The Takeover Thread - Duchatelet Finally Sells (Jan 2020)
Comments
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The latter option, please, Roland.....Chris_from_Sidcup said:
If you were Roland, then you'd surely have realised by now that the club in league one is not going to get you 40m.alburyaddick said:Covered End - tbh I’d have to do a bit more homework,but I would have thought that c £20- 25m in the current market would be about right, but valuing football clubs is certainly an anomaly- after all the buyers are paying £20-25m to buy the right to lose another c £10m a year which is totally bizarre.
In most business purchases, in order to justify a price of £20-25m you’d expect the business to be actually making a profit !! of probably c £2m to £3m a year.
Football club purchases generally defy any business logic because they are a relatively quick way to become poor or broke.
Why not spend 1-2m in January to go for promotion, then you'd have a much better chance of getting your 40m as a championship side in the summer.
If not, take 25m now and fuck off.
....before any more loyal staff totally lose it and depart.1 -
Unless he has been offered £40m by two separate parties, as some on here claim.Chris_from_Sidcup said:
If you were Roland, then you'd surely have realised by now that the club in league one is not going to get you 40m.alburyaddick said:Covered End - tbh I’d have to do a bit more homework,but I would have thought that c £20- 25m in the current market would be about right, but valuing football clubs is certainly an anomaly- after all the buyers are paying £20-25m to buy the right to lose another c £10m a year which is totally bizarre.
In most business purchases, in order to justify a price of £20-25m you’d expect the business to be actually making a profit !! of probably c £2m to £3m a year.
Football club purchases generally defy any business logic because they are a relatively quick way to become poor or broke.
Why not spend 1-2m in January to go for promotion, then you'd have a much better chance of getting your 40m as a championship side in the summer.
If not, take 25m now and fuck off.
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So if he has why hasn't he taken the money (from one if them) and slunk off back to the land of moules and frittes?andynelson said:
Unless he has been offered £40m by two separate parties, as some on here claim.Chris_from_Sidcup said:
If you were Roland, then you'd surely have realised by now that the club in league one is not going to get you 40m.alburyaddick said:Covered End - tbh I’d have to do a bit more homework,but I would have thought that c £20- 25m in the current market would be about right, but valuing football clubs is certainly an anomaly- after all the buyers are paying £20-25m to buy the right to lose another c £10m a year which is totally bizarre.
In most business purchases, in order to justify a price of £20-25m you’d expect the business to be actually making a profit !! of probably c £2m to £3m a year.
Football club purchases generally defy any business logic because they are a relatively quick way to become poor or broke.
Why not spend 1-2m in January to go for promotion, then you'd have a much better chance of getting your 40m as a championship side in the summer.
If not, take 25m now and fuck off.
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Russian billionaire, owner of Bournemouth, lives in sandbanks. I would suggest he chose that club as he lives there?
Secondly 100% premium on Charlton over Wigan purley on corporate hospitality is fanciful I agree.
To use your first point more billionaires live in London than Wigan so the resale in my previous point, would be easier to achieve?
Also to suggest that it is 100% on that basis alone, would be to agree everything else between the 2 is equal, it clearly isn't.
Lastly if you were say, Australian, and you want a club near a big expat community, London would be preferable ;-)
I am not saying the club is worth £40 million, or even close, I am saying I can see how you could argue it is and that "normal business valuation" doesn't fit football.0 -
Nothing makes senseChris_from_Sidcup said:
If you were Roland, then you'd surely have realised by now that the club in league one is not going to get you 40m.alburyaddick said:Covered End - tbh I’d have to do a bit more homework,but I would have thought that c £20- 25m in the current market would be about right, but valuing football clubs is certainly an anomaly- after all the buyers are paying £20-25m to buy the right to lose another c £10m a year which is totally bizarre.
In most business purchases, in order to justify a price of £20-25m you’d expect the business to be actually making a profit !! of probably c £2m to £3m a year.
Football club purchases generally defy any business logic because they are a relatively quick way to become poor or broke.
Why not spend 1-2m in January to go for promotion, then you'd have a much better chance of getting your 40m as a championship side in the summer.
If not, take 25m now and fuck off.
After selling Josh and konsa for a combined fee of £82.50 two players with could of done with this season for the promotion push.
I could understand him selling these players for decent money and putting the money in his pocket but the money he got kept the club going for what a month.
He should of spent a couple of quid in August.
If still here in January spend a couple of million for the push if it doesn't come off sell everyone in May0 -
I still say an offer of around £32,500,000 would clinch it.0
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At last. Someone eminently qualified to make a reasoned house buying analogy.alburyaddick said:I buy and sell businesses for a living. Put simply, businesses for sale are only worth what someone is prepared to pay for them. Although there is a technical definition of ‘ enterprise value’ to include debt etc - if there is no willing buyer at the price then the seller has to decide whether to sell at a lower price than ‘ enterprise value’. An example would be that we just tried to buy Gaucho Restaurants, the fact that it had millions of accumulated debt didn’t stop us offering a price that meant that the sellers were going to have to write off most of that debt.
The same is true with Roland, he has funded c £64m so far which includes his original cost of acquisition and annual operating losses. He has somehow secured a valuation ( probably from a firm of surveyors/ commercial agents) that the underlying property assets are worth £40m - therefore he is prepared to carry on funding the annual operating losses of c £8-10m but he is holding out for the perceived value of the property.
In reality, in order to secure a sale he is going to have to write off some of his debt and accept a lower price than £40m. Despite the flimflam club announcements about price agreement it appears fairly clear that neither of the interested parties are prepared to pay his asking price and by the way they are right not to pay £40m or anywhere near that.
Let’s hear it @alburyaddick
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I am interested in a rational business valuation. There's a difference. It looks like you agree that £40m isn't rational. That's probably a good way to close this particular dialogue.Cafc43v3r said:Russian billionaire, owner of Bournemouth, lives in sandbanks. I would suggest he chose that club as he lives there?
Secondly 100% premium on Charlton over Wigan purley on corporate hospitality is fanciful I agree.
To use your first point more billionaires live in London than Wigan so the resale in my previous point, would be easier to achieve?
Also to suggest that it is 100% on that basis alone, would be to agree everything else between the 2 is equal, it clearly isn't.
Lastly if you were say, Australian, and you want a club near a big expat community, London would be preferable ;-)
I am not saying the club is worth £40 million, or even close, I am saying I can see how you could argue it is and that "normal business valuation" doesn't fit football.
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Bit of buyin and a bit of sellin, probly guvnorPragueAddick said:
Glad you are here on this thread, what kept you?alburyaddick said:I buy and sell businesses for a living. Put simply, businesses for sale are only worth what someone is prepared to pay for them. Although there is a technical definition of ‘ enterprise value’ to include debt etc - if there is no willing buyer at the price then the seller has to decide whether to sell at a lower price than ‘ enterprise value’. An example would be that we just tried to buy Gaucho Restaurants, the fact that it had millions of accumulated debt didn’t stop us offering a price that meant that the sellers were going to have to write off most of that debt.
The same is true with Roland, he has funded c £64m so far which includes his original cost of acquisition and annual operating losses. He has somehow secured a valuation ( probably from a firm of surveyors/ commercial agents) that the underlying property assets are worth £40m - therefore he is prepared to carry on funding the annual operating losses of c £8-10m but he is holding out for the perceived value of the property.
In reality, in order to secure a sale he is going to have to write off some of his debt and accept a lower price than £40m. Despite the flimflam club announcements about price agreement it appears fairly clear that neither of the interested parties are prepared to pay his asking price and by the way they are right not to pay £40m or anywhere near that.
:-)3 -
I buy and sell businesses for a living. Put simply, businesses for sale are only worth what someone is prepared to pay for them. Although there is a technical definition of ‘ enterprise value’ to include debt etc - if there is no willing buyer at the price then the seller has to decide whether to sell at a lower price than ‘ enterprise value’. An example would be that we just tried to buy Gaucho Restaurants, the fact that it had millions of accumulated debt didn’t stop us offering a price that meant that the sellers were going to have to write off most of that debt.
The same is true with Roland, he has funded c £64m so far which includes his original cost of acquisition and annual operating losses. He has somehow secured a valuation ( probably from a firm of surveyors/ commercial agents) that the underlying property assets are worth £40m - therefore he is prepared to carry on funding the annual operating losses of c £8-10m but he is holding out for the perceived value of the property.
In reality, in order to secure a sale he is going to have to write off some of his debt and accept a lower price than £40m. Despite the flimflam club announcements about price agreement it appears fairly clear that neither of the interested parties are prepared to pay his asking price and by the way they are right not to pay £40m or anywhere near that.
A friend of mine had a stake in Gaucho.4 - Sponsored links:
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You won't get a rational valuation in a nonrational business. That was my point.PragueAddick said:
I am interested in a rational business valuation. There's a difference. It looks like you agree that £40m isn't rational. That's probably a good way to close this particular dialogue.Cafc43v3r said:Russian billionaire, owner of Bournemouth, lives in sandbanks. I would suggest he chose that club as he lives there?
Secondly 100% premium on Charlton over Wigan purley on corporate hospitality is fanciful I agree.
To use your first point more billionaires live in London than Wigan so the resale in my previous point, would be easier to achieve?
Also to suggest that it is 100% on that basis alone, would be to agree everything else between the 2 is equal, it clearly isn't.
Lastly if you were say, Australian, and you want a club near a big expat community, London would be preferable ;-)
I am not saying the club is worth £40 million, or even close, I am saying I can see how you could argue it is and that "normal business valuation" doesn't fit football.4 -
Brilliant. I reckon whilst there is very strong competition that must make your top 10.golfaddick said:could it be as simple as the fact the club (CAFC) think that the Aussies need to submit paperwork to the EFL, whereas its actually the club (CAFC) who sends the FAPT papers.
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I've said all along the value is in the freeholds, but not many agreed with me.Henry Irving said:
Thanks @alburyaddick for the insightful and professional information.alburyaddick said:Covered End - tbh I’d have to do a bit more homework,but I would have thought that c £20- 25m in the current market would be about right, but valuing football clubs is certainly an anomaly- after all the buyers are paying £20-25m to buy the right to lose another c £10m a year which is totally bizarre.
In most business purchases, in order to justify a price of £20-25m you’d expect the business to be actually making a profit !! of probably c £2m to £3m a year.
Football club purchases generally defy any business logic because they are a relatively quick way to become poor or broke.
You mentioned that "He has somehow secured a valuation ( probably from a firm of surveyors/ commercial agents) that the underlying property assets are worth £40m".
That's an interesting take on things if he is valuing the club just by its property assets (tangible and easier to make comparisons with the market) and not as a football club (how much is a piece of string worth?).
Any property agents or surveyors out there able to value the Valley and Sparrows Lane with and without planning permission for housing?
It's not essential to be able to redevelop.
If the land value continues to rise (it will long term), you have a very valuable asset, increasing in value, so long as there is always a willing buyer.0 -
Its not a valuable asset if you can do sod all with it. One day the council may change its mind & allow development but until then thw value is only as a sports stadium & very little else ( the council reduced the usage of the proposed bowling alley back in the Prem years when we were looking to expand)Covered End said:
I've said all along the value is in the freeholds, but not many agreed with me.Henry Irving said:
Thanks @alburyaddick for the insightful and professional information.alburyaddick said:Covered End - tbh I’d have to do a bit more homework,but I would have thought that c £20- 25m in the current market would be about right, but valuing football clubs is certainly an anomaly- after all the buyers are paying £20-25m to buy the right to lose another c £10m a year which is totally bizarre.
In most business purchases, in order to justify a price of £20-25m you’d expect the business to be actually making a profit !! of probably c £2m to £3m a year.
Football club purchases generally defy any business logic because they are a relatively quick way to become poor or broke.
You mentioned that "He has somehow secured a valuation ( probably from a firm of surveyors/ commercial agents) that the underlying property assets are worth £40m".
That's an interesting take on things if he is valuing the club just by its property assets (tangible and easier to make comparisons with the market) and not as a football club (how much is a piece of string worth?).
Any property agents or surveyors out there able to value the Valley and Sparrows Lane with and without planning permission for housing?
It's not essential to be able to redevelop.
If the land value continues to rise (it will long term), you have a very valuable asset, increasing in value, so long as there is always a willing buyer.1 -
I did say it in my blog a while back - all readers and non abusive comments welcome !AFKABartram said:
Bit of buyin and a bit of sellin, probly guvnorPragueAddick said:
Glad you are here on this thread, what kept you?alburyaddick said:I buy and sell businesses for a living. Put simply, businesses for sale are only worth what someone is prepared to pay for them. Although there is a technical definition of ‘ enterprise value’ to include debt etc - if there is no willing buyer at the price then the seller has to decide whether to sell at a lower price than ‘ enterprise value’. An example would be that we just tried to buy Gaucho Restaurants, the fact that it had millions of accumulated debt didn’t stop us offering a price that meant that the sellers were going to have to write off most of that debt.
The same is true with Roland, he has funded c £64m so far which includes his original cost of acquisition and annual operating losses. He has somehow secured a valuation ( probably from a firm of surveyors/ commercial agents) that the underlying property assets are worth £40m - therefore he is prepared to carry on funding the annual operating losses of c £8-10m but he is holding out for the perceived value of the property.
In reality, in order to secure a sale he is going to have to write off some of his debt and accept a lower price than £40m. Despite the flimflam club announcements about price agreement it appears fairly clear that neither of the interested parties are prepared to pay his asking price and by the way they are right not to pay £40m or anywhere near that.
:-)0 -
Appreciate your insight @alburyaddick
There’s been a number of interesting posts on this in the last 24hrs1 -
Even then it’s at least £12.67 too much for me.CAFCDAZ said:
im up for a whip round? got £12.67 to add right now? if we can get 2.6m charlton fans we could all put in the same and still have enough money to buy water for the academy!! whos in?SoundAsa£ said:I still say an offer of around £32,500,000 would clinch it.
I wouldn’t want to be saddled with a company like Charlton and it’s liabilities.
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Art appreciates in value, but you can't do anything with it.golfaddick said:
Its not a valuable asset if you can do sod all with it. One day the council may change its mind & allow development but until then thw value is only as a sports stadium & very little else ( the council reduced the usage of the proposed bowling alley back in the Prem years when we were looking to expand)Covered End said:
I've said all along the value is in the freeholds, but not many agreed with me.Henry Irving said:
Thanks @alburyaddick for the insightful and professional information.alburyaddick said:Covered End - tbh I’d have to do a bit more homework,but I would have thought that c £20- 25m in the current market would be about right, but valuing football clubs is certainly an anomaly- after all the buyers are paying £20-25m to buy the right to lose another c £10m a year which is totally bizarre.
In most business purchases, in order to justify a price of £20-25m you’d expect the business to be actually making a profit !! of probably c £2m to £3m a year.
Football club purchases generally defy any business logic because they are a relatively quick way to become poor or broke.
You mentioned that "He has somehow secured a valuation ( probably from a firm of surveyors/ commercial agents) that the underlying property assets are worth £40m".
That's an interesting take on things if he is valuing the club just by its property assets (tangible and easier to make comparisons with the market) and not as a football club (how much is a piece of string worth?).
Any property agents or surveyors out there able to value the Valley and Sparrows Lane with and without planning permission for housing?
It's not essential to be able to redevelop.
If the land value continues to rise (it will long term), you have a very valuable asset, increasing in value, so long as there is always a willing buyer.
Stamps, wine, etc etc.
I venture to suggest that the value of the freeholds are worth substantially more than they were in let's say 1992.
If they are then I suggest I may have a valid point, that the value of the club is mainly in the freeholds.0 -
I think those numbers sound right. CAFC are worth well north of £18M now. Charlton would be a screaming value at an £18M price in this day and age. Given the large monthly losses, £40M seems wacky, now. But I believe RD will never sell below £30M, even if it means keeping the club 2 more years and losing £5-10M per year (after more player sales.) He just won't. Throw financial logic out the window when it comes to Roland.PragueAddick said:
He paid £18m, and it looks like the Aussies maybe value it at £25m. That all seems to me to be broadly reasonable, assuming clean title and no undiscovered nonsense surrounding player contracts.
There is no basis I can see for a £40m sale price, other than that RD desperately needs it in order not to lose face in the Belgian business community. I am afraid that so far you have not argud in sufficient depth to convince me that a figure above circa £25m has any business-based merit.3 - Sponsored links:
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He said he buys businesses for a living, not train wrecks.CAFCDAZ said:
any chance you could encourage someone to purchase charlton? 😀alburyaddick said:I buy and sell businesses for a living.
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Right now, anyone can waltz into Newcastle and buy it for £400M. I hear Ashley is now willing to sell for £350M.
That is 2.7x turnover.
Debt = 1x annual turnover
For a club making at least £27M profit in 2017-18
And on pace to make a similar amount this season.
Already in the PL.
Selling out 51,000 seats per match.
In a one club city with nothing else to do.
And a Champions League manager.
Or... buy CAFC
at 3.3x turnover
Debt = 5x annual turnover
For a club in League One
With 5 clubs in that city-area already in the Premier League
A stadium that can probably never be developed past 30,000 anymore
Losing a million per month
Sold off its best players
No CEO
I want CAFC to get out from RD, but frankly, any Saudis that are looking to buy CAFC when Newcastle is just sitting there must be 50th distant cousins in the royal family and not so rich.3 -
Shit, in the last 4 hours we have seen...AFKABartram said:Appreciate your insight @alburyaddick
There’s been a number of interesting posts on this in the last 24hrs
Aussies out of negotiations
Aussies with a bid of £40.5M
Another bidder at £40.5M
For most clubs, that's a busy year. For us, its a standard 4 hours.3 -
Yes I have liked the road puns as wellAFKABartram said:Appreciate your insight @alburyaddick
There’s been a number of interesting posts on this in the last 24hrs0 -
Great idea! can you Sub us?, as im waiting for my Giro to come in.CAFCDAZ said:
im up for a whip round? got £12.67 to add right now? if we can get 2.6m charlton fans we could all put in the same and still have enough money to buy water for the academy!! whos in?SoundAsa£ said:I still say an offer of around £32,500,000 would clinch it.
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Bournemouth not exactly a poor part of the world either and I'm sure they can attract the locals in from Sandbanks to watch a game or two.PragueAddick said:@Cafc43v3r
Let's forget about the advertising agency analogy :-)
There are two reasons why someone might insist on buying a London based club. One is that the owner might live there. The Ukrainian oligarch in late 2013 was an example. But more commonly London clubs are presumed to attract a premium simply because they are generally presumed to be better revenue-earners than say Middleborough or Sunderland, but mainly in the corporate hospitality area. Thats what RM explained to me a while ago, and is the key reason why the porn merchants wanted the Olympic Stadium. The Valley is relatively light on corporate capacity, and, I'm told, difficult to build more into it.
So if the thinking of the owner is hard commercial, then he will know what his London premium is worth. Given that Wigan went for £20m, and are now a division higher, you are implying that the premium is 100%. Pretty heroic assumption that. If you ask the quiet Russian owner of Bournemouth (capacity 11,000) what he thinks of your premium, he will probably reply with the Russian version of "good luck with that one, mate". TV money is location-blind.2 -
@DOUCHER - you heard anything of late mate?11
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Maybe a fair business analysis although I think you miss the ‘London’ factor in the above.NapaAddick said:Right now, anyone can waltz into Newcastle and buy it for £400M. I hear Ashley is now willing to sell for £350M.
That is 2.7x turnover.
Debt = 1x annual turnover
For a club making at least £27M profit in 2017-18
And on pace to make a similar amount this season.
Already in the PL.
Selling out 51,000 seats per match.
In a one club city with nothing else to do.
And a Champions League manager.
Or... buy CAFC
at 3.3x turnover
Debt = 5x annual turnover
For a club in League One
With 5 clubs in that city-area already in the Premier League
A stadium that can probably never be developed past 30,000 anymore
Losing a million per month
Sold off its best players
No CEO
I want CAFC to get out from RD, but frankly, any Saudis that are looking to buy CAFC when Newcastle is just sitting there must be 50th distant cousins in the royal family and not so rich.
If you are a billionaire from Saudi you will fly to London to go look at your properties you own and not want to bother with a trip oopNorth to Newcastle.
Charlton is a stones throw away, that if any, is our pull for the mega wealthy like the Saudi Royals.
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I've heard that Steve Claridge has given a tour of his ground to some Russian Oligarchs who had flown over.
Possible big investment or just a day trip?1 -
On the other hand there is a significant financial downside with Newcastle if they get relegated (which for a non top 6 side is likely to happen at some point, and could easily happen this season), and the chance of financial upside (Champions League football) is remote. And the club is profitable because they spend bugger all on players for a club of their size, buy a few stars and the wage bill will shoot up.NapaAddick said:Right now, anyone can waltz into Newcastle and buy it for £400M. I hear Ashley is now willing to sell for £350M.
That is 2.7x turnover.
Debt = 1x annual turnover
For a club making at least £27M profit in 2017-18
And on pace to make a similar amount this season.
Already in the PL.
Selling out 51,000 seats per match.
In a one club city with nothing else to do.
And a Champions League manager.
Or... buy CAFC
at 3.3x turnover
Debt = 5x annual turnover
For a club in League One
With 5 clubs in that city-area already in the Premier League
A stadium that can probably never be developed past 30,000 anymore
Losing a million per month
Sold off its best players
No CEO
I want CAFC to get out from RD, but frankly, any Saudis that are looking to buy CAFC when Newcastle is just sitting there must be 50th distant cousins in the royal family and not so rich.
By contrast, our revenue is unlikely to go down very much, but could increase significantly if the club is successful on the pitch and promoted. Buy us, get two promotions in say 5 years and kerching.2
