Is the holdup Hoffman, not SISU? (1 Viewer)

shmmeee · Jan 14, 2012

Most everyone has been blaming SISU for the holdup on the takeover: e.g. they want to cash in, or they are spiteful, or some other theory. To be honest, none of these hold much water when examined in the light of day.

However, one party DOES have a motive for drawing the takeover out and that's Hoffman (or any new buyer).

When this club go down (and it is when, not if) it will be worth far less and a major restructuring will need to take place with players going in and out. If Hoffman were to take over while the transfer window (or loan window) is still open, there would be an expectation from fans to "try something" and spend cash on players. Otherwise when we go down, the fans would turn on the owners claiming they did nothing to stop relegation happening.

If a new buyer waits it out until we are down and the fans are really against SISU and the debts have stacked up some more they can buy cheaper and have none of the bad will from fans about the relegation.

It's a bit like when I really wanted an iPhone, but knew there was a new version coming out in a couple of months. I decided to wait it out rather than be stuck with a product that immediately lost value.

So my prediction is: we will hear nothing of the takeover until at least after March when the loan window closes.

neilyboy67 · Jan 14, 2012

yep totally agree nowts gonna happen till end of season imo when relegation happens. Hoffmans crowd want the club on the cheap at the end of the day (they are investors looking for a return). Ideal scenario hoff would av shit loads of wad (like me if i won a treble rollover on the euro) to piss up the wall on us but he aint.

Otis · Jan 14, 2012

Do you blame Hoffman if he does want the club on the cheap?

SkyBlue_Bear83 · Jan 14, 2012

Otis said:
Do you blame Hoffman if he does want the club on the cheap?

No but everyone assumes it is SISU who are being awkward in negotiations when it may well not be like that.

Disorganised1 · Jan 14, 2012

I suppose if its all done right it may work out for the best.

Sir Digby Chicken Caesar · Jan 14, 2012

Otis said:
Do you blame Hoffman if he does want the club on the cheap?

No. I don't think he'll want to do SISU any favors at all.

shmmeee · Jan 14, 2012

Otis said:
Do you blame Hoffman if he does want the club on the cheap?

Not in the slightest. I think he's doing exactly the right thing for the long term future of the club.

Just pointing it out for the many on here and other sites who seem to subscribe to the "Hoffman would be in spending millions if it wasn't for that pesky SISU" line.

It also kind of makes a mockery of the whole SISU OUT thing as well. As I'd wager that SISU want SISU OUT as well.

I support SoC and Jan in all that they are doing, but I wonder if they aren't barking up the wrong tree. That said, there is a very important job to do when any new owners come in in terms of fan representation and SoC are currently best placed to do it.

skybluesteve76 · Jan 14, 2012

There's no hold up on Hoffmans part because he's got nothing

Paxman II · Jan 14, 2012

No i don't agree.

The clubs value remains virtually the same whether league 1 or Championship.
Player assets are minimum either way.

IF Hoffman took on the club now he would not promise money on a dead duck but rather help with a smaller investment in players and hope the impetus would get us out of it, maybe even changing the manager for someone like Warnock (who will stay with us for league 1)
If not he will gear up for a complete revamp and players in league 1 for a promotion season probably outspending anyone else in that league and therefore virtually guaranteeing promotion. He will be a hero and will have seen gates rise in league 1 with that promotion push. That's business sense.

CCFC123 · Jan 14, 2012

I would buy the club when it goes into admin and pump a huge sum is smashing our way out of league 1 even with -10 points. Get the Ricoh and the club will be doing OK.....

@richh87 · Jan 14, 2012

shmmeee said:
Not in the slightest. I think he's doing exactly the right thing for the long term future of the club.

Just pointing it out for the many on here and other sites who seem to subscribe to the "Hoffman would be in spending millions if it wasn't for that pesky SISU" line.

It also kind of makes a mockery of the whole SISU OUT thing as well. As I'd wager that SISU want SISU OUT as well.

I support SoC and Jan in all that they are doing, but I wonder if they aren't barking up the wrong tree. That said, there is a very important job to do when any new owners come in in terms of fan representation and SoC are currently best placed to do it.

Sorry Schmeee - I don't follow...

shmmeee · Jan 14, 2012

@richh87 said:
Sorry Schmeee - I don't follow...

The stated aim of SoC (unless it's changed with the last meeting, I haven't had a chance to read the minutes yet) is to remove SISU.

If what I say is correct, the reason SISU are still here is Hoffman dragging his heels not SISU digging theirs in. Hence the barking up the wrong tree.

Like I say, I actually agree that a new owner should wait it out, but if people want change now then SISU aren't the people to be putting pressure on, Hoffman is.

Hope that makes sense.

shmmeee · Jan 14, 2012

Paxman II said:
No i don't agree.

The clubs value remains virtually the same whether league 1 or Championship.
Player assets are minimum either way.

IF Hoffman took on the club now he would not promise money on a dead duck but rather help with a smaller investment in players and hope the impetus would get us out of it, maybe even changing the manager for someone like Warnock (who will stay with us for league 1)
If not he will gear up for a complete revamp and players in league 1 for a promotion season probably outspending anyone else in that league and therefore virtually guaranteeing promotion. He will be a hero and will have seen gates rise in league 1 with that promotion push. That's business sense.

With all due respect it's not business sense.

The value of the club does not stay the same. The income will be severaly reduced and outgoings will be virtually the same.

My theory is SISU went into this season thinking they could stay up on the cheap. When it became obvious that wasn't going to happen the balance of power shifted to a potential buyer as relegation is a disaster for owners who do not want to speculate cash.

Hoffman would be stupid to take over now, for the reasons I've already stated. Apart from anything else, if we accept we are down then SISU are doing the right thing in selling players who will go now and getting cheap loans in. If we bought anyone now on longer than a six month deal we'd be stuck with them in L1.

Makes more sense to buy players after relegation, except the fans don't want to hear that. Whoever the owners are right now are on a hiding to nothing.

Also, it's well known that January prices are inflated so if we were buying for L1 now we be paying over the odds in both fees and wages. It'd be the same for a manager as you're negotiating the wages of a Championship manager not one in L1.

skybluedan · Jan 15, 2012

I just think its all aload of bollox

Paxman II · Jan 15, 2012

That's my point Shimmee....overhead will reduce dramatically as players contracts will be renegotiated for those that remain and others will be gone. (sold) Those coming in will be cheap as league 1 players etc etc.
The crowds will likely not dip and maybe if they start well and Hoffman comes in they will increase. Makes good sense.
The value of the club is not solely on it's championship status or league 1 status....like any business it's the base plus the turnover/money making potential in the right ownership that any new owner will give it. License to trade in the football league remains and so does the option on the Ricoh. Getting SISU to write off a large chunk of it's debt and buying in for a small investment to land the club debt free will aid Hoffman dramatically in investing in the club and team from a fresh perspective....the only sensible one for the club. SISU will not want to be left holding the reigns in league 1 as they will not invest anymore cash.
With all due respect you need to look at the broader picture.
I do agree it makes no sense to buy players now unless there was a concerted effort by SISU to maintain championship status. I suspect they are not bothered either way. What they want are investors to come forward and give them some of their money back. As I said even if Hoffman took it on now he would probably disguise the fact he wanted to make his big play from league one and out spend the rest in that league and go for promotion using that impetus in a similar way that Southampton have done and Norwich before them.
That's what I would do.

dadgad · Jan 15, 2012

But why did SISU give long term contracts to people like Bell, McSheffrey.....
We know they're utterly clueless about football but the decisions to give has beens ridiculous contract extensions made zero economic sense either.

blueflint · Jan 15, 2012

what takeover it aint gonna happen :slap::slap:

shmmeee · Jan 15, 2012

dadgad said:
But why did SISU give long term contracts to people like Bell, McSheffrey.....
We know they're utterly clueless about football but the decisions to give has beens ridiculous contract extensions made zero economic sense either.

This has been talked about before. Supposedly it gives them a higher book value and hence the club a higher value

oldskyblue58 · Jan 15, 2012

some good points but CCFC has no value. Assets are far exceeded by liabilities. The discussion between GH and SISU is about settlement terms on the loan not the value of CCFC in championship or division 1. That loan doesnt go away or reduce if we go down.

shmmeee · Jan 15, 2012

oldskyblue58 said:
some good points but CCFC has no value. Assets are far exceeded by liabilities. The discussion between GH and SISU is about settlement terms on the loan not the value of CCFC in championship or division 1. That loan doesnt go away or reduce if we go down.

A fair point as always OSB, but value != worth. A club losing £300k a month with £30m of debt is more attractive than a club losing £1m a month with £35m of debt. The waiting game only suits the buyer, the more desperate SISU are to get rid, the lower offer they will accept on the debt.

EDIT: didnt explain myself very well. There comes a point where the debt is so large and the income so small that no-one will touch CCFC. SISU need to sell before that point or they lose everything.

oldskyblue58 · Jan 15, 2012

shmmeee said:
A fair point as always OSB, but value != worth. A club losing £300k a month with £30m of debt is more attractive than a club losing £1m a month with £35m of debt. The waiting game only suits the buyer, the more desperate SISU are to get rid, the lower offer they will accept on the debt.

not necessarily shmeee might depend on a whole raft of factors .............. but in our case it would be difficult to find anyone who valued the worth of our club at more than £1 whatever the division. There is a legal liability by way of a loan to SISU's investors and that is the main factor in any negotiation. SISU investors wont put more into the club whether we lose £300K or £1m per month so their loan isnt going to grow unless they start charging interest. What they will take in settlement of that loan is key to any negotiation which has no relationship to the actual worth of CCFC. Quite likely that if they settled the loan out at say £10m the worth or value of CCFC would still be £1 in any division (except perhaps premiership - but its total fantasy being there as it stands)

shmmeee · Jan 15, 2012

oldskyblue58 said:
not necessarily shmeee might depend on a whole raft of factors .............. but in our case it would be difficult to find anyone who valued the worth of our club at more than £1 whatever the division. There is a legal liability by way of a loan to SISU's investors and that is the main factor in any negotiation. SISU investors wont put more into the club whether we lose £300K or £1m per month so their loan isnt going to grow unless they start charging interest. What they will take in settlement of that loan is key to any negotiation which has no relationship to the actual worth of CCFC. Quite likely that if they settled the loan out at say £10m the worth or value of CCFC would still be £1 in any division (except perhaps premiership - but its total fantasy being there as it stands)

Sorry, maybe we're talking at crossed purposes.

I was assuming that any cash paid for CCFC would be nominal, the real negotiation happens around the repayment of the loan from SISU.

As I see it the only valid exit strategy for SISU and their investors is to negotiate the best deal possible on the debt. IIRC the original Hoffman offer was quite a poor one (repayment deferred until we went up and if that didn't happen in 3 years it was written off). SISU will want more than that, probably something up front and some more over time, maybe as well as clauses related to club performance.

Hoffman's group will want to pay as little of the debt as possible. The bigger that debt gets and the less CCFC are bringing in, the more twitchy SISU and their investors will get about never seeing any cash again and the more likely they are to accept a lower amount, or less preferential terms on the repayment.

That's what I mean by it being worth Hoffman's while to wait it out. The debt may be bigger at the end of the season, but chances are SISU will be more willing to write some of it off.

EDIT: Interesting you say SISU won't grow the loan. How are we paying the bills at the moment then? Surely it's in SISU's interests to be the sole creditor as then they are the only ones who can put the club into admin. Otherwise (as I understand it, please correct if wrong) some CCFC fan florist owed a tenner could call in admin with the express aim of forcing SISU out.

oldskyblue58 · Jan 15, 2012

player sales to pay the bills perhaps? In the last 12 months SBS & L group have cashed in some of its investments, reduced costs, sold players, and got windfalls like Dann add fee - my guess is thats how they are covering the bills. However i temper that with the fact that the debt to SISU investors has apparently increased significantly in that time - the maths doesnt add up from the info we know

if ccfc is but a small part of a much larger group of investments then the investors might not be as twitchy as folk might think. Hedge funds tend to spread risk over a range of investments - some they win some they lose. SISU are very used to playing hard ball with respect to their clients money. I would be surprised if they didnt have in mind a settlement arrangement, but they are duty bound to try to recover as much as possible. Everything SISU have done so far points to them not seeing the business as perhaps you me and most fans would - why would they change ? So whilst we might think it should make them twitchy they might not see it like that

shmmeee · Jan 15, 2012

oldskyblue58 said:
player sales to pay the bills perhaps? In the last 12 months SBS & L group have cashed in some of its investments, reduced costs, sold players, and got windfalls like Dann add fee - my guess is thats how they are covering the bills. However i temper that with the fact that the debt to SISU investors has apparently increased significantly in that time - the maths doesnt add up from the info we know

if ccfc is but a small part of a much larger group of investments then the investors might not be as twitchy as folk might think. Hedge funds tend to spread risk over a range of investments - some they win some they lose. SISU are very used to playing hard ball with respect to their clients money. I would be surprised if they didnt have in mind a settlement arrangement, but they are duty bound to try to recover as much as possible. Everything SISU have done so far points to them not seeing the business as perhaps you me and most fans would - why would they change ? So whilst we might think it should make them twitchy they might not see it like that

There's playing hardball and there's downright suicidal.

Taking your argument to it's logical extreme, at some point CCFC will literally not have enough players to sell to pay the bills. I'd imagine that point will hit after this transfer window. We've sold Juke for a fairly small amount if the rumours are true and he's out most valuable asset. It seems Clingan will be next, and rightfully so as he's worth nothing in the summer. Then we've got to get rid of Cranie (which I don't think will happen) and Keogh (who IMO is not worth more than Turner who went for £650k).

We've got maybe £2m of value left in the team, and at the last count we were losing £3.6m a year, that will increase next season. At which point SISU have 3 options:

- Put in more cash to protect the loans they are owed
- Let the club go into admin and lose the ability to negotiate a deal on the debt
- Liquidate the club and lose everything

None of those are particularly attractive, much better to strike a deal now for as much as they can get. And you'll get a better deal from a Championship club than one in L1. So as I say, time in on the buyer's side.

Unlike the majority, I don't see the player sales as asset stripping, simply as SISU avoiding putting in their own cash, which must mean they want out as the club isn't going to break even any time soon.

oldskyblue58 · Jan 15, 2012

but if you take the view ( putting yourself in SISU's shoes) that they value CCFC as one of the small investments that didnt work they may well have written it down to nil internally already. So what happens to it doesnt actually matter to them, if they get something back all well and good if not they dont actually increase their loss - then it is much easier to be tough in negotiations and to say we are not putting more money in

stupot07 · Jan 15, 2012

OSB - what happens to the money SISU owe to Robinson et al?

shmmeee · Jan 15, 2012

oldskyblue58 said:
but if you take the view ( putting yourself in SISU's shoes) that they value CCFC as one of the small investments that didnt work they may well have written it down to nil internally already. So what happens to it doesnt actually matter to them, if they get something back all well and good if not they dont actually increase their loss - then it is much easier to be tough in negotiations and to say we are not putting more money in

I get your point. But don't see how it changes mine to be honest. SISU may have written off the investment, but will still rather have say £15m back than £10m. Their bargaining position to get that is weaker the longer the season drags on and they are forced to sell players to pay the bills.

shmmeee · Jan 15, 2012

stupot07 said:
OSB - what happens to the money SISU owe to Robinson et al?

Is there any money owed? It was my understanding all previous debts were either taken on by SISU or written off. Hence why all the money is currently owed to SISU. If Robinson was still owed money, he could call in admin right now and force SISU's hand.

oldskyblue58 · Jan 15, 2012

Per SBS&L 2010 accounts then there is a maximum of £6m payable by the Group dependent on promotion to the premier league by end of 2012/13 season . Extremely unlikely to be paid. Had we been promotion candidates then there could have been a conspiracy theory but given our current position etc it isnt going to be a problem. If there are other agreements directly between SISU investors and Robinson etc (ie not through the football club etc ) then I dont have the details

Bloodnut1964 · Jan 15, 2012

All speculation, maybes and ifs, nobody on here knows what is happening with SISU so why beat yourself up about it?

Godiva · Jan 15, 2012

oldskyblue58 said:
but if you take the view ( putting yourself in SISU's shoes) that they value CCFC as one of the small investments that didnt work they may well have written it down to nil internally already. So what happens to it doesnt actually matter to them, if they get something back all well and good if not they dont actually increase their loss - then it is much easier to be tough in negotiations and to say we are not putting more money in

I wouldn't think they have written off the loans as investment. It would not make much sense as the loans are not defaulted. If they wrote that investment off one of they directors would stand to lose out some bonus money, and if they are all gready bastárds (as most think on here) then that would be against their nature.

Anyway - you are quite comfortable with an acabus and have access to the filed accounts.
If you look at the cost side, it seems like we are down to bleeding £2-2.5mil cashflow wise per year. Should we get relegated we will need to reduce wages to around 55% of turnover. Hopefully most fans will stay with the team as we battle for promotion(!) so matchday income shouldn't drop more than 20%. Sponsor contracts may drop a bit but some will be long term and stay the same.
What amount of cash in your estimate will it take to get through one year in league 1? Assume we already have the cash for the rest of this season ... would selling Cranie and Clingan this window get enough money to run next season?

In any team there will always be a standout performer - when that player leaves another step up like Juke did when King left. I wouldn't be surprised if Thomas, Cristie or even one of our strikers will become the next standout performer. This player will raise in value and if selling Cranie and Clingan is not enough to raise the cash for next season ... selling the new star might get us there.

But you're the mathematician ...

cloughie · Jan 15, 2012

Match day income will reduce by 50% in league 1, plus loss of tv revenue and championship money sponsership, so increasing losses

Godiva · Jan 15, 2012

cloughie said:
Match day income will reduce by 50% in league 1, plus loss of tv revenue and championship money sponsership, so increasing losses

I am not sure about a 50% match day income loss, but anyway I think you miss my point. Whatever our income decreses we will have to reduce wages accordingly down to 55% of the total income. Thereby reducing the cash needed to run the club.

But just how much cash will be needed next season? Will the inevitable selling players needed to reduce the wage bill in fact raise enough money to run the club next season? If not, how much more will it take?
Not too much is my guess.

Jack Griffin · Jan 15, 2012

Godiva said:
I am not sure about a 50% match day income loss, but anyway I think you miss my point. Whatever our income decreses we will have to reduce wages accordingly down to 55% of the total income. Thereby reducing the cash needed to run the club.

I think the rules allow a temporary deviation from that figure, a bedding period of several years.

One source I found says...

£90m was the minimum financial prize for winners of the play-offs
Record Championship revenues but £133m Championship cumulative loss and Football League losses down to £194m
14 Championship clubs lost £5m or more
Championship clubs spending £4 for every £3 generated
Reduced Football League revenues due to lower broadcasting deal from 2012/13 (down from £264m to £195m for 3 years)
Championship wages grew by 6% with wages/revenue ratio down to 88%
Aggregate net debt of 24 Championship clubs increased to £875m
6% decrease in attendances in 2010/11

Nonleagueherewecome · Jan 16, 2012

A star performer for a bottom of L1 side...well lets see..we paid 150k for Baker. So don't expect much more for any of our other players post-relegation. Players depreciate in value when they are playing in a lower division. It's one aspect of football that Football Manager does get right.

So if SISU have realised this, they'd do well to take any offers for players they can get now. If they wanted 1.5m for Keogh in August, they won't get more than 300-500k next season.

Is the holdup Hoffman, not SISU? (1 Viewer)

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