Potential Investors

[The Only Way Is Up]

Some say that without a tangible asset in Wrexham AFC, no one would be prepared to put in money without expecting a financial return on his/her investment.

If the Club's objective was simply to find investors in order to buy our way back into the Football League, I wonder if someone prepared to invest a decent sum for skilled players who could definitely do a job down here would consider a future return of say 10% or more at the end of the following season IF promotion was achieved?

How would the return on investment be funded? It could be offset against future income derived from increased attendances, the £472,000 basic award and £430,000 Premier League Solidarity payments that all L2 clubs receive for starters - though some or all of that would be required to maintain a competitive playing budget in L2.


Any thoughts?

[ruthinred]

Originally Posted by The Only Way Is Up

Some say that without a tangible asset in Wrexham AFC, no one would be prepared to put in money without expecting a financial return on his/her investment.

If the Club's objective was simply to find investors in order to buy our way back into the Football League, I wonder if someone prepared to invest a decent sum for skilled players who could definitely do a job down here would consider a future return of say 10% or more at the end of the following season IF promotion was achieved?

How would the return on investment be funded? It could be offset against future income derived from increased attendances, the £472,000 basic award and £430,000 Premier League Solidarity payments that all L2 clubs receive for starters - though some or all of that would be required to maintain a competitive playing budget in L2.


Any thoughts?

Good idea

There are plenty of financially secure people who are willing to invest in. a project/ life experience
Look at the number of racehorse owners who recieve Little return despite stumping up huge training fees.

[Red_Jackoisback]

The trouble is there is no guarantee and would the investor go it for several seasons? Whet is the base investment each year? 10% return is pretty crap as most private equity houses expect to double their money st least in 3 years.

So even at £500k per year at 10% per year and it takes 3 years of missing out we have a secured debt of £1.65m - doesn’t sound sustainable to me.

[Junior Shabadoo]

You end up like York that way (and other less apocalyptic scenarios like Mansfield). Getting up and owing a load of money to the point that it hampers what you do when you get there is just swapping one bad situation for another.

[pagl]

For me the Salford model seems sensible, a group of directors all willing to put in a certain amount that then provides the basis for improved revenues.
6-8 directors say £50k pa and all have a place on WAFC board.

This also does not compromise the ownership model.

[Screwe Alexander]

Originally Posted by pagl

For me the Salford model seems sensible, a group of directors all willing to put in a certain amount that then provides the basis for improved revenues.
6-8 directors say £50k pa and all have a place on WAFC board.

This also does not compromise the ownership model.

Salford are 50% owned by a Singaporean billionaire who is the real money behind the enterprise. Not sure it's a model we'll be able to replicate here somehow

[Quay Red]

Originally Posted by pagl

For me the Salford model seems sensible, a group of directors all willing to put in a certain amount that then provides the basis for improved revenues.
6-8 directors say £50k pa and all have a place on WAFC board.

This also does not compromise the ownership model.

The constitution would ensure that the Majority on the Club Board are WST Board Members.
Therefore the "Investor"/ benefactor would not have any real control over the spending of his / her cash.
Don't think there's many around that would accept that situation easily.

[John Neals Dynasty]

Originally Posted by pagl

For me the Salford model seems sensible, a group of directors all willing to put in a certain amount that then provides the basis for improved revenues.
6-8 directors say £50k pa and all have a place on WAFC board.

This also does not compromise the ownership model.

You forgetting about the guy from Valencia who is putting a lot in.
Posted via mobile theme

[The Only Way Is Up]

Originally Posted by Red_Jackoisback

The trouble is there is no guarantee and would the investor go it for several seasons? Whet is the base investment each year? 10% return is pretty crap as most private equity houses expect to double their money st least in 3 years.

So even at £500k per year at 10% per year and it takes 3 years of missing out we have a secured debt of £1.65m - doesn’t sound sustainable to me.

We're not talking private equity houses though. A more modest sum, say £100,000 from each of a number of investors with a target return of 10% but linked to performance (in just the same way as the actual return on the same sum used to purchase shares in a company would be dependent on the performance of that company) would be sustainable in the sense that without the promotion and ongoing financial success of the club, the investment would be worth no more than if it had been into a company that failed to produce the anticipated returns, i.e. little or nothing.

By linking the investment return to league status and profitability, it safeguards the club in the event of it failing to hit the target agreed upon for the return offered. Would anyone invest on those terms? For those with the spare cash earning virtually nothing in their bank account it could be an attractive alternative, albeit a gamble with the potential to lose 100%.

The art is in making the potential return offered high enough for the investor to consider it worthwhile, whilst at the same time securing the club's financial need both now and in the future.

I'm sure that in the same way as those of us with very limited funding might still be prepared to buy a lottery ticket or place a bet on a horse, there will be others with far greater means who might think of a speculative investment into the club in the same vein.