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Due Diligence !

Under normal football circumstances I would agree, it's very unattractive to take on a club saddled with debt and little or no assets, however our situation is quite unique with the new stadium, residential elements, training ground and the RH site all involved with any potential takeover.

There is scope to make some serious money on these if the negotiations can be agreed with RM, I'm not aware of anything like this recently to compare it to?
I may be proved wrong, but last I heard was he was not trying to sell his two golden eggs. Obviously if the price is right, he may do. But it's mainly the money losing club he wants out of.
 
Thanks but as you will probably appreciate the chance of any return, especially short term is remote.

I read a recent article comparing Championship and league 1 clubs profit and loss pre COVID. Out of the 48 clubs only 12 made a profit and for most this was negligible.

I would love to be proved wrong but believe the debt or lack of assets would put most people off.

With respect, that's why they're buying it and you're not.

As previously mentioned I've bought and sold companies in different states. While there is no one size fits all formula for the value of a business, turnover matters a lot more than profit.

Edit, just to add that debt doesn't really matter either, especially in this case where the debt is basically to one person and can be easily negotiated (Ron's need to sell). Notwithstanding that, as long as the debt is serviceable it doesn't really matter, some debt is good debt. In our case I suspect all debts to RM will be paid off (whatever figure that ends up being) so we will be pretty much debt free.

And with regards to assets, again pretty much irrelvant. It sounds like they are buying the stadium (i'm interested if this will be owned by the company that takes shares in SUFC or will be owned by the football club itself, suspect the former) and the training ground. Assets can always be added.

Football clubs are pretty unique businesses. There is a very (very very very!) obvious opportunity here.
 
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I may be proved wrong, but last I heard was he was not trying to sell his two golden eggs. Obviously if the price is right, he may do. But it's mainly the money losing club he wants out of.
The trouble is, Ron Martin haven’t got any golden egg, as he don’t have the money to build a new stadium!
 
When talking about due diligence, i would hope prospective buyers to the club also take into account many other factors that can convince them that SUFC is not a basket case of a club, i would like to believe they would look back at our history in many cases it would show them that we are a sleeping giant ,with the right owners we can be everything we the supporters dream we can be. WE have shown it to the world ,go back to 1953 i think it was versus Man city 28000 spectators some say it was over 30000 crammed into RH on a rainy day ,versus Liverpool on a snow filled RH ,versus Chelsea ,versus Man Utd, also going back to the 1950 s versus Birmingham we played in Gold shirts lost 6-0 . Now fast forward to two finals we played at Millenium stadium. How many fans trekked all the way to Wales to watch those 2 defeats, Wembley i do believe over 30000 fans were at those matches Give us an owner /owners that care for the club and give us a team to be proud of we can /will move up the pyramid and supporters will come in their abundance. One last comment its about ARRY you know the spammer and what he wrote in his book saying SUFC wasnt a football club etc , i believe was said out of fear of what we could be and how it maybe could affect his beloved Wet Spam. Anyway i will leave it there for you to comment on , I probably missed so many other games also like the ones against Liverpool back in the 50s also .and Spurs .not too long ago.
With all due respect why did Judas Fry walk out on us then (still unforgivable in my eyes)?
 
I can't see why anyone would want to buy our club given the financial mess we are in.
I would appreciate if someone in the know can advise what Ron is offering to sell? From an outsider it would just appear to be the club with no assets and a significant amount of debt.
There's a huge intangible value, opportunity, and community in my opinion - saying that as someone who was prepared to pay for it.
 
With respect, that's why they're buying it and you're not.

As previously mentioned I've bought and sold companies in different states. While there is no one size fits all formula for the value of a business, turnover matters a lot more than profit.

Edit, just to add that debt doesn't really matter either, especially in this case where the debt is basically to one person and can be easily negotiated (Ron's need to sell). Notwithstanding that, as long as the debt is serviceable it doesn't really matter, some debt is good debt. In our case I suspect all debts to RM will be paid off (whatever figure that ends up being) so we will be pretty much debt free.

And with regards to assets, again pretty much irrelvant. It sounds like they are buying the stadium (i'm interested if this will be owned by the company that takes shares in SUFC or will be owned by the football club itself, suspect the former) and the training ground. Assets can always be added.

Football clubs are pretty unique businesses. There is a very (very very very!) obvious opportunity here.

Turnover is vanity, profit is sanity and cash flow is King! Turnover is never more important than profit!

I agree that debt can be good but it's my understanding that most of the debt Ron has burderned the club with cannot be considered as good debt (I may be wrong but this is my observation).

It seems positive that we have interest from a consortium and I really hope that they purchase the club. My concern is when they do their due diligence they may feel that the sums don't add up. As we all can appreciate just because someone has shown interest doesn't necessarily correlate to a sell.
 
Turnover is vanity, profit is sanity and cash flow is King! Turnover is never more important than profit!

I agree that debt can be good but it's my understanding that most of the debt Ron has burderned the club with cannot be considered as good debt (I may be wrong but this is my observation).

It seems positive that we have interest from a consortium and I really hope that they purchase the club. My concern is when they do their due diligence they may feel that the sums don't add up. As we all can appreciate just because someone has shown interest doesn't necessarily correlate to a sell.
I would assume the bargaining will be over how much of Ron’s debt will be written off by him.
 
I would assume the bargaining will be over how much of Ron’s debt will be written off by him.
Let’s face it, an amount of the debt is pie in the sky. He set the rental price that he would pay himself for Roots Hall, and that makes up a big chunk of the debt. If he’d kept the club and stadium together there wouldn’t have been rent to pay (unless I’m missing something).
 
Exactly, and that’s why I refer to it as good debt from the purchaser‘s POV. One easy negotiable settlement with someone who needs the cash. It’s hardly off putting to a buyer - as proven by Carl above and the multiple interested parties.
 
With all due respect why did Judas Fry walk out on us then (still unforgivable in my eyes)?
I agree ,i havent forgiven him or the broad who was in charge at Birmingham either, maybe it was a money thing ,at the time a bigger club syndrome, only he can truly answer that.
 
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