Seems to be a process that costs a six figure sum, but interested in what it entails outside of what can be garnered from the most recent published accounts.
Suspect it’s a study of the club’s assets, contracts surrounding those assets, contracts related to outsourcing and facilities.
But what else would it include, in particular which might become a deterrent to potential buyers, that’s outside the published accounts?
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Compliance to statutory legislation not only financial but hard services. Then on how much remedial work is required for recovery and who pays.
Outstanding projects . An example is the under pitch heating.What is there,what needs to be installed etc and who pays.
Commitments. The training ground .What funds had been committed ,what debt is outstanding,what phase of the works are we in etc. What contractually has been committed to the NHS re the ticket office (as is or farther in the future).
DD can be as involved (or not) as the potent buyer wants. Even a potential road block isn't a deal breaker it's all about the money and the risk.
As well as tearing the P&L and balance sheet apart, it will look at everything financial as well as procedural matters to ensure no rules/ laws have been broken.
In particular in football clubs cases it will look at player transfers, contracts, add ons where there has been a player sale, ownership of royalties and such like.
My gut feeling is that something may well have come up that the purchaser wasn't expecting and that's why negotiations are taking so long.
Lawyers will run it, but there is likely separate involvement from accountants, property (surveyors/valuers), management consultants, as well as potentially private investigators that look into the personnel and softer 'market indicators'.
The costs will soon rack up when each will likely charge a day rate of £1,000-1,500 plus expenses and then lawyers fees.
The annual accounts will probably form a start point as they provide a useful summary of the assets and liabilities of the organisation. However the prospective purchaser will investigate in far more detail than an auditor whom, in simplistic terms, looks at samples only although the auditors will (or should) satisfy themselves as to the veracity of balance sheet and profit and loss figures at a given date.
A purchaser though will be concerned with the future such as the length and nature of commitments arising from existing contracts with customers and suppliers and the feasibility (and likely costs) of being able to renew those contracts and on what terms. If property is involved the purchaser will want to confirm the nature of the tenure (freehold or leasehold) if owned and what charges and loans (if any) have been secured against that property. If the property is rented how long remains on the rental lease? What is the situation regarding break clauses (does the tenant have a right to break the lease at a given point or points or just the landlord) and arrangements regarding rent increases? What is the situation regarding renewal of the rental lease if it is due to expire shortly?
Just a brief look at some of the type of questions that due diligence covers that preparation and audit of accounts may not.