The Case FOR Hicks

[Guest]

DIC wouldnt have us paying £30m interest payments each year, their financial position is stronger and they'd get a better deal on any borrowings. Furthermore, they're capable of underwriting interest payments if it was required, even on a temporary basis. Hicks cant and wouldnt do that.

Basically, with Hicks, we're playing on the edge. His financial position is vulnerable and he's being stretched. Dangerous game. All it'd take is one year outside the top four and you'd soon see top players being sold to service the debt. DIC wouldnt need to resort to that.

All of this have made me very sceptical about takeovers. I'm just not sold up to DIC either. The only thing in their favour is the fact they've got Ansari who's supposed to be a true fan, so that would be a change from what we have here.

I'm not sure about the underwriting bit Syd. You may be right, but they're hard nosed businessmen. Surely, they won't be making the same information public in case it upsets us.

The American's most glaring mistake dealing with all of this in the public domain. If this had been dealt 'inhouse', we'd have been talking about Torres & Babel signing on big fees instead of having to deal with all of this.

[Craig_H]

Just about everything on this forum is purely speculative. That is why I'm not jumping on any bandwagons.

People are coming to all sorts of conclusions, based on a very public and hugely embarrassing war of spin in the media.

However, it is clear that the club is earning nowhere near the amount of money as it should be. We are all agreed on that. Even Chelsea, with a fanbase a fraction of ours earn more money as a club.

There's speculative...as in 'will we sign player x?' and then there's speculative...as in "if we were able to sell Voronin for £25m, we could bring in player y" - you see the difference.

I personally find it pointless to answer the question you asked previously, simply because there's no logical way that we're just going to turn £43m of commercially derived profit into £70m of commercially derived profit.

We probably will increase our commercial profits over the course of time, but that's just the problem, for every year it takes us to do this, we're without a transfer budget. How are we going to compete to even STAY in the top four without a transfer budget? Never mind competing for the title. It doesnt add up, as far as i can see.

[Craig_H]

Agreed - it will take at least 5 years to realise the potential profit from the club. In the meantime, investment is required. That can come from a billionaire, or it can be borrowed against future income.

I think Hicks has milked his borrowing sources to the max. Also, the more he borrows, the more we're paying back in interest.

Our current borrowings have an interest payment of £30m per annum, which as i say, will eat our transfer budget away. Borrowing more would increase the interest, so i cant see how that'd solve the problem of having no transfer funds to play with.

[dom9]

There's speculative...as in 'will we sign player x?' and then there's speculative...as in "if we were able to sell Voronin for £25m, we could bring in player y" - you see the difference.

I personally find it pointless to answer the question you asked previously, simply because there's no logical way that we're just going to turn £43m of commercially derived profit into £70m of commercially derived profit.

We probably will increase our commercial profits over the course of time, but that's just the problem, for every year it takes us to do this, we're without a transfer budget. How are we going to compete to even STAY in the top four without a transfer budget? Never mind competing for the title. It doesnt add up, as far as i can see.

That is why the borrowing is required. Either that, or find another Abramovich. The profit will come, but not instantly.

We already don't earn enough to compete.

[Craig_H]

it all depends on the re-financing deal. we might pay less the first few years and start paying much more once the stadium is in place. it's a tough case to argue as i'm not educated enough on that matter which makes it twice as hard for a non-native speaker like me.
put short, the important thing is whether the re-financing deal is profound and has plans a, b and c in place, that is all eventualities covered.

I agree with you about re-financing, but wasnt Hicks' last refinancing deal the one which GAVE us the £30m interest bill? So from what i can see, that's the best deal he was able to get in his refinancing plan.

[Parr_Zee]

But the bigger stadium isnt going to suddenly appear overnight is it? So for what's likely to be 3 or 4 years, how is the profit going to be enhanced to a level to ensure the interest payments are serviced AND to ensure that we still have a proper transfer budget?

Same thing applies to sponsorship deals, you cant just tipex out the current deals, and you wont be milking hundreds of millions of pounds out of Asia overnight either.

Maybe the loan Hicks has taken out covers this 3-4 year period that we will not be profitable, and then after that he see's big money rolling in. Maybe he's in it for the long run ... nobody knows, we're all speculating. And that £30m interest payment that you are going on about is probably an exagerated media figure anyway. No-one knows the facts. I know one thing though ... Hicks is not about to start p1ssing his money up the wall.

[Guest]

I think Hicks has milked his borrowing sources to the max. Also, the more he borrows, the more we're paying back in interest.

Our current borrowings have an interest payment of £30m per annum, which as i say, will eat our transfer budget away. Borrowing more would increase the interest, so i cant see how that'd solve the problem of having no transfer funds to play with.

That could mean more borrowing to pay for transfers !?

In x years time, and with all the right commercial deals into place, we could be racking in loads of money. Stadium naming rights, TV channel, Internet revenue, Asian Market maximization, and even the US market which is untapped and huge.

Bear with me, it's just an educated guess that I'm taking here, and obviously that would be a huge risk to take. But it seems this is not putting off our big texan.

[Craig_H]

All of this have made me very sceptical about takeovers. I'm just not sold up to DIC either. The only thing in their favour is the fact they've got Ansari who's supposed to be a true fan, so that would be a change from what we have here.

I'm not sure about the underwriting bit Syd. You may be right, but they're hard nosed businessmen. Surely, they won't be making the same information public in case it upsets us.

The American's most glaring mistake dealing with all of this in the public domain. If this had been dealt 'inhouse', we'd have been talking about Torres & Babel signing on big fees instead of having to deal with all of this.

The thing in their favour mate, is that they're financially minted and the more you've got, the better your chances of negotiating a good finance deal, with less interest. It's similar to everyday folk who take loans. Those with a good credit record will get a bank loan, with a more favourable interest rate than those with a CCJ (for example), who'd end up turning to finance companies, who rip them off with enormous interest rates. But what choice do they have? Very little.

As for underwriting it, i'm not saying DIC would do it as a 'favour' to us, but if it meant they ultimately paid less interest, they'd probably underwrite it and then take the money back out of the club, without adding millions of pounds in interest. After all, they'd effectively be charging themselves interest, which wouldnt make sense.

Ultimately, Hicks is maxed out money-wise, if something goes wrong, he's ****ed and there is potential for a Leeds-type of crisis if it went badly wrong. DIC would never end up in such a desperate situation and there'd be no risk of such a financial crumble.

[Craig_H]

That is why the borrowing is required. Either that, or find another Abramovich. The profit will come, but not instantly.

We already don't earn enough to compete.

But if you do it with better interest rates, you're paying less interest and it's a better all-round situation.

Borrowing is required, £30m annual interest payments arent.

[dom9]

I would like to emphasise that I am not pro-Hicks by the way.

The way in which he has conducted himself in the last 12 months is nothing short of a disgrace.

However, the business plan is one I can see the benfits from. I also acknowledge the risks involved.

[Craig_H]

That could mean more borrowing to pay for transfers !?

In x years time, and with all the right commercial deals into place, we could be racking in loads of money. Stadium naming rights, TV channel, Internet revenue, Asian Market maximization, and even the US market which is untapped and huge.

Bear with me, it's just an educated guess that I'm taking here, and obviously that would be a huge risk to take. But it seems this is not putting off our big texan.

In x years, that could happen. In the meantime though, the US financial markets could screw Hicks big time. And if that happens, where do you think he'll turn in his attempts to raise money? He certainly wont be holding a raffle, put it that way A player auction? Now you're talking... *Yee ha!*

[Guest]

The thing in their favour mate, is that they're financially minted and the more you've got, the better your chances of negotiating a good finance deal, with less interest. It's similar to everyday folk who take loans. Those with a good credit record will get a bank loan, with a more favourable interest rate than those with a CCJ (for example), who'd end up turning to finance companies, who rip them off with enormous interest rates. But what choice do they have? Very little.

As for underwriting it, i'm not saying DIC would do it as a 'favour' to us, but if it meant they ultimately paid less interest, they'd probably underwrite it and then take the money back out of the club, without adding millions of pounds in interest. After all, they'd effectively be charging themselves interest, which wouldnt make sense.

Ultimately, Hicks is maxed out money-wise, if something goes wrong, he's ****ed and there is potential for a Leeds-type of crisis if it went badly wrong. DIC would never end up in such a desperate situation and there'd be no risk of such a financial crumble.

Agreed.

[lfc1394]

Rick being such a prick is the reason Hicks wants so much more money to sell.

If Rick had been doing his ****ing job properly then we would already have the 20 or so big sponsors, and the other world markets. A) we may not have even have to have sold to the ****ing yanks and B) it would have been for a **** load more than £220 odd million!

Out of the whole interview he nailed Parry spot on. The rest of it is bollocks.

[Skillz]

DIC wouldnt have us paying £30m interest payments each year, their financial position is stronger and they'd get a better deal on any borrowings. Furthermore, they're capable of underwriting interest payments if it was required, even on a temporary basis. Hicks cant and wouldnt do that.

Basically, with Hicks, we're playing on the edge. His financial position is vulnerable and he's being stretched. Dangerous game. All it'd take is one year outside the top four and you'd soon see top players being sold to service the debt. DIC wouldnt need to resort to that.

We have no idea what DIC will do. TBH I am coming to the conclusion they are not backing Rafa and that pisses me off.

A Lot.

[Craig_H]

We have no idea what DIC will do. TBH I am coming to the conclusion they are not backing Rafa and that pisses me off.

A Lot.

Surely you're contradicting yourself here? On one hand, we have no idea what DIC will do. On the other, they're not gonna back Rafa...

Do we know what they're gonna do or dont we?