Super League expecting to field investment offers in February

[Terrybill]

Does anyone seriously beleve SL is worth anywhere near the investment level of the RFU if they do I have a mint condition Allegro and by mint I mean it has at least pne hole in the bodywork, one careful owner, the rest could not have cared less, full service history, its running in certificate, in BL beige with black plastic seat covers going to highest bidder with a reserve at £100K cash only no timewasters

[GUBRATS]

1 hour ago, Oliver Clothesoff said:

No but the abuse and vitriol of the last structure change and demanding certain amounts of money trickling down is. 

Which nobody on this thread has suggested ? , So why bring it up ?

[aj1908]

8 minutes ago, Terrybill said:

Does anyone seriously beleve SL is worth anywhere near the investment level of the RFU if they do I have a mint condition Allegro and by mint I mean it has at least pne hole in the bodywork, one careful owner, the rest could not have cared less, full service history, its running in certificate, in BL beige with black plastic seat covers going to highest bidder with a reserve at £100K cash only no timewasters

Need to try harder. One out of ten lol.

[GUBRATS]

The bottom line in both these investment threads is that when comparing to Union , ultimately the investors know that if it was to fail , the RFU does have cash to bail out ( to a degree ) if necessary , RL does not , a much bigger gamble , so much less favourable terms 

[Terrybill]

what about the value

[Toby Chopra]

12 minutes ago, GUBRATS said:

The bottom line in both these investment threads is that when comparing to Union , ultimately the investors know that if it was to fail , the RFU does have cash to bail out ( to a degree ) if necessary , RL does not , a much bigger gamble , so much less favourable terms 

I'm not sure what bailing out is necessary, for either code. If it fails, PE takes the loss, not the sport. We're essentially broke as it is, so in my view there isn't much downside for RL. All the issues about the viability of the lower tiers and community game exist whether CVC comes in or not. 

[Toby Chopra]

25 minutes ago, scotchy1 said:

Super league(europe) LTD isnt the clubs, super league is a business with employees and a board and revenue.

The PE would be buying 25%(or so) of SL europe.

It's a strange and the moment pointless distinction to make at the moment but Robert elstone doesnt work for the SL clubs, he works for SLe and the SL board. His remit isnt to grow the clubs but to act in the best interests of the business. 

Currently this makes no difference as the SL clubs are the board, they are the shareholders and to all intents and purposes they are the same but, legally, Elstones duty is to the company not to the clubs. If they sell a substantial portion to PE the Elstones duty is still to the company which is no longer just the clubs.

It's likely the PE company will want people on the board and working for them in SLe so SLe will have a much bigger degree of distance from the clubs.

And it would be SLe which spends the money rather than clubs. This in the hope of growing the size of SLe, giving the clubs a smaller share of a bigger pie.

There are some pretty obvious questions about how this holds up. Each club currently owns 1/12th of SLe, but that rotates as clubs are moved up and down (strangely, toronto seem to not have been transferred their ownership share, maybe they won't and that's part of their entrance criteria, but stranger still London seem to have retained theirs, which according to the articles of association gives them the right to play in SL)

What happens when a club transfers it share, what if the clubs gaining the share didnt want to sell to the PE?

Why would a PE want to invest in a club it might lose?

If toronto arent a share holder in SL and want to sell the rights outside the UK doesnt that preclude the PE doing the same?

Why would clubs coming up agree to the PE rules when it would mean that a significant percentage of their share of SL.revenue goes elsewhere.

How long is the runway for this spending? What's the point in spending  millions on a club in 2021 if it's in the championship in 2022?

Could london, currently a shareholder, get funding even though they are in the championship?

How could you ensure funds were spent on specific projects if the  governance changes from SLe to the RFL as clubs come up and down.?

I did not know that London is still a shareholder in SLE. That is... complicated to say the least. 

[GUBRATS]

9 minutes ago, Toby Chopra said:

I'm not sure what bailing out is necessary, for either code. If it fails, PE takes the loss, not the sport. We're essentially broke as it is, so in my view there isn't much downside for RL. All the issues about the viability of the lower tiers and community game exist whether CVC comes in or not. 

The viabilities of the lower tiers and community game won't be of any interest to investors , making money out of SL will be their concern , I doubt they will offer ' carte blanche ' to SLE , there will be some conditions IMO safeguarding their investment 

Then again it could all just be some feindish plan to finish of RL once and for all

[aj1908]

16 minutes ago, Toby Chopra said:

I did not know that London is still a shareholder in SLE. That is... complicated to say the least. 

They should get a share then.

[cookey]

It's worth remembering that a number of S L owners must be around 70 yo. I trust that this isn't just a way of them taking back what they have previously loaned to clubs,leaving the game with a future reduced income.

Transparency - precisely what would the clubs be able to do with the money?

[Smudger06]

1 hour ago, scotchy1 said:

Super league(europe) LTD isnt the clubs, super league is a business with employees and a board and revenue.

The PE would be buying 25%(or so) of SL europe.

It's a strange and the moment pointless distinction to make at the moment but Robert elstone doesnt work for the SL clubs, he works for SLe and the SL board. His remit isnt to grow the clubs but to act in the best interests of the business. 

Currently this makes no difference as the SL clubs are the board, they are the shareholders and to all intents and purposes they are the same but, legally, Elstones duty is to the company not to the clubs. If they sell a substantial portion to PE the Elstones duty is still to the company which is no longer just the clubs.

It's likely the PE company will want people on the board and working for them in SLe so SLe will have a much bigger degree of distance from the clubs.

And it would be SLe which spends the money rather than clubs. This in the hope of growing the size of SLe, giving the clubs a smaller share of a bigger pie.

There are some pretty obvious questions about how this holds up. Each club currently owns 1/12th of SLe, but that rotates as clubs are moved up and down (strangely, toronto seem to not have been transferred their ownership share, maybe they won't and that's part of their entrance criteria, but stranger still London seem to have retained theirs, which according to the articles of association gives them the right to play in SL)

What happens when a club transfers it share, what if the clubs gaining the share didnt want to sell to the PE?

Why would a PE want to invest in a club it might lose?

If toronto arent a share holder in SL and want to sell the rights outside the UK doesnt that preclude the PE doing the same?

Why would clubs coming up agree to the PE rules when it would mean that a significant percentage of their share of SL.revenue goes elsewhere.

How long is the runway for this spending? What's the point in spending  millions on a club in 2021 if it's in the championship in 2022?

Could london, currently a shareholder, get funding even though they are in the championship?

How could you ensure funds were spent on specific projects if the  governance changes from SLe to the RFL as clubs come up and down.?

Each Club owns 1/13 of SLE Ltd. Not 1/12 as you state. 

[Smudger06]

The last transfer of share went through on 13th December 2018, Rule was replaced by Hughes on the Board. I'd imagine London's Share will be transferred within the next couple of weeks. 

[GUBRATS]

5 minutes ago, Smudger06 said:

The last transfer of share went through on 13th December 2018, Rule was replaced by Hughes on the Board. I'd imagine London's Share will be transferred within the next couple of weeks. 

To who ?

[Adeybull]

Around a year ago, IIRC, when the other code announced the proposed PE investment, a number of people on here - including me - speculated about whether similar thoughts might be in the minds of the SL club chairmen?  And, if so, what the practicalities and the consequences might be. 

I was not the only one to express concerns that such a move COULD be a means of various SL club owners getting their loans repaid, or otherwise realising the value of their "investments" in their respective clubs, should they so wish. Rather than, necessarily investing (all the ) the windfall in their clubs or the wider game.

There was also debate about, e.g. whether this would enable (or require) the SL clubs who happened to be sat down on the chairs when the music stopped to pull up the drawbridge.  Various other potential implications were discussed.

However, the debate did not last long, because John Drake determined that the subject was not about Rugby league but about another sport. And he kept either moving the threads to the Other Sports forum, or locking them (or both - can't remember which, now).  Even though I and others argued that what the other lot were up to could well have significant implications for our own code, and could perhaps provide some possible reasons behind the coup that had recently taken place.

I think a common thread, nevertheless, was that the game - and its leading clubs - had to do SOMETHING, as the status quo ante was clearly untenable in the longer term.  Whether PE investment, as the other code was considering, would be the appropriate (or indeed only...) route or not was a matter that seemed relevant for discussion? 

Maybe such threads might be deemed relevant now?  And maybe those of us who speculated might feel that we had good reason to do so at the time?  But, for whatever reason (and JD provided his reason) no continuing discussion was entertained on this main forum thread.

(OK, after that, and given I was also hacked off with the continual unpleasant attacks on Bulls supporters from too many posters on here - why keep attacking US for the series of bandits whom Wood & co appointed to re-wreck the club? - I packed in posting on here.  Other than one post, a few months ago, saying QED after a few especially nasty shots at Bulls supporters, I have just looked in to read, from time to time. As I will return to so doing, so worry not.)

But, as a parting comment, I'll say what I tried to say a while ago.  Private Equity is a huge misnomer, since it is usually an outfit borrowing loads of money to buy another, with only a small capital investment of their own money.  They then have to squeeze cash flow out of the acquired business to service and repay the loans, and probably pay big dividends on the capital, and then they look to sell on the business at a significant profit. 

Sometimes this transforms the acquired business into a leaner and saleable proposition. Sometimes spectacularly so.  And sometimes it provides the means of removing the muppetry whose poor management of the business led to the need for PE investment in the first place.

Sometimes instead, though it sucks the cash and the life out of the acquired business, the quality of whose product and/or the performance of whose business then reduces, and reduces more, until it falls over.  Sometimes spectacularly so.  The loans are invariably secured, so THEY get paid off.  Those who have invested capital probably lose it - but they may have recovered a lot already through dividends or loan interest.  As for what (if anything) is left...well I could list loads of examples... 

When selling out to PE, you have a tiger by the tail. It CAN be the making of a dynamic business.  Or in can be the ruination of a business. You have to be very sure of what you are about, if you remain involved.  And be very clear-minded and careful of what you wish for, if looking in and hoping for big benefits. 

 

[Smudger06]

Just now, GUBRATS said:

To who ?

Toronto you'd hope, or perhaps these loan sharks. 

[Rupert Prince]

8 hours ago, aj1908 said:

i agree with this.

but, if the each club got like 20 million pounds each it could be revolutionary 

ie :

1. cas and wakey could finally get their own grounds done properly.

2. wigan could get their own ground (if they could get out of the horrible lease they have).  the reebok sold for like 8 million pounds didnt it?

3. warrington could expand their ground to 20k

4. leeds, dunno probably pay off the loans on the new ground ,saving interest.

5. hull kr - help with their ground proposals.

dont know how it would help the clubs who dont own their own grounds.  if only bradford were in super league now they could get some money finally to start doing odsal or maybe fixing up horsfall.

the problem is the super league money got wasted.  i cant see how this wont be a repeat and sells off the games future

it is very interesting development though.  if it was only invested in stadia it would probably pay itself back many times over.  these are lasting assets.  plus the PE firm could share in increased tv money.  the RFL appear clueless in getting good value for their tv deals.

maybe elstone is finally becoming more of a yesman who does nothing 

Are you and others blind?  The article points out that the money that might be there would not be used to pay off indebtedness. It sounds as if it would not go directly to the clubs. 

The wider hope is that this new partner would themselves invest and grow the game. My suggestion is that the league would increase to 14 at the earliest possibility.

Improved TV money would provide more for Championship and Div1, in the same way that it currently does.

[GUBRATS]

5 minutes ago, Rupert Prince said:

Are you and others blind?  The article points out that the money that might be there would not be used to pay off indebtedness. It sounds as if it would not go directly to the clubs. 

The wider hope is that this new partner would themselves invest and grow the game. My suggestion is that the league would increase to 14 at the earliest possibility.

Improved TV money would provide more for Championship and Div1, in the same way that it currently does.

Why would a PE influx increase TV money ?

[bobbruce]

Just now, GUBRATS said:

Why would a PE influx increase TV money ?

Is the idea that they take over the negotiations for the TV deal and sponsorships as any increase increases their return. 

[Kayakman]

3 minutes ago, GUBRATS said:

To who ?

It should be Toronto clearly...I don't like these private equity sharks....for them it is simply a dollar cost benefit analysis...they care nothing of the game....they will gut Union to get their money out if they need to.

And yet, in Toronto, we have a very successful businessman with a high net worth, who cares for the game, and wants to invest.  

Do we consult David Argyle on this: "No".   Do we ask him to help us: "No".  Do we allow him to supply, or set up,  the private equity: "No".

Are we stupid to trust unproven money men who know nothing of the game with its future when better options are directly infront of us, staring us in the face?: "Yes".

Dopey is as dopey does.

[GUBRATS]

1 minute ago, bobbruce said:

Is the idea that they take over the negotiations for the TV deal and sponsorships as any increase increases their return. 

So why would any broadcaster offer more to something that's just had a massive influx of cash ?

[aj1908]

8 minutes ago, Rupert Prince said:

Are you and others blind?  The article points out that the money that might be there would not be used to pay off indebtedness. It sounds as if it would not go directly to the clubs. 

The wider hope is that this new partner would themselves invest and grow the game. My suggestion is that the league would increase to 14 at the earliest possibility.

Improved TV money would provide more for Championship and Div1, in the same way that it currently does.

I don't think super league clubs are selling shares on themselves to give more money to anybody but themselves.

They can say what they want about how they spend the money before.it happens.

After it goes through the super league clubs will.spend it how.they want 

I can't.see.this money not.being wasted.

Rugby league clubs.the world.over will spend whatever money they can find 

[aj1908]

2 minutes ago, Kayakman said:

It should be Toronto clearly...I don't like these private equity sharks....for them it is simply a dollar cost benefit analysis...they care nothing of the game....they will gut Union to get their money out if they need to.

And yet, in Toronto, we have a very successful businessman with a high net worth, who cares for the game, and wants to invest.  

Do we consult David Argyle on this: "No".   Do we ask him to help us: "No".  Do we allow him to supply, or set up,  the private equity: "No".

Are we stupid to trust unproven money men who know nothing of the game with its future when better options are directly infront of us, staring us in the face?: "Yes".

Dopey is as dopey does.

They did the same to koucash when he was pumping crazy money into Salford.

I agree about the loan sharks comment 

[GUBRATS]

1 minute ago, Kayakman said:

It should be Toronto clearly...I don't like these private equity sharks....for them it is simply a dollar cost benefit analysis...they care nothing of the game....they will gut Union to get their money out if they need to.

And yet, in Toronto, we have a very successful businessman with a high net worth, who cares for the game, and wants to invest.  

Do we consult David Argyle on this: "No".   Do we ask him to help us: "No".  Do we allow him to supply, or set up,  the private equity: "No".

Are we stupid to trust unproven money men who know nothing of the game with its future when better options are directly infront of us, staring us in the face?: "Yes".

Dopey is as dopey does.

I don't disagree K man , as I've often posted anybody , be that DB at Leigh ,Koucash or indeed Mr Argyle has my utmost respect for investing in the sport of RL for genuine love and enjoyment rather than return 

[Kayakman]

1 minute ago, GUBRATS said:

I don't disagree K man , as I've often posted anybody , be that DB at Leigh ,Koucash or indeed Mr Argyle has my utmost respect for investing in the sport of RL for genuine love and enjoyment rather than return 

We need to know all about theses other guys before anything is signed...they are money men and the game they play is not our game.

[bobbruce]

1 minute ago, GUBRATS said:

So why would any broadcaster offer more to something that's just had a massive influx of cash ?

They back themselves as better negotiators that’s  how the sell it. They give cash up front and then promise to increase the value of the 75% stake you have remaining. That way the clubs future income won’t drop as they claim they can increase the value. The question is do you trust them and how much you tie their return into the increase they can create.