Investment thread (merged)

[Abbotts Ann Green]

6.7x in fact!

Wages are also considerably more too which will take a great chunk of that just to stand still.

 

[MGM]

[Apologies - as always, I have started writing, gone around the houses a bit, and ended writing far too many words so that most people will just take a look, think 'too long' and move on!]

The bulk of any money spent on the playing squad basically vanishes out of sight into the players' bank accounts. Take a player signed for £1m (a low fee for a Championship talent but a high fee for Argyle) who is signed to a 4 year contract on £10k per week (a low wage for a Championship talent but a high wage for Argyle). The total cost of the deal is ~£3m, two-thirds of which is pocketed by the player. Instead you can invest £3m into infrastructure and at the end of 4 years you still have that infrastructure and can continue to use it to generate income or home-grown talent.

Of course, if you manage to get promoted whilst putting more money into your playing squad then yes, you might get back more money than you put in. But in that case you then you need all of that money (and more) to meet the higher financial demands of the kinds of players needed at that level. Much more likely is the scenario that you don't get promoted and end up like the majority of teams in the Premier League and Championship - continually having to pump new money into the club (even with the increased TV revenue) just to try to stay where you are. Unless you have a bottomless wallet or a magic-money tree this can only end one way - it is just a matter of when that end arrives...

The other possibility is that you buy a player for a total investment (including wages) of, say, £3m and then sell them on for a good profit (say for a £10m transfer fee). That seems to work from a financial perspective but the profit generated is nowhere near the apparent difference of £7m because of tax and inflation. To replace the £3m player in 2-3 years time you probably have to buy a new player for a higher fee and paying higher wages.

Also, to build a really competitive squad at this level it is necessary to have not one or two £1m (really £3m) players, but many times this (and probably a few £5m+ players thrown into the mix too) which means that to increase the chance of a return on investment via the promotion route you need a far higher level of investment than the kind of amount that might become available to Argyle. Finally, to attract the kind of players needed you need to be able to provide them with the kind of working environment, facilities and support personnel that they could have access to at other clubs at Championship level and for that you need to invest in support personnel and infrastructure...

I know this will seem a bit defeatist but I am a realist. This doesn't mean that there isn't fun to be had supporting the club in its attempt to try to compete - there is. I just think that anyone expecting the club to find external investment that dramatically alters the parameters that the club operates within is almost certainly going to be disappointed.

The other point about the £11m being spent on Brickfields is that I am pretty sure that Simon Hallett would not contemplate spending it on players if he wasn't spending it on infrastructure. It is not a choice between infrastructure or players but a choice between infrastructure or nothing. It's Simon Hallett's personal money that is, plain and simply, not there for anything other than Brickfields.

There is nothing wrong being a realist. In fact l often think it helps to put a good perspective on those bad times, as well as good.

 

[GreenEden]

So reading on many of these boards I keep hearing little rumours of investment.
I know Simon says that he's spoken with a couple but there seems to be rumours of people at the Leicester game and others saying it depends if we stay up I just wondered if we have any credible rumours on this yet?

 

[StrictlyGreen]

Just inference at the moment. To paraphrase the excellent Joe Bell on Argyle Life, at the beginning of the season Simon Hallett was saying the Championship was harder than we'd imagined and that we might become a yo-yo side alternating to L1. The impression given was that a relegation wouldn't be the end of the world.

That message seems to have changed, especially since the sacking of Foster. The messages coming out from the club are that we must remain a Championship club at the end of this season. Dewsnip referred to it in the post match conference, we want to be a Championship side as it supports our progression next year.

Inference is there are potential investors on board, but they will only get further involved with us as a club if we stay in this league

 

[MGM]

Just inference at the moment. To paraphrase the excellent Joe Bell on Argyle Life, at the beginning of the season Simon Hallett was saying the Championship was harder than we'd imagined and that we might become a yo-yo side alternating to L1. The impression given was that a relegation wouldn't be the end of the world.

That message seems to have changed, especially since the sacking of Foster. The messages coming out from the club are that we must remain a Championship club at the end of this season. Dewsnip referred to it in the post match conference, we want to be a Championship side as it supports our progression next year.

Inference is there are potential investors on board, but they will only get further involved with us as a club if we stay in this league

I thought the narrative was that whether we stay up or not, these people are potential investors. That if Argyle go down, the amount of money to buy some of Simon' shares would drop & this would result in less money to invest in the club.

 

[Stbkk]

and perhaps also the realisation that the yo-yo club model is actually much harder to achieve than say? look at our promotion season, the wendies with 90+ points having to play off, and this season, one of Derby and Bolton (both big budgets I'm sure) going into the playoffs.

 

[UptheTamar]

I thought the narrative was that whether we stay up or not, these people are potential investors. That if Argyle go down, the amount of money to buy some of Simon' shares would drop & this would result in less money to invest in the club.

I think you’re right. We were valued at £20 million when Argyle Green invested in August 2022 as a League One Club. It will be interesting (if we stay up) what we’re valued at now. Theres been some crazy valuations of Championship Clubs recently.

 

[PL2 3DQ]

So reading on many of these boards I keep hearing little rumours of investment.
I know Simon says that he's spoken with a couple but there seems to be rumours of people at the Leicester game and others saying it depends if we stay up I just wondered if we have any credible rumours on this yet?

Merged with the other thread on investment.

 

[Argyleloyal]

So reading on many of these boards I keep hearing little rumours of investment.
I know Simon says that he's spoken with a couple but there seems to be rumours of people at the Leicester game and others saying it depends if we stay up I just wondered if we have any credible rumours on this yet?

Simon said in his interview with Chris Errington it depends what league we are in to how much the potential investors would pay. If I was a investor I would definitely wait to see what league we would be in before saying yes etc

 

[zakbrown96]

I think you’re right. We were valued at £20 million when Argyle Green invested in August 2022 as a League One Club. It will be interesting (if we stay up) what we’re valued at now. Theres been some crazy valuations of Championship Clubs recently.

I wouldn’t be surprised if we are valued at around £45m mark. When you consider how much revenue we bring in now that alone this season I believe is expected to be £25m.

 

[The Pasty Kid]

Take this with a huge grain of salt...

Championship - Club market value

This page contains a statistic that shows a tendency of the development of the full market value of Championship up to the respective due date.

www.transfermarkt.co.uk

 

[Biggs]

Take this with a huge grain of salt...

Championship - Club market value

This page contains a statistic that shows a tendency of the development of the full market value of Championship up to the respective due date.

www.transfermarkt.co.uk

About 25 million quid. We were valued at about £20m when Argyle Green first invested in League One, so should probably be more than that in the Championship.

Morgan Whittaker could go for almost that alone, so the whole club would surely now be worth considerably more. Though it's only worth as much as someone wants to pay... £50m perhaps?

 

[Green Flash]

About 25 million quid. We were valued at about £20m when Argyle Green first invested in League One, so should probably be more than that in the Championship.

Morgan Whittaker could go for almost that alone, so the whole club would surely now be worth considerably more. Though it's only worth as much as someone wants to pay... £50m perhaps?

Football clubs are valued more on potential than their assets I would have thought, because realistically the assets are not realisable for the owners, they cannot just sell stuff and pocket the money as they could do with other businesses. Unless they reach the premier league in real economic terms football clubs are pretty worthless in terms of providing a return, and even then most premier league clubs lose money. The whole thing is crazy from a purely financial point of view.

 

[Dave Gomm]

What will happen when we realize that we have to spend another £10 mil on Harpers Park with the new land bought, and maybe £20 mil to increase the capacity significantly.

There is far, far to go for us to catch up with where the club should be!

 

[Quintrell Green]

Simon said in his interview with Chris Errington it depends what league we are in to how much the potential investors would pay. If I was a investor I would definitely wait to see what league we would be in before saying yes etc

Whilst Argyle as an asset has good things going for it in terms of no borrowings, has a tidy ground and being a family club with an enduring ethos over decades, I think any potential big investor would draw breath a little, at the fact the ground capacity limits the annual revenue stream, in order to help maintain the certainty of Championship membership. The Brickfields project will come on stream in due course but the possibility of developing local playing talent to a level, where they become competitive replacements for purchased players in the early £Ms, is quite a way down the track yet. Yes, I would love to see a deep pocketed guy, smoking a cigar in a stetson in the front row of the Directors' Box, but it would be a shame if his 'investment' was just used to fund the wages of new players bought in and he gets no return out of it. I will keep my fingers crossed on this one and hope for the very best.