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Stadium refinancing idea

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Ale taster said:
Just listened to Mr Donald's podcast for the second time and his idea (which is just that at this stage and may come to nothing) of securing £40m of borrowing against half the value of the ground to buy, for example, four hotels at £10m each that would each generate £2.5m per annum to be ploughed straight back into the team to help us compete against other clubs parachute payments in the Championship.
I think this makes perfect sense if done prudently which I trust SD would, but it does expose our ground to an element of risk.
What do the financial savvy think ?
@Grumpy Old Man etc. etc.
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Thought we had a Billionaire Director?
 

Mary Hinge said:
Thought we had a Billionaire Director?
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minority shareholders rarely oput much in..stewrat saud maybe juan would want to get more involved next year..maybe he could use the stadium..he was just thinking about different options..having lots of different potential plans..

mcq10 said:
Coventry City went down that route look at the mess they are in.

Ground owned by wasps rugby club and they pay wasps to use the ground.

Dreadful idea tbh
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we arent going down that troute..they sold their ground..safc wouldnt be..
the ground has been used as security for months and no one has noticed the difference..

robbied1 said:
Until the time comes when they end up.selling the club and want to keep the hotels as part of the deal, i think the whole thing is fishy myself
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they are not going to do it man..the ground has been used as security for months and months and no one has noticed..

PhilSAFC said:
They'd have to be owned by the club for FFP. Regardless it's too much of a risk. You simply do not risk the club on a hotel venture. f***ing madness.
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the ground is already risked...its already used as security...which is what is supect gave stewrat the idea..
 
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Diversifying a football business to be a football and something else business, with the something else funded via a (no doubt expensive) loan on our stadium just sounds a bit poorly thought out.

Can anyone think of any other club investing in a non-football related enterprise and making a success of it? And obviously it is far from guaranteed that any new business, which wouldn’t be within the Boards expertise, would be a success.

Also when these guys come to sell why would a buyer want to acquire a diversified enterprise rather than a pure play? If a buyer wanted a hotel business and a football business, they could buy them separately.

I’m out – scatty thinking like this makes me nervous.
 
AndrewP said:
What's it used as security against currently?
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the owners not paying ellis short for the club...

daveybigpotatoes said:
Diversifying a football business to be a football and something else business, with the something else funded via a (no doubt expensive) loan on our stadium just sounds a bit poorly thought out.

Can anyone think of any other club investing in a non-football related enterprise and making a success of it? And obviously it is far from guaranteed that any new business, which wouldn’t be within the Boards expertise, would be a success.

Also when these guys come to sell why would a buyer want to acquire a diversified enterprise rather than a pure play? If a buyer wanted a hotel business and a football business, they could buy them separately.

I’m out – scatty thinking like this makes me nervous.
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sheff utd and chelsea have both done this..now im not in favour of safc doing it but chelsea did it under bates and sheff utd did it more recently..
 
kildaremackem said:
minority shareholders rarely oput much in..stewrat saud maybe juan would want to get more involved next year..maybe he could use the stadium..he was just thinking about different options..having lots of different potential plans..


we arent going down that troute..they sold their ground..safc wouldnt be..
the ground has been used as security for months and no one has noticed the difference..


they are not going to do it man..the ground has been used as security for months and months and no one has noticed..


the ground is already risked...its already used as security...which is what is supect gave stewrat the idea..
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BERB has the ground been used for security?.......Can you clarify....
 
Mary Hinge said:
BERB has the ground been used for security?.......Can you clarify....
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it has been used by security..if the opwners dont pay ellis..then ellis gets the ground..that has been in the public domain from day one..but as the owners are paying ellis..it hasnt made any difference..
 
Mary Hinge said:
Thought we had a Billionaire Director?
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This is what makes me nervous about Donald and co. It might just be me but the narrative seems to have changed. At the start it was we've got this really rich Uruguayan; he can financially help us when required.

Now, it's a case of we need to generate other revenue streams to compete in the championship (which may carry a great deal of risk).

He concerns me a bit. Need to listen to this latest podcast mind.
 
North Yorks Mackem said:
This is what makes me nervous about Donald and co. It might just be me but the narrative seems to have changed. At the start it was we've got this really rich Uruguayan; he can financially help us when required.

Now, it's a case of we need to generate other revenue streams to compete in the championship (which may carry a great deal of risk).

He concerns me a bit. Need to listen to this latest podcast mind.
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i do know what you mean. but i suspect it could just be that stewart doesnt want to make promises about what juan will do..
 
Geronimo said:
Borrowing against an asset isn't a new idea.
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Tesco built their empire on building shops and borrowing against these new builds to finance building more shops. I think they got into trouble due to over valuing their assets to get extra cash, but, they were making so much cash, at that point, that it wasn't an issue.
 
Mary Hinge said:
I trust the Don me like......
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What is with this trust we need to have?! :D
We've trusted Drumaville, we've trusted Ellis Short, we've trusted Di Fanti, Congerton, Bain...and we're in L1.
I hope he gets it right, did well so far, but I don't get this blind faith in someone handling the club.
 
kildaremackem said:
minority shareholders rarely oput much in..stewrat saud maybe juan would want to get more involved next year..maybe he could use the stadium..he was just thinking about different options..having lots of different potential plans..


we arent going down that troute..they sold their ground..safc wouldnt be..
the ground has been used as security for months and no one has noticed the difference..


they are not going to do it man..the ground has been used as security for months and months and no one has noticed..


the ground is already risked...its already used as security...which is what is supect gave stewrat the idea..
Click to expand...

No it hasn't? It's Black Cat House and the AOL that the monies are secured against.

rjj501 said:
I read a Mintel report on the budget hotel sector a few years ago. There appeared to be vast profits to be had if the formula was right. Clearly Premier Inn (Whitbread) have got this formula right and are (have already!) expanding rapidly.

At £10m per site, I think the club would be able to enter the budget hotel space effectively... a cursory scan of some land banks and there are a few sites for development on major arterial routes where the buy + build (inc fit out) cost could be completed under this budget.

I’m no expert in hotel operations, but I notice that Premier Inn ROCE was 15.4% this year...

It’s certainly food for thought. Depends how much they feel comfortable leveraging, I suppose. With the right formula, expansion into the correct sites, with a well managed debt structure, the Club could end up in a very strong position... equally... the club could end up owning a low occupancy shit box or four..,
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So nowhere near 25% then, for an extremely well established chain of hotels.
 
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