[Albion] Burnley taken over

[Eeyore]

So it appears now, but may still be unconfirmed, that it's leveraged, and that ALK have fronted only about £15m of the kitty.
[MENTION=31]El Presidente[/MENTION] does this look fishy at all? Has this template for a club purchase worked anywhere else (obvs there are a number where it has bombed)? Southampton?

£80m Loan
£15m Investment
£42m Was already in the bank.

Interest rate on loan not revealed.

Better hope they don't go down.

They've been very well run for some time prior to this.

 

[El Presidente]

£80m Loan
£15m Investment
£42m Was already in the bank.

Interest rate on loan not revealed.

Better hope they don't go down.

They've been very well run for some time prior to this.

If ALK don’t make payments on time then shares go back to former owner.

Borrowing at somewhere between 9.5-12% on the £80m loan according to Bloomberg/Athletic and other sources I can’t reveal.


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[Change at Barnham]

An in depth article about the Burnley takeover is in The Athletic which is behind a paywall.
We don't know how accurate the figures quoted are but it must cause a bit of concern for Burnley fans.

https://theathletic.co.uk/2305713/2021/01/08/burnley-takeover-football-soccer/

A small sample of the article:

Following that call, The Athletic asked ALK to confirm it had paid £150 million and put in £10-15 million of its own money, with the rest being the cash in the bank and around £80 million from MSD Capital. A spokesperson said: “This information — about both the terms of the loan and structure of the acquisition — is factually incorrect and untrue. ALK Capital will therefore not be commenting further.”
That, however, is not what multiple sources with knowledge of such deals have told The Athletic.
It is highly leveraged — £80 million in debt believes one source, who is clear the MSD debt will be at 12 per cent once the various fees are included.
“American hedge funds are very aggressive when things go wrong — forced sale of players and so on. It won’t end well. They will get relegated in the next few years and the loan will be called, much like Sunderland and (that club’s former owner) Ellis Short. And the problem is Burnley are a relatively small club, historically.”
Another source said: “Manchester United was bought entirely on debt, so it’s not illegal. If (Pace) buys it on debt, can finance that debt, invest in the team, get into Europe and increase the revenues by £50 million a year, then that’s not a bad plan. But it means they have to increase their revenues by £50 million a year, and that isn’t easy.

If you have the time to read The Athletic it's well worth the subscription (providing you remember you've subscribed!).

 

[Springal]

This is where shit gets interesting. New owners, American, Sports is an 'entertainment business' - how long before the falling out with Dyche, new manager and relegation to Championship?

 

[dsr-burnley]

An in depth article about the Burnley takeover is in The Athletic which is behind a paywall.
We don't know how accurate the figures quoted are but it must cause a bit of concern for Burnley fans.

https://theathletic.co.uk/2305713/2021/01/08/burnley-takeover-football-soccer/

A small sample of the article:

Following that call, The Athletic asked ALK to confirm it had paid £150 million and put in £10-15 million of its own money, with the rest being the cash in the bank and around £80 million from MSD Capital. A spokesperson said: “This information — about both the terms of the loan and structure of the acquisition — is factually incorrect and untrue. ALK Capital will therefore not be commenting further.”
That, however, is not what multiple sources with knowledge of such deals have told The Athletic.
It is highly leveraged — £80 million in debt believes one source, who is clear the MSD debt will be at 12 per cent once the various fees are included.
“American hedge funds are very aggressive when things go wrong — forced sale of players and so on. It won’t end well. They will get relegated in the next few years and the loan will be called, much like Sunderland and (that club’s former owner) Ellis Short. And the problem is Burnley are a relatively small club, historically.”
Another source said: “Manchester United was bought entirely on debt, so it’s not illegal. If (Pace) buys it on debt, can finance that debt, invest in the team, get into Europe and increase the revenues by £50 million a year, then that’s not a bad plan. But it means they have to increase their revenues by £50 million a year, and that isn’t easy.

If you have the time to read The Athletic it's well worth the subscription (providing you remember you've subscribed!).

It certainly concerns me. On the face of it, it appears that Burnley are £130m worse off for this takeover. I have no idea what the supposed benefits are.

 

[herecomesaregular]

Would still take Dyche if he becomes available. Bloke always talks sense, most recently about vaccinating players and redirecting funds/costs/staff back to nhs vaccinations of the vulnerable and away from continual testing of footballers.

 

[Pondicherry]

Would still take Dyche if he becomes available. Bloke always talks sense, most recently about vaccinating players and redirecting funds/costs/staff back to nhs vaccinations of the vulnerable and away from continual testing of footballers.

The main limiting factor in vaccinating individuals (as I understand it) is the supply of vaccine itself. So if you have one dose of the vaccine and the choice to give it to an 80 year old or a premiership footballer, Dyche is advocating the footballer gets it. Not only does this not make sense, its another example on the Premier League existing on another planet where rules and decisions don't apply to them.

 

[MattBackHome]

If ALK don’t make payments on time then shares go back to former owner.

Borrowing at somewhere between 9.5-12% on the £80m loan according to Bloomberg/Athletic and other sources I can’t reveal.


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Pardon my ignorance here, maestro, but how are they able to use the £42m that was already in the bank?

Isn't that like me going into the sweetshop, buying a Freddo and using money that was already in the till to pay for it?

 

[Neville's Breakfast]

An in depth article about the Burnley takeover is in The Athletic which is behind a paywall.
We don't know how accurate the figures quoted are but it must cause a bit of concern for Burnley fans.

https://theathletic.co.uk/2305713/2021/01/08/burnley-takeover-football-soccer/

A small sample of the article:

Following that call, The Athletic asked ALK to confirm it had paid £150 million and put in £10-15 million of its own money, with the rest being the cash in the bank and around £80 million from MSD Capital. A spokesperson said: “This information — about both the terms of the loan and structure of the acquisition — is factually incorrect and untrue. ALK Capital will therefore not be commenting further.”
That, however, is not what multiple sources with knowledge of such deals have told The Athletic.
It is highly leveraged — £80 million in debt believes one source, who is clear the MSD debt will be at 12 per cent once the various fees are included.
“American hedge funds are very aggressive when things go wrong — forced sale of players and so on. It won’t end well. They will get relegated in the next few years and the loan will be called, much like Sunderland and (that club’s former owner) Ellis Short. And the problem is Burnley are a relatively small club, historically.”
Another source said: “Manchester United was bought entirely on debt, so it’s not illegal. If (Pace) buys it on debt, can finance that debt, invest in the team, get into Europe and increase the revenues by £50 million a year, then that’s not a bad plan. But it means they have to increase their revenues by £50 million a year, and that isn’t easy.

If you have the time to read The Athletic it's well worth the subscription (providing you remember you've subscribed!).

Let’s hope Burnley fans are watching closely rather than just dreaming of the January transfer window

 

[dsr-burnley]

The main limiting factor in vaccinating individuals (as I understand it) is the supply of vaccine itself. So if you have one dose of the vaccine and the choice to give it to an 80 year old or a premiership footballer, Dyche is advocating the footballer gets it. Not only does this not make sense, its another example on the Premier League existing on another planet where rules and decisions don't apply to them.

No he isn't. Dyche is advocating that after all the vulnerable have been injected, then there might be a way to put footballers at the top of the non-vulnerable list to save money.

The problem was that he said it in two sentences, or possibly in one long sentence. Twitter posters, and some journalists for that matter, have very short attentiion spans so they pick out half a sentence to start a row and don't care about truth or accuracy.

 

[dsr-burnley]

Pardon my ignorance here, maestro, but how are they able to use the £42m that was already in the bank?

Isn't that like me going into the sweetshop, buying a Freddo and using money that was already in the till to pay for it?

Yes it is. But like you, I have no idea how it is legal.

 

[Barham's tash]

It certainly concerns me. On the face of it, it appears that Burnley are £130m worse off for this takeover. I have no idea what the supposed benefits are.

Purely commercial. The yanks will think they can entice much larger commercial deals from
US companies and are branding Burnley as British Football’s Underdogs.

It wouldn’t be hard to improve their commercial deals until you try to sell it and realise well erm, it’s Burnley.

 

[Neville's Breakfast]

No he isn't. Dyche is advocating that after all the vulnerable have been injected, then there might be a way to put footballers at the top of the non-vulnerable list to save money.

The problem was that he said it in two sentences, or possibly in one long sentence. Twitter posters, and some journalists for that matter, have very short attentiion spans so they pick out half a sentence to start a row and don't care about truth or accuracy.

I would imagine his view was criticized on the basis it would make a lot more sense to vaccinate 500 000 teachers before sports people. Or people under 50 with asthma or police officers or actually lots of other groups.

 

[Bozza]

If ALK don’t make payments on time then shares go back to former owner.

Borrowing at somewhere between 9.5-12% on the £80m loan according to Bloomberg/Athletic and other sources I can’t reveal.

I know on your prior club valuations you had Burnley at £350m - http://nortr3nixy.nimpr.uk/showthread.php?379833-Premier-League-club-values - and I picked up on that as looking somewhat high.

Does the relatively low value of this deal surprise you? I guess Covid-19 may have impacted valuations in the short-term, but it would surprise me if the impact was of this magnitude.

 

[dsr-burnley]

I know on your prior club valuations you had Burnley at £350m - http://nortr3nixy.nimpr.uk/showthread.php?379833-Premier-League-club-values - and I picked up on that as looking somewhat high.

Does the relatively low value of this deal surprise you? I guess Covid-19 may have impacted valuations in the short-term, but it would surprise me if the impact was of this magnitude.

No, the value doesn't surprise me. Most of the value is based on the club's Premier League status, and unless you're Man United etc., that's an asset with potential to vanish in a flash.

 

[El Presidente]

I know on your prior club valuations you had Burnley at £350m - http://nortr3nixy.nimpr.uk/showthread.php?379833-Premier-League-club-values - and I picked up on that as looking somewhat high.

Does the relatively low value of this deal surprise you? I guess Covid-19 may have impacted valuations in the short-term, but it would surprise me if the impact was of this magnitude.

The £350m has always looked high but based on Burnley maintaining their footballing success on existing cost base. That’s a challenge but SD has managed it to date. If a club’s valuation looks intuitively high (which Burnley’s does) then indicates the club has been punching above its weight, how long that can continue is questionable.


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[El Presidente]

Yes it is. But like you, I have no idea how it is legal.

It’s a bit like buying a house for £200k including its contents. One of the contents is a safe which contains £40k.

You take the money from the safe and use that as part payment to the previous house owner.

 

[dsr-burnley]

It’s a bit like buying a house for £200k including its contents. One of the contents is a safe which contains £40k.

You take the money from the safe and use that as part payment to the previous house owner.

It's worse than that. It's more like buying a house with a sitting tenant, and the tenant owns the safe with £40k in it, and it's the tenant's money that the new landlord pays the old landlord with.

 

[El Presidente]

It's worse than that. It's more like buying a house with a sitting tenant, and the tenant owns the safe with £40k in it, and it's the tenant's money that the new landlord pays the old landlord with.

I’ve had a load of stick from Burnley fans (and Alan Pace) today so was trying to be nice as didn’t want to fall out with you too.

The interest rates quoted would seem to be about right as MSD Holdings borrowed at 9% themselves last year so will want to make a profit.

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[SweatyMexican]

I don’t think Americans know what relegation is. Reminds me the Venkys.