Motherwell FC - A Thread For All Seasons

[StAndrew7]

2 minutes ago, Wellwatcher said:

I find it surprising when EB states that there was little feedback from the Well Society on his offer. Given the categoric nature of the WS statement perhaps it would be worthwhile for the WS board and EB to go into further negotiations before any vote is held

The issue with that is the current deal has been unanimously recommended by the Executive Board. They won't renege on that now. The only way I can see a negotiation happening is if and when this deal gets kiboshed. Even then, who's to say EB will come back again?

Edited June 11 by StAndrew7

[Alanos]

On 10/06/2024 at 20:57, one m in Motherwell said:

As far as our Serbian track record goes I’m hoping he’s more Curcic than Belic.  The bold Sasa was pretty ineffectual when he was with us, but the fact he was completely unhinged was good patter. 

He lived downstairs from me in my old flat in Windmill Court. Apart from occasionally playIng music till 4 in the morning and what seemed like a constant stream of takeaways (they rang our bell a lot), he was fairly quiet and unassuming at home anyway.

[Jim McLean's Ghost]

1 hour ago, standupforthemotherwell said:

The loan which has been asked to be written off could also feasibly be converted to equity but that loses the largest creditor safety net without having the cash available in exchange 

The loans are specifically not being converted to equity because the they whole point is to dilute the well society's % shareholding.

Also right now the Well Society do not want to hold more shares in the club. And a small % were sold to lower the current holding to below 75% because that threshold has some legal consequences.

Having the Well Society debt secured against the stadium is one of the soundest bits of business since should things go wrong Fir Park cannot be sold without the Society being involved. Obviously Barmack will remove this safeguard when his take over is complete.

[Busta Nut]

37 minutes ago, Wellwatcher said:

I find it surprising when EB states that there was little feedback from the Well Society on his offer. Given the categoric nature of the WS statement perhaps it would be worthwhile for the WS board and EB to go into further negotiations before any vote is held

 

35 minutes ago, StAndrew7 said:

The issue with that is the current deal has been unanimously recommended by the Executive Board. They won't renege on that now. The only way I can see a negotiation happening is if and when this deal gets kiboshed. Even then, who's to say EB will come back again?

as @StAndrew7 says, it looks as though this was negotiated with McMahon, acting as the Executive board. Who got his lap dogs on board.

All stems back to the way the WS was treated by the Exec board. As an inconvenience. 

[Erik Barmack]

19 minutes ago, Vietnam91 said:

 

It would be pretty easy to amend your shareholding to 3% in the first year opposed to 8% so by year six you hold 44% and the WS holds 51% and rightfully give the WS casting vote but you're not going to do that are you?

I think what is telling out of all of this is, if you discount the two with a conflict of interest, 6 of the other 7 WS members who have had extensive time to debate and review the details of your offer think its poor enough to endorse such a strong rebuttal. Your offer works if not enough people get into the weeds of your offer and actually look at the detail and implications.

I agree that valuation is subjective.  There are a number of comps, none of them are perfect.  Ultimately, a thing is worth what a qualified buyer will pay for it, and w/r/t MFC, it's complicated by the fact that several buyers don't want to deal with fan-ownership, whereas we see it as a plus.  So, ultimately, I could be wrong, you might be wrong, too, but I reject the implications that this is some nefarious low-ball offer. We used data.  You can use data to tell me we're wrong, and if you're right, another buyer will come along and pay more.

Similarly, when you write, "Your offer works if not enough people get into the weeds," it implies a nefarious intention that we don't have.  I think many of the WS Board members would say that there were several interesting facets to the offer, and the idea that we're somehow trying to pull a fast one (while being relatively engaged with people who are clearly against the offer) is logically and emotionally inconsistent, even to those who voted no.  I think there's also frustrations on all sides, just so you know, that criticisms were communicated (by TWS) but weren't always received by me. Negotiations are easier if you can go back and forth, which didn't happen here, and that isn't the fault of the WS Board.  But in short, and similarly, the characterization that I have presented a glossy offer without substance is also unfair.

Your point about the casting vote is interesting.  In our proposal, the structure is 3 WS votes, 2 executive board votes, and 3 votes for us, with a tie going to us.  Given that the executives need to be voted in, I don't really see us as having control of the Board.  That feels fairly balanced to me, in fact, and healthier, perhaps, than the current structure that exists today.  

Finally, just as a touch point, I don't believe in life that there is one side that has universal access to the the truth, while the other side is "duped."  That doesn't mean that terrible deals don't exist, because they do.  But I think the idea that someone (me) is pulling a "fast one" or a "scam" detracts from the fact that a) a lot of people are excited about this model and b) we can be debating what's best for the Club, which I enjoy doing and which I think is healthy.  I'm less willing, over time, to be defending myself as, like, an anti-Darth Vader, or something.  I'd rather debate, "Which option puts the Club in a better place in 5-6 years?"

 

 

[joewarkfanclub]

Get the old board in the bin.

Let the WS elect a new board.

Let the new board renegotiate with EB on an offer thats mutually acceptable to all.

Simples. 

Edited June 11 by joewarkfanclub

[Erik Barmack]

58 minutes ago, Busta Nut said:

 

as @StAndrew7 says, it looks as though this was negotiated with McMahon, acting as the Executive board. Who got his lap dogs on board.

All stems back to the way the WS was treated by the Exec board. As an inconvenience. 

To be fair to the WS Board, there WAS feedback, which was extensive, though it didn't always make its way to me.  What wasn't clear was how to address this feedback (which is not the fault of anyone -- it's just complicated).

[Jim McLean's Ghost]

2 minutes ago, Erik Barmack said:

To be fair to the WS Board, there WAS feedback, which was extensive, though it didn't always make its way to me.  What wasn't clear was how to address this feedback (which is not the fault of anyone -- it's just complicated).

Do you think now that you negotiated with the wrong people? Going through the club board rather than negotiate directly with the major shareholder feels like a mistake to me.

You have said now You tried to this, it's just complicated. Can you explain why some things failed or what the complications were?

 

[Erik Barmack]

5 minutes ago, Jim McLean's Ghost said:

Do you think now that you negotiated with the wrong people? Going through the club board rather than negotiate directly with the major shareholder feels like a mistake to me.

You have said now You tried to this, it's just complicated. Can you explain why some things failed or what the complications were?

 

No, I don't.  I think there are a lot of moving pieces and the structure of the club is inherently complicated.  Would I do some things differently?  Sure, but I also think I've learned a lot about how the Club ticks, which is important if a deal goes through, and I think everyone has negotiated with good intentions.  I just raise this point because I feel like an earlier post that I made implied that TWS didn't provide feedback, and I know that they have (and I would reiterate that even those who are adamantly against the deal have been overwhelmingly kind to me on a personal level, and have wanted, I think, to share why the club is so special to them).   But to answer your question, it was just hard to corral everything together.

Edited June 11 by Erik Barmack

[Handsome_Devil]

SOD is in the paper today giving details his the option clause in his contract - nothing earth-shattering but given how prevalent these seem to be becoming for us, good to see it's at least notionally performance based rather than being a literal 'option' for the player to exercise.

[StAndrew7]

8 hours ago, Erik Barmack said:

To be fair to the WS Board, there WAS feedback, which was extensive, though it didn't always make its way to me.  What wasn't clear was how to address this feedback (which is not the fault of anyone -- it's just complicated).

This isn't a slight on you at all @Erik Barmack, but this very much reads like you weren't receiving the full picture of feedback/communication from the Club's Majority owner; I hope you can see why that has a lot of us concerned about the process that has taken place, led by the outgoing chairman?

I understand the feeling that everyone has negotiated in good faith and has been from your perspective, well intentioned; but based on your comment above it does feel like certain bits of feedback or information that was supposed/intended to be provided to you were either withheld entirely or at the very least misrepresented to you? That's incredibly concerning to me and I would imagine to the majority of other posters here.

Edited June 12 by StAndrew7

[Vietnam91]

Quote

it's complicated by the fact that several buyers don't want to deal with fan-ownership, whereas we see it as a plus.

Big plus having a ready made crowdfunder set up to get us to match your input. The reason you won't accept a smaller shareholding than the WS is because it would be hard to justify a casting vote while sitting on 44% to the WS's 49%. But this is all about control and always has been.

 

Getting on to valuation.

Quote

"The amounts being subscribed by the Barmacks – £1.95m – prices the equity in the club at just under £4m – with the addition of the debt of £3.7m (WS and Government) that equates to an Enterprise Value (EV) of £7.7m for the whole club."

First thing to ascertain, who derived this EV figure, you, McMahon or someone else?

The Enterprise Value (EV) Formula = Market Cap + Total Debt (short and long term) − Cash & cash equivalents (liquid assets)

The debt figure used should be net, not the gross, whoever did this sum did not include the liquid assets of the club (£3.59m). Our figures in reality are:

• £1.94m (short term) + £1.54m (long term) = £3.48m total debt minus £3.59m total assets (bank and debtors) = net debt of -£110k
• Puts a very different complexion on the published EV, in reality by offering £1.95m for 49% the TRUE ENTERPRISE VALUE is £3.8m NOT £7.7m cited on the official site, it is a gross misrepresentation and doubled overstatement by just under £4m.

The fact this was even published when so incorrect is a scandal and alone should be a disqualifier. My head is literally spinning at the audacity of this being overlooked or done deliberately because it's one of the two. How many people read that overstated valuation and found it palatable?

To compare this to Hibs, a 25% stake was purchased for £6m - prices the equity in the club at £24m – with the addition of the NET DEBT of £6.2m (£13.7m total debt minus £7.5m liquid assets) that equates to an Enterprise Value of £30.2m for the whole club.

The corrected Barmack valuation of Motherwell remains as 1/6th (16.7%) of the equity value of Hibs, however his offer means our real EV equates to 1/8th (12.5%) of Hibs EV value (opposed to 1/4 with the original incorrect figures). Pretty sobering! But let's distract with talk about Newcastle United!

To put this another way, it means he is looking to pay 6.25% or 1/24th of the value of Hibs to get half of our club ..... on tic

If an EV value the club of £7.7m is the aim, it means a 49% acquired holding jumps from costing Erik £1.95m to £3.85m. He would have to find another £2m roughly because our liquid assets cancel out our total debt, something omitted from figures published on the club website.

This is what I'm talking about getting into the weeds, its an expression about extracting the details. If you wish to spin a negative connotation then crack on. The LA based multi-millionaire as a victim is a tough sell on here when a big bit of your plan is advocating a pensioner throws in an extra £5 per month. You perceived I suggested nefarious intent, I could equally argue it elicits a defensive response if shining a light and holding feet to the fire. Stuff like overstating something by 100%/£4m tends to increase scepticism tenfold.

 

Onto the board ....... both the club appointees are already on the board from the 29th of April, no election required. From the Articles of Association the majority shareholder can remove any board member by informing the club secretary in writing. Also, not much in theory to stop the majority shareholder sacking the CEO or Finance Director and appointing their own candidate, then every vote is carried. This is why you NEED the casting vote and a greater shareholding than the WS.

 

Quote

"logically and emotionally inconsistent"

Sorry but ... whit? This is a meaningless word salad. Can we get serious?

6 WS board members voted to put out the as strong as you can get of strongly worded counter statements to your offer. Two resigned rather than explain why they supported it and one other .... who knows. I suspect we'll hear hee-haw. Many would be willing to work with you with a smaller shareholding on fairer terms than present, however the current offer is weighted heavily in your favour and at every turn. The easiest solution would be to take 20% of the WS 71.7%, get two board seats, no need for new shares issued, dilutions, etc. But that will never fly eh?

 

Quote

"Which option puts the Club in a better place in 5-6 years?"

Easy, if its this or fan ownership, the latter hands down. We may for the first time truly since John Boyle facilitated the Society have the club, society and all personnel pulling in the same direction rather than sniping, self aggrandisement, ego fluffing and silo building. When we sell Theo Bair for £1.5m this summer we can offer you something on our terms, not yours. 

 

Finally, the Football Supporters Association define fan/supporter ownership as:

Quote

"A minimum of 50% + 1 of the voting rights of the club to be controlled collectively by a democratic entity which has an open and inclusive membership based on one member, one vote with no substantial barriers to participation as a voting member."

Your proposal kills this so please don't use the term going forward because it's simply not true and disingenuous to even allude it would remain a thing.

Edited June 12 by Vietnam91

[MurrayWell]

On 22/02/2024 at 16:38, MurrayWell said:

Today's statement is absolutely shambolic, and I don't mean the extension itself, that's another debate. 

Those currently running the club have learned the hard way that their communications haven't been good, despite what their echo chamber may tell them, and, whether they like it or not, it's actually important to keep fans informed. 

This was from February, after Kettlewell's contract extension was confirmed (after those in charge "forgot" to tell us about it) seems relevant again now. The executive board have got previous for withholding information when it suits them. 

I've been consistent in my opinion of Jim McMahon, that he likes to talk a good game but does very little to back that up. Full of his own self importance. 

I've always been open to investment in the club in the right circumstances, I don't think in it's current form this deal is right for the club. @Erik Barmack, fair play to you for coming on here to confirm your position, many wouldn't, and our departing chairman certainly wouldn't be as open. I don't think you're being viewed as the villain of the piece here, by most anyway. As others have said, if something can be done that works for everyone and is the right thing for Motherwell FC going forward, ideal. 

The key thing here, for me anyway, is the ineptitude of the current executive board is finally there for all to see. 

Thankfully in Brian Caldwell, I actually think we have someone with fresh ideas who values fan input. 

[Vietnam91]

1 hour ago, StAndrew7 said:

This isn't a slight on you at all @Erik Barmack, but this very much reads like you weren't receiving the full picture of feedback/communication from the Club's Majority owner; I hope you can see why that has a lot of us concerned about the process that has taken place, led by the outgoing chairman?

I understand the feeling that everyone has negotiated in good faith and has been from your perspective, well intentioned; but based on your comment above it does feel like certain bits of feedback or information that was supposed/intended to be provided to you were either withheld entirely or at the very least misrepresented to you? That's incredibly concerning to me and I would imagine to the majority of other posters here.

You don't know the half of it.

Appreciate the acknowledgement on SOL.

[StAndrew7]

1 minute ago, Vietnam91 said:

You don't know the half of it.

Appreciate the acknowledgement on SOL.

I can only begin to imagine. And you're welcome, was about to do it on here, too!

[welldaft]

As per MurrayWell I don't think the majority view Erik as a villain in the mould of "Darth Vader" or anything like that. 

I can also fully understand why Erik wants to defend himself and explain the background to the negotiations. It does not come as a surprise to me that Erik did not always get to hear of any discontent as if this whole exercise has served to highlight anything, it is the disconnect between the Well Society Board and our Executive Board. 

I am no expert when it comes to Financials and valuations. Erik is right in that the club is worth only what someone is prepared to pay.  But unless we are actually in a distressed state then their is no obligation for the Well Society and the fans to vote in favour of this proposal. I am actually quite impressed by the Well Society response and the response of the majority of fans on here. We all love the club and we all want what is best for it now and in the future. For us to thrive and prosper that would inevitably include outside investment. 

What concerns me is that the Board have recommended this offer when by many metrics it still considerably undervalues the club. We have 2 sellable assets (Bair and Miller) that would be expected to raise a minimum of £2m. Where is that included in the valuation ?

It also underplays the efforts of all of the fans to raise nearly £2m to help support the club in times of need. This notion we should be obligated to put a further £800k+ over 4 years and see our shareholding dwindle is a non starter for me. The likelihood if this deal went through is that WS contributions would drastically reduce and as has been mentioned mean that we would use up all our reserves currently at £750k. Simply put - not very attractive or palatable at all.

 

 

Edited June 12 by welldaft

[Handsome_Devil]

5 minutes ago, Vietnam91 said:

You don't know the half of it.

Appreciate the acknowledgement on SOL.

When we're backslapping, the @StAndrew7 suggestion of binning the executive board and starting negotiations afresh is excellent. 

It removes the middle man, works with clear red lines and - frankly most important - challenges Erik to match actions to his reassuring words.

No matter how reasonable he is on here (and while he certainly seems pleasant, he's lobbying for his deal, no more and no less), when the offer on the table wants control of the club for a song and in practice will kill the Society, it means nothing.

He says he respects the fans, doesn't want a phyric victory in the vote etc etc. Great...prove it.

 

[Alanos]

On 10/06/2024 at 22:21, 'WellDel said:

Tight Cow

FIFY

[Alanos]

On 10/06/2024 at 22:21, 'WellDel said:

Tight Cow

FIFY

[Vietnam91]

When the red mist descended when I re-read the EV thing, I missed the following:

Quote

A multiple of maintainable profits – this can be profit, profit before tax or EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation- sometimes referred to as a measure of the free cash flow a business generates). We have operated at around breakeven over the period since we moved into fan ownership. There is no standard multiple for businesses – especially football clubs – there generally is a range – eg pubs might go at 5/8 times profits. But to get to £7.7m EV for MFC would require something like stable EBITDA of £1m and a multiple of 8.

Incorrect figure repeated again in what can only be described as double down of the finance jargon for tyre kicking the clubs value.

The reality is it's £475k if a multiple of 8 is used.

 

But before we go any deeper, lets look again at these debts that we'd be told are a weight round our neck.

WS £868k - no interest, no repayment schedule, held as a security against the club so a boiled plated safeguard, all in all as good a "debt" as you could hope to have.

Scot Gov COVID £3m over 20 years - no interest, yearly repayment schedule of approx 165k.

Our liquid assets exceed the total of our softest of all soft debts by £110k. We could be considered "debt free".