$200 Million Takeover

[LondonLax]

 

 

What I am about to say is fact not opinion and is a response to today's posts and generally to what fans think about the relationship between owner funding and Premier League football clubs.

I have seen people say if Abramovic or Mansour left their respective clubs that they would go bankrupt within a year and that is simply not true. Both clubs are self sustaining now after the initial massive investment they received.

The reason for this is very simple, both clubs have CL money and receive more money for finishing higher in the league than most other clubs in the league but that isn't the big difference between us and them. The big difference is merchandising and sponsorship as I would be surprised if they earned more than 50m more than us from higher finishing money and group stage money for the CL that doesn't go very far when you pay some players 15m a year in your squad.

Like I said the stand out difference is sponsorship and merchandising. Sponsorship like the stadium naming rights and kit sponsor at Man City is worth 35m a year to them which people say is over the top and the owners circumventing FFP rules however Man Utd are reported to be signing a deal for 60m a year just for their shirt sponsorship and their training kit deal is worth 20m a year so that puts that myth to shame.

Merchandising is mostly selling shirts to people all over the world.

Ok Paul your not telling me much I don't know already here.....

Ok but why do those clubs get that kind of merchandising sales and sponsorship? Simple they win things and playing at the top end of the table. When some kid in China or Africa chooses an Premier League club they usually pick them because of how they play, a player who plays for them or because they are win things. In some cultures being a winner is a really attractive thing for example.

So when Mansour pops into Man City or Abramovic pop into Chelsea and drops a ton of money on the club it may seem really dumb financially but it actually isn't. What that money buys is success when you spend on that kind of level and that in turn buys you the foreign fans and unfortunately more and more in this country the kids of that generation here (how many more top 5 teams tops do you see on kids these days?). That is the merchandising revenue sorted and now the sponsors want you because of those fans following you and your exposure in the media.

Simple.

The owners get their money back by having a self sustaining club and when they eventually sell on the club is worth loads of money. It isn't hard to imagine City selling for over 500m now is it? Especially in a few years time with a few more cups under their belt and those benefits I just talked about doesn't take into account the other business benefits that someone like Mansour profits from with his Man City connection which are well known.

So to anyone who didn't understand that before I hope that debunked a few myths about these top owners just being in it for a benevolence factor.

Abramovic and Mansur will never make a profit off their investments, they will never get their money back. You might be able to make a club sustainable after a while, but that is only after a vast investment that far outweighs any increase in the value of the club. And missing out on CL for a couple of seasons makes you very unsustainable again.

To use Man utd revenue as an example is not a valid comparison, Man utd and even Liverpool have a following that far outweighs teams like Chelsea and Man City, it would take a generation to change this. No jonny come lately clubs have anything close to this sponsorship potential without their owners paying vastly over the odds .

Merchandising worldwide is not the potential cash cow you seem to think, few countries will sell more than a few thousand Man City shirts a season. Most people can't afford them. City will get a few promotional gigs, but the main ones all go to Utd, Barca and Real, etc.

I live in Indonesia, and there is probably 1 Chelsea fan for every 40 Man Utd fans. For Man City it probably 1 in 100. Yes, people here choose the successful teams to support or teams with popular players, but this is also very fickle, a few poor seasons and they won't stick around or a few transfers of the popular players can have the same effect. You used to see Leeds and Blackburn shirts in Asia, not so much now.

Man Utd and Liverpool are the 2 exceptions to the fickle fan. Man Utd probably have 30 'corporate partners' here, Man City promote an energy drink for manual labourers.

There is no business model in investing in an English Premiership football club and throwing cash around. A few titles will never give you the clout of Man Utd. It won't even make you Liverpool.

A few years of success doesn't make you an elite worldwide brand, and unless you are one of the brand name clubs, you only get left with their crumbs.

What I said is based off facts not opinions such as people can't afford tops. This is about the numbers these clubs report on their books.

Ask yourself the question how much would Chelsea sell for? You can check it against their losses and purchase price.

Also Chelsea for example have more revenue than Arsenal now.

Everything I said is checkable and right

 

 

Chelsea comply with FFP now but only because Abramovich has written off £500m Chelsea owe him and the losses they make are with in the limits. They will never be profitable enough to be able to pay him back the money he has given them.

 

Man City can't even manage to get close to a profit and are being sanctioned.

 

These are political projects for their owners, they don't care if they lose half a billion on them. There are only 3 such owners in the world (the other is at PSG), it is not an actual business model we can hope to follow, our new owners will be like the hundreds of other sports owners in the world who need the club to be run as a business investment.

[suttonpaul]

Chelsea compliance without the debt is my point debt + purchase price = less then sale price therefore owner doesn't lose out.

 

As for Man City's sanction they have been sanctioned because UEFA believes that their sponsorship is fraudulent which is laughable as Utd's training kit deal is just 15m a year less.

 

As I mentioned previously their is external interests for the two owners in question but the motives aren't as you make out.

[srsmithusa]

Dodgy, you're too confident unless you know something. Spill it.

[Mart-L7]

Yeah he's worth around 50 billion ain't 95% of the tied up into charity's? If so that leaves him a few billion, how much of that few bill do you think would come our way? . Lets face it the money Villa need to return to former glory and catch up with the top 4 or 5 teams would be massive amounts, then you have the age factor 70 years of age how long would Villa play a part in his life?.

Realistically it makes no sense for a man like Ellison to buy Villa.

NO!

When he dies he is leaving 95% of his wealth to bill gates charity that's it nothing to do with his wealth while he is alive.

If that's the case then I'll take back what I said.

What I was getting at is once you start paying for a club then start rebuilding a team to try and challenge for the title or champions league ( if that's what the new owners goal was ) that would take a nice big chunk out of that " few billion " . Which then makes that "few billion" not look so massive.

[dukes]

Ellison wants us,  but Lerner wants his money and paid on time there cant agree to a deal as yet one min its on and one min its off .

 

I can't say what i think !

[AVFCAM]

Sorry Sutton, I can possible understand Chelsea, maybe at a push, but Man City are definitely NOT self sustainable...their wage bill is higher than such powerhouses as the New York Yankees and the Chicago Bulls...2 of arguably the biggest brands.

Up until a handful of years ago, Manchester City were just a second team in Manchester that most outside the Uk didn't know.

They're not running Manchester City to become sustainable, they're running them as an advertising vehicle to promote their country.

[Dodgyknees]

Dodgy, you're too confident unless you know something. Spill it.

I said what I knew a few pages back, I don't have enough to add to it, but I trust this person 100%, and his dad has links to Villa.

Plus he is a media person. And he doesn't like James Nursey. Says he knows **** all.

And I have been told exactly the same thing, by a second person (an American) and the two who told me don't know each other.

I also heard this on Jan 14th, when somebody at a meeting spotted my Villa pin badge (I wear it when suited) and said (basically) 'New owner at the end of the season...'

First two said we had an owner lined up, third said we were in talks with a few parties - there was interest from Russia, South America, America, and he said a consortium too.

So I'm very confident, unless all three are one big conspiracy

Edited May 15, 2014 by dodgyknees

[botak]

Chelsea compliance without the debt is my point debt + purchase price = less then sale price therefore owner doesn't lose out.

 

As for Man City's sanction they have been sanctioned because UEFA believes that their sponsorship is fraudulent which is laughable as Utd's training kit deal is just 15m a year less.

 

As I mentioned previously their is external interests for the two owners in question but the motives aren't as you make out.

 Forbes values Chelsea at under 600m. Abramovich has spent more than 1 billion on the club. If he sells, he loses money overall. 

 

Even if they run in a debt free manner for the next 10 years and the value keeps going up and up  at an amazing rate and he actually somehow manages to make a small profit (which is highly unlikely), it would still be the worst return on investment imaginable. 

 

If you want to make money off a football team, you do a Glazer, not a Mansour or Abramovic. If Villa is worth 200m, we would need to become as successful as Chelsea over a decade or more on a net owner spend of under 400m for an investor to even have a chance of breaking even. Football is a very high risk investment, with a very low potential return on investment. If you think that is good from a purely financial perspective, I've got some magic beans you might like.

 

As for the Man City/Man Utd comparison, it isn't surprising that Man Utd get so much for training kit sponsorship. Man Utd are one of the world's biggest brands, Man City are not. You are paying for your association with the brand and the ability to use them in your worldwide marketing campaigns, not just to have your name on their training kit. 

[P3te]

Sorry Sutton, I can possible understand Chelsea, maybe at a push, but Man City are definitely NOT self sustainable...their wage bill is higher than such powerhouses as the New York Yankees and the Chicago Bulls...2 of arguably the biggest brands.

Up until a handful of years ago, Manchester City were just a second team in Manchester that most outside the Uk didn't know.

They're not running Manchester City to become sustainable, they're running them as an advertising vehicle to promote their country.

They also now own half of Manchester. People are forgetting the importance of property and how it ties in to club ownership. The club is a tool, property is the cash cow.

You make the area fashionable with a successful global sporting brand after buying up as much land as you can, and you develop that land to make your money back many times over as the years tick on.

Edited May 15, 2014 by P3te

[islingtonclaret]

Mendi, were you on the phone to Lerner yesterday being given details about the Ellison deal so that you can spill them on villatalk?

[avfcwills10]

I can confirm Mendi is in New York after flying on the same plane as Faulkner and Lambert

[islingtonclaret]

I can confirm Mendi is in New York after flying on the same plane as Faulkner and Lambert

Not sure I trust you wills. That could be 'shopped....

[VillaForever1970]

I’ve got an interesting suggestion...

We are actually starting from when Randy said we were up for sale, or more likely after we guaranteed premier league survival.

No conspiracy, no x number of buyers lined up.

If Lambert quits then that will be sure sign, as no doubt he’ll want some bucks regardless.

[smetrov]

I’ve got an interesting suggestion...

We are actually starting from when Randy said we were up for sale, or more likely after we guaranteed premier league survival.

No conspiracy, no x number of buyers lined up.

If Lambert quits then that will be sure sign, as no doubt he’ll want some bucks regardless.

 

Effectivley correct - I think Lerner has been looking for a buyer for a while. But the search took on new sense of urgency monday.

I wouldn't read Lamberts resignation that a buyer is in the pipeline though

[Mantis]

Effectively correct? We barely know anything so how can you come to that conclusion (or indeed others coming to the conclusion that we're pretty much sold)?

[smetrov]

Effectively correct? We barely know anything so how can you come to that conclusion (or indeed others coming to the conclusion that we're pretty much sold)?

 

Effectivley correct - I think

[omariqy]

 

I can confirm Mendi is in New York after flying on the same plane as Faulkner and Lambert

Not sure I trust you wills. That could be 'shopped....

 

 

Mate that is so legit that it's too legit to quit.

[CrackpotForeigner]

I'm sure it's shopped. The shadows are all wrong.

[Jarpie]

I'm sure it's shopped. The shadows are all wrong.

 

How many fingers does he have?

[Folski]

 

I'm sure it's shopped. The shadows are all wrong.

 

How many fingers does he have?

 

 

Right hand looks bigger than his left to me. Don't think it's real.