| £250m + valuation. A mystery to me 11:23 - Mar 24 with 5200 views | CBMTOBWMMBG |
The last 2 years have been astonishing. Great football, goals galore, we all know the story. We're on the up - it is brilliant!
And yet, it is an absolute mystery to me how we are suddenly worth £250m. It seems totally crackers.
We make a massive loss, year after year
Our wages alone are very close to 100% of turnover
And we're a relatively small operation. £22m turnover last year, maybe about £30m this?
Asset wise, our playing squad is worth what? Perhaps £50m, and that's giving generous valuations to Davis, Chaplin, Burns, Woolf, Hirst etc. And if we sold them we need to replace them, obviously
We don't own our ground
Lots of investment is still required, including a new stand
If and when we go up, we'll have to spend to compete
The bizarre financial rules of The Premiership mean we can't spend, spend, spend as they will then dock points. So it will be hard to compete
I'm delighted people want to invest, it is fantastic, and I totally get the excitement of what is potentially ahead.
But I sure don't get the valuation! |  | | |  |
| £250m + valuation. A mystery to me on 21:44 - Mar 24 with 792 views | Nthsuffolkblue |
| £250m + valuation. A mystery to me on 19:16 - Mar 24 by Keno |
I dread to think how much anyone would have to stump up for the TWTD business empire |
Clearly more likely to be accepted in the currency of Hobnobs. |  |
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| The most important part of the statement is .....40% at a cost of "Up to £ on 23:41 - Mar 24 with 715 views | Marshalls_Mullet |
| £250m + valuation. A mystery to me on 18:39 - Mar 24 by PhilTWTD |
Valuation would be higher than that, can't simply extrapolate 40 per cent costing £105m as assume it would cost more to take a controlling interest. |
That surely means that the £105m figure is conditional on triggers such as promotion to the Premier League, qualification for Europe etc.
That suggests that the current value of the club in the Chamionship is not £250m, and the investment is not a guaranteed £105m. |  |
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| £250m + valuation. A mystery to me on 07:38 - Mar 25 with 656 views | SuperKieranMcKenna |
There two things at play why the valuation is so high I think:-
- key word is ‘up to’ which suggests performance related valuation, presumably the full amount payable on promotion whereby suddenly income jumps multiples.
- as I understand it we are debt free, most clubs at our level have millions of pounds of debt. If we use the £1m valuation of Reading it’s not due to a lack of assets, but crippling debt.
It’s clear there are only two ways to be sustainable as a club ‘flipping it’ to the next very wealthy owner (arguably only of value to the owners and not the club), or player trading. I think if the investors are in it for the medium to long term as they say they are we have to expect that’s the route we’ll go down. I hope there’s not too much blubbing when we do sell our star assets, as that’s going to be the only way to stop losing millions every year (including at PL level where the wage bill will go up exponentially). | | | |
| £250m + valuation. A mystery to me on 07:52 - Mar 25 with 626 views | Pinewoodblue |
| £250m + valuation. A mystery to me on 07:38 - Mar 25 by SuperKieranMcKenna |
There two things at play why the valuation is so high I think:-
- key word is ‘up to’ which suggests performance related valuation, presumably the full amount payable on promotion whereby suddenly income jumps multiples.
- as I understand it we are debt free, most clubs at our level have millions of pounds of debt. If we use the £1m valuation of Reading it’s not due to a lack of assets, but crippling debt.
It’s clear there are only two ways to be sustainable as a club ‘flipping it’ to the next very wealthy owner (arguably only of value to the owners and not the club), or player trading. I think if the investors are in it for the medium to long term as they say they are we have to expect that’s the route we’ll go down. I hope there’s not too much blubbing when we do sell our star assets, as that’s going to be the only way to stop losing millions every year (including at PL level where the wage bill will go up exponentially). |
Depends what you call debt. We are presumably still paying for the two new stands and there is still the bonds sold around the time we went into Administration which I assume mature in a few years. But nothing compared to the debts of others. |  |
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| £250m + valuation. A mystery to me on 07:55 - Mar 25 with 624 views | ElephantintheRoom |
It’s ’added value’.
Reality doesn’t enter the equation. If you say you own a business worth £250 million you can borrow a lot more money in the USA to keep your gravy train afloat than if you say you’ve bought a loss-making business worth £8 million.
The other phrase you need to bear in mind in all that hot air blurb is ‘up to’. | |
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| £250m + valuation. A mystery to me on 08:40 - Mar 25 with 602 views | Churchman |
| £250m + valuation. A mystery to me on 07:52 - Mar 25 by Pinewoodblue |
Depends what you call debt. We are presumably still paying for the two new stands and there is still the bonds sold around the time we went into Administration which I assume mature in a few years. But nothing compared to the debts of others. |
I thought the £30m debt for the North Stand and Churchmans was written off or 10p in the £1 paid? No idea.
Back to the point, I’m confused about this, despite having a reasonable knowledge of economics and basic accounting. The questions I have are:
Is this money, which they indicated was for infrastructure projects to be presumably released in packets/tranches, new money or replacing what GC20 would have spent anyway, but have now reduced their exposure?
How long was this in the planning? If one of the new dudes was at the Exeter game, I guess from the second year of their ownership?
What’s in it for GC20 and these new people - that I can find very little information on? Football clubs, bar the big boys, lose money. Just about all of them. Why would you go near a football club? I know Americans believe football here is undervalued (see NFL etc), so maybe that’s it.
If they are to get a return on their money then selling on and player sales is the only option. All the shirts in the world are not going to offset the horrendous costs associated with the football club.
One of the noticeable things of the last three years is the people they’ve brought in and that in the interview was mentioned a lot. Will that continue? It must do if they are serious about Cat1, facilities etc. but is it just talk? It hasn’t been so far.
So from me, a complete lack of understanding, which I find unsettling. But since they’ve been true to their word for three years, I go with that and just enjoy what we are doing in the here and now. None of it is in our control anyway so what’ll be will be. [Post edited 25 Mar 18:27]
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| £250m + valuation. A mystery to me on 13:20 - Mar 25 with 514 views | greymonkey |
The investment is “up to” £105m. I suspect that actual amount will be dependent on promotion and the timing of it.
I suspect that if we are still in the Championship in 3 years time the amount paid for the shares will be significantly below £105m. | | | |
| The most important part of the statement is .....40% at a cost of "Up to £ on 13:30 - Mar 25 with 499 views | PhilTWTD |
| The most important part of the statement is .....40% at a cost of "Up to £ on 23:41 - Mar 24 by Marshalls_Mullet |
That surely means that the £105m figure is conditional on triggers such as promotion to the Premier League, qualification for Europe etc.
That suggests that the current value of the club in the Chamionship is not £250m, and the investment is not a guaranteed £105m. |
Not heard that there are conditions along those lines. As I say, I don't think you can extrapolate in that manner in terms of the overall value. |  | | |
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| £250m + valuation. A mystery to me on 13:44 - Mar 25 with 486 views | JakeITFC |
| £250m + valuation. A mystery to me on 08:40 - Mar 25 by Churchman |
I thought the £30m debt for the North Stand and Churchmans was written off or 10p in the £1 paid? No idea.
Back to the point, I’m confused about this, despite having a reasonable knowledge of economics and basic accounting. The questions I have are:
Is this money, which they indicated was for infrastructure projects to be presumably released in packets/tranches, new money or replacing what GC20 would have spent anyway, but have now reduced their exposure?
How long was this in the planning? If one of the new dudes was at the Exeter game, I guess from the second year of their ownership?
What’s in it for GC20 and these new people - that I can find very little information on? Football clubs, bar the big boys, lose money. Just about all of them. Why would you go near a football club? I know Americans believe football here is undervalued (see NFL etc), so maybe that’s it.
If they are to get a return on their money then selling on and player sales is the only option. All the shirts in the world are not going to offset the horrendous costs associated with the football club.
One of the noticeable things of the last three years is the people they’ve brought in and that in the interview was mentioned a lot. Will that continue? It must do if they are serious about Cat1, facilities etc. but is it just talk? It hasn’t been so far.
So from me, a complete lack of understanding, which I find unsettling. But since they’ve been true to their word for three years, I go with that and just enjoy what we are doing in the here and now. None of it is in our control anyway so what’ll be will be. [Post edited 25 Mar 18:27]
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I think it is your point in paragraph 5 is the key one here - the value of football clubs (especially it seems in England) seems to rise year on year, seemingly regardless of net losses. I would love to see the investment pitch that GC20 is giving to prospective investors as to how they see it going, because American investment into English football is absolutely flourishing at all levels.
The case of Ipswich is especially interesting as it doesn't own the asset (Portman Road) in which a lot of this investment is going in to, but one thing that is seemingly in our favour is the last accounts show that we actually aren't (currently) a club that is massively either: a) spending beyond our means on the football side of things or b) massively dependent on TV revenues as it stands. |  | | |
| £250m + valuation. A mystery to me on 15:23 - Mar 25 with 422 views | Aviator |
| £250m + valuation. A mystery to me on 08:40 - Mar 25 by Churchman |
I thought the £30m debt for the North Stand and Churchmans was written off or 10p in the £1 paid? No idea.
Back to the point, I’m confused about this, despite having a reasonable knowledge of economics and basic accounting. The questions I have are:
Is this money, which they indicated was for infrastructure projects to be presumably released in packets/tranches, new money or replacing what GC20 would have spent anyway, but have now reduced their exposure?
How long was this in the planning? If one of the new dudes was at the Exeter game, I guess from the second year of their ownership?
What’s in it for GC20 and these new people - that I can find very little information on? Football clubs, bar the big boys, lose money. Just about all of them. Why would you go near a football club? I know Americans believe football here is undervalued (see NFL etc), so maybe that’s it.
If they are to get a return on their money then selling on and player sales is the only option. All the shirts in the world are not going to offset the horrendous costs associated with the football club.
One of the noticeable things of the last three years is the people they’ve brought in and that in the interview was mentioned a lot. Will that continue? It must do if they are serious about Cat1, facilities etc. but is it just talk? It hasn’t been so far.
So from me, a complete lack of understanding, which I find unsettling. But since they’ve been true to their word for three years, I go with that and just enjoy what we are doing in the here and now. None of it is in our control anyway so what’ll be will be. [Post edited 25 Mar 18:27]
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I don't know the answer to most of those questions, but I was told about this in June last year, right down to the percentages involved, so it must have been agreed, at least in principle, some time ago.
I thought they were going to announce it all in July when they reclassified some shares. | | | |
| £250m + valuation. A mystery to me on 18:41 - Mar 25 with 361 views | Churchman |
| £250m + valuation. A mystery to me on 13:44 - Mar 25 by JakeITFC |
I think it is your point in paragraph 5 is the key one here - the value of football clubs (especially it seems in England) seems to rise year on year, seemingly regardless of net losses. I would love to see the investment pitch that GC20 is giving to prospective investors as to how they see it going, because American investment into English football is absolutely flourishing at all levels.
The case of Ipswich is especially interesting as it doesn't own the asset (Portman Road) in which a lot of this investment is going in to, but one thing that is seemingly in our favour is the last accounts show that we actually aren't (currently) a club that is massively either: a) spending beyond our means on the football side of things or b) massively dependent on TV revenues as it stands. |
My understanding is that ITFC own the buildings (stands etc), but not the land on which it sits. Bit like owning a flat. So if I am correct, ITFC do own the ground in exactly the same way as one would a Maisonette.
The lease of the land is long if memory serves me right so PR does have a value to Ipswich Town. Where this arrangement protects is that the whole lot cannot just be flogged off (asset stripped), unless ITFC and the council both agreed to do it - change of use etc.
I may well have this completely wrong and the club doesn’t own the stadium and PR buildings, so please correct me if I am. | | | |
| £250m + valuation. A mystery to me on 19:35 - Mar 25 with 313 views | SmithersJones |
| £250m + valuation. A mystery to me on 13:20 - Mar 25 by greymonkey |
The investment is “up to” £105m. I suspect that actual amount will be dependent on promotion and the timing of it.
I suspect that if we are still in the Championship in 3 years time the amount paid for the shares will be significantly below £105m. |
Even if the £105m was guaranteed it wouldn’t all be paid in a lump. The PSR (aka FFP) rules in the Premier League are often quoted as allowing a £35m loss per year (or £105m over three years) but the actual allowable loss is only £5m. The other £30m is allowable only if it’s covered by an owner’s investment. So putting the whole lot in immediately would be madness from a future PSR point of view. | | | |
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