being reported on the Farnell/Hearn bid (such as the letter to Lai which the BBC saw and now this story in The Athletic about them flying to China this week) is embarrassing. I wonder why we haven’t heard this level of detail about other interested parties…

[Malcolm Tucker]

All clubs in the Championship will become self-sufficient.  Our crowds and our academy provide us with every opportunity to be one of the stronger ones compared to other clubs

How many clubs are currently self sufficient in the Championship and breaking even? What timescale are clubs expected to make the transition to self sufficient? That is going to be a massive upheaval currently.

As for ourselves becoming self sufficient under the current owners… I shudder to think where that would leave us as a club, certainly not in a strong position.

The answer to the first question is None, including those with parachute payments. The maximum permitted loss is £39m over 3 years, and unless owners pump in equity (maximum £24m over 3 years), the maximum loss is just £15m over 3 years.  Most  are losing £20-£25m a year.  A transition will take a couple of years but just as we are now, clubs are being very careful with these limits and hardly any transfer fees have been paid by Championship clubs since COVID.  In that sense the transition has already started, and clubs know that points deductions will happen if they don’t transition, as some found out last year. 

The objective is to make all clubs self-sufficient, regardless of who the owners are.  Many current owners wouldn’t have bought if they weren’t able to throw their tens of millions at gambling to go up, putting the clubs’ future existences at risk. The Championship is a basket case of ownership.  Nearly every Championship is in reality up for sale. Big changes are coming.

Prag I’ve enjoyed the conversation, I will say that I believe a Prem 2 and or a legal challenge to the wage cap will happen before more than a handful (3-6 clubs) become self sufficient. Clubs with owners prepared to spend are already looking to find ways around the rules as I said look at Blues ‘sponsorship’ announcements. It really won’t be the level playing Or even less sloped field fans are hoping for imo.

Likewise - a good conversation.  

I do see a Prem 2 happening, but I doubt there will be a legal challenge because it’s to stop multiple clubs going bust. Has to happen. Biggest issue is how to deal with parachute payments. 

Sponsorship deals and stadium naming rights etc will all be under the microscope to ensure that they are on arms length market rate terms.  Those clubs who can increase their revenue will obviously have an advantage but we should do ok on that front.  If clubs are allowed to spend 70% of their revenue on wages then obviously boosting the revenue is important.

---

Making the Championship self-sufficient will take a decade or more. Hardly worth talking about in the context of our immediate future.

It will take less than 5 years.  Why?  Because if it doesn’t then half the Championship clubs will otherwise no longer exist.

Why won’t they? Championship clubs have been pissing money for a good while now.

[Fulham Fallout]

Matt Slater of The Athletic now weirdly saying that although Patel is the frontrunner, that Farnell & Hearn are flying to China on Tuesday to try and close a deal.

Quotes below:

“The situation at West Bromwich Albion is even more confusing.

As first reported by The Athletic last month, there is a three-way race to buy the Championship club from Guochuan Lai, the Chinese businessman who paid £175million for a majority stake for them in 2016, when they were a Premier League side. The contenders are: a group put together by the English sports lawyer Chris Farnell, Armenian entrepreneur Roman Gevorkyan’s Noah Football Group and a bid led by Florida-based businessman Shilen Patel.

The latter is very much the choice of the club’s senior staff and also of West Brom’s main creditor, MSD Partners, the investment firm linked to American IT billionaire Michael Dell. And it would be fair to say Patel is now the frontrunner. However, Farnell’s group still believes it has the inside track with Lai, the man who is actually selling the shares, and Farnell and potential partner Alex Hearn are going to China this week to try to close their staged takeover of the club.

Lai borrowed £2million from Hearn in 2021. The loan was secured on 2.35 per cent of West Brom’s shares, with a deadline for repayment of last Thursday. That deadline, unsurprisingly, came and went without repayment and the accrued interest has raised Lai’s debt to Hearn to more than £4million.

Hearn has recently sold his main business, a domestic heating firm called Warmfront, so he does not need his money back urgently. In fact, he has recently signalled to the club that he would be happy to wait for a change of control at The Hawthorns before repayment.

But, equally, he is willing to see if Farnell can get his deal over the line and perhaps convert that loan into a minority stake. Gevorkyan, in the meantime, has been encouraged to remain in the race, as all outcomes are still possible.”


Another attempt by Farnell to get his name in the media following Patel getting ahead in the race?

So even the athletic have got it wrong!!!   The loan from warmfront is to Lai’s company (Holdings Ltd) not the club.

[Jacko]

Slater, a journalist with a decent reputation, appears to only have one source on his current Albion story. Mr Chris Farnell. Them NDA's are holding up well. 

[Fulham Fallout]

Slater, a journalist with a decent reputation, appears to only have one source on his current Albion story. Mr Chris Farnell. Them NDA's are holding up well. 

As mentioned above, the Athletic has it totally wrong re the warmfront loan. 

The BBC website this week dismissed reports of Hearn's bid having printed details the week before of Hearn's proposed offering.

So fuck knows what's happening, as the media haven't a clue.

As there's been little gossip coming out re the takeover of late.... I'd say the NDA's have held up fairly well.

[Tom Joad]

Maybe the NDAs are doing their job and the press are scratting around for crumbs?
The Farnell/Hearn news items could only have come from either them or Lai and so have been leaked for what reason?
That Farnell one doesn't look like the sort to turn down an ego trip to China, especially if he has roped others in to pay for it.
Is my opinion. Not ITK, no financial qualifications but I do have a clean driving license and a bronze swimming badge from Coseley.

[Fulham Fallout]

Maybe the NDAs are doing their job and the press are scratting around for crumbs?
The Farnell/Hearn news items could only have come from either them or Lai and so have been leaked for what reason?
That Farnell one doesn't look like the sort to turn down an ego trip to China, especially if he has roped others in to pay for it.
Is my opinion. Not ITK, no financial qualifications but I do have a clean driving license and a bronze swimming badge from Coseley.

Do you have one art o-level?  If so, did it do anything for you?

[Psalm23]

Anyone willing to enter into any form of partnership with Lai, is definitely an unsuitable person to own a football club. FFS

[Peachy]

This Farnell/Hearn story has pissed me off. It sounds like they are trying to destabilise the deal imo so they can engineer a position whereby they might be able to make a quick turn with another potential buyer. It's just muddying the waters.

I'm getting fucking tired of this whole saga.....