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Post by chippenhamgas on Mar 27, 2016 11:07:42 GMT
Whoever invests in uwe will want a return, either an interest rate or a share of the income generated by the asset (which means less for brfc). Borrowing 30m at 5% would cost 1.5m per annum just to service, unless we are going to be giving up an equity share in the new stadium. People don't want to see it chippenham, even when it is staring them in the face. The owners will borrow money to finish the stadium (it's the logical tax efficient way of doing it) but be very clear when you pay £20 for your ticket they can only spend that £20 once, if it's on paying the interest then it can't be used to pay for better players. Simples. Exactly, a large chunk of our increased income (through bigger crowds and what the stadium generates through other activities) will either go on servicing debt or giving outside investors a return on their investment. The uwe may be the holy grail for some but it may not be brfc.
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Post by Antonio Fargas on Mar 27, 2016 11:08:59 GMT
Investment means just that, they will be wanting a return on their capital. At the end of the day if wanted to build a house and was a millionaire, i wouldn't be going to the bank for a mortgage. You would if you had your millions invested in a business that was making more than the current mortgage rate. Otherwise you'd lose money.
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Post by lulworthgas on Mar 27, 2016 11:19:11 GMT
How much would naming rights be worth for a football stadium in league 1 that can also be used on an international level for big European rugby games for the likes of bath and Gloucester? Investment from this area wouldn't involve the club paying any money back.
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Post by Deleted on Mar 27, 2016 11:23:15 GMT
Investment means just that, they will be wanting a return on their capital. At the end of the day if wanted to build a house and was a millionaire, i wouldn't be going to the bank for a mortgage. Strange that because I get people buying cars on finance who could buy them outright easily.
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Post by bluebeard on Mar 27, 2016 11:28:25 GMT
Hopefully we will get some firm news soon as investment partners could mean a number of things. A best case scenario might be that the new owners are looking to acquire the freehold in order to exploit other development opportunities. For example, if they are able to incorporate a hotel, retail or student accommodation into the project the funds generated from these sources would represent an additional income stream. Revenue from the stadium itself could therefore stay with the club. Worst case scenario (apart from a new stadium not happening at all) is that revenue is swallowed up by borrowing costs so, other than having better facilities and increased capacity, the club does not benefit financially. Perhaps the most likely scenario is that we will see a mix of both debt and equity funding from investors who will get a return on aspects of the development that previously didn't exist.
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Post by countygroundhotel on Mar 27, 2016 11:35:59 GMT
People don't want to see it chippenham, even when it is staring them in the face. The owners will borrow money to finish the stadium (it's the logical tax efficient way of doing it) but be very clear when you pay £20 for your ticket they can only spend that £20 once, if it's on paying the interest then it can't be used to pay for better players. Simples. Yeah, well done for assuming anyone who doesn't agree with you must be willfully ignoring facts that are staring them in the face. It is just possible that we trust the new owners to put the club on a sustainable business footing *and* take on external investment. 99% of successful businesses in the country manage that. Not at all just pointing out that from everything that has been said it has not indicated at anytime that the new owners will be building us a free stadium. As to the 99% of businesses historically must of the 92 league clubs have been in the 1% that don't. And that's without even arguing about 99% of businesses actually manage that.
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Post by lulworthgas on Mar 27, 2016 11:49:51 GMT
let's say that you're a billionaire who wants to buy a super-duper luxury apartment that costs $50,000,000. Since that's less than 5% of your net worth, the odds are that you have enough liquid investments that you could cash them out and pay for the apartment with a check if you wanted to. But do you?
Let's say that because of your great credit rating and the high quality of the apartment you could get a 25 year mortgage for the full amount at 4% interest. But let's also say that as a reasonably smart investor who does exactly as well as the S&P 500 market index, you know that your 25 year averaged return is 10%. That means if you sold your stock to buy the apartment for 'cash', it would cost you 6% annually, or $3 million per year. Or, looked at from the other direction, because the loan will be secured by apartment, you have the ability to borrow $50 million at 4% interest, then turn around and invest it to generate 10%, making you a profit of $3 million per year.
The bottom line? If you're a billionaire and can use the money you borrow on the apartment to get a higher equity return, you may well want to take out a mortgage!
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Post by chippenhamgas on Mar 27, 2016 11:59:37 GMT
How much would naming rights be worth for a football stadium in league 1 that can also be used on an international level for big European rugby games for the likes of bath and Gloucester? Investment from this area wouldn't involve the club paying any money back. Maybe 5m over ten years, 15m for the mem and a 20m funding gap. 20m to a billionaire family is like me pulling out a couple of hundred yet we are scouring the world for potential investors.
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Post by lulworthgas on Mar 27, 2016 12:10:10 GMT
How much would naming rights be worth for a football stadium in league 1 that can also be used on an international level for big European rugby games for the likes of bath and Gloucester? Investment from this area wouldn't involve the club paying any money back. Maybe 5m over ten years, 15m for the mem and a 20m funding gap. 20m to a billionaire family is like me pulling out a couple of hundred yet we are scouring the world for potential investors. Read my post above. Even mark Zuckeberg has a mortgage on his 5 million dollar home and he has a personal wealth of 14 billion. They do it for tax reasons etc. Our chairman said they were talking to financiers. If you borrow the money at a rate less tahn inflation you are borrowing the money for free. His own money then stays invested in whatever,hotels, banks etc, earning him more money in interest etc. If he spends all that money on a stadium it one payment it earns him nothing. A very rich person could build something and not see a penny of his fortune spent. It would just mean he earns less than he could have over the same period.
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Post by youmadethatup on Mar 27, 2016 12:10:20 GMT
At some point in the not too distant future the mem in its current guise will be deemed not suitable for football league standards ,it is currently on a par with conf south clubs like Ebbsfleet or bath city. So there is little choice but to either move or rebuild the mem as a 18,000 max all seater with no expansion ever available. The idea of getting a loan/mortgage/investment appears to be scary to some but this will have to happen ,either that or someone else will own the stadium and BRFC will rent it...remember Eastville !. Students like music.....a stadium providing concerts has 10,000 students already on site sounds like a good money spinner to me....well apart from the fact the gigs will be in the summer when the students have gone home mostly....put a retractable roof on though ........ So a mortgage has structured payments which seem high at first but over time hit the pocket less and less , so all (!) You need to do is ensure you have enough income streams to pay the mortgage ,which may need some help in the early years but over time the income streams should provide way more than the mortgage will require. If anyone thinks you can run a football club finances solely on standard ticket money ,pasties and beer they are deluded that won't even cover the wage bill. The club needs income 7 days a week ,every week and you can not get that from the same people ,you need to have different people paying for different things . Yes I know it's all bleeding obvious but we do need to look at a bigger picture not just football ,hence the whole involving and improving the community. As that'swhere agood chunk of the long term money will come from.
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Post by beaver132 on Mar 27, 2016 12:11:57 GMT
Some v few, very lucky clubs (man city, West ham) are gifted stadia by us, the taxpayers. The rest have to buy them. We're part of the rest. Investment may include, for instance, a hotel chain, paying for part of the infrastructure if the ground includes a hotel. It may include naming rights to the stadium as a whole, or parts of it. It may include a lot of cash upfront, with a return guaranteed in 10 years time or longer. Who knows. I'm not a millionaire businessman with a load of successful business ventures under my belt. With a team of quality solicitors and accountants advising me. I guess there may be an element of risk, but I don't know. Let's see what happens. They own 92% of the club, and their intentions seem genuine. The glaziers landed man u with loads of debt, but these people seem more tuned in if you ask me. Certainly better off today I suspect than we would have been a few week ago.
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Post by Deleted on Mar 27, 2016 12:13:59 GMT
Students like music. So there.
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Post by peterparker on Mar 27, 2016 12:15:33 GMT
The Al Qadis are investment bankers,... they arent in the business of throwing money around. To be fair, that is what investment bankers do. maybe i should have said their own money. I am sure they are trying to finance the stadium on a sustaianble financial agreement as opposed.to.the hit and hope approach of the previous BoD. With regards to UWE i do wonder if they will try and build the 26000 version straight of, or even the full 30,000 odd it could go to. Might make morr finacial sense to do that
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Post by baggins on Mar 27, 2016 12:21:58 GMT
Got a feeling, our multi billionaire owner and his even richer friends and contacts, know exactly what they're doing.
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Post by Antonio Fargas on Mar 27, 2016 12:31:23 GMT
Yeah, well done for assuming anyone who doesn't agree with you must be willfully ignoring facts that are staring them in the face. It is just possible that we trust the new owners to put the club on a sustainable business footing *and* take on external investment. 99% of successful businesses in the country manage that. Not at all just pointing out that from everything that has been said it has not indicated at anytime that the new owners will be building us a free stadium. As to the 99% of businesses historically must of the 92 league clubs have been in the 1% that don't. And that's without even arguing about 99% of businesses actually manage that. Yes, I wasn't pointing out that most football clubs do it, I was pointing out that it's a perfectly reasonable business practice.
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Post by countygroundhotel on Mar 27, 2016 12:44:55 GMT
Not at all just pointing out that from everything that has been said it has not indicated at anytime that the new owners will be building us a free stadium. As to the 99% of businesses historically must of the 92 league clubs have been in the 1% that don't. And that's without even arguing about 99% of businesses actually manage that. Yes, I wasn't pointing out that most football clubs do it, I was pointing out that it's a perfectly reasonable business practice. So we are agreeing that historically the majority (of professional) football clubs haven't operated a perfectly reasonable business practice?
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Post by Antonio Fargas on Mar 27, 2016 13:02:10 GMT
Yes, I wasn't pointing out that most football clubs do it, I was pointing out that it's a perfectly reasonable business practice. So we are agreeing that historically the majority (of professional) football clubs haven't operated a perfectly reasonable business practice? I don't know about historically (istm back in the day a lot of clubs were pretty much break even) but certainly over the last 20 years or so.
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Post by Dr Gas on Mar 27, 2016 13:30:39 GMT
Whoever invests in uwe will want a return, either an interest rate or a share of the income generated by the asset (which means less for brfc). Borrowing 30m at 5% would cost 1.5m per annum just to service, unless we are going to be giving up an equity share in the new stadium. People don't want to see it chippenham, even when it is staring them in the face. The owners will borrow money to finish the stadium (it's the logical tax efficient way of doing it) but be very clear when you pay £20 for your ticket they can only spend that £20 once, if it's on paying the interest then it can't be used to pay for better players. Simples. What stares me in the face is that investment bankers invest other peoples' money. The investors are effectively gambling with their money and hope that the bank makes a profit on the money they have given them to "bet" with. If the bank invests the money poorly then the investors either ride the roller coaster and hope for better things to come, or sell out to someone else willing to take the risk. If the bankers turn a profit they pass it back to the investors whilst taking a cut of said profit themselves. Where is the borrowing in that?
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Post by baggins on Mar 27, 2016 13:35:21 GMT
People don't want to see it chippenham, even when it is staring them in the face. The owners will borrow money to finish the stadium (it's the logical tax efficient way of doing it) but be very clear when you pay £20 for your ticket they can only spend that £20 once, if it's on paying the interest then it can't be used to pay for better players. Simples. What stares me in the face is that investment bankers invest other peoples' money. The investors are effectively gambling with their money and hope that the bank makes a profit on the money they have given them to "bet" with. If the bank invests the money poorly then the investors either ride the roller coaster and hope for better things to come, or sell out to someone else willing to take the risk. If the bankers turn a profit they pass it back to the investors whilst taking a cut of said profit themselves. Where is the borrowing in that? Worked quite well for Lansdown.
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Post by Dr Gas on Mar 27, 2016 13:41:29 GMT
What stares me in the face is that investment bankers invest other peoples' money. The investors are effectively gambling with their money and hope that the bank makes a profit on the money they have given them to "bet" with. If the bank invests the money poorly then the investors either ride the roller coaster and hope for better things to come, or sell out to someone else willing to take the risk. If the bankers turn a profit they pass it back to the investors whilst taking a cut of said profit themselves. Where is the borrowing in that? Worked quite well for Lansdown. Nobody was silly enough to take the investment off of him as he proved too well that it was a perennial loss maker. So he is lumbered with his lot.
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