[Football] Crystal Palace sell £87.5m stake to US businessman

[Uh_huh_him]

Parish: “I’m delighted that search led us to John, who has invested significant sums, helping to facilitate the rejuvenation of the squad, bolster the balance sheet and enable the club to finalise the Academy…” my emboldening.

Unless Parish is being economical with the truth, this is new money into the club.

The most usual interpretation of Parish’s words would be to assume that Textor has either bought new shares or given a loan to the club. A second, much less usual, interpretation of the quote is that Textor has bought shares from/made a loan to an existing shareholder who has in turn put money into the club, though if this is what has happened it would be unusual to give Textor a seat on the Board, which the club have done.

When Palace eventually (what, you have expected me not to have a little dig? Behave.) submit their accounts for this financial year (though there is, imo, a strong argument for saying that a transaction of this nature is material enough to be recorded as a post Balance Sheet event in the next set of filed accounts) we will indeed know whether new money has been put in - either the number of shares issued will have increased or the creditors (if it was a loan) will have.

None of the above changes my hope that Palace have a truly dreadful season, eclipsing Derby’s record, before plummeting down through the EFL into the National League. Obviously.

Hope you’re keeping well.

Edit: this piece in the Grauniad, if accurate, would indicate that the most likely situation I describe above is what has happened and that it is an equity investment, not a loan.

“It is hoped that Textor’s investment of £87.5m for what is believed to be a substantial percentage of the club close to Parish’s 18% controlling stake will significantly reduce debts…”, though how 18% can credibly be described as ‘controlling’ is a bit of a puzzle…

https://www.google.co.uk/amp/s/amp....sell-875m-stake-to-us-businessman-john-textor

Separately, it values CPFC2010 at c£500m pre-money. Not bad for an 11-year old club.

I couldn't find this valuation, where did you see it?

I have previously seen reference to a £210m valuation in 2019, with a projection of being worth £500m once the new stand has been up and running for a couple of years.
I doubt the club's value has gone up that much following the last couple of year's losses.

 

[Brovion]

Neither of [MENTION=1721]Mr Putdown[/MENTION]’s numbers are debt. They are both the losses in a single year. The total non-trading debt at Palace and the Albion (in both cases just looking at the football club, not the topco holding company) is £76m and £244m respectively. These facts further strengthens your underlying point.

Fair enough, I stand corrected re the debts. (My fault for believing a Palace fan ). But yes, as you say my point stands. Simply saying "We've got a Sugar Daddy who paid for our ground and will continue to pump money into us for evermore" doesn't mean we are on a sound financial footing with a sustainable business model.

 

[Goldstone1976]

I don't understand the Guardian's reference to "significantly reduce debts". Elsewhere it's stated that the new investment hasn't diluted Parrish's stake, so presumably no new voting shares have been issued. Which presumably means that Textor has acquired his shares from an existing shareholder - which obviously means the money goes to the out-going shareholder, not CPFC2010. But there are also comments that Textor has helped fund some of the recent player acquisitions - which presumably he did via loans. But the Guardian piece also implies that the whole of the £87.5m was the price of acquiring his stake of around (but just below) 18%. But it's highly, highly unlikely that Palace are worth anywhere near £500m, which is the implied valuation if the whole investment was in exchange for the 18% holding. So my guess would be that he initially loaned money to the club (and maybe that loan has been converted into non-voting preference shares, for example)...and also acquired a stake from an outgoing investor, but for less than the £89m figure.

I don't think we'll ever know the details, as Palace are (I believe) ultimately owned by a company registered in Delaware, which seems to be designed to maintain a certain amount of anonymity. But on the face of it, this seems to be good news for Palace.

The only sources I have looked at are the official club statement and the Grauniad article I cite. Your explanation is definitely plausible, though somewhat convoluted (except for the suggestion of non-voting pref stock, that, as your post implies you know, is pretty standard).

I have no intention in doing further research though. Partly because, frankly, I do t really care enough, and partly because we have a DULLARD who does football finance stuff as a day job.

I couldn't find this valuation, where did you see it?

I have previously seen reference to a £210m valuation in 2019, with a projection of being worth £500m once the new stand has been up and running for a couple of years.
I doubt the club's value has gone up that much following the last couple of year's losses.

I just calculated it from the Grauniad article. If 18% cost £87.5m then 100% would have cost (a tad under) £500m. Of course, if the Grauniad is misinformed then so is the valuation.

 

[Uh_huh_him]

The only sources I have looked at are the official club statement and the Grauniad article I cite. Your explanation is definitely plausible, though somewhat convoluted (except for the suggestion of non-voting pref stock, that, as your post implies you know, is pretty standard).

I have no intention in doing further research though. Partly because, frankly, I do t really care enough, and partly because we have a DULLARD who does football finance stuff as a day job.




I just calculated it from the Grauniad article. If 18% cost £87.5m then 100% would have cost (a tad under) £500m. Of course, if the Grauniad is misinformed then so is the valuation.

Indeed.

I shall be tuning into his podcast to hear what he has to say about this.

 

[Frankie]

Listening to Paul Barberout this morning and he said our losses over the pandemic period equate to well over 100 million pounds ! I'm not exactly sure those sums add up to me but he should know isuppose .

That's a mind boggling sum of money for the club to absorb , makes the money we received for White even more sensible decision now.

 

[PILTDOWN MAN]

Neither of [MENTION=1721]Mr Putdown[/MENTION]’s numbers are debt. They are both the losses in a single year. The total non-trading debt at Palace and the Albion (in both cases just looking at the football club, not the topco holding company) is £76m and £244m respectively. These facts further strengthens your underlying point.

You're stating the football clubs but surely the non-trading debt is the holding company not the football club especially as the main debt is the stadium and training complex. The football club rents the facilities off the stadium company, both owned by the holding company

 

[Mr Putdown]

Neither of [MENTION=1721]Mr Putdown[/MENTION]’s numbers are debt. They are both the losses in a single year. The total non-trading debt at Palace and the Albion (in both cases just looking at the football club, not the topco holding company) is £76m and £244m respectively. These facts further strengthens your underlying point.

If you look back, I merely replicated the term used by the person I quoted in my reply,

Both the articles I linked to in my reply clearly stated losses and not debt.

 

[Mr Putdown]

None of the above changes my hope that Palace have a truly dreadful season, eclipsing Derby’s record, before plummeting down through the EFL into the National League. Obviously.

Hope you’re keeping well.

I wouldn’t expect anything less.

We are all good thanks, you know you are most welcome anytime If you fancy a day on the river, despite your ridiculous choice of supporting Brighton.

(If you fancy a day on the Itchen, pencil the 8th October in your diary.)

 

[Goldstone1976]

I wouldn’t expect anything less.

We are all good thanks, you know you are most welcome anytime If you fancy a day on the river, despite your ridiculous choice of supporting Brighton.

(If you fancy a day on the Itchen, pencil the 8th October in your diary.)

Glad you’re all well.

Itchen on 8 Oct is far too good an opportunity to miss! As is a day on the river (had a 15lb-er out of the Kennet a couple of weeks back). V many thanks for both offers. I’ll pm/call you.